Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Nov. 30, 2014 | |
Document and Entity Information | |
Entity Registrant Name | NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ |
Entity Central Index Key | 70502 |
Document Type | 10-Q |
Document Period End Date | 30-Nov-14 |
Amendment Flag | FALSE |
Current Fiscal Year End Date | -26 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 0 |
Document Fiscal Year Focus | 2015 |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Nov. 30, 2014 | 31-May-14 | ||
In Thousands, unless otherwise specified | ||||
ASSETS | ||||
Cash and cash equivalents | $512,501 | $338,715 | ||
Restricted cash | 1,532 | 520 | ||
Investments | 83,779 | 55,177 | ||
Time deposits | 495,000 | 550,000 | ||
Loans to members | 20,782,986 | [1] | 20,476,642 | [1] |
Less: Allowance for loan losses | -50,757 | -56,429 | ||
Loans to members, net | 20,732,229 | 20,420,213 | ||
Accrued interest and other receivables | 195,969 | 200,656 | ||
Fixed assets, net | 108,789 | 107,070 | ||
Debt service reserve funds | 25,602 | 39,353 | ||
Debt issuance costs, net | 41,648 | 42,058 | ||
Foreclosed assets, net | 213,207 | 245,651 | ||
Derivative assets | 139,377 | 209,759 | ||
Other assets | 23,470 | 23,571 | ||
Total assets | 22,573,103 | 22,232,743 | ||
LIABILITIES AND EQUITY | ||||
Short-term debt | 4,222,404 | 4,099,331 | ||
Long-term debt | 14,836,922 | 14,513,284 | ||
Accrued interest payable | 116,954 | 118,381 | ||
Deferred income | 78,754 | 78,040 | ||
Derivative liabilities | 400,687 | 388,208 | ||
Subordinated deferrable debt | 400,000 | 400,000 | ||
Members’ subordinated certificates: | ||||
Membership subordinated certificates | 644,881 | 644,944 | ||
Loan and guarantee subordinated certificates | 667,589 | 699,723 | ||
Member capital securities | 238,370 | 267,560 | ||
Total members’ subordinated certificates | 1,550,840 | 1,612,227 | ||
Total debt outstanding | 21,010,166 | 20,624,842 | ||
Other liabilities | 47,716 | 52,898 | ||
Total liabilities | 21,654,277 | 21,262,369 | ||
Commitments and contingencies | ||||
CFC equity: | ||||
Retained equity | 884,393 | 939,888 | ||
Accumulated other comprehensive income | 6,773 | 3,649 | ||
Total CFC equity | 891,166 | 943,537 | ||
Noncontrolling interest | 27,660 | 26,837 | ||
Total equity | 918,826 | 970,374 | ||
Total liabilities and equity | $22,573,103 | $22,232,743 | ||
[1] | Includes nonperforming and restructured loans. |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Income Statement [Abstract] | ||||
Interest income | $235,235 | $239,254 | $472,526 | $480,325 |
Interest expense | -158,275 | -165,345 | -314,827 | -332,930 |
Net interest income | 76,960 | 73,909 | 157,699 | 147,395 |
Provision for loan losses | -992 | -1,096 | 5,779 | -2,374 |
Net interest income after provision for loan losses | 75,968 | 72,813 | 163,478 | 145,021 |
Non-interest income: | ||||
Fee and other income | 9,872 | 5,125 | 14,229 | 9,281 |
Derivative gains (losses), net | -74,561 | -30,780 | -124,439 | 75,604 |
Results of operations of foreclosed assets | -28,991 | -3,269 | -31,690 | -7,318 |
Total non-interest income | -93,680 | -28,924 | -141,900 | 77,567 |
Non-interest expense: | ||||
Salaries and employee benefits | -10,528 | -9,018 | -21,325 | -19,346 |
Other general and administrative expenses | -7,709 | -9,555 | -15,455 | -17,842 |
Provision for guarantee liability | 13 | -73 | 80 | -42 |
Other | -17 | -150 | -23 | -298 |
Total non-interest expense | -18,241 | -18,796 | -36,723 | -37,528 |
Income (loss) before income taxes | -35,953 | 25,093 | -15,145 | 185,060 |
Income tax (expense) benefit | 41 | -101 | -155 | -1,802 |
Net income (loss) | -35,912 | 24,992 | -15,300 | 183,258 |
Less: Net (income) loss attributable to noncontrolling interests | 207 | -67 | -4 | -2,785 |
Net income (loss) attributable to CFC | ($35,705) | $24,925 | ($15,304) | $180,473 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | ($35,912) | $24,992 | ($15,300) | $183,258 |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on available-for-sale investment securities | 902 | -1,335 | 3,602 | -5,244 |
Reclassification of derivative losses to net income | -242 | -249 | -483 | -495 |
Other comprehensive income (loss) | 660 | -1,584 | 3,119 | -5,739 |
Total comprehensive income (loss) | -35,252 | 23,408 | -12,181 | 177,519 |
Less: Total comprehensive (income) loss attributable to noncontrolling interest | 209 | -62 | 1 | -2,776 |
Total comprehensive income (loss) attributable to CFC | ($35,043) | $23,346 | ($12,180) | $174,743 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $) | Total | Non-controlling Interests | Total CFC Equity | CFC Accumulated Other Comprehensive Income | CFC Retained Equity | Unallocated Net Income (Loss) | Members’ Capital Reserve | Patronage Capital Allocated | Membership Fees and Education Fund |
In Thousands, unless otherwise specified | |||||||||
Balance at May. 31, 2013 | $811,261 | $11,790 | $799,471 | $8,381 | $791,090 | ($213,255) | $410,259 | $591,581 | $2,505 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 183,258 | 2,785 | 180,473 | 180,473 | 180,473 | 0 | 0 | 0 | |
Other comprehensive income (loss) | -5,739 | -9 | -5,730 | -5,730 | |||||
Patronage capital retirement | -40,724 | 0 | -40,724 | -40,724 | 0 | -40,724 | |||
Other | 680 | 1,095 | -415 | -415 | -415 | ||||
Balance at Nov. 30, 2013 | 948,736 | 15,661 | 933,075 | 2,651 | 930,424 | -32,782 | 410,259 | 550,857 | 2,090 |
Balance at May. 31, 2014 | 970,374 | 26,837 | 943,537 | 3,649 | 939,888 | -178,650 | 485,447 | 630,340 | 2,751 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | -15,300 | 4 | -15,304 | -15,304 | -15,304 | 0 | 0 | 0 | |
Other comprehensive income (loss) | 3,119 | -5 | 3,124 | 3,124 | |||||
Patronage capital retirement | -39,662 | 0 | -39,662 | -39,662 | -39,662 | ||||
Other | 295 | 824 | -529 | -529 | 1 | -1 | -529 | ||
Balance at Nov. 30, 2014 | $918,826 | $27,660 | $891,166 | $6,773 | $884,393 | ($193,954) | $485,448 | $590,677 | $2,222 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | ($15,300) | $183,258 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of deferred income | -5,781 | -6,104 |
Amortization of debt issuance costs and deferred charges | 3,630 | 3,647 |
Amortization of discount on long-term debt | 3,605 | 2,367 |
Amortization of issuance costs for revolving bank lines of credit | 4,213 | 1,332 |
Depreciation | 2,920 | 2,838 |
Provision for loan losses | -5,779 | 2,374 |
Provision for contingent guarantee liability | -80 | 42 |
Results of operations of foreclosed assets | 31,690 | 7,318 |
Derivative forward value | 82,574 | -111,760 |
Changes in operating assets and liabilities: | ||
Accrued interest and other receivables | 2,298 | -30,795 |
Accounts payable | -1,296 | -875 |
Accrued interest payable | -1,427 | -10,795 |
Deferred income | 6,495 | 54,502 |
Other | -4,442 | -2,790 |
Net cash provided by operating activities | 103,320 | 94,559 |
Cash flows from investing activities: | ||
Advances on loans | -4,116,020 | -3,941,276 |
Principal collections on loans | 3,809,772 | 3,859,164 |
Net investment in fixed assets | -4,565 | -3,196 |
Proceeds from foreclosed assets | 7,404 | 8,567 |
Investments in foreclosed assets | -6,650 | -10,020 |
Investments in time deposits | 0 | -100,000 |
Proceeds from Time Deposits Accepted | 55,000 | 0 |
Investments in equity securities | -25,000 | 0 |
Change in restricted cash | -1,012 | -955 |
Net cash used in investing activities | -281,071 | -187,716 |
Cash flows from financing activities: | ||
Proceeds from issuances of short-term debt, net | 150,891 | 64,751 |
Proceeds from issuances of short-term debt with original maturity greater than 90 days | 240,662 | 468,142 |
Repayments of short term-debt with original maturity greater than 90 days | -268,480 | -324,820 |
Issuance costs for revolving bank lines of credit | -2,822 | -2,751 |
Proceeds from issuance of long-term debt | 748,073 | 1,769,662 |
Payments for retirement of long-term debt | -431,260 | -1,713,395 |
Issuance costs for subordinated debt | 0 | -150 |
Proceeds from issuance of members’ subordinated certificates | 54,560 | 1,608 |
Payments for retirement of members’ subordinated certificates | -101,251 | -5,945 |
Payments for retirement of patronage capital | -38,836 | -39,630 |
Net cash provided by financing activities | 351,537 | 217,472 |
Net increase in cash and cash equivalents | 173,786 | 124,315 |
Beginning cash and cash equivalents | 338,715 | 177,062 |
Ending cash and cash equivalents | 512,501 | 301,377 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 304,806 | 336,379 |
Cash paid for income taxes | 81 | 152 |
Non-cash financing and investing activities: | ||
Net decrease in debt service reserve funds/debt service reserve certificates | ($13,751) | ($450) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | |||||||||||||||||
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||
The Company | |||||||||||||||||
National Rural Utilities Cooperative Finance Corporation (“CFC”) is a member-owned cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation, transmission and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes. | |||||||||||||||||
Principles of Consolidation and Basis of Presentation | |||||||||||||||||
The accompanying financial statements include the consolidated accounts of CFC, Rural Telephone Finance Cooperative (“RTFC”) and National Cooperative Services Corporation (“NCSC”) and certain entities created and controlled by CFC to hold foreclosed assets and accommodate loan securitization transactions. The entities controlled by CFC that hold foreclosed assets include Caribbean Asset Holdings, LLC (“CAH”) and Denton Realty Partners, LP (“DRP”). CAH is a holding company for various U.S. Virgin Islands, British Virgin Islands and St. Maarten-based telecommunications operating entities that provide local, long-distance and wireless telephone, cable television and internet services to residential and commercial customers. DRP holds assets primarily consisting of a land development loan and limited partnership interests in certain real estate developments and related receivables, developed lots and retail land. Intercompany accounts and transactions have been eliminated in consolidation. Unless stated otherwise, references to “we,” “our” or “us” relate to CFC and its consolidated entities. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair presentation of this interim financial information. | |||||||||||||||||
These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and related notes thereto, included in CFC's Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (the “2014 Form 10-K”). | |||||||||||||||||
Reclassifications | |||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current period presentation. The most significant reclassification relates to the presentation of short-term and long-term debt. Effective August 31, 2014, we began classifying debt as either short-term or long-term based on the original contractual maturity at issuance. For reporting periods prior to August 31, 2014, we reported long-term debt maturing within one year as part of our short-term debt. The debt reclassification had no impact on our debt ratios or financial covenants. | |||||||||||||||||
Variable Interest Entities | |||||||||||||||||
We are required to consolidate the financial results of RTFC and NCSC because CFC is the primary beneficiary of variable interests in RTFC and NCSC due to its exposure to absorbing the majority of their expected losses. | |||||||||||||||||
Under separate guarantee agreements, RTFC and NCSC pay CFC a fee to indemnify them against loan losses. CFC is the sole lender to and manages the business operations of RTFC through a management agreement in effect until December 1, 2016, which is automatically renewed for one-year terms thereafter unless terminated by either party. CFC is the primary source of funding to, and manages the lending activities of, NCSC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC funds its lending programs through loans from CFC or debt guaranteed by CFC. In connection with these guarantees, NCSC must pay a guarantee fee. | |||||||||||||||||
RTFC and NCSC creditors have no recourse against CFC in the event of a default by RTFC and NCSC, unless there is a guarantee agreement under which CFC has guaranteed NCSC or RTFC debt obligations to a third party. As of November 30, 2014, CFC had guaranteed $91 million of NCSC debt, derivative instruments and guarantees with third parties, and CFC’s maximum potential exposure for these instruments totaled $97 million. The maturities for NCSC obligations guaranteed by CFC extend through 2031. Guarantees of NCSC debt and derivative instruments are not included in Note 10, Guarantees, as the debt and derivatives are reported on the condensed consolidated balance sheets. As of November 30, 2014, CFC guaranteed $2 million of RTFC guarantees with third parties. The maturities for RTFC obligations guaranteed by CFC extend through 2015 and are renewed on an annual basis. All CFC loans to RTFC and NCSC are secured by all assets and revenue of RTFC and NCSC, respectively. As of November 30, 2014, RTFC had total assets of $546 million including loans outstanding to members of $429 million, and NCSC had total assets of $690 million including loans outstanding of $669 million. As of November 30, 2014, CFC had committed to lend RTFC up to $4,000 million, of which $413 million was outstanding. As of November 30, 2014, CFC had committed to provide up to $3,000 million of credit to NCSC, of which $743 million was outstanding, representing $652 million of outstanding loans and $91 million of credit enhancements. | |||||||||||||||||
Interest Income | |||||||||||||||||
Interest income on loans is recognized using the effective interest method. The following table presents the components of interest income for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest on long-term fixed-rate loans | $ | 219,119 | $ | 221,952 | $ | 438,535 | $ | 446,535 | |||||||||
Interest on long-term variable-rate loans | 4,902 | 4,826 | 10,262 | 9,654 | |||||||||||||
Interest on line of credit loans | 6,687 | 7,505 | 13,629 | 15,077 | |||||||||||||
Interest on restructured loans | 10 | — | 10 | 136 | |||||||||||||
Interest on investments | 1,549 | 1,817 | 4,121 | 3,753 | |||||||||||||
Fee income(1) | 2,968 | 3,154 | 5,969 | 5,170 | |||||||||||||
Total interest income | $ | 235,235 | $ | 239,254 | $ | 472,526 | $ | 480,325 | |||||||||
____________________________ | |||||||||||||||||
(1) Primarily related to conversion fees, which are deferred and recognized in interest income over the original loan interest rate pricing term using the effective interest method. Also includes a small portion of conversion fees that are intended to cover the administrative costs related to the conversion, which are recognized immediately. | |||||||||||||||||
Deferred income on the condensed consolidated balance sheets primarily includes deferred conversion fees totaling $74 million and $73 million as of November 30, 2014 and May 31, 2014, respectively. | |||||||||||||||||
Interest Expense | |||||||||||||||||
The following table presents the components of interest expense for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest expense on debt:(1) | |||||||||||||||||
Short-term debt | $ | 1,432 | $ | 1,607 | $ | 2,706 | $ | 3,039 | |||||||||
Medium-term notes | 17,022 | 20,980 | 33,741 | 42,551 | |||||||||||||
Collateral trust bonds | 75,219 | 74,858 | 149,986 | 151,656 | |||||||||||||
Subordinated deferrable debt | 4,750 | 4,750 | 9,500 | 9,500 | |||||||||||||
Subordinated certificates | 16,116 | 20,494 | 32,896 | 41,120 | |||||||||||||
Long-term notes payable | 36,823 | 38,759 | 75,257 | 76,698 | |||||||||||||
Debt issuance costs(2) | 1,932 | 1,782 | 3,725 | 3,647 | |||||||||||||
Fee expense(3) | 4,981 | 2,115 | 7,016 | 4,719 | |||||||||||||
Total interest expense | $ | 158,275 | $ | 165,345 | $ | 314,827 | $ | 332,930 | |||||||||
____________________________ | |||||||||||||||||
(1) Represents interest expense and the amortization of discounts on debt. | |||||||||||||||||
(2) Primarily consists of underwriter’s fees, legal fees, printing costs and certain accounting fees, which are deferred and recognized in interest expense using the effective interest method. Also includes issuance costs related to dealer commercial paper, which are recognized immediately as incurred. | |||||||||||||||||
(3) Reflects various fees related to funding activities, including fees paid to banks participating in our revolving credit agreements. Amounts are recognized as incurred or amortized on a straight-line basis over the life of the agreement. | |||||||||||||||||
We exclude indirect costs, if any, related to funding activities from interest expense. | |||||||||||||||||
Recently Issued but Not Yet Adopted Accounting Standards | |||||||||||||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue from contracts with customers. The new accounting guidance, which does not apply to financial instruments, is effective for us beginning in the first quarter of fiscal year 2018. We do not expect the new guidance to have a material impact on our financial condition, results of operations or liquidity, as CFC’s primary business and source of revenue is from lending. |
Investment_Securities
Investment Securities | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Investments [Abstract] | |||||||||||||||||
Investment Securities | |||||||||||||||||
NOTE 2—INVESTMENT SECURITIES | |||||||||||||||||
Our investment portfolio consists of preferred stock and common stock of Federal Agricultural Mortgage Corporation (“Farmer Mac”). These investments were classified as available for sale as of November 30, 2014 and May 31, 2014, and therefore recorded on our condensed consolidated balance sheets at fair value with any unrealized gains and losses recorded as a component of accumulated other comprehensive income. | |||||||||||||||||
The following tables present the amortized cost, gross unrealized gains and losses and fair value of our available-for-sale investment securities as of November 30, 2014 and May 31, 2014. | |||||||||||||||||
30-Nov-14 | |||||||||||||||||
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Farmer Mac—Series A Non-Cumulative Preferred Stock | $ | 30,000 | $ | — | $ | — | $ | 30,000 | |||||||||
Farmer Mac—Series B Non-Cumulative Preferred Stock | 25,000 | 1,300 | — | 26,300 | |||||||||||||
Farmer Mac—Series C Non-Cumulative Preferred Stock | 25,000 | 584 | — | 25,584 | |||||||||||||
Farmer Mac—Class A Common Stock | 538 | 1,357 | — | 1,895 | |||||||||||||
Total available-for-sale investment securities | $ | 80,538 | $ | 3,241 | $ | — | $ | 83,779 | |||||||||
31-May-14 | |||||||||||||||||
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Farmer Mac—Series A Non-Cumulative Preferred Stock | $ | 30,000 | $ | — | $ | (2,220 | ) | $ | 27,780 | ||||||||
Farmer Mac—Series B Non-Cumulative Preferred Stock | 25,000 | 500 | — | 25,500 | |||||||||||||
Farmer Mac—Class A Common Stock | 538 | 1,359 | — | 1,897 | |||||||||||||
Total available-for-sale securities | $ | 55,538 | $ | 1,859 | $ | (2,220 | ) | $ | 55,177 | ||||||||
We did not have any investment securities in an unrealized loss position as of November 30, 2014. The gross unrealized loss on our Farmer Mac—Series A Non-Cumulative Preferred Stock of $2 million as of May 31, 2014 was largely attributable to changes in interest rates. We do not intend to sell our investment securities in the foreseeable future and therefore expect to recover any declines in fair value resulting from changes in interest rates. |
Loans_and_Commitments
Loans and Commitments | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||
Loans and Commitments | |||||||||||||||||||||||||
NOTE 3—LOANS AND COMMITMENTS | |||||||||||||||||||||||||
The outstanding principal balance of loans to members, unadvanced commitments and deferred loan origination costs, by loan type and member class, as of November 30, 2014 and May 31, 2014 are presented below. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Loans | Unadvanced | Loans | Unadvanced | |||||||||||||||||||||
Outstanding | Commitments (1) | Outstanding | Commitments (1) | ||||||||||||||||||||||
Loan type: (2) | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 18,712,604 | $ | — | $ | 18,175,656 | $ | — | |||||||||||||||||
Long-term variable-rate loans | 689,878 | 4,484,225 | 753,918 | 4,710,273 | |||||||||||||||||||||
Loans guaranteed by RUS | 181,986 | — | 201,863 | — | |||||||||||||||||||||
Line of credit loans | 1,188,812 | 9,378,303 | 1,335,488 | 9,201,805 | |||||||||||||||||||||
Total loans outstanding (3) | 20,773,280 | 13,862,528 | 20,466,925 | 13,912,078 | |||||||||||||||||||||
Deferred loan origination costs | 9,706 | — | 9,717 | — | |||||||||||||||||||||
Loans to members | $ | 20,782,986 | $ | 13,862,528 | $ | 20,476,642 | $ | 13,912,078 | |||||||||||||||||
Member class:(2) | |||||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,386,626 | $ | 9,350,749 | $ | 15,035,365 | $ | 9,531,315 | |||||||||||||||||
Power supply | 4,224,787 | 3,051,250 | 4,086,163 | 3,025,423 | |||||||||||||||||||||
Statewide and associate | 63,740 | 128,989 | 67,902 | 105,961 | |||||||||||||||||||||
CFC total | 19,675,153 | 12,530,988 | 19,189,430 | 12,662,699 | |||||||||||||||||||||
RTFC | 428,648 | 290,284 | 449,546 | 304,500 | |||||||||||||||||||||
NCSC | 669,479 | 1,041,256 | 827,949 | 944,879 | |||||||||||||||||||||
Total loans outstanding | $ | 20,773,280 | $ | 13,862,528 | $ | 20,466,925 | $ | 13,912,078 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. | |||||||||||||||||||||||||
(2) Includes nonperforming and restructured loans. | |||||||||||||||||||||||||
(3) Represents the unpaid principal balance excluding deferred loan origination costs. | |||||||||||||||||||||||||
Unadvanced Loan Commitments | |||||||||||||||||||||||||
A total of $2,591 million and $2,274 million of unadvanced commitments as of November 30, 2014 and May 31, 2014, respectively, represented unadvanced commitments related to committed lines of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we will be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the facility. | |||||||||||||||||||||||||
The following table summarizes the available balance under committed lines of credit as of November 30, 2014 and the related maturities by fiscal year and thereafter as follows: | |||||||||||||||||||||||||
Available | Notional Maturities of Unconditional Committed Lines of Credit | ||||||||||||||||||||||||
(Dollars in thousands) | Balance | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Committed lines of credit | $2,591,131 | $ | 17,885 | $61,000 | $424,723 | $792,305 | $1,119,618 | $175,600 | |||||||||||||||||
The remaining unadvanced commitments totaling $11,272 million and $11,638 million as of November 30, 2014 and May 31, 2014, respectively, were generally subject to material adverse change clauses. Prior to making an advance on these facilities, we confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. In some cases, the borrower’s access to the full amount of the facility is further constrained by the designated purpose, imposition of borrower-specific restrictions or by additional conditions that must be met prior to advancing funds. | |||||||||||||||||||||||||
Unadvanced commitments related to line of credit loans are typically for periods not to exceed five years and are generally revolving facilities used for working capital and backup liquidity purposes. Historically, we have experienced a very low utilization rate on line of credit loan facilities, whether or not there is a material adverse change clause. Since we generally do not charge a fee on the unadvanced portion of the majority of our loan facilities, our borrowers will typically request long-term facilities to cover maintenance and capital expenditure work plans for periods of up to five years and draw down on the facility over that time. In addition, borrowers will typically request an amount in excess of their immediate estimated loan requirements to avoid the expense related to seeking additional loan funding for unexpected items. These factors contribute to our expectation that the majority of the unadvanced commitments will expire without being fully drawn upon and that the total unadvanced amount does not necessarily represent future cash funding requirements. | |||||||||||||||||||||||||
Loan Sales | |||||||||||||||||||||||||
We account for the transfer of loans resulting from direct loan sales to third parties and securitization transactions by removing the loans from our condensed consolidated balance sheets when control has been surrendered. We retain the servicing performance obligations on these loans and recognize related servicing fees on an accrual basis over the period for which servicing activity is provided. Deferred transaction costs and unamortized deferred loan origination costs related to the loans sold are included in determining the gain or loss on the sale. We do not hold any continuing interest in the loans sold to date other than servicing performance obligations. We have no obligation to repurchase loans from the purchaser, except in the case of breaches of representations and warranties. | |||||||||||||||||||||||||
During the six months ended November 30, 2014 and 2013, we sold CFC loans with outstanding balances totaling $14 million and $37 million, respectively, at par for cash. | |||||||||||||||||||||||||
Payment Status of Loans | |||||||||||||||||||||||||
The tables below show an analysis of the age of the recorded investment in loans outstanding by member class as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Current | 30-89 Days Past Due | 90 Days or More | Total | Total Financing | Nonaccrual Loans | |||||||||||||||||||
Past Due (1) | Past Due | Receivables | |||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,386,626 | $ | — | $ | — | $ | — | $ | 15,386,626 | $ | 7,221 | |||||||||||||
Power supply | 4,224,787 | — | — | — | 4,224,787 | — | |||||||||||||||||||
Statewide and associate | 63,740 | — | — | — | 63,740 | — | |||||||||||||||||||
CFC total | 19,675,153 | — | — | — | 19,675,153 | 7,221 | |||||||||||||||||||
RTFC | 428,455 | 98 | 95 | 193 | 428,648 | 1,695 | |||||||||||||||||||
NCSC | 669,479 | — | — | — | 669,479 | 321 | |||||||||||||||||||
Total loans outstanding | $ | 20,773,087 | $ | 98 | $ | 95 | $ | 193 | $ | 20,773,280 | $ | 9,237 | |||||||||||||
As a % of total loans | 100 | % | — | % | — | % | — | % | 100 | % | 0.05 | % | |||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Current | 30-89 Days Past Due | 90 Days or More | Total | Total Financing | Nonaccrual Loans | |||||||||||||||||||
Past Due (1) | Past Due | Receivables | |||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,035,365 | $ | — | $ | — | $ | — | $ | 15,035,365 | $ | 7,584 | |||||||||||||
Power supply | 4,086,163 | — | — | — | 4,086,163 | — | |||||||||||||||||||
Statewide and associate | 67,902 | — | — | — | 67,902 | — | |||||||||||||||||||
CFC total | 19,189,430 | — | — | — | 19,189,430 | 7,584 | |||||||||||||||||||
RTFC | 449,546 | — | — | — | 449,546 | 1,695 | |||||||||||||||||||
NCSC | 827,949 | — | — | — | 827,949 | 400 | |||||||||||||||||||
Total loans outstanding | $ | 20,466,925 | $ | — | $ | — | $ | — | $ | 20,466,925 | $ | 9,679 | |||||||||||||
As a % of total loans | 100 | % | — | % | — | % | — | % | 100 | % | 0.05 | % | |||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) All loans 90 days or more past due are on nonaccrual status. | |||||||||||||||||||||||||
Credit Quality | |||||||||||||||||||||||||
We monitor the credit quality and performance statistics of our financing receivables in an ongoing manner to provide a balance between the credit needs of our members and the requirements for sound credit quality of the loan portfolio. We evaluate the credit quality of our loans using an internal risk rating system that employs similar criteria for all member classes. | |||||||||||||||||||||||||
Our internal risk rating system is based on a determination of a borrower’s risk of default utilizing both quantitative and qualitative measurements. | |||||||||||||||||||||||||
We have grouped our risk ratings into the categories of pass and criticized based on the criteria below. | |||||||||||||||||||||||||
(i) Pass: Borrowers that are not experiencing difficulty and/or not showing a potential or well-defined credit weakness. | |||||||||||||||||||||||||
(ii) Criticized: Includes borrowers categorized as special mention, substandard and doubtful as described below: | |||||||||||||||||||||||||
• | Special mention: Borrowers that may be characterized by a potential credit weakness or deteriorating financial condition that is not sufficiently serious to warrant a classification of substandard or doubtful. | ||||||||||||||||||||||||
• | Substandard: Borrowers that display a well-defined credit weakness that may jeopardize the full collection of principal and interest. | ||||||||||||||||||||||||
• | Doubtful: Borrowers that have a well-defined weakness and the full collection of principal and interest is questionable or improbable. | ||||||||||||||||||||||||
Borrowers included in the pass, special mention, and substandard categories are generally reflected in the general portfolio of loans. Borrowers included in the doubtful category are reflected in the impaired portfolio of loans. Each risk rating is reassessed annually based on the receipt of the borrower’s audited financial statements; however, interim downgrades and upgrades may take place at any time as significant events or trends occur. | |||||||||||||||||||||||||
The following table presents our loan portfolio by risk rating category and member class based on available data as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Pass | Criticized | Total | Pass | Criticized | Total | |||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,357,810 | $ | 28,816 | $ | 15,386,626 | $ | 15,018,642 | $ | 16,723 | $ | 15,035,365 | |||||||||||||
Power supply | 4,224,787 | — | 4,224,787 | 4,086,163 | — | 4,086,163 | |||||||||||||||||||
Statewide and associate | 63,468 | 272 | 63,740 | 67,625 | 277 | 67,902 | |||||||||||||||||||
CFC total | 19,646,065 | 29,088 | 19,675,153 | 19,172,430 | 17,000 | 19,189,430 | |||||||||||||||||||
RTFC | 426,953 | 1,695 | 428,648 | 447,851 | 1,695 | 449,546 | |||||||||||||||||||
NCSC | 667,439 | 2,040 | 669,479 | 825,736 | 2,213 | 827,949 | |||||||||||||||||||
Total loans outstanding | $ | 20,740,457 | $ | 32,823 | $ | 20,773,280 | $ | 20,446,017 | $ | 20,908 | $ | 20,466,925 | |||||||||||||
Loan Security | |||||||||||||||||||||||||
Except when providing line of credit loans, we typically lend to our members on a senior secured basis. Long-term loans are typically secured on parity with other secured lenders (primarily RUS), if any, by all assets and revenue of the borrower with exceptions typical in utility mortgages. Line of credit loans are generally unsecured. In addition to the lien and security interest we receive under the mortgage, our member borrowers are also required to achieve certain financial ratios as required by loan covenants. | |||||||||||||||||||||||||
The following tables summarize our secured and unsecured loans outstanding by loan type and by company as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Secured | % | Unsecured | % | Total | ||||||||||||||||||||
Loan type: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 17,725,009 | 95 | % | $ | 987,595 | 5 | % | $ | 18,712,604 | |||||||||||||||
Long-term variable-rate loans | 598,981 | 87 | 90,897 | 13 | 689,878 | ||||||||||||||||||||
Loans guaranteed by RUS | 181,986 | 100 | — | — | 181,986 | ||||||||||||||||||||
Line of credit loans | 203,346 | 17 | 985,466 | 83 | 1,188,812 | ||||||||||||||||||||
Total loans outstanding | $ | 18,709,322 | 90 | $ | 2,063,958 | 10 | $ | 20,773,280 | |||||||||||||||||
Company: | |||||||||||||||||||||||||
CFC | $ | 17,838,337 | 91 | % | $ | 1,836,816 | 9 | % | $ | 19,675,153 | |||||||||||||||
RTFC | 411,169 | 96 | 17,479 | 4 | 428,648 | ||||||||||||||||||||
NCSC | 459,816 | 69 | 209,663 | 31 | 669,479 | ||||||||||||||||||||
Total loans outstanding | $ | 18,709,322 | 90 | $ | 2,063,958 | 10 | $ | 20,773,280 | |||||||||||||||||
31-May-14 | |||||||||||||||||||||||||
(Dollars in thousands) | Secured | % | Unsecured | % | Total | ||||||||||||||||||||
Loan type: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 17,185,456 | 95 | % | $ | 990,200 | 5 | % | $ | 18,175,656 | |||||||||||||||
Long-term variable-rate loans | 650,211 | 86 | 103,707 | 14 | 753,918 | ||||||||||||||||||||
Loans guaranteed by RUS | 201,863 | 100 | — | — | 201,863 | ||||||||||||||||||||
Line of credit loans | 311,103 | 23 | 1,024,385 | 77 | 1,335,488 | ||||||||||||||||||||
Total loans outstanding | $ | 18,348,633 | 90 | $ | 2,118,292 | 10 | $ | 20,466,925 | |||||||||||||||||
Company: | |||||||||||||||||||||||||
CFC | $ | 17,313,990 | 90 | % | $ | 1,875,440 | 10 | % | $ | 19,189,430 | |||||||||||||||
RTFC | 429,626 | 96 | 19,920 | 4 | 449,546 | ||||||||||||||||||||
NCSC | 605,017 | 73 | 222,932 | 27 | 827,949 | ||||||||||||||||||||
Total loans outstanding | $ | 18,348,633 | 90 | $ | 2,118,292 | 10 | $ | 20,466,925 | |||||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||||||||
We maintain an allowance for loan losses at a level estimated by management to provide for probable losses inherent in the loan portfolio as of each balance sheet date. The tables below summarize changes, by company, in the allowance for loan losses as of and for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of August 31, 2014 | $ | 40,461 | $ | 4,288 | $ | 4,962 | $ | 49,711 | |||||||||||||||||
Provision for loan losses | 670 | 739 | (417 | ) | 992 | ||||||||||||||||||||
Recoveries | 54 | — | — | 54 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of August 31, 2013 | $ | 43,336 | $ | 8,497 | $ | 3,823 | $ | 55,656 | |||||||||||||||||
Provision for loan losses | (627 | ) | 968 | 755 | 1,096 | ||||||||||||||||||||
Charge-offs | — | (1,606 | ) | — | (1,606 | ) | |||||||||||||||||||
Recoveries | 53 | — | — | 53 | |||||||||||||||||||||
Balance as of November 30, 2013 | $ | 42,762 | $ | 7,859 | $ | 4,578 | $ | 55,199 | |||||||||||||||||
Six Months Ended November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of May 31, 2014 | $ | 45,600 | $ | 4,282 | $ | 6,547 | $ | 56,429 | |||||||||||||||||
Provision for loan losses | (4,522 | ) | 745 | (2,002 | ) | (5,779 | ) | ||||||||||||||||||
Recoveries | 107 | — | — | 107 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Six Months Ended November 30, 2013 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of May 31, 2013 | $ | 41,246 | $ | 9,158 | $ | 3,921 | $ | 54,325 | |||||||||||||||||
Provision for loan losses | 1,410 | 307 | 657 | 2,374 | |||||||||||||||||||||
Charge-offs | — | (1,606 | ) | — | (1,606 | ) | |||||||||||||||||||
Recoveries | 106 | — | — | 106 | |||||||||||||||||||||
Balance as of November 30, 2013 | $ | 42,762 | $ | 7,859 | $ | 4,578 | $ | 55,199 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The allowance for loan losses recorded for RTFC and NCSC are held at CFC. | |||||||||||||||||||||||||
Our allowance for loan losses consists of a specific allowance for loans individually evaluated for impairment and a general allowance for loans collectively evaluated for impairment. The tables below present, by company, the components of our allowance for loan losses and the recorded investment of the related loans as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC | NCSC | Total | |||||||||||||||||||||
Ending balance of the allowance: | |||||||||||||||||||||||||
Collectively evaluated | $ | 41,185 | $ | 3,671 | $ | 4,385 | $ | 49,241 | |||||||||||||||||
Individually evaluated | — | 1,356 | 160 | 1,516 | |||||||||||||||||||||
Total ending balance of the allowance | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Recorded investment in loans: | |||||||||||||||||||||||||
Collectively evaluated | $ | 19,667,932 | $ | 426,953 | $ | 669,158 | $ | 20,764,043 | |||||||||||||||||
Individually evaluated | 7,221 | 1,695 | 321 | 9,237 | |||||||||||||||||||||
Total recorded investment in loans | $ | 19,675,153 | $ | 428,648 | $ | 669,479 | $ | 20,773,280 | |||||||||||||||||
Loans to members, net (1) | $ | 19,633,968 | $ | 423,621 | $ | 664,934 | $ | 20,722,523 | |||||||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC | NCSC | Total | |||||||||||||||||||||
Ending balance of the allowance: | |||||||||||||||||||||||||
Collectively evaluated | $ | 45,600 | $ | 3,876 | $ | 6,527 | $ | 56,003 | |||||||||||||||||
Individually evaluated | — | 406 | 20 | 426 | |||||||||||||||||||||
Total ending balance of the allowance | $ | 45,600 | $ | 4,282 | $ | 6,547 | $ | 56,429 | |||||||||||||||||
Recorded investment in loans: | |||||||||||||||||||||||||
Collectively evaluated | $ | 19,181,846 | $ | 447,851 | $ | 827,549 | $ | 20,457,246 | |||||||||||||||||
Individually evaluated | 7,584 | 1,695 | 400 | 9,679 | |||||||||||||||||||||
Total recorded investment in loans | $ | 19,189,430 | $ | 449,546 | $ | 827,949 | $ | 20,466,925 | |||||||||||||||||
Loans to members, net(1) | $ | 19,143,830 | $ | 445,264 | $ | 821,402 | $ | 20,410,496 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) Excludes deferred origination costs of $10 million as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
Impaired Loans | |||||||||||||||||||||||||
Our recorded investment in individually-impaired loans, which consists of the unpaid principal balance, and the related specific valuation allowance, by member class, as of November 30, 2014 and May 31, 2014 are summarized below. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Recorded | Related | Recorded | Related | |||||||||||||||||||||
Investment | Allowance | Investment | Allowance | ||||||||||||||||||||||
With no specific allowance recorded: | |||||||||||||||||||||||||
CFC/Distribution | $ | 7,221 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
With a specific allowance recorded: | |||||||||||||||||||||||||
NCSC | 321 | 160 | 400 | 20 | |||||||||||||||||||||
RTFC | 1,695 | 1,356 | 1,695 | 406 | |||||||||||||||||||||
Total | 2,016 | 1,516 | 2,095 | 426 | |||||||||||||||||||||
Total impaired loans | $ | 9,237 | $ | 1,516 | $ | 9,679 | $ | 426 | |||||||||||||||||
The table below represents the average recorded investment in impaired loans and the interest income recognized, by member class, for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||
CFC/Distribution | $ | 7,221 | $ | 7,584 | $ | — | $ | — | |||||||||||||||||
CFC/Power Supply | — | 5,000 | — | — | |||||||||||||||||||||
NCSC | 325 | — | 10 | — | |||||||||||||||||||||
RTFC | 1,695 | 7,295 | — | — | |||||||||||||||||||||
Total impaired loans | $ | 9,241 | $ | 19,879 | $ | 10 | $ | — | |||||||||||||||||
Six Months Ended November 30, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||
CFC/Distribution | $ | 7,403 | $ | 14,116 | $ | — | $ | 136 | |||||||||||||||||
CFC/Power Supply | — | 5,000 | — | — | |||||||||||||||||||||
NCSC | 344 | — | 10 | — | |||||||||||||||||||||
RTFC | 1,695 | 8,838 | — | — | |||||||||||||||||||||
Total impaired loans | $ | 9,442 | $ | 27,954 | $ | 10 | $ | 136 | |||||||||||||||||
Nonperforming and Restructured Loans | |||||||||||||||||||||||||
Nonperforming and restructured loans outstanding and unadvanced commitments to members are summarized as follows by loan type and by company as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Loans | Unadvanced | Loans | Unadvanced | |||||||||||||||||||||
Outstanding | Commitments(1) | Outstanding | Commitments(1) | ||||||||||||||||||||||
Nonperforming and restructured loans: | |||||||||||||||||||||||||
Nonperforming loans: | |||||||||||||||||||||||||
RTFC: | |||||||||||||||||||||||||
Long-term variable-rate loans | $ | 1,695 | $ | — | $ | 1,695 | $ | — | |||||||||||||||||
NCSC: | |||||||||||||||||||||||||
Line of credit loans | — | — | 400 | — | |||||||||||||||||||||
Total nonperforming loans | $ | 1,695 | $ | — | $ | 2,095 | $ | — | |||||||||||||||||
Restructured loans: | |||||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 7,221 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
NCSC: | |||||||||||||||||||||||||
Line of credit loans | 321 | — | — | — | |||||||||||||||||||||
Total restructured loans | $ | 7,542 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. | |||||||||||||||||||||||||
The following table shows foregone interest income as a result of holding loans on nonaccrual status for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Nonperforming loans | $ | 25 | $ | 142 | $ | 51 | $ | 321 | |||||||||||||||||
Restructured loans | 127 | 122 | 264 | 244 | |||||||||||||||||||||
Total | $ | 152 | $ | 264 | $ | 315 | $ | 565 | |||||||||||||||||
As of November 30, 2014 and May 31, 2014, nonperforming loans totaled $2 million, or 0.01%, of loans outstanding. One borrower in this group is currently seeking a buyer for its system, as it is not anticipated that it will have sufficient cash flow to repay its loans without the proceeds from the sale of the business. We currently anticipate that even with the sale of the business, there will not be sufficient funds to repay the full amount owed to us. We have approval rights with respect to the sale of this company. | |||||||||||||||||||||||||
As of November 30, 2014 and May 31, 2014, we had restructured loans totaling $8 million, or 0.04%, of loans outstanding, all of which were performing according to their restructured terms. Interest income recognized on restructured loans was less than $1 million during the three and six months ended November 30, 2014, and also less than $1 million during the same prior-year periods. | |||||||||||||||||||||||||
We believe our allowance for loan losses was appropriate to cover the losses inherent in our loan portfolio as of November 30, 2014. | |||||||||||||||||||||||||
Pledging of Loans and Loans on Deposit | |||||||||||||||||||||||||
We are required to pledge eligible mortgage notes in an amount at least equal to the outstanding balance of our secured debt. | |||||||||||||||||||||||||
The following table summarizes our loans outstanding as collateral pledged to secure our collateral trust bonds, Clean Renewable Energy Bonds and notes payable to Farmer Mac and the amount of the corresponding debt outstanding (see “Note 5—Short-Term Debt and Credit Arrangements” and “Note 6—Long-Term Debt”) as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||||||
Collateral trust bonds: | |||||||||||||||||||||||||
2007 indenture: | |||||||||||||||||||||||||
Distribution system mortgage notes | $ | 6,144,439 | $ | 5,987,767 | |||||||||||||||||||||
RUS guaranteed loans qualifying as permitted investments | 159,051 | 161,372 | |||||||||||||||||||||||
Total pledged collateral | $ | 6,303,490 | $ | 6,149,139 | |||||||||||||||||||||
Collateral trust bonds outstanding | 5,697,711 | 5,397,711 | |||||||||||||||||||||||
1994 indenture: | |||||||||||||||||||||||||
Distribution system mortgage notes | $ | 967,604 | $ | 1,005,058 | |||||||||||||||||||||
Collateral trust bonds outstanding | 855,000 | 860,000 | |||||||||||||||||||||||
Farmer Mac: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes | $ | 1,853,003 | $ | 1,907,607 | |||||||||||||||||||||
Notes payable outstanding | 1,527,643 | 1,667,505 | |||||||||||||||||||||||
Clean Renewable Energy Bonds Series 2009A: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes | $ | 20,329 | $ | 21,398 | |||||||||||||||||||||
Cash | 1,098 | 520 | |||||||||||||||||||||||
Total pledged collateral | $ | 21,427 | $ | 21,918 | |||||||||||||||||||||
Notes payable outstanding | 18,230 | 18,230 | |||||||||||||||||||||||
We are required to maintain collateral on deposit in an amount at least equal to the balance of debt outstanding to the Federal Financing Bank of the United States Treasury issued under the Guaranteed Underwriter Program of the USDA (the “Guaranteed Underwriter Program”). See “Note 5—Short-Term Debt and Credit Arrangements” and “Note 6—Long-Term Debt.” | |||||||||||||||||||||||||
The following table shows the collateral on deposit and the amount of the corresponding debt outstanding as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||||||
Federal Financing Bank: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes on deposit | $ | 4,876,247 | $ | 5,076,428 | |||||||||||||||||||||
Notes payable outstanding | 4,291,500 | 4,299,000 | |||||||||||||||||||||||
Foreclosed_Assets
Foreclosed Assets | 6 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
Repossessed Assets [Abstract] | |||||||||||||
Foreclosed Assets | |||||||||||||
NOTE 4—FORECLOSED ASSETS | |||||||||||||
Assets received in satisfaction of loan receivables are initially recorded at fair value less estimated costs to sell when received and are subsequently periodically evaluated for impairment. These assets are reported on our condensed consolidated balance sheets as foreclosed assets. Our foreclosed assets are held through CAH and DRP, which are wholly-owned subsidiaries of CFC. | |||||||||||||
Foreclosed Asset Activity | |||||||||||||
Foreclosed asset activity as of and for the six months ended November 30, 2014 is summarized below. | |||||||||||||
Six Months Ended November 30, 2014 | |||||||||||||
(Dollars in thousands) | CAH | DRP | Total | ||||||||||
Balance as of beginning of period | $ | 239,119 | $ | 6,532 | $ | 245,651 | |||||||
Results of operations | (4,438 | ) | (249 | ) | (4,687 | ) | |||||||
Impairment | (27,003 | ) | — | (27,003 | ) | ||||||||
Results of operations of foreclosed assets | (31,441 | ) | (249 | ) | (31,690 | ) | |||||||
Net cash investments | 2,246 | (3,000 | ) | (754 | ) | ||||||||
Balance as of end of period | $ | 209,924 | $ | 3,283 | $ | 213,207 | |||||||
CAH | |||||||||||||
We recorded an initial investment in CAH of $254 million upon the completion of transfer of control of the U.S. Virgin Islands, British Virgin Islands and St. Maarten-based operating businesses of Innovative Communication Corporation (“ICC”) to CAH in October 2010 and March 2011. | |||||||||||||
Our strategic plan since the transfer of the foreclosed assets of ICC to CAH has been to upgrade and sell the operating businesses of CAH. Since acquisition, we have made additional investments in CAH for capital expenditures to upgrade and modernize the hardware, software and network infrastructure of the existing operations in order to retain existing subscribers and attract new subscribers. Our carrying value of CAH was $239 million as of May 31, 2014, consisting of the initial recorded investment of $254 million, our subsequent net investments of $75 million, cumulative operating losses of $44 million and cumulative non-cash impairment charges of $46 million, including $1 million in fiscal year 2014 and $45 million in fiscal year 2012. | |||||||||||||
CAH continues to work on its planned technology and infrastructure upgrades and its marketing of the enhanced services that will be available to CAH’s customer base following the completion of the upgrades. However, during the quarter ending November 30, 2014, CAH encountered issues with certain elements of the construction of the new network and service delivery technology, which required remediation and delayed the acceptance testing of network upgrades and product enhancements. CAH has experienced less than expected subscriber growth, revenue growth and lower than anticipated customer migration rates to the new network and internet services. In addition, the economic recovery in the area has lagged improvements in the overall U.S. recovery and is slower than previously expected. After taking these multiple factors into consideration, we concluded that a triggering event had occurred requiring us to conduct an interim impairment test to evaluate certain CAH tangible and intangible assets for impairment and assess whether the estimated fair value of CAH was less than our carrying value. As a result of the aforementioned events, CAH cash flow forecasts utilized in the interim impairment test were lowered to reflect reduced revenues. To assess goodwill impairment, we estimated the fair value of CAH based on a market approach and an income approach (discounted cash flow method), both of which require significant judgment. In applying these approaches, we relied on a number of factors, including actual operating results, an updated cash flow forecast based on the developments during the quarter and future business plans, revised economic projections and market data. We also considered recent transaction activity and market multiples for the telecommunications industry. | |||||||||||||
Based on the above analysis, we recognized impairment on certain identifiable intangible assets and goodwill of $27 million. The impairment charge is included in our condensed consolidated statements of operations as a component of results of operations of foreclosed assets. The decrease in CAH’s carrying value to $210 million as of November 30, 2014, from $239 million as of May 31, 2014 was attributable to the impairment charge recorded in the current quarter and the operating losses of $4 million recorded during the six months ended November 30, 2014. The impairment charge contributed to a decrease in CAH’s total assets, which consisted primarily of property, plant and equipment and goodwill and other intangible assets, to $267 million as of November 30, 2014, from $295 million as of May 31, 2014. CAH had total liabilities of $242 million and $236 million as of November 30, 2014 and May 31, 2014, respectively, and net equity of $25 million and $59 million, respectively. CAH's total liabilities included loans and interest payable to CFC, which are eliminated in consolidation, of $185 million and $180 million as of November 30, 2014 and May 31, 2014, respectively. | |||||||||||||
CAH is nearing the completion of its program to update its network infrastructure. CAH is actively transitioning customers to the new infrastructure and marketing the enhanced services to current and new customers. Our intent is to sell CAH; however, it is difficult to predict the level of interest from potential buyers and we can provide no certainty as to whether or when a disposition transaction will be completed or the amount of any sales proceeds that may be realized from such a transaction. It is also uncertain as to whether we will be able to sell all of the CAH operating businesses in a single transaction, or if the businesses will be sold to multiple buyers. | |||||||||||||
DRP | |||||||||||||
DRP had losses from the results of operations of less than $1 million for the six months ended November 30, 2014 and 2013. Our carrying value of DRP decreased to $3 million as of November 30, 2014, from $7 million as of May 31, 2014. The decrease was due to the sale of DRP’s interest in bond reimbursement receivables for which we received proceeds of approximately $2 million. We have entered into a contract to sell DRP’s remaining interest in real estate properties. We expect the sale, which would dispose of our DRP holdings, to be completed by March 2015. |
ShortTerm_Debt_and_Credit_Arra
Short-Term Debt and Credit Arrangements | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||
Short-Term Debt and Credit Arrangements | |||||||||||||||||||||
NOTE 5—SHORT-TERM DEBT AND CREDIT ARRANGEMENTS | |||||||||||||||||||||
The following is a summary of short-term debt outstanding as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||
Short-term debt: | |||||||||||||||||||||
Commercial paper sold through dealers, net of discounts (1) | $ | 2,040,851 | $ | 1,973,557 | |||||||||||||||||
Commercial paper sold directly to members, at par (1) | 720,176 | 838,074 | |||||||||||||||||||
Commercial paper sold directly to non-members, at par (1) | 21,371 | 20,315 | |||||||||||||||||||
Select notes | 634,851 | 548,610 | |||||||||||||||||||
Daily liquidity fund notes | 586,592 | 486,501 | |||||||||||||||||||
Bank bid notes | — | 20,000 | |||||||||||||||||||
Medium-term notes sold to members | 218,563 | 212,274 | |||||||||||||||||||
Total short-term debt | $ | 4,222,404 | $ | 4,099,331 | |||||||||||||||||
____________________________ | |||||||||||||||||||||
(1) Backup liquidity is provided by our revolving credit agreements. | |||||||||||||||||||||
As indicated in “Note 1—Summary of Significant Accounting Policies,” effective August 31, 2014, we began classifying debt as either short-term or long-term based on the original contractual maturity at issuance. For reporting periods prior to August 31, 2014, we reported long-term debt maturing within one year as part of our short-term debt. The amount reclassified from short-term debt to long-term debt as of May 31, 2014 was $1,300 million. | |||||||||||||||||||||
Revolving Credit Agreements | |||||||||||||||||||||
As of November 30, 2014 and May 31, 2014, we had $3,420 million and $3,226 million, respectively, of commitments under revolving credit agreements. We had the ability to request up to $150 million of letters of credit under each agreement in place as of November 30, 2014, which would then reduce the amount available under the facility. The following table presents the total available and the outstanding letters of credit under our revolving credit agreements as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||
Total Available | Letters of Credit Outstanding | ||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | November 30, 2014 | May 31, 2014 | Maturity | Annual Facility Fee (1) | |||||||||||||||
Three-year agreement | $ | 1,720,000 | $ | — | $ | — | $ | — | October 28, 2017 | 7.5 basis points | |||||||||||
Five-year agreement | 1,698,109 | — | 1,891 | — | October 28, 2019 | 10 basis points | |||||||||||||||
Three-year agreement | — | 1,036,000 | — | — | October 28, 2016 | 10 basis points | |||||||||||||||
Four-year agreement | — | 1,122,500 | — | — | October 28, 2017 | 10 basis points | |||||||||||||||
Five-year agreement | — | 1,065,609 | — | 1,891 | October 28, 2018 | 10 basis points | |||||||||||||||
Total | $ | 3,418,109 | $ | 3,224,109 | $ | 1,891 | $ | 1,891 | |||||||||||||
____________________________ | |||||||||||||||||||||
(1) Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement. | |||||||||||||||||||||
On October 28, 2014, we amended the $1,123 million four-year and $1,068 million five-year revolving credit agreements to increase the total aggregate amount of commitments under the four-year and five-year agreements to $1,720 million and $1,700 million, respectively, and to extend the commitment termination date for the five-year agreement to October 28, 2019. Also, on October 28, 2014, we terminated the existing $1,036 million three-year revolving credit agreement which was scheduled to mature on October 28, 2016. | |||||||||||||||||||||
The following represents our required and actual financial ratios under the revolving credit agreements as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||
Actual | |||||||||||||||||||||
Requirement | November 30, 2014 | May 31, 2014 | |||||||||||||||||||
Minimum average adjusted TIER over the six most recent fiscal quarters(1) | 1.025 | 1.24 | 1.28 | ||||||||||||||||||
Minimum adjusted TIER for the most recent fiscal year (1) (2) | 1.05 | 1.23 | 1.23 | ||||||||||||||||||
Maximum ratio of adjusted senior debt to total equity (1) | 10 | 5.93 | 5.79 | ||||||||||||||||||
____________________________ | |||||||||||||||||||||
(1) In addition to the adjustments made to the leverage ratio set forth in “Item 7. MD&A—Non-GAAP Financial Measures,” senior debt excludes guarantees to member systems that have certain investment-grade ratings by Moody’s Investors Service (“Moody's”) and Standard & Poor’s Corporation (“S&P”). The TIER and debt-to-equity calculations include the adjustments set forth in “Item 7. MD&A—Non-GAAP Financial Measures” and exclude the results of operations and other comprehensive income for CAH. | |||||||||||||||||||||
(2) We must meet this requirement to retire patronage capital. | |||||||||||||||||||||
As of November 30, 2014 and May 31, 2014, we were in compliance with all covenants and conditions under our revolving credit agreements and there were no borrowings outstanding under these agreements. |
LongTerm_Debt
Long-Term Debt | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Debt Instruments [Abstract] | |||||||||
Long-Term Debt | |||||||||
NOTE 6—LONG-TERM DEBT | |||||||||
The following is a summary of long-term debt outstanding as of November 30, 2014 and May 31, 2014. | |||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||
Unsecured long-term debt: | |||||||||
Medium-term notes sold through dealers | $ | 2,293,995 | $ | 2,228,459 | |||||
Medium-term notes sold to members | 392,847 | 285,988 | |||||||
Subtotal medium-term notes | 2,686,842 | 2,514,447 | |||||||
Unamortized discount | (413 | ) | (418 | ) | |||||
Total unsecured medium-term notes | 2,686,429 | 2,514,029 | |||||||
Guaranteed Underwriter Program notes payable | 4,291,500 | 4,299,000 | |||||||
Other unsecured notes payable | 35,075 | 35,075 | |||||||
Subtotal unsecured notes payable | 4,326,575 | 4,334,075 | |||||||
Unamortized discount | (694 | ) | (770 | ) | |||||
Total unsecured notes payable | 4,325,881 | 4,333,305 | |||||||
Total unsecured long-term debt | 7,012,310 | 6,847,334 | |||||||
Secured long-term debt: | |||||||||
Collateral trust bonds | 6,552,711 | 6,257,711 | |||||||
Unamortized discount | (273,972 | ) | (277,496 | ) | |||||
Total collateral trust bonds | 6,278,739 | 5,980,215 | |||||||
Farmer Mac notes payable | 1,527,643 | 1,667,505 | |||||||
Other secured notes payable | 18,230 | 18,230 | |||||||
Total secured notes payable | 1,545,873 | 1,685,735 | |||||||
Total secured long-term debt | 7,824,612 | 7,665,950 | |||||||
Total long-term debt | $ | 14,836,922 | $ | 14,513,284 | |||||
In November 2014, we issued $300 million of 2.30% collateral trust bonds due 2019. | |||||||||
As of November 30, 2014 and May 31, 2014, we had unsecured notes payable totaling $4,292 million and $4,299 million, respectively, outstanding under bond purchase agreements with the Federal Financing Bank (“FFB”) and a bond guarantee agreement with RUS issued under the Guaranteed Underwriter Program, which provides guarantees to the FFB. We pay RUS a fee of 30 basis points per year on the total amount borrowed. As of November 30, 2014, $4,292 million of unsecured notes payable outstanding under the Guaranteed Underwriter Program require us to place mortgage notes on deposit in an amount at least equal to the principal balance of the notes outstanding. See “Note 3—Loans and Commitments” for additional information on the mortgage notes held on deposit and the triggering events that result in these mortgage notes becoming pledged as collateral. On November 18, 2014, we closed on a commitment from RUS to guarantee a loan from the FFB for additional funding of $250 million as part of the Guaranteed Underwriter Program. As a result, we will have an additional $250 million available under FFB loan facilities with a 20-year maturity repayment period for advances made through October 15, 2017. As of November 30, 2014, we had up to $874 million available under committed loan facilities from the Federal Financing Bank as part of this program. We are required to maintain collateral on deposit in an amount at least equal to the balance of debt outstanding to the FFB under this program. | |||||||||
As of November 30, 2014 and May 31, 2014, secured notes payable include $1,528 million and $1,668 million, respectively, in debt outstanding to Federal Agricultural Mortgage Corporation (“Farmer Mac”) under a note purchase agreement totaling $3,900 million. Under the terms of the note purchase agreement in place as of November 30, 2014, we could borrow up to $3,900 million at any time through January 11, 2016, and thereafter automatically extend the agreement on each anniversary date of the closing for an additional year, unless prior to any such anniversary date, Farmer Mac provided CFC with a notice that the draw period would not be extended beyond the remaining term. In October 2014, we borrowed $80 million under the note purchase agreement with the Farmer Mac. | |||||||||
Subsequent to November 30, 2014, we issued $200 million in notes payable in December 2014 under the Farmer Mac note purchase agreement. On January 8, 2015, the commitment amount under the Farmer Mac note purchase agreement was increased by $600 million to $4,500 million, and the draw period was extended by four years to January 11, 2020. | |||||||||
The agreement with Farmer Mac is a revolving credit facility that allows us to borrow, repay and re-borrow funds at any time through maturity or from time to time as market conditions permit, provided that the principal amount at any time outstanding under the note purchase agreement is not more than the total available under the agreement. We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under the agreement. See “Note 3—Loans and Commitments” for additional information on the collateral pledged to secure notes payable under these programs. |
Subordinated_Deferrable_Debt
Subordinated Deferrable Debt | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Subordinated Debt [Abstract] | |||||
Subordinated Deferrable Debt | |||||
NOTE 7—SUBORDINATED DEFERRABLE DEBT | |||||
We had $400 million of 4.75% outstanding subordinated deferrable debt, due in 2043, as of both November 30, 2014 and May 31, 2014. Our outstanding subordinated deferrable debt is callable at par on or after April 30, 2023. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Derivative Financial Instruments | |||||||||||||||||||||||||
NOTE 8—DERIVATIVE FINANCIAL INSTRUMENTS | |||||||||||||||||||||||||
Use of Derivatives | |||||||||||||||||||||||||
We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as over-the-counter (“OTC”) derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. | |||||||||||||||||||||||||
Accounting for Derivatives | |||||||||||||||||||||||||
In accordance with the accounting standards for derivatives and hedging activities, we record derivative instruments at fair value as either a derivative asset or derivative liability on our condensed consolidated balance sheets. We report derivative asset and liability amounts on a gross basis based on individual contracts, which does not take into consideration the effects of master netting agreements or collateral netting. Derivatives in a gain position are reported as derivative assets on our condensed consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our condensed consolidated balance sheets as a component of either accrued interest and other receivables or accrued interest payable. | |||||||||||||||||||||||||
If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of periodic derivative cash settlements and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses), net. If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of the hedge relationship. Changes in the fair value of derivatives designated as qualifying fair value hedges are recorded in earnings together with offsetting changes in the fair value of the hedged item and any related ineffectiveness. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”), to the extent that the hedge relationships are effective, and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses), net in our consolidated statement of operations. | |||||||||||||||||||||||||
We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting. Accordingly, changes in the fair value of interest rate swaps are reported in our consolidated statements of operations under derivative gains (losses), net. Cash settlements related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows. | |||||||||||||||||||||||||
We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances. Accordingly, changes in the fair value of the derivative instruments are recorded as a component of OCI and reclassified to interest expense when the forecasted transaction occurs using the effective interest method. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses), net in our consolidated statements of operations. We did not have any derivatives designated as accounting hedges as of November 30, 2014 or May 31, 2014. | |||||||||||||||||||||||||
Outstanding Notional Amount of Derivatives | |||||||||||||||||||||||||
The notional amount provides an indication of the volume of our derivatives activity, but this amount is not recorded on our condensed consolidated balance sheets. The notional amount is used only as the basis on which interest payments are determined and is not the amount exchanged. The following table shows the outstanding notional amounts and the weighted-average rate paid and received for our interest rate swaps, by type, as of November 30, 2014 and May 31, 2014. The substantial majority of our interest rate exchange agreements use an index based on the London Interbank Offered Rate (“LIBOR”) for either the pay or receive leg of the swap agreement. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Notional | Weighted- | Weighted- | Notional | Weighted- | Weighted- | |||||||||||||||||||
Amount | Average | Average | Amount | Average | Average | ||||||||||||||||||||
Rate Paid | Rate Received | Rate Paid | Rate Received | ||||||||||||||||||||||
Pay-fixed swaps | $ | 5,617,235 | 3.31 | % | 0.22 | % | $ | 5,322,809 | 3.33 | % | 0.21 | % | |||||||||||||
Receive-fixed swaps | 2,949,000 | 0.83 | 3.6 | 3,124,000 | 0.85 | 3.62 | |||||||||||||||||||
Total interest rate swaps | $ | 8,566,235 | 2.45 | 1.38 | $ | 8,446,809 | 2.41 | 1.48 | |||||||||||||||||
Impact of Derivatives on Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||
The following table displays the fair value of the derivative assets and derivative liabilities recorded on our condensed consolidated balance sheets and the related outstanding notional amount of our interest rate swaps as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | 31-May-14 | ||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Notional Balance | Fair Value | Notional Balance | |||||||||||||||||||||
Derivative assets | $ | 139,377 | $ | 3,294,493 | $ | 209,759 | $ | 3,817,593 | |||||||||||||||||
Derivative liabilities | (400,687 | ) | 5,271,742 | (388,208 | ) | 4,629,216 | |||||||||||||||||||
Total | $ | (261,310 | ) | $ | 8,566,235 | $ | (178,449 | ) | $ | 8,446,809 | |||||||||||||||
In addition to the notional amount of swaps shown above, we had $50 million outstanding notional amount of forward starting swaps with an effective date of December 1, 2014. As of November 30, 2014, these forward starting swaps had a fair value of $2 million that is included in derivative liabilities on our condensed consolidated balance sheet. There were no cash settlements or accrued amounts related to these forward starting swaps as of November 30, 2014, as the effective date was subsequent to November 30, 2014. | |||||||||||||||||||||||||
All of our master swap agreements include legally enforceable netting provisions that allow for offsetting of all contracts with a given counterparty in the event of default by one of the two parties. However, as indicated above, we report derivative asset and liability amounts on a gross basis based on individual contracts. The following table presents the gross fair value of derivative assets and liabilities reported on our condensed consolidated balance sheets as of November 30, 2014 and May 31, 2014, and provides information on the impact of netting provisions and collateral pledged. | |||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 139,377 | $ | — | $ | 139,377 | $ | 137,508 | $ | — | $ | 1,869 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 400,687 | — | 400,687 | 137,508 | — | 263,179 | |||||||||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 209,759 | $ | — | $ | 209,759 | $ | 169,700 | $ | — | $ | 40,059 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 388,208 | — | 388,208 | 169,700 | — | 218,508 | |||||||||||||||||||
Impact of Derivatives on Condensed Consolidated Statements of Operations | |||||||||||||||||||||||||
Derivative gains (losses), net reported in our condensed consolidated statements of operations consist of derivative cash settlements and derivative forward value. Derivative cash settlements represent net contractual interest expense accruals on interest rate swaps during the period. The derivative forward value represents the change in fair value of our interest rate swaps during the reporting period due to changes in the estimate of future interest rates over the remaining life of our derivative contracts. | |||||||||||||||||||||||||
The following table presents the components of the derivative gains (losses), net reported in our condensed consolidated statements of operations for our interest rate swaps for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Derivative cash settlements | $ | (21,764 | ) | $ | (19,471 | ) | $ | (41,865 | ) | $ | (36,156 | ) | |||||||||||||
Derivative forward value | (52,797 | ) | (11,309 | ) | (82,574 | ) | 111,760 | ||||||||||||||||||
Derivative gains (losses), net | $ | (74,561 | ) | $ | (30,780 | ) | $ | (124,439 | ) | $ | 75,604 | ||||||||||||||
Impact of Derivative Rating Triggers | |||||||||||||||||||||||||
The majority of our interest rate swap agreements have credit risk-related contingent features referred to as rating triggers. Under these rating triggers, if the credit rating for either counterparty falls to the level specified in the agreement, the other counterparty may, but is not obligated to, terminate the agreement. | |||||||||||||||||||||||||
On December 12, 2014, S&P announced a downgrade on the senior secured debt of CFC from A+ to A based on the ratings criteria titled “Issue Credit Rating Methodology for Nonbank Financial Institutions and Nonbank Financial Service Companies,” published on December 9, 2014. Specifically, S&P applied the revised ratings criteria to rate CFC’s senior secured debt at the same level as CFC’s issuer credit rating. S&P also announced that it has changed CFC’s issuer credit rating outlook from “stable” to “negative” based on its revised ratings criteria titled “Nonbank Financial Institutions Rating Methodology,” published on December 9, 2014. The change only affects our senior secured debt credit rating; our corporate and short-term credit ratings remained unchanged. The change did not result in a rating trigger event under the provisions of our derivative transaction agreements. On November 24, 2014, Moody’s reaffirmed CFC’s existing senior secured debt, senior unsecured debt, subordinated debt and short-term credit ratings with a stable outlook. There have been no changes of CFC’s ratings by Moody’s since November 24, 2014. | |||||||||||||||||||||||||
The table below displays the notional amounts of our derivative contracts with rating triggers as of November 30, 2014 and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our senior unsecured credit ratings to or below Baa1/BBB+ or Baa3/BBB- by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assumed that the amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements for each counterparty. The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts. | |||||||||||||||||||||||||
(Dollars in thousands) | Notional | Payment | Payment Due to CFC | Net (Payable) | |||||||||||||||||||||
Amount | Required by CFC | Due | |||||||||||||||||||||||
Impact of mutual rating downgrade trigger: | |||||||||||||||||||||||||
falls below Baa1/BBB+ | $ | 4,431,017 | $ | (174,883 | ) | $ | 210 | $ | (174,673 | ) | |||||||||||||||
falls to Baa3/BBB- | 1,680,595 | — | 3,575 | 3,575 | |||||||||||||||||||||
falls below Baa3/BBB- | 601,345 | (21,663 | ) | — | (21,663 | ) | |||||||||||||||||||
Total | $ | 6,712,957 | $ | (196,546 | ) | $ | 3,785 | $ | (192,761 | ) | |||||||||||||||
The aggregate amount, including the credit risk valuation adjustment, of all interest rate swaps with rating triggers that were in a net liability position was $198 million as of November 30, 2014, while the aggregate amount, including the credit risk valuation adjustment, of all interest rate swaps with rating triggers that were in a net asset position was $2 million as of November 30, 2014. |
Equity
Equity | 6 Months Ended | ||||
Nov. 30, 2014 | |||||
Stockholders' Equity Note [Abstract] | |||||
Equity | |||||
NOTE 9—EQUITY | |||||
In May 2014, the CFC Board of Directors authorized the allocation of $1 million of fiscal year 2014 net earnings to the Cooperative Educational Fund. In July 2014, the CFC Board of Directors authorized the allocation of the fiscal year 2014 net earnings as follows: $75 million to the members’ capital reserve and $79 million to members in the form of patronage. In July 2014, the CFC Board of Directors authorized the retirement of allocated net earnings totaling $40 million, representing 50% of the fiscal year 2014 allocation. This amount was returned to members in cash in September 2014. Future allocations and retirements of net earnings may be made annually as determined by the CFC Board of Directors with due regard for its financial condition. The CFC Board of Directors has the authority to change the current practice for allocating and retiring net earnings at any time, subject to applicable laws and regulations. |
Guarantees
Guarantees | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Guarantees [Abstract] | |||||||||
Guarantees | |||||||||
NOTE 10—GUARANTEES | |||||||||
The following table summarizes total guarantees by type of guarantee and member class as of November 30, 2014 and May 31, 2014. | |||||||||
(Dollars in thousands) | 30-Nov-14 | 31-May-14 | |||||||
Total by type: | |||||||||
Long-term tax-exempt bonds | $ | 498,995 | $ | 518,360 | |||||
Letters of credit | 367,837 | 431,064 | |||||||
Other guarantees | 114,596 | 115,398 | |||||||
Total | $ | 981,428 | $ | 1,064,822 | |||||
Total by member class: | |||||||||
CFC: | |||||||||
Distribution | $ | 169,716 | $ | 165,559 | |||||
Power supply | 744,145 | 826,231 | |||||||
Statewide and associate | 5,264 | 5,397 | |||||||
CFC total | 919,125 | 997,187 | |||||||
RTFC | 2,465 | 2,304 | |||||||
NCSC | 59,838 | 65,331 | |||||||
Total | $ | 981,428 | $ | 1,064,822 | |||||
The maturities for the long-term tax-exempt bonds and the related guarantees run through calendar year 2042. Amounts in the table represent the outstanding principal amount of the guaranteed bonds. As of November 30, 2014, our maximum potential exposure for the $72 million of fixed-rate tax-exempt bonds is $103 million, representing principal and interest. Of the amounts shown in the table above for long-term tax-exempt bonds, $427 million and $445 million as of November 30, 2014 and May 31, 2014, respectively, are adjustable or floating-rate bonds that may be converted to a fixed rate as specified in the applicable indenture for each bond offering. We are unable to determine the maximum amount of interest that we could be required to pay related to the remaining adjustable and floating-rate bonds. Many of these bonds have a call provision that in the event of a default allow us to trigger the call provision. This would limit our exposure to future interest payments on these bonds. Our maximum potential exposure is secured by a mortgage lien on all of the system’s assets and future revenue. If the debt is accelerated because of a determination that the interest thereon is not tax-exempt, the system’s obligation to reimburse us for any guarantee payments will be treated as a long-term loan. | |||||||||
The maturities for letters of credit run through calendar year 2024. The amounts shown in the table above represent our maximum potential exposure, of which $82 million is secured as of November 30, 2014. As of November 30, 2014 and May 31, 2014, the letters of credit include $76 million and $125 million, respectively, to provide the standby liquidity for adjustable and floating-rate tax-exempt bonds issued for the benefit of our members, respectively. Security provisions include a mortgage lien on substantially all of the system’s assets, future revenue and the system’s investment in our commercial paper. | |||||||||
In addition to the letters of credit listed in the table, under master letter of credit facilities in place as of November 30, 2014, we may be required to issue up to an additional $121 million in letters of credit to third parties for the benefit of our members. As of November 30, 2014, all of our master letter of credit facilities were subject to material adverse change clauses at the time of issuance. Also, as of November 30, 2014 we had hybrid letter of credit facilities totaling $1,741 million that represent commitments that may be used for the issuance of letters of credit or line of credit loan advances, at the option of a borrower, and are included in unadvanced loan commitments for line of credit loans reported in “Note 3— Loans and Commitments.” Hybrid letter of credit facilities subject to material adverse change clauses at the time of issuance totaled $415 million as of November 30, 2014. Prior to issuing a letter of credit, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with the letter of credit terms and conditions. The remaining commitment under hybrid letter of credit facilities of $1,326 million may be used for the issuance of letters of credit as long as the borrower is in compliance with the terms and conditions of the facility. | |||||||||
The maturities for other guarantees listed in the table run through calendar year 2025. The maximum potential exposure for these other guarantees is $115 million, all of which is unsecured. | |||||||||
As of November 30, 2014 and May 31, 2014, we had $400 million and $418 million of guarantees, respectively, representing 41% and 39%, respectively, of total guarantees, under which our right of recovery from our members was not secured. | |||||||||
In addition to the guarantees described above, as of November 30, 2014, we were the liquidity provider for a total of $503 million of variable-rate tax-exempt bonds issued for our member cooperatives. While the bonds are in variable-rate mode, in return for a fee, we have unconditionally agreed to purchase bonds tendered or put for redemption if the remarketing agents are unable to sell such bonds to other investors. During the six months ended November 30, 2014, we were not required to perform as liquidity provider pursuant to these obligations. | |||||||||
Guarantee Liability | |||||||||
As of November 30, 2014 and May 31, 2014, we recorded a guarantee liability of $21 million and $22 million, respectively, which represents the contingent and non-contingent exposures related to guarantees and liquidity obligations associated with our members’ debt. The contingent guarantee liability as of November 30, 2014 and May 31, 2014 was $2 million based on management’s estimate of exposure to losses within the guarantee portfolio. The remaining balance of the total guarantee liability of $19 million and $20 million as of November 30, 2014 and May 31, 2014, respectively, relates to our non-contingent obligation to stand ready to perform over the term of our guarantees and liquidity obligations that we have entered into or modified since January 1, 2003. | |||||||||
Activity in the guarantee liability account is summarized below as of and for the six months ended November 30, 2014. | |||||||||
(Dollars in thousands) | Six Months Ended November 30, 2014 | ||||||||
Beginning balance | $ | 22,091 | |||||||
Net change in non-contingent liability | (1,450 | ) | |||||||
Provision for contingent guarantee liability | (80 | ) | |||||||
Ending balance | $ | 20,561 | |||||||
Liability as a percentage of total guarantees | 2.1 | % | |||||||
Fair_Value_Measurement
Fair Value Measurement | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Fair Value Measurement | |||||||||||||||||||||||||
NOTE 11—FAIR VALUE MEASUREMENTS | |||||||||||||||||||||||||
Fair Value | |||||||||||||||||||||||||
Assets and liabilities measured at fair value on either a recurring or non-recurring basis on the condensed consolidated balance sheets as of November 30, 2014 and May 31, 2014 consisted of investments in common and preferred stock, derivative instruments and nonperforming collateral-dependent loans. | |||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis as of November 30, 2014 and May 31, 2014 consisted of our derivative instruments, investments in common and preferred stock and deferred compensation investments. The following table presents our assets and liabilities that are measured at fair value on a recurring basis as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||||||||||
Derivative assets | $ | — | $ | 139,377 | $ | — | $ | 209,759 | |||||||||||||||||
Derivative liabilities | — | 400,687 | — | 388,208 | |||||||||||||||||||||
Investments in common and preferred stock | 83,779 | — | 55,177 | — | |||||||||||||||||||||
Deferred compensation investments | 4,486 | — | 4,156 | — | |||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||||||
We account for derivative instruments in the condensed consolidated balance sheets as either an asset or liability measured at fair value. There is not an active secondary market for the types of interest rate swaps we use. Our process to estimate the fair value of our derivative instruments involves multiple steps including consideration of indicative quotes from counterparties and use of a discounted cash flow model. We obtain indicative quotes from the interest rate swap counterparties to estimate fair value on a quarterly basis. The indicative quotes are based on the expected future cash flow and the estimated yield curve. | |||||||||||||||||||||||||
We perform analysis to validate the indicative quotes obtained from our swap counterparties and investigate any significant differences. We adjust the market values received from the counterparties using credit default swap levels for us and the counterparties. The credit default swap levels represent the credit risk premium required by a market participant based on the available information related to us and the counterparty. We only enter into swap agreements with counterparties that are participating in our revolving lines of credit at the time the exchange agreements are executed. All of our swap agreements are subject to master netting agreements. | |||||||||||||||||||||||||
Our valuation technique for interest rate swaps is based on discounted cash flows and we utilize observable inputs, which reflect market data. To calculate fair value, we determine the forward curve. The forward curve allows us to determine the projected floating rate cash flows and the discount factors needed to calculate the net present value of each interest payment. The significant observable inputs for our derivatives include spot LIBOR rates, Eurodollar futures contracts, and market swap rates. | |||||||||||||||||||||||||
Fair values for our interest rate swaps are classified as a Level 2 valuation. We record the change in the fair value of our derivatives for each reporting period in the derivative gains (losses) line, included in non-interest income in the consolidated statements of operations, as currently none of our derivatives qualify for hedge accounting. | |||||||||||||||||||||||||
Investments in Preferred and Common Stock | |||||||||||||||||||||||||
Our investments in equity securities consist of investments in Farmer Mac Series A, Series B and Series C preferred stock and Class A common stock, which are recorded in the condensed consolidated balance sheets at fair value. We determine the fair value of these investments based on the quoted price on the stock exchange where the stock is traded. That stock exchange is an active market based on the volume of shares transacted. Fair values for these securities are classified as a Level 1 valuation. For the three and six months ended November 30, 2014, we recorded an unrealized gain of $1 million and $4 million, respectively, in accumulated other comprehensive income, compared to an unrealized loss of $1 million and $5 million, respectively, for the same prior-year periods. | |||||||||||||||||||||||||
Deferred Compensation Investments | |||||||||||||||||||||||||
Deferred compensation investments are recorded in the condensed consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the quoted price on the stock exchange where the funds are traded. That stock exchange is an active market based on the volume of shares transacted. The amounts are invested in highly liquid indices and mutual funds and are classified within Level 1 of the fair value hierarchy. | |||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | |||||||||||||||||||||||||
We may be required, from time to time, to measure certain assets at fair value on a non-recurring basis in accordance with GAAP. Any adjustments to fair value usually result from application of lower-of-cost or fair value accounting or write-downs of individual assets. Assets measured at fair value on a non-recurring basis as of November 30, 2014 and May 31, 2014 consisted of certain nonperforming collateral-dependent loans. The fair value of these assets is determined based on the use of significant unobservable inputs, which are considered Level 3 in the fair value hierarchy. | |||||||||||||||||||||||||
Nonperforming Collateral-Dependent Loans | |||||||||||||||||||||||||
As of November 30, 2014 and May 31, 2014, we measured certain collateral-dependent nonperforming loans at fair value. We utilize the fair value of the collateral underlying the loan to determine the specific allowance for loan loss. In estimating the fair value of the collateral, we may use third-party valuation specialists, internal estimates or a combination of both. The valuation technique used to determine fair value of the nonperforming loans provided by both our internal staff and third-party specialists includes market multiples (i.e., comparable companies). The significant unobservable input used in the determination of fair value for the specific nonperforming loans is a multiple of earnings before interest, taxes, depreciation and amortization of 3.5x as of May 31, 2014. The material inputs used in estimating fair value by both internal staff and third-party specialists are Level 3 within the fair value hierarchy. In these instances, the valuation is considered to be a non-recurring item. The significant unobservable inputs for estimating the fair value of nonperforming collateral-dependent loans are obtained from third-party specialists and reviewed by our Credit Risk Management group to assess the reasonableness of the assumptions used and the accuracy of the work performed. In cases where we rely on third-party inputs, we use the final unadjusted third-party valuation analysis as support for any financial statement adjustments and disclosures to the financial statements. | |||||||||||||||||||||||||
Because of the balance of nonperforming collateral-dependent loans, we do not believe that changes in the significant unobservable inputs used in the determination of the fair value will have a material impact on the fair value measurement of these assets or our results of operations. The following table displays the carrying value and fair value of these loans as of November 30, 2014 and May 31, 2014 and the total losses for the three and six months ended November 30, 2014 and 2013. | |||||||||||||||||||||||||
Level 3 Fair Value | Total Losses For The Three Months Ended November 30, | Total Losses For The Six Months Ended November 30, | |||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Nonperforming loans, net of specific reserves | $ | 339 | $ | 1,669 | $ | (724 | ) | $ | — | $ | (950 | ) | $ | — | |||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
NOTE 12—FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||||||||||||||||||
The carrying and fair values of our financial instruments as of November 30, 2014 and May 31, 2014 are presented below. | |||||||||||||||||||||
November 30, 2014 | Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 512,501 | $ | 512,501 | $ | 512,501 | $ | — | $ | — | |||||||||||
Restricted cash | 1,532 | 1,532 | 1,532 | — | — | ||||||||||||||||
Investments | 83,779 | 83,779 | 83,779 | — | — | ||||||||||||||||
Time deposits | 495,000 | 495,000 | — | 495,000 | — | ||||||||||||||||
Deferred compensation investments | 4,486 | 4,486 | 4,486 | — | — | ||||||||||||||||
Loans to members, net | 20,732,229 | 21,338,380 | — | — | 21,338,380 | ||||||||||||||||
Debt service reserve funds | 25,602 | 25,602 | 25,602 | — | — | ||||||||||||||||
Derivative instruments | 139,377 | 139,377 | — | 139,377 | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Short-term debt | 4,222,404 | 4,222,522 | 2,627,592 | 1,594,930 | — | ||||||||||||||||
Long-term debt | 14,836,922 | 16,030,115 | — | 10,022,733 | 6,007,382 | ||||||||||||||||
Guarantee liability | 20,561 | 23,290 | — | — | 23,290 | ||||||||||||||||
Derivative instruments | 400,687 | 400,687 | — | 400,687 | — | ||||||||||||||||
Subordinated deferrable debt | 400,000 | 398,400 | — | 398,400 | — | ||||||||||||||||
Members’ subordinated certificates | 1,550,840 | 1,550,840 | — | — | 1,550,840 | ||||||||||||||||
May 31, 2014 | Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 338,715 | $ | 338,715 | $ | 338,715 | $ | — | $ | — | |||||||||||
Restricted cash | 520 | 520 | 520 | — | — | ||||||||||||||||
Investments | 55,177 | 55,177 | 55,177 | — | — | ||||||||||||||||
Time deposits | 550,000 | 550,000 | — | 550,000 | — | ||||||||||||||||
Deferred compensation investments | 4,156 | 4,156 | 4,156 | — | — | ||||||||||||||||
Loans to members, net | 20,420,213 | 21,000,687 | — | — | 21,000,687 | ||||||||||||||||
Debt service reserve funds | 39,353 | 39,353 | 39,353 | — | — | ||||||||||||||||
Derivative instruments | 209,759 | 209,759 | — | 209,759 | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Short-term debt | 4,099,331 | 4,099,534 | 2,480,166 | 1,619,368 | — | ||||||||||||||||
Long-term debt | 14,513,284 | 15,738,970 | — | 9,618,645 | 6,120,325 | ||||||||||||||||
Guarantee liability | 22,091 | 24,946 | — | — | 24,946 | ||||||||||||||||
Derivative instruments | 388,208 | 388,208 | — | 388,208 | — | ||||||||||||||||
Subordinated deferrable debt | 400,000 | 385,744 | — | 385,744 | — | ||||||||||||||||
Members’ subordinated certificates | 1,612,227 | 1,612,227 | — | — | 1,612,227 | ||||||||||||||||
We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. There were no transfers between levels of the fair value hierarchy during the six months ended November 30, 2014. | |||||||||||||||||||||
With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity excluding common stock and preferred stock investments that have no stated maturity. Below is a summary of significant methodologies used in estimating fair value amounts as of November 30, 2014 and May 31, 2014. | |||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||
Cash and cash equivalents include cash and certificates of deposit with original maturities of less than 90 days. Cash and cash equivalents are valued at the carrying value, which approximates fair value. | |||||||||||||||||||||
Restricted Cash | |||||||||||||||||||||
Restricted cash consists of cash and cash equivalents for which use is contractually restricted. The carrying value of restricted cash approximates fair value. | |||||||||||||||||||||
Investments | |||||||||||||||||||||
Our investments consist of Farmer Mac Series A, Series B and Series C preferred stock and Class A common stock. These securities are classified as available-for-sale and reported at fair value in our condensed consolidated balance sheets. We determine the fair value based on quoted prices on the stock exchange where the stock is traded. That stock exchange is an active market based on the volume of shares transacted. | |||||||||||||||||||||
Time Deposits | |||||||||||||||||||||
Time deposits with financial institutions in interest-bearing accounts have maturities of less than one year as of the reporting date and are valued at the carrying value, which approximates fair value. | |||||||||||||||||||||
Deferred Compensation Investments | |||||||||||||||||||||
CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees. Such amounts deferred by employees are invested by the company. The deferred compensation investments are recorded in the condensed consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the quoted price on the stock exchange where the funds are traded. That stock exchange is an active market based on the volume of shares transacted. The amounts are invested in highly liquid indices and mutual funds. | |||||||||||||||||||||
Loans to Members, Net | |||||||||||||||||||||
As part of receiving a loan from us, our members have additional requirements and rights that are not typical of other financial institutions, such as the ability to receive a patronage capital allocation, the general requirement to purchase subordinated certificates or member capital securities to meet their capital contribution requirements as a condition of obtaining additional credit from us, the option to select fixed rates from one year to maturity with the fixed rate resetting or repricing at the end of each selected rate term, the ability to convert from a fixed rate to another fixed rate or the variable rate at any time, and certain interest rate discounts that are specific to the borrower’s activity with us. These features make it difficult to obtain market data for similar loans. Therefore, we must use other methods to estimate the fair value. | |||||||||||||||||||||
Fair values for fixed-rate loans are estimated using a discounted cash flow technique by discounting the expected future cash flows using the current rates at which we would make similar loans to new borrowers for the same remaining maturities. The maturity date used in the fair value calculation of loans with a fixed rate for a selected rate term is the next repricing date since these borrowers must reprice their loans at various times throughout the life of the loan at the current market rate. | |||||||||||||||||||||
Loans with different risk characteristics, specifically nonperforming and restructured loans, are valued by using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities. See “Note 11—Fair Value Measurement” for more details about how we calculate the fair value of certain nonperforming loans. | |||||||||||||||||||||
The carrying value of our variable-rate loans adjusted for credit risk approximates fair value since variable-rate loans are eligible to be reset at least monthly. | |||||||||||||||||||||
Debt Service Reserve Funds | |||||||||||||||||||||
Debt service reserve funds represent cash and/or investments on deposit with the bond trustee for tax-exempt bonds that we guarantee. Debt service reserve fund investments are comprised of actively traded tax exempt municipal bonds and commercial paper. Carrying value is considered to be equal to fair value. | |||||||||||||||||||||
Short-Term Debt | |||||||||||||||||||||
Short-term debt consists of commercial paper, select notes, bank bid notes, daily liquidity fund notes and medium-term notes. The fair value of short-term debt with maturities less than or equal to 90 days is carrying value, which is a reasonable estimate of fair value. The fair value of short-term debt with maturities greater than 90 days is estimated based on discounted cash flows and quoted market rates for debt with similar maturities. Short-term debt classified within Level 1 of the fair value hierarchy is comprised of dealer commercial paper, bank bid notes and daily liquidity fund notes. Short-term debt classified within Level 2 of the fair value hierarchy is comprised of member commercial paper, non-member commercial paper and select notes, and is determined based on discounted cash flows using discount rates consistent with current market rates for similar products with similar remaining terms. | |||||||||||||||||||||
Short-term debt classified within Level 2 also includes our medium-term notes with an original maturity equal to or less than one year. The fair value of short-term medium-term notes classified within Level 2 of the fair value hierarchy was determined based on discounted cash flows using a pricing model that incorporates available market information such as indicative benchmark yields and credit spread assumptions that are provided by third-party pricing services such as our banks that underwrite our other debt transactions. | |||||||||||||||||||||
Long-Term Debt | |||||||||||||||||||||
Long-term debt consists of collateral trust bonds, medium-term notes and long-term notes payable. We issue substantially all collateral trust bonds and some medium-term notes in underwritten public transactions. Collateral trust bonds and medium-term notes are classified within Level 2 of the fair value hierarchy. The fair value of long-term debt classified within Level 2 of the fair value hierarchy was determined based on discounted cash flows. There is no active secondary trading for the underwritten collateral trust bonds and medium-term notes; therefore, dealer quotes and recent market prices are both used in estimating fair value. There is essentially no secondary market for the medium-term notes issued to our members or in transactions that are not underwritten; therefore, fair value is estimated based on observable benchmark yields and spreads for similar instruments supplied by banks that underwrite our other debt transactions. | |||||||||||||||||||||
The long-term notes payable are issued in private placement transactions and there is no secondary trading of such debt. Long-term notes payable are classified within Level 3 of the fair value hierarchy. The fair value was determined based on discounted cash flows using benchmark yields and spreads for similar instruments supplied by underwriter quotes for similar instruments, if available. Secondary trading quotes for our debt instruments used in the determination of fair value incorporate our credit risk. | |||||||||||||||||||||
Guarantees | |||||||||||||||||||||
The fair value of our guarantee liability is based on the fair value of our contingent and non-contingent exposure related to our guarantees. The fair value of our contingent exposure for guarantees is based on management’s estimate of our exposure to losses within the guarantee portfolio using a discounted cash flow method. The fair value of our non-contingent exposure for guarantees issued is estimated based on the total unamortized balance of guarantee fees paid and guarantee fees to be paid discounted at our current short-term funding rate, which represents management’s estimate of the fair value of our obligation to stand ready to perform. | |||||||||||||||||||||
Subordinated Deferrable Debt | |||||||||||||||||||||
Subordinated deferrable debt outstanding was issued in an underwritten public transaction. There is no active secondary trading for this subordinated deferrable debt; therefore, dealer quotes and recent market prices are both used in estimating fair value based on a discounted cash flow method. | |||||||||||||||||||||
Members’ Subordinated Certificates | |||||||||||||||||||||
Members’ subordinated certificates include (i) membership subordinated certificates issued to our members, (ii) loan and guarantee subordinated certificates issued as a condition of obtaining loan funds or guarantees and (iii) member capital securities issued as voluntary investments by our members. All members' subordinated certificates are non-transferable other than among members with CFC’s consent and there is no ready market from which to obtain fair value quotes. These certificates are valued at par. | |||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||
We report derivative instruments at fair value as either an asset or liability in our condensed consolidated balance sheets. Because there is not an active secondary market for the types of interest rate swaps we use, we obtain indicative quotes from the interest rate swap counterparties to estimate fair value on a quarterly basis. The indicative quotes are based on the expected future cash flow and estimated yield curves. We adjust the market values received from the counterparties using credit default swap levels for us and the counterparties. The credit default swap levels represent the credit risk premium required by a market participant based on the available information related to us and the counterparty. | |||||||||||||||||||||
Commitments | |||||||||||||||||||||
The fair value of our commitments is estimated based on the carrying value, or zero. Extensions of credit under these commitments, if exercised, would result in loans priced at market rates. | |||||||||||||||||||||
See “Note 11—Fair Value Measurement” for additional information on assets and liabilities reported at fair value on a recurring and non-recurring basis on our condensed consolidated balance sheets. |
Segment_Information
Segment Information | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Information | |||||||||||||||||
NOTE 13—SEGMENT INFORMATION | |||||||||||||||||
The following tables display segment results for the three and six months ended November 30, 2014 and 2013, and assets attributable to each segment as of November 30, 2014 and 2013. | |||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 232,168 | $ | 11,328 | $ | (8,261 | ) | $ | 235,235 | ||||||||
Interest expense | (157,918 | ) | (8,618 | ) | 8,261 | (158,275 | ) | ||||||||||
Net interest income | 74,250 | 2,710 | — | 76,960 | |||||||||||||
Provision for loan losses | (992 | ) | — | — | (992 | ) | |||||||||||
Net interest income after provision for loan losses | 73,258 | 2,710 | — | 75,968 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 9,646 | 1,369 | (1,143 | ) | 9,872 | ||||||||||||
Derivative losses, net | (73,061 | ) | (1,500 | ) | — | (74,561 | ) | ||||||||||
Results of operations of foreclosed assets | (28,991 | ) | — | — | (28,991 | ) | |||||||||||
Total non-interest income | (92,406 | ) | (131 | ) | (1,143 | ) | (93,680 | ) | |||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (16,553 | ) | (1,940 | ) | 256 | (18,237 | ) | ||||||||||
Provision for guarantee liability | 13 | — | — | 13 | |||||||||||||
Other | (17 | ) | (887 | ) | 887 | (17 | ) | ||||||||||
Total non-interest expense | (16,557 | ) | (2,827 | ) | 1,143 | (18,241 | ) | ||||||||||
Loss before income taxes | (35,705 | ) | (248 | ) | — | (35,953 | ) | ||||||||||
Income tax benefit | — | 41 | — | 41 | |||||||||||||
Net loss | $ | (35,705 | ) | $ | (207 | ) | $ | — | $ | (35,912 | ) | ||||||
Three Months Ended November 30, 2013 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 235,505 | $ | 12,582 | $ | (8,833 | ) | $ | 239,254 | ||||||||
Interest expense | (164,980 | ) | (9,198 | ) | 8,833 | (165,345 | ) | ||||||||||
Net interest income | 70,525 | 3,384 | — | 73,909 | |||||||||||||
Provision for loan losses | (1,096 | ) | — | — | (1,096 | ) | |||||||||||
Net interest income after provision for loan losses | 69,429 | 3,384 | — | 72,813 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 4,163 | 342 | 620 | 5,125 | |||||||||||||
Derivative losses, net | (29,232 | ) | (1,548 | ) | — | (30,780 | ) | ||||||||||
Results of operations of foreclosed assets | (3,269 | ) | — | — | (3,269 | ) | |||||||||||
Total non-interest income | (28,338 | ) | (1,206 | ) | 620 | (28,924 | ) | ||||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (15,942 | ) | (2,011 | ) | (620 | ) | (18,573 | ) | |||||||||
Provision for guarantee liability | (73 | ) | — | — | (73 | ) | |||||||||||
Other | (151 | ) | 1 | — | (150 | ) | |||||||||||
Total non-interest expense | (16,166 | ) | (2,010 | ) | (620 | ) | (18,796 | ) | |||||||||
Income before income taxes | 24,925 | 168 | — | 25,093 | |||||||||||||
Income tax expense | — | (101 | ) | — | (101 | ) | |||||||||||
Net income | $ | 24,925 | $ | 67 | $ | — | $ | 24,992 | |||||||||
Six Months Ended November 30, 2014 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 466,308 | $ | 23,135 | $ | (16,917 | ) | $ | 472,526 | ||||||||
Interest expense | (314,146 | ) | (17,598 | ) | 16,917 | (314,827 | ) | ||||||||||
Net interest income | 152,162 | 5,537 | — | 157,699 | |||||||||||||
Provision for loan losses | 5,779 | — | — | 5,779 | |||||||||||||
Net interest income after provision for loan losses | 157,941 | 5,537 | — | 163,478 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 13,872 | 1,731 | (1,374 | ) | 14,229 | ||||||||||||
Derivative losses, net | (122,232 | ) | (2,207 | ) | — | (124,439 | ) | ||||||||||
Results of operations of foreclosed assets | (31,690 | ) | — | — | (31,690 | ) | |||||||||||
Total non-interest income | (140,050 | ) | (476 | ) | (1,374 | ) | (141,900 | ) | |||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (33,252 | ) | (4,015 | ) | 487 | (36,780 | ) | ||||||||||
Provision for guarantee liability | 80 | — | — | 80 | |||||||||||||
Other | (23 | ) | (887 | ) | 887 | (23 | ) | ||||||||||
Total non-interest expense | (33,195 | ) | (4,902 | ) | 1,374 | (36,723 | ) | ||||||||||
Income before income taxes | (15,304 | ) | 159 | — | (15,145 | ) | |||||||||||
Income tax expense | — | (155 | ) | — | (155 | ) | |||||||||||
Net income | $ | (15,304 | ) | $ | 4 | $ | — | $ | (15,300 | ) | |||||||
Assets: | |||||||||||||||||
Total loans outstanding | $ | 20,739,565 | $ | 1,098,127 | $ | (1,064,412 | ) | $ | 20,773,280 | ||||||||
Deferred origination costs | 9,706 | — | — | 9,706 | |||||||||||||
Less: Allowance for loan losses | (50,757 | ) | — | — | (50,757 | ) | |||||||||||
Loans to members, net | 20,698,514 | 1,098,127 | (1,064,412 | ) | 20,732,229 | ||||||||||||
Other assets | 1,818,603 | 137,686 | (115,415 | ) | 1,840,874 | ||||||||||||
Total assets | $ | 22,517,117 | $ | 1,235,813 | $ | (1,179,827 | ) | $ | 22,573,103 | ||||||||
Six Months Ended November 30, 2013 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 472,831 | $ | 25,345 | $ | (17,851 | ) | $ | 480,325 | ||||||||
Interest expense | (332,200 | ) | (18,581 | ) | 17,851 | (332,930 | ) | ||||||||||
Net interest income | 140,631 | 6,764 | — | 147,395 | |||||||||||||
Provision for loan losses | (2,374 | ) | — | — | (2,374 | ) | |||||||||||
Net interest income after provision for loan losses | 138,257 | 6,764 | — | 145,021 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 8,187 | 694 | 400 | 9,281 | |||||||||||||
Derivative gains, net | 74,351 | 1,253 | — | 75,604 | |||||||||||||
Results of operations of foreclosed assets | (7,318 | ) | — | — | (7,318 | ) | |||||||||||
Total non-interest income | 75,220 | 1,947 | 400 | 77,567 | |||||||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (32,663 | ) | (4,125 | ) | (400 | ) | (37,188 | ) | |||||||||
Provision for guarantee liability | (42 | ) | — | — | (42 | ) | |||||||||||
Other | (299 | ) | 1 | — | (298 | ) | |||||||||||
Total non-interest expense | (33,004 | ) | (4,124 | ) | (400 | ) | (37,528 | ) | |||||||||
Income before income taxes | 180,473 | 4,587 | — | 185,060 | |||||||||||||
Income tax expense | — | (1,802 | ) | — | (1,802 | ) | |||||||||||
Net income | $ | 180,473 | $ | 2,785 | $ | — | $ | 183,258 | |||||||||
Assets: | |||||||||||||||||
Total loans outstanding | $ | 20,342,560 | $ | 1,199,116 | $ | (1,163,246 | ) | $ | 20,378,430 | ||||||||
Deferred origination costs | 9,790 | — | — | 9,790 | |||||||||||||
Less: Allowance for loan losses | (55,199 | ) | — | — | (55,199 | ) | |||||||||||
Loans to members, net | 20,297,151 | 1,199,116 | (1,163,246 | ) | 20,333,021 | ||||||||||||
Other assets | 2,079,206 | 140,738 | (121,601 | ) | 2,098,343 | ||||||||||||
Total assets | $ | 22,376,357 | $ | 1,339,854 | $ | (1,284,847 | ) | $ | 22,431,364 | ||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
The Company | The Company | ||||||||||||||||
National Rural Utilities Cooperative Finance Corporation (“CFC”) is a member-owned cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation, transmission and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes. | |||||||||||||||||
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation | ||||||||||||||||
The accompanying financial statements include the consolidated accounts of CFC, Rural Telephone Finance Cooperative (“RTFC”) and National Cooperative Services Corporation (“NCSC”) and certain entities created and controlled by CFC to hold foreclosed assets and accommodate loan securitization transactions. The entities controlled by CFC that hold foreclosed assets include Caribbean Asset Holdings, LLC (“CAH”) and Denton Realty Partners, LP (“DRP”). CAH is a holding company for various U.S. Virgin Islands, British Virgin Islands and St. Maarten-based telecommunications operating entities that provide local, long-distance and wireless telephone, cable television and internet services to residential and commercial customers. DRP holds assets primarily consisting of a land development loan and limited partnership interests in certain real estate developments and related receivables, developed lots and retail land. Intercompany accounts and transactions have been eliminated in consolidation. Unless stated otherwise, references to “we,” “our” or “us” relate to CFC and its consolidated entities. | |||||||||||||||||
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). | |||||||||||||||||
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related disclosures. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgment, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair presentation of this interim financial information. | ||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||
Certain prior period amounts have been reclassified to conform to the current period presentation. The most significant reclassification relates to the presentation of short-term and long-term debt. Effective August 31, 2014, we began classifying debt as either short-term or long-term based on the original contractual maturity at issuance. For reporting periods prior to August 31, 2014, we reported long-term debt maturing within one year as part of our short-term debt. The debt reclassification had no impact on our debt ratios or financial covenants. | |||||||||||||||||
Variable Interest Entities | Variable Interest Entities | ||||||||||||||||
We are required to consolidate the financial results of RTFC and NCSC because CFC is the primary beneficiary of variable interests in RTFC and NCSC due to its exposure to absorbing the majority of their expected losses. | |||||||||||||||||
Under separate guarantee agreements, RTFC and NCSC pay CFC a fee to indemnify them against loan losses. CFC is the sole lender to and manages the business operations of RTFC through a management agreement in effect until December 1, 2016, which is automatically renewed for one-year terms thereafter unless terminated by either party. CFC is the primary source of funding to, and manages the lending activities of, NCSC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC funds its lending programs through loans from CFC or debt guaranteed by CFC. In connection with these guarantees, NCSC must pay a guarantee fee. | |||||||||||||||||
Recently Issued but Not Yet Adopted Accounting Standards | Recently Issued but Not Yet Adopted Accounting Standards | ||||||||||||||||
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, which clarifies the principles for recognizing revenue from contracts with customers. The new accounting guidance, which does not apply to financial instruments, is effective for us beginning in the first quarter of fiscal year 2018. We do not expect the new guidance to have a material impact on our financial condition, results of operations or liquidity, as CFC’s primary business and source of revenue is from lending. | |||||||||||||||||
Derivatives | Use of Derivatives | ||||||||||||||||
We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as over-the-counter (“OTC”) derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. | |||||||||||||||||
Accounting for Derivatives | |||||||||||||||||
In accordance with the accounting standards for derivatives and hedging activities, we record derivative instruments at fair value as either a derivative asset or derivative liability on our condensed consolidated balance sheets. We report derivative asset and liability amounts on a gross basis based on individual contracts, which does not take into consideration the effects of master netting agreements or collateral netting. Derivatives in a gain position are reported as derivative assets on our condensed consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our condensed consolidated balance sheets as a component of either accrued interest and other receivables or accrued interest payable. | |||||||||||||||||
If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of periodic derivative cash settlements and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses), net. If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of the hedge relationship. Changes in the fair value of derivatives designated as qualifying fair value hedges are recorded in earnings together with offsetting changes in the fair value of the hedged item and any related ineffectiveness. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”), to the extent that the hedge relationships are effective, and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses), net in our consolidated statement of operations. | |||||||||||||||||
We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting. Accordingly, changes in the fair value of interest rate swaps are reported in our consolidated statements of operations under derivative gains (losses), net. Cash settlements related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows. | |||||||||||||||||
We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances. Accordingly, changes in the fair value of the derivative instruments are recorded as a component of OCI and reclassified to interest expense when the forecasted transaction occurs using the effective interest method. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses), net in our consolidated statements of operations. | |||||||||||||||||
Fair value of assets and liabilities measured on recurring or nonrecurring basis | Fair Value | ||||||||||||||||
Assets and liabilities measured at fair value on either a recurring or non-recurring basis on the condensed consolidated balance sheets as of November 30, 2014 and May 31, 2014 consisted of investments in common and preferred stock, derivative instruments and nonperforming collateral-dependent loans. | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis as of November 30, 2014 and May 31, 2014 consisted of our derivative instruments, investments in common and preferred stock and deferred compensation investments. The following table presents our assets and liabilities that are measured at fair value on a recurring basis as of November 30, 2014 and May 31, 2014. | |||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||
Derivative assets | $ | — | $ | 139,377 | $ | — | $ | 209,759 | |||||||||
Derivative liabilities | — | 400,687 | — | 388,208 | |||||||||||||
Investments in common and preferred stock | 83,779 | — | 55,177 | — | |||||||||||||
Deferred compensation investments | 4,486 | — | 4,156 | — | |||||||||||||
Derivative Instruments | |||||||||||||||||
We account for derivative instruments in the condensed consolidated balance sheets as either an asset or liability measured at fair value. There is not an active secondary market for the types of interest rate swaps we use. Our process to estimate the fair value of our derivative instruments involves multiple steps including consideration of indicative quotes from counterparties and use of a discounted cash flow model. We obtain indicative quotes from the interest rate swap counterparties to estimate fair value on a quarterly basis. The indicative quotes are based on the expected future cash flow and the estimated yield curve. | |||||||||||||||||
We perform analysis to validate the indicative quotes obtained from our swap counterparties and investigate any significant differences. We adjust the market values received from the counterparties using credit default swap levels for us and the counterparties. The credit default swap levels represent the credit risk premium required by a market participant based on the available information related to us and the counterparty. We only enter into swap agreements with counterparties that are participating in our revolving lines of credit at the time the exchange agreements are executed. All of our swap agreements are subject to master netting agreements. | |||||||||||||||||
Our valuation technique for interest rate swaps is based on discounted cash flows and we utilize observable inputs, which reflect market data. To calculate fair value, we determine the forward curve. The forward curve allows us to determine the projected floating rate cash flows and the discount factors needed to calculate the net present value of each interest payment. The significant observable inputs for our derivatives include spot LIBOR rates, Eurodollar futures contracts, and market swap rates. | |||||||||||||||||
Fair values for our interest rate swaps are classified as a Level 2 valuation. We record the change in the fair value of our derivatives for each reporting period in the derivative gains (losses) line, included in non-interest income in the consolidated statements of operations, as currently none of our derivatives qualify for hedge accounting. | |||||||||||||||||
Investments in Preferred and Common Stock | |||||||||||||||||
Our investments in equity securities consist of investments in Farmer Mac Series A, Series B and Series C preferred stock and Class A common stock, which are recorded in the condensed consolidated balance sheets at fair value. We determine the fair value of these investments based on the quoted price on the stock exchange where the stock is traded. That stock exchange is an active market based on the volume of shares transacted. Fair values for these securities are classified as a Level 1 valuation. For the three and six months ended November 30, 2014, we recorded an unrealized gain of $1 million and $4 million, respectively, in accumulated other comprehensive income, compared to an unrealized loss of $1 million and $5 million, respectively, for the same prior-year periods. | |||||||||||||||||
Deferred Compensation Investments | |||||||||||||||||
Deferred compensation investments are recorded in the condensed consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the quoted price on the stock exchange where the funds are traded. That stock exchange is an active market based on the volume of shares transacted. The amounts are invested in highly liquid indices and mutual funds and are classified within Level 1 of the fair value hierarchy. | |||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Non-recurring Basis | |||||||||||||||||
We may be required, from time to time, to measure certain assets at fair value on a non-recurring basis in accordance with GAAP. Any adjustments to fair value usually result from application of lower-of-cost or fair value accounting or write-downs of individual assets. Assets measured at fair value on a non-recurring basis as of November 30, 2014 and May 31, 2014 consisted of certain nonperforming collateral-dependent loans. The fair value of these assets is determined based on the use of significant unobservable inputs, which are considered Level 3 in the fair value hierarchy. | |||||||||||||||||
Nonperforming Collateral-Dependent Loans | |||||||||||||||||
As of November 30, 2014 and May 31, 2014, we measured certain collateral-dependent nonperforming loans at fair value. We utilize the fair value of the collateral underlying the loan to determine the specific allowance for loan loss. In estimating the fair value of the collateral, we may use third-party valuation specialists, internal estimates or a combination of both. The valuation technique used to determine fair value of the nonperforming loans provided by both our internal staff and third-party specialists includes market multiples (i.e., comparable companies). The significant unobservable input used in the determination of fair value for the specific nonperforming loans is a multiple of earnings before interest, taxes, depreciation and amortization of 3.5x as of May 31, 2014. The material inputs used in estimating fair value by both internal staff and third-party specialists are Level 3 within the fair value hierarchy. In these instances, the valuation is considered to be a non-recurring item. The significant unobservable inputs for estimating the fair value of nonperforming collateral-dependent loans are obtained from third-party specialists and reviewed by our Credit Risk Management group to assess the reasonableness of the assumptions used and the accuracy of the work performed. In cases where we rely on third-party inputs, we use the final unadjusted third-party valuation analysis as support for any financial statement adjustments and disclosures to the financial statements. | |||||||||||||||||
Because of the balance of nonperforming collateral-dependent loans, we do not believe that changes in the significant unobservable inputs used in the determination of the fair value will have a material impact on the fair value measurement of these assets or our results of operations. | |||||||||||||||||
Fair value of financial instruments | We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. There were no transfers between levels of the fair value hierarchy during the six months ended November 30, 2014. | ||||||||||||||||
With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity excluding common stock and preferred stock investments that have no stated maturity. Below is a summary of significant methodologies used in estimating fair value amounts as of November 30, 2014 and May 31, 2014. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
Cash and cash equivalents include cash and certificates of deposit with original maturities of less than 90 days. Cash and cash equivalents are valued at the carrying value, which approximates fair value. | |||||||||||||||||
Restricted Cash | |||||||||||||||||
Restricted cash consists of cash and cash equivalents for which use is contractually restricted. The carrying value of restricted cash approximates fair value. | |||||||||||||||||
Investments | |||||||||||||||||
Our investments consist of Farmer Mac Series A, Series B and Series C preferred stock and Class A common stock. These securities are classified as available-for-sale and reported at fair value in our condensed consolidated balance sheets. We determine the fair value based on quoted prices on the stock exchange where the stock is traded. That stock exchange is an active market based on the volume of shares transacted. | |||||||||||||||||
Time Deposits | |||||||||||||||||
Time deposits with financial institutions in interest-bearing accounts have maturities of less than one year as of the reporting date and are valued at the carrying value, which approximates fair value. | |||||||||||||||||
Deferred Compensation Investments | |||||||||||||||||
CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees. Such amounts deferred by employees are invested by the company. The deferred compensation investments are recorded in the condensed consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the quoted price on the stock exchange where the funds are traded. That stock exchange is an active market based on the volume of shares transacted. The amounts are invested in highly liquid indices and mutual funds. | |||||||||||||||||
Loans to Members, Net | |||||||||||||||||
As part of receiving a loan from us, our members have additional requirements and rights that are not typical of other financial institutions, such as the ability to receive a patronage capital allocation, the general requirement to purchase subordinated certificates or member capital securities to meet their capital contribution requirements as a condition of obtaining additional credit from us, the option to select fixed rates from one year to maturity with the fixed rate resetting or repricing at the end of each selected rate term, the ability to convert from a fixed rate to another fixed rate or the variable rate at any time, and certain interest rate discounts that are specific to the borrower’s activity with us. These features make it difficult to obtain market data for similar loans. Therefore, we must use other methods to estimate the fair value. | |||||||||||||||||
Fair values for fixed-rate loans are estimated using a discounted cash flow technique by discounting the expected future cash flows using the current rates at which we would make similar loans to new borrowers for the same remaining maturities. The maturity date used in the fair value calculation of loans with a fixed rate for a selected rate term is the next repricing date since these borrowers must reprice their loans at various times throughout the life of the loan at the current market rate. | |||||||||||||||||
Loans with different risk characteristics, specifically nonperforming and restructured loans, are valued by using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities. See “Note 11—Fair Value Measurement” for more details about how we calculate the fair value of certain nonperforming loans. | |||||||||||||||||
The carrying value of our variable-rate loans adjusted for credit risk approximates fair value since variable-rate loans are eligible to be reset at least monthly. | |||||||||||||||||
Debt Service Reserve Funds | |||||||||||||||||
Debt service reserve funds represent cash and/or investments on deposit with the bond trustee for tax-exempt bonds that we guarantee. Debt service reserve fund investments are comprised of actively traded tax exempt municipal bonds and commercial paper. Carrying value is considered to be equal to fair value. | |||||||||||||||||
Short-Term Debt | |||||||||||||||||
Short-term debt consists of commercial paper, select notes, bank bid notes, daily liquidity fund notes and medium-term notes. The fair value of short-term debt with maturities less than or equal to 90 days is carrying value, which is a reasonable estimate of fair value. The fair value of short-term debt with maturities greater than 90 days is estimated based on discounted cash flows and quoted market rates for debt with similar maturities. Short-term debt classified within Level 1 of the fair value hierarchy is comprised of dealer commercial paper, bank bid notes and daily liquidity fund notes. Short-term debt classified within Level 2 of the fair value hierarchy is comprised of member commercial paper, non-member commercial paper and select notes, and is determined based on discounted cash flows using discount rates consistent with current market rates for similar products with similar remaining terms. | |||||||||||||||||
Short-term debt classified within Level 2 also includes our medium-term notes with an original maturity equal to or less than one year. The fair value of short-term medium-term notes classified within Level 2 of the fair value hierarchy was determined based on discounted cash flows using a pricing model that incorporates available market information such as indicative benchmark yields and credit spread assumptions that are provided by third-party pricing services such as our banks that underwrite our other debt transactions. | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Long-term debt consists of collateral trust bonds, medium-term notes and long-term notes payable. We issue substantially all collateral trust bonds and some medium-term notes in underwritten public transactions. Collateral trust bonds and medium-term notes are classified within Level 2 of the fair value hierarchy. The fair value of long-term debt classified within Level 2 of the fair value hierarchy was determined based on discounted cash flows. There is no active secondary trading for the underwritten collateral trust bonds and medium-term notes; therefore, dealer quotes and recent market prices are both used in estimating fair value. There is essentially no secondary market for the medium-term notes issued to our members or in transactions that are not underwritten; therefore, fair value is estimated based on observable benchmark yields and spreads for similar instruments supplied by banks that underwrite our other debt transactions. | |||||||||||||||||
The long-term notes payable are issued in private placement transactions and there is no secondary trading of such debt. Long-term notes payable are classified within Level 3 of the fair value hierarchy. The fair value was determined based on discounted cash flows using benchmark yields and spreads for similar instruments supplied by underwriter quotes for similar instruments, if available. Secondary trading quotes for our debt instruments used in the determination of fair value incorporate our credit risk. | |||||||||||||||||
Guarantees | |||||||||||||||||
The fair value of our guarantee liability is based on the fair value of our contingent and non-contingent exposure related to our guarantees. The fair value of our contingent exposure for guarantees is based on management’s estimate of our exposure to losses within the guarantee portfolio using a discounted cash flow method. The fair value of our non-contingent exposure for guarantees issued is estimated based on the total unamortized balance of guarantee fees paid and guarantee fees to be paid discounted at our current short-term funding rate, which represents management’s estimate of the fair value of our obligation to stand ready to perform. | |||||||||||||||||
Subordinated Deferrable Debt | |||||||||||||||||
Subordinated deferrable debt outstanding was issued in an underwritten public transaction. There is no active secondary trading for this subordinated deferrable debt; therefore, dealer quotes and recent market prices are both used in estimating fair value based on a discounted cash flow method. | |||||||||||||||||
Members’ Subordinated Certificates | |||||||||||||||||
Members’ subordinated certificates include (i) membership subordinated certificates issued to our members, (ii) loan and guarantee subordinated certificates issued as a condition of obtaining loan funds or guarantees and (iii) member capital securities issued as voluntary investments by our members. All members' subordinated certificates are non-transferable other than among members with CFC’s consent and there is no ready market from which to obtain fair value quotes. These certificates are valued at par. | |||||||||||||||||
Derivative Instruments | |||||||||||||||||
We report derivative instruments at fair value as either an asset or liability in our condensed consolidated balance sheets. Because there is not an active secondary market for the types of interest rate swaps we use, we obtain indicative quotes from the interest rate swap counterparties to estimate fair value on a quarterly basis. The indicative quotes are based on the expected future cash flow and estimated yield curves. We adjust the market values received from the counterparties using credit default swap levels for us and the counterparties. The credit default swap levels represent the credit risk premium required by a market participant based on the available information related to us and the counterparty. | |||||||||||||||||
Commitments | |||||||||||||||||
The fair value of our commitments is estimated based on the carrying value, or zero. Extensions of credit under these commitments, if exercised, would result in loans priced at market rates. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Schedule of components of interest income | Interest income on loans is recognized using the effective interest method. The following table presents the components of interest income for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest on long-term fixed-rate loans | $ | 219,119 | $ | 221,952 | $ | 438,535 | $ | 446,535 | |||||||||
Interest on long-term variable-rate loans | 4,902 | 4,826 | 10,262 | 9,654 | |||||||||||||
Interest on line of credit loans | 6,687 | 7,505 | 13,629 | 15,077 | |||||||||||||
Interest on restructured loans | 10 | — | 10 | 136 | |||||||||||||
Interest on investments | 1,549 | 1,817 | 4,121 | 3,753 | |||||||||||||
Fee income(1) | 2,968 | 3,154 | 5,969 | 5,170 | |||||||||||||
Total interest income | $ | 235,235 | $ | 239,254 | $ | 472,526 | $ | 480,325 | |||||||||
____________________________ | |||||||||||||||||
(1) Primarily related to conversion fees, which are deferred and recognized in interest income over the original loan interest rate pricing term using the effective interest method. Also includes a small portion of conversion fees that are intended to cover the administrative costs related to the conversion, which are recognized immediately. | |||||||||||||||||
Schedule of components of interest expense | The following table presents the components of interest expense for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest expense on debt:(1) | |||||||||||||||||
Short-term debt | $ | 1,432 | $ | 1,607 | $ | 2,706 | $ | 3,039 | |||||||||
Medium-term notes | 17,022 | 20,980 | 33,741 | 42,551 | |||||||||||||
Collateral trust bonds | 75,219 | 74,858 | 149,986 | 151,656 | |||||||||||||
Subordinated deferrable debt | 4,750 | 4,750 | 9,500 | 9,500 | |||||||||||||
Subordinated certificates | 16,116 | 20,494 | 32,896 | 41,120 | |||||||||||||
Long-term notes payable | 36,823 | 38,759 | 75,257 | 76,698 | |||||||||||||
Debt issuance costs(2) | 1,932 | 1,782 | 3,725 | 3,647 | |||||||||||||
Fee expense(3) | 4,981 | 2,115 | 7,016 | 4,719 | |||||||||||||
Total interest expense | $ | 158,275 | $ | 165,345 | $ | 314,827 | $ | 332,930 | |||||||||
____________________________ | |||||||||||||||||
(1) Represents interest expense and the amortization of discounts on debt. | |||||||||||||||||
(2) Primarily consists of underwriter’s fees, legal fees, printing costs and certain accounting fees, which are deferred and recognized in interest expense using the effective interest method. Also includes issuance costs related to dealer commercial paper, which are recognized immediately as incurred. | |||||||||||||||||
(3) Reflects various fees related to funding activities, including fees paid to banks participating in our revolving credit agreements. Amounts are recognized as incurred or amortized on a straight-line basis over the life of the agreement. |
Investment_Securities_Tables
Investment Securities (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Investments [Abstract] | |||||||||||||||||
Schedule of investments in equity securities | The following tables present the amortized cost, gross unrealized gains and losses and fair value of our available-for-sale investment securities as of November 30, 2014 and May 31, 2014. | ||||||||||||||||
30-Nov-14 | |||||||||||||||||
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Farmer Mac—Series A Non-Cumulative Preferred Stock | $ | 30,000 | $ | — | $ | — | $ | 30,000 | |||||||||
Farmer Mac—Series B Non-Cumulative Preferred Stock | 25,000 | 1,300 | — | 26,300 | |||||||||||||
Farmer Mac—Series C Non-Cumulative Preferred Stock | 25,000 | 584 | — | 25,584 | |||||||||||||
Farmer Mac—Class A Common Stock | 538 | 1,357 | — | 1,895 | |||||||||||||
Total available-for-sale investment securities | $ | 80,538 | $ | 3,241 | $ | — | $ | 83,779 | |||||||||
31-May-14 | |||||||||||||||||
(Dollars in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||
Farmer Mac—Series A Non-Cumulative Preferred Stock | $ | 30,000 | $ | — | $ | (2,220 | ) | $ | 27,780 | ||||||||
Farmer Mac—Series B Non-Cumulative Preferred Stock | 25,000 | 500 | — | 25,500 | |||||||||||||
Farmer Mac—Class A Common Stock | 538 | 1,359 | — | 1,897 | |||||||||||||
Total available-for-sale securities | $ | 55,538 | $ | 1,859 | $ | (2,220 | ) | $ | 55,177 | ||||||||
Loans_and_Commitments_Tables
Loans and Commitments (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||
Summary of loans outstanding to members and unadvanced commitments by loan type and by member class | outstanding principal balance of loans to members, unadvanced commitments and deferred loan origination costs, by loan type and member class, as of November 30, 2014 and May 31, 2014 are presented below. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Loans | Unadvanced | Loans | Unadvanced | |||||||||||||||||||||
Outstanding | Commitments (1) | Outstanding | Commitments (1) | ||||||||||||||||||||||
Loan type: (2) | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 18,712,604 | $ | — | $ | 18,175,656 | $ | — | |||||||||||||||||
Long-term variable-rate loans | 689,878 | 4,484,225 | 753,918 | 4,710,273 | |||||||||||||||||||||
Loans guaranteed by RUS | 181,986 | — | 201,863 | — | |||||||||||||||||||||
Line of credit loans | 1,188,812 | 9,378,303 | 1,335,488 | 9,201,805 | |||||||||||||||||||||
Total loans outstanding (3) | 20,773,280 | 13,862,528 | 20,466,925 | 13,912,078 | |||||||||||||||||||||
Deferred loan origination costs | 9,706 | — | 9,717 | — | |||||||||||||||||||||
Loans to members | $ | 20,782,986 | $ | 13,862,528 | $ | 20,476,642 | $ | 13,912,078 | |||||||||||||||||
Member class:(2) | |||||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,386,626 | $ | 9,350,749 | $ | 15,035,365 | $ | 9,531,315 | |||||||||||||||||
Power supply | 4,224,787 | 3,051,250 | 4,086,163 | 3,025,423 | |||||||||||||||||||||
Statewide and associate | 63,740 | 128,989 | 67,902 | 105,961 | |||||||||||||||||||||
CFC total | 19,675,153 | 12,530,988 | 19,189,430 | 12,662,699 | |||||||||||||||||||||
RTFC | 428,648 | 290,284 | 449,546 | 304,500 | |||||||||||||||||||||
NCSC | 669,479 | 1,041,256 | 827,949 | 944,879 | |||||||||||||||||||||
Total loans outstanding | $ | 20,773,280 | $ | 13,862,528 | $ | 20,466,925 | $ | 13,912,078 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. | |||||||||||||||||||||||||
(2) Includes nonperforming and restructured loans. | |||||||||||||||||||||||||
(3) Represents the unpaid principal balance excluding deferred loan origination costs. | |||||||||||||||||||||||||
Summary of available balance under committed lines of credit and the related maturities by fiscal year | The following table summarizes the available balance under committed lines of credit as of November 30, 2014 and the related maturities by fiscal year and thereafter as follows: | ||||||||||||||||||||||||
Available | Notional Maturities of Unconditional Committed Lines of Credit | ||||||||||||||||||||||||
(Dollars in thousands) | Balance | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Committed lines of credit | $2,591,131 | $ | 17,885 | $61,000 | $424,723 | $792,305 | $1,119,618 | $175,600 | |||||||||||||||||
Schedule of analysis of the age of the recorded investment in loans outstanding by member class | The tables below show an analysis of the age of the recorded investment in loans outstanding by member class as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Current | 30-89 Days Past Due | 90 Days or More | Total | Total Financing | Nonaccrual Loans | |||||||||||||||||||
Past Due (1) | Past Due | Receivables | |||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,386,626 | $ | — | $ | — | $ | — | $ | 15,386,626 | $ | 7,221 | |||||||||||||
Power supply | 4,224,787 | — | — | — | 4,224,787 | — | |||||||||||||||||||
Statewide and associate | 63,740 | — | — | — | 63,740 | — | |||||||||||||||||||
CFC total | 19,675,153 | — | — | — | 19,675,153 | 7,221 | |||||||||||||||||||
RTFC | 428,455 | 98 | 95 | 193 | 428,648 | 1,695 | |||||||||||||||||||
NCSC | 669,479 | — | — | — | 669,479 | 321 | |||||||||||||||||||
Total loans outstanding | $ | 20,773,087 | $ | 98 | $ | 95 | $ | 193 | $ | 20,773,280 | $ | 9,237 | |||||||||||||
As a % of total loans | 100 | % | — | % | — | % | — | % | 100 | % | 0.05 | % | |||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Current | 30-89 Days Past Due | 90 Days or More | Total | Total Financing | Nonaccrual Loans | |||||||||||||||||||
Past Due (1) | Past Due | Receivables | |||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,035,365 | $ | — | $ | — | $ | — | $ | 15,035,365 | $ | 7,584 | |||||||||||||
Power supply | 4,086,163 | — | — | — | 4,086,163 | — | |||||||||||||||||||
Statewide and associate | 67,902 | — | — | — | 67,902 | — | |||||||||||||||||||
CFC total | 19,189,430 | — | — | — | 19,189,430 | 7,584 | |||||||||||||||||||
RTFC | 449,546 | — | — | — | 449,546 | 1,695 | |||||||||||||||||||
NCSC | 827,949 | — | — | — | 827,949 | 400 | |||||||||||||||||||
Total loans outstanding | $ | 20,466,925 | $ | — | $ | — | $ | — | $ | 20,466,925 | $ | 9,679 | |||||||||||||
As a % of total loans | 100 | % | — | % | — | % | — | % | 100 | % | 0.05 | % | |||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) All loans 90 days or more past due are on nonaccrual status. | |||||||||||||||||||||||||
Schedule of loan portfolio by risk rating category and member class based on available data | The following table presents our loan portfolio by risk rating category and member class based on available data as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Pass | Criticized | Total | Pass | Criticized | Total | |||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Distribution | $ | 15,357,810 | $ | 28,816 | $ | 15,386,626 | $ | 15,018,642 | $ | 16,723 | $ | 15,035,365 | |||||||||||||
Power supply | 4,224,787 | — | 4,224,787 | 4,086,163 | — | 4,086,163 | |||||||||||||||||||
Statewide and associate | 63,468 | 272 | 63,740 | 67,625 | 277 | 67,902 | |||||||||||||||||||
CFC total | 19,646,065 | 29,088 | 19,675,153 | 19,172,430 | 17,000 | 19,189,430 | |||||||||||||||||||
RTFC | 426,953 | 1,695 | 428,648 | 447,851 | 1,695 | 449,546 | |||||||||||||||||||
NCSC | 667,439 | 2,040 | 669,479 | 825,736 | 2,213 | 827,949 | |||||||||||||||||||
Total loans outstanding | $ | 20,740,457 | $ | 32,823 | $ | 20,773,280 | $ | 20,446,017 | $ | 20,908 | $ | 20,466,925 | |||||||||||||
Summary of secured and unsecured loans outstanding by loan type and by company | The following tables summarize our secured and unsecured loans outstanding by loan type and by company as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | Secured | % | Unsecured | % | Total | ||||||||||||||||||||
Loan type: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 17,725,009 | 95 | % | $ | 987,595 | 5 | % | $ | 18,712,604 | |||||||||||||||
Long-term variable-rate loans | 598,981 | 87 | 90,897 | 13 | 689,878 | ||||||||||||||||||||
Loans guaranteed by RUS | 181,986 | 100 | — | — | 181,986 | ||||||||||||||||||||
Line of credit loans | 203,346 | 17 | 985,466 | 83 | 1,188,812 | ||||||||||||||||||||
Total loans outstanding | $ | 18,709,322 | 90 | $ | 2,063,958 | 10 | $ | 20,773,280 | |||||||||||||||||
Company: | |||||||||||||||||||||||||
CFC | $ | 17,838,337 | 91 | % | $ | 1,836,816 | 9 | % | $ | 19,675,153 | |||||||||||||||
RTFC | 411,169 | 96 | 17,479 | 4 | 428,648 | ||||||||||||||||||||
NCSC | 459,816 | 69 | 209,663 | 31 | 669,479 | ||||||||||||||||||||
Total loans outstanding | $ | 18,709,322 | 90 | $ | 2,063,958 | 10 | $ | 20,773,280 | |||||||||||||||||
31-May-14 | |||||||||||||||||||||||||
(Dollars in thousands) | Secured | % | Unsecured | % | Total | ||||||||||||||||||||
Loan type: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 17,185,456 | 95 | % | $ | 990,200 | 5 | % | $ | 18,175,656 | |||||||||||||||
Long-term variable-rate loans | 650,211 | 86 | 103,707 | 14 | 753,918 | ||||||||||||||||||||
Loans guaranteed by RUS | 201,863 | 100 | — | — | 201,863 | ||||||||||||||||||||
Line of credit loans | 311,103 | 23 | 1,024,385 | 77 | 1,335,488 | ||||||||||||||||||||
Total loans outstanding | $ | 18,348,633 | 90 | $ | 2,118,292 | 10 | $ | 20,466,925 | |||||||||||||||||
Company: | |||||||||||||||||||||||||
CFC | $ | 17,313,990 | 90 | % | $ | 1,875,440 | 10 | % | $ | 19,189,430 | |||||||||||||||
RTFC | 429,626 | 96 | 19,920 | 4 | 449,546 | ||||||||||||||||||||
NCSC | 605,017 | 73 | 222,932 | 27 | 827,949 | ||||||||||||||||||||
Total loans outstanding | $ | 18,348,633 | 90 | $ | 2,118,292 | 10 | $ | 20,466,925 | |||||||||||||||||
Summary of the activity in the loan loss allowance reflecting disaggregation by company of the allowance for loan losses held at CFC based on borrower type | The tables below summarize changes, by company, in the allowance for loan losses as of and for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of August 31, 2014 | $ | 40,461 | $ | 4,288 | $ | 4,962 | $ | 49,711 | |||||||||||||||||
Provision for loan losses | 670 | 739 | (417 | ) | 992 | ||||||||||||||||||||
Recoveries | 54 | — | — | 54 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Three Months Ended November 30, 2013 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of August 31, 2013 | $ | 43,336 | $ | 8,497 | $ | 3,823 | $ | 55,656 | |||||||||||||||||
Provision for loan losses | (627 | ) | 968 | 755 | 1,096 | ||||||||||||||||||||
Charge-offs | — | (1,606 | ) | — | (1,606 | ) | |||||||||||||||||||
Recoveries | 53 | — | — | 53 | |||||||||||||||||||||
Balance as of November 30, 2013 | $ | 42,762 | $ | 7,859 | $ | 4,578 | $ | 55,199 | |||||||||||||||||
Six Months Ended November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of May 31, 2014 | $ | 45,600 | $ | 4,282 | $ | 6,547 | $ | 56,429 | |||||||||||||||||
Provision for loan losses | (4,522 | ) | 745 | (2,002 | ) | (5,779 | ) | ||||||||||||||||||
Recoveries | 107 | — | — | 107 | |||||||||||||||||||||
Balance as of November 30, 2014 | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Six Months Ended November 30, 2013 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC (1) | NCSC (1) | Total | |||||||||||||||||||||
Balance as of May 31, 2013 | $ | 41,246 | $ | 9,158 | $ | 3,921 | $ | 54,325 | |||||||||||||||||
Provision for loan losses | 1,410 | 307 | 657 | 2,374 | |||||||||||||||||||||
Charge-offs | — | (1,606 | ) | — | (1,606 | ) | |||||||||||||||||||
Recoveries | 106 | — | — | 106 | |||||||||||||||||||||
Balance as of November 30, 2013 | $ | 42,762 | $ | 7,859 | $ | 4,578 | $ | 55,199 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The allowance for loan losses recorded for RTFC and NCSC are held at CFC. | |||||||||||||||||||||||||
Schedule of loan loss allowance and the recorded investment in outstanding loans by impairment methodology and by company | The tables below present, by company, the components of our allowance for loan losses and the recorded investment of the related loans as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC | NCSC | Total | |||||||||||||||||||||
Ending balance of the allowance: | |||||||||||||||||||||||||
Collectively evaluated | $ | 41,185 | $ | 3,671 | $ | 4,385 | $ | 49,241 | |||||||||||||||||
Individually evaluated | — | 1,356 | 160 | 1,516 | |||||||||||||||||||||
Total ending balance of the allowance | $ | 41,185 | $ | 5,027 | $ | 4,545 | $ | 50,757 | |||||||||||||||||
Recorded investment in loans: | |||||||||||||||||||||||||
Collectively evaluated | $ | 19,667,932 | $ | 426,953 | $ | 669,158 | $ | 20,764,043 | |||||||||||||||||
Individually evaluated | 7,221 | 1,695 | 321 | 9,237 | |||||||||||||||||||||
Total recorded investment in loans | $ | 19,675,153 | $ | 428,648 | $ | 669,479 | $ | 20,773,280 | |||||||||||||||||
Loans to members, net (1) | $ | 19,633,968 | $ | 423,621 | $ | 664,934 | $ | 20,722,523 | |||||||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
(Dollars in thousands) | CFC | RTFC | NCSC | Total | |||||||||||||||||||||
Ending balance of the allowance: | |||||||||||||||||||||||||
Collectively evaluated | $ | 45,600 | $ | 3,876 | $ | 6,527 | $ | 56,003 | |||||||||||||||||
Individually evaluated | — | 406 | 20 | 426 | |||||||||||||||||||||
Total ending balance of the allowance | $ | 45,600 | $ | 4,282 | $ | 6,547 | $ | 56,429 | |||||||||||||||||
Recorded investment in loans: | |||||||||||||||||||||||||
Collectively evaluated | $ | 19,181,846 | $ | 447,851 | $ | 827,549 | $ | 20,457,246 | |||||||||||||||||
Individually evaluated | 7,584 | 1,695 | 400 | 9,679 | |||||||||||||||||||||
Total recorded investment in loans | $ | 19,189,430 | $ | 449,546 | $ | 827,949 | $ | 20,466,925 | |||||||||||||||||
Loans to members, net(1) | $ | 19,143,830 | $ | 445,264 | $ | 821,402 | $ | 20,410,496 | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) Excludes deferred origination costs of $10 million as of November 30, 2014 and May 31, 2014 | |||||||||||||||||||||||||
Summary of recorded investment in individually-impaired loans and the related specific valuation allowance by member class | Our recorded investment in individually-impaired loans, which consists of the unpaid principal balance, and the related specific valuation allowance, by member class, as of November 30, 2014 and May 31, 2014 are summarized below. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Recorded | Related | Recorded | Related | |||||||||||||||||||||
Investment | Allowance | Investment | Allowance | ||||||||||||||||||||||
With no specific allowance recorded: | |||||||||||||||||||||||||
CFC/Distribution | $ | 7,221 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
With a specific allowance recorded: | |||||||||||||||||||||||||
NCSC | 321 | 160 | 400 | 20 | |||||||||||||||||||||
RTFC | 1,695 | 1,356 | 1,695 | 406 | |||||||||||||||||||||
Total | 2,016 | 1,516 | 2,095 | 426 | |||||||||||||||||||||
Total impaired loans | $ | 9,237 | $ | 1,516 | $ | 9,679 | $ | 426 | |||||||||||||||||
Schedule of average recorded investment in impaired loans and the interest income recognized by member class | The table below represents the average recorded investment in impaired loans and the interest income recognized, by member class, for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||
Three Months Ended November 30, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||
CFC/Distribution | $ | 7,221 | $ | 7,584 | $ | — | $ | — | |||||||||||||||||
CFC/Power Supply | — | 5,000 | — | — | |||||||||||||||||||||
NCSC | 325 | — | 10 | — | |||||||||||||||||||||
RTFC | 1,695 | 7,295 | — | — | |||||||||||||||||||||
Total impaired loans | $ | 9,241 | $ | 19,879 | $ | 10 | $ | — | |||||||||||||||||
Six Months Ended November 30, | |||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(Dollars in thousands) | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||
CFC/Distribution | $ | 7,403 | $ | 14,116 | $ | — | $ | 136 | |||||||||||||||||
CFC/Power Supply | — | 5,000 | — | — | |||||||||||||||||||||
NCSC | 344 | — | 10 | — | |||||||||||||||||||||
RTFC | 1,695 | 8,838 | — | — | |||||||||||||||||||||
Total impaired loans | $ | 9,442 | $ | 27,954 | $ | 10 | $ | 136 | |||||||||||||||||
Schedule of nonperforming and restructured loans | Nonperforming and restructured loans outstanding and unadvanced commitments to members are summarized as follows by loan type and by company as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Loans | Unadvanced | Loans | Unadvanced | |||||||||||||||||||||
Outstanding | Commitments(1) | Outstanding | Commitments(1) | ||||||||||||||||||||||
Nonperforming and restructured loans: | |||||||||||||||||||||||||
Nonperforming loans: | |||||||||||||||||||||||||
RTFC: | |||||||||||||||||||||||||
Long-term variable-rate loans | $ | 1,695 | $ | — | $ | 1,695 | $ | — | |||||||||||||||||
NCSC: | |||||||||||||||||||||||||
Line of credit loans | — | — | 400 | — | |||||||||||||||||||||
Total nonperforming loans | $ | 1,695 | $ | — | $ | 2,095 | $ | — | |||||||||||||||||
Restructured loans: | |||||||||||||||||||||||||
CFC: | |||||||||||||||||||||||||
Long-term fixed-rate loans | $ | 7,221 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
NCSC: | |||||||||||||||||||||||||
Line of credit loans | 321 | — | — | — | |||||||||||||||||||||
Total restructured loans | $ | 7,542 | $ | — | $ | 7,584 | $ | — | |||||||||||||||||
____________________________ | |||||||||||||||||||||||||
(1) The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. | |||||||||||||||||||||||||
Summary of foregone interest income as a result of holding loans on non-accrual status | The following table shows foregone interest income as a result of holding loans on nonaccrual status for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Nonperforming loans | $ | 25 | $ | 142 | $ | 51 | $ | 321 | |||||||||||||||||
Restructured loans | 127 | 122 | 264 | 244 | |||||||||||||||||||||
Total | $ | 152 | $ | 264 | $ | 315 | $ | 565 | |||||||||||||||||
Summary of loans outstanding as collateral pledged to secure the entity's collateral trust bonds, Clean Renewable Energy Bonds and notes payable to the Federal Agricultural Mortgage Corporation and the amount of the corresponding debt outstanding | The following table summarizes our loans outstanding as collateral pledged to secure our collateral trust bonds, Clean Renewable Energy Bonds and notes payable to Farmer Mac and the amount of the corresponding debt outstanding (see “Note 5—Short-Term Debt and Credit Arrangements” and “Note 6—Long-Term Debt”) as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||||||
Collateral trust bonds: | |||||||||||||||||||||||||
2007 indenture: | |||||||||||||||||||||||||
Distribution system mortgage notes | $ | 6,144,439 | $ | 5,987,767 | |||||||||||||||||||||
RUS guaranteed loans qualifying as permitted investments | 159,051 | 161,372 | |||||||||||||||||||||||
Total pledged collateral | $ | 6,303,490 | $ | 6,149,139 | |||||||||||||||||||||
Collateral trust bonds outstanding | 5,697,711 | 5,397,711 | |||||||||||||||||||||||
1994 indenture: | |||||||||||||||||||||||||
Distribution system mortgage notes | $ | 967,604 | $ | 1,005,058 | |||||||||||||||||||||
Collateral trust bonds outstanding | 855,000 | 860,000 | |||||||||||||||||||||||
Farmer Mac: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes | $ | 1,853,003 | $ | 1,907,607 | |||||||||||||||||||||
Notes payable outstanding | 1,527,643 | 1,667,505 | |||||||||||||||||||||||
Clean Renewable Energy Bonds Series 2009A: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes | $ | 20,329 | $ | 21,398 | |||||||||||||||||||||
Cash | 1,098 | 520 | |||||||||||||||||||||||
Total pledged collateral | $ | 21,427 | $ | 21,918 | |||||||||||||||||||||
Notes payable outstanding | 18,230 | 18,230 | |||||||||||||||||||||||
Schedule of collateral on deposit and the amount of the corresponding debt outstanding | The following table shows the collateral on deposit and the amount of the corresponding debt outstanding as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||||||
Federal Financing Bank: | |||||||||||||||||||||||||
Distribution and power supply system mortgage notes on deposit | $ | 4,876,247 | $ | 5,076,428 | |||||||||||||||||||||
Notes payable outstanding | 4,291,500 | 4,299,000 | |||||||||||||||||||||||
Foreclosed_Assets_Tables
Foreclosed Assets (Tables) | 6 Months Ended | ||||||||||||
Nov. 30, 2014 | |||||||||||||
Repossessed Assets [Abstract] | |||||||||||||
Summary of activity for foreclosed assets | Foreclosed asset activity as of and for the six months ended November 30, 2014 is summarized below. | ||||||||||||
Six Months Ended November 30, 2014 | |||||||||||||
(Dollars in thousands) | CAH | DRP | Total | ||||||||||
Balance as of beginning of period | $ | 239,119 | $ | 6,532 | $ | 245,651 | |||||||
Results of operations | (4,438 | ) | (249 | ) | (4,687 | ) | |||||||
Impairment | (27,003 | ) | — | (27,003 | ) | ||||||||
Results of operations of foreclosed assets | (31,441 | ) | (249 | ) | (31,690 | ) | |||||||
Net cash investments | 2,246 | (3,000 | ) | (754 | ) | ||||||||
Balance as of end of period | $ | 209,924 | $ | 3,283 | $ | 213,207 | |||||||
ShortTerm_Debt_and_Credit_Arra1
Short-Term Debt and Credit Arrangements (Tables) | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||
Summary of short-term debt outstanding and the weighted-average effective interest rates | The following is a summary of short-term debt outstanding as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||||||||||||||
Short-term debt: | |||||||||||||||||||||
Commercial paper sold through dealers, net of discounts (1) | $ | 2,040,851 | $ | 1,973,557 | |||||||||||||||||
Commercial paper sold directly to members, at par (1) | 720,176 | 838,074 | |||||||||||||||||||
Commercial paper sold directly to non-members, at par (1) | 21,371 | 20,315 | |||||||||||||||||||
Select notes | 634,851 | 548,610 | |||||||||||||||||||
Daily liquidity fund notes | 586,592 | 486,501 | |||||||||||||||||||
Bank bid notes | — | 20,000 | |||||||||||||||||||
Medium-term notes sold to members | 218,563 | 212,274 | |||||||||||||||||||
Total short-term debt | $ | 4,222,404 | $ | 4,099,331 | |||||||||||||||||
____________________________ | |||||||||||||||||||||
(1) Backup liquidity is provided by our revolving credit agreements. | |||||||||||||||||||||
Schedule of total available and outstanding letters of credit under the revolving credit agreements | The following table presents the total available and the outstanding letters of credit under our revolving credit agreements as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||
Total Available | Letters of Credit Outstanding | ||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | November 30, 2014 | May 31, 2014 | Maturity | Annual Facility Fee (1) | |||||||||||||||
Three-year agreement | $ | 1,720,000 | $ | — | $ | — | $ | — | October 28, 2017 | 7.5 basis points | |||||||||||
Five-year agreement | 1,698,109 | — | 1,891 | — | October 28, 2019 | 10 basis points | |||||||||||||||
Three-year agreement | — | 1,036,000 | — | — | October 28, 2016 | 10 basis points | |||||||||||||||
Four-year agreement | — | 1,122,500 | — | — | October 28, 2017 | 10 basis points | |||||||||||||||
Five-year agreement | — | 1,065,609 | — | 1,891 | October 28, 2018 | 10 basis points | |||||||||||||||
Total | $ | 3,418,109 | $ | 3,224,109 | $ | 1,891 | $ | 1,891 | |||||||||||||
____________________________ | |||||||||||||||||||||
(1) Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement. | |||||||||||||||||||||
Schedule of required and actual financial ratios under the revolving credit agreements | The following represents our required and actual financial ratios under the revolving credit agreements as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||
Actual | |||||||||||||||||||||
Requirement | November 30, 2014 | May 31, 2014 | |||||||||||||||||||
Minimum average adjusted TIER over the six most recent fiscal quarters(1) | 1.025 | 1.24 | 1.28 | ||||||||||||||||||
Minimum adjusted TIER for the most recent fiscal year (1) (2) | 1.05 | 1.23 | 1.23 | ||||||||||||||||||
Maximum ratio of adjusted senior debt to total equity (1) | 10 | 5.93 | 5.79 | ||||||||||||||||||
____________________________ | |||||||||||||||||||||
(1) In addition to the adjustments made to the leverage ratio set forth in “Item 7. MD&A—Non-GAAP Financial Measures,” senior debt excludes guarantees to member systems that have certain investment-grade ratings by Moody’s Investors Service (“Moody's”) and Standard & Poor’s Corporation (“S&P”). The TIER and debt-to-equity calculations include the adjustments set forth in “Item 7. MD&A—Non-GAAP Financial Measures” and exclude the results of operations and other comprehensive income for CAH. | |||||||||||||||||||||
(2) We must meet this requirement to retire patronage capital. |
LongTerm_Debt_Tables
Long-Term Debt (Tables) (Long-Term Debt) | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Long-Term Debt | |||||||||
Long-term debt | |||||||||
Summary of long-term debt outstanding and the weighted-average effective interest rates | The following is a summary of long-term debt outstanding as of November 30, 2014 and May 31, 2014. | ||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | |||||||
Unsecured long-term debt: | |||||||||
Medium-term notes sold through dealers | $ | 2,293,995 | $ | 2,228,459 | |||||
Medium-term notes sold to members | 392,847 | 285,988 | |||||||
Subtotal medium-term notes | 2,686,842 | 2,514,447 | |||||||
Unamortized discount | (413 | ) | (418 | ) | |||||
Total unsecured medium-term notes | 2,686,429 | 2,514,029 | |||||||
Guaranteed Underwriter Program notes payable | 4,291,500 | 4,299,000 | |||||||
Other unsecured notes payable | 35,075 | 35,075 | |||||||
Subtotal unsecured notes payable | 4,326,575 | 4,334,075 | |||||||
Unamortized discount | (694 | ) | (770 | ) | |||||
Total unsecured notes payable | 4,325,881 | 4,333,305 | |||||||
Total unsecured long-term debt | 7,012,310 | 6,847,334 | |||||||
Secured long-term debt: | |||||||||
Collateral trust bonds | 6,552,711 | 6,257,711 | |||||||
Unamortized discount | (273,972 | ) | (277,496 | ) | |||||
Total collateral trust bonds | 6,278,739 | 5,980,215 | |||||||
Farmer Mac notes payable | 1,527,643 | 1,667,505 | |||||||
Other secured notes payable | 18,230 | 18,230 | |||||||
Total secured notes payable | 1,545,873 | 1,685,735 | |||||||
Total secured long-term debt | 7,824,612 | 7,665,950 | |||||||
Total long-term debt | $ | 14,836,922 | $ | 14,513,284 | |||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of notional amounts and weighted average rates paid and received | The following table shows the outstanding notional amounts and the weighted-average rate paid and received for our interest rate swaps, by type, as of November 30, 2014 and May 31, 2014. The substantial majority of our interest rate exchange agreements use an index based on the London Interbank Offered Rate (“LIBOR”) for either the pay or receive leg of the swap agreement. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Notional | Weighted- | Weighted- | Notional | Weighted- | Weighted- | |||||||||||||||||||
Amount | Average | Average | Amount | Average | Average | ||||||||||||||||||||
Rate Paid | Rate Received | Rate Paid | Rate Received | ||||||||||||||||||||||
Pay-fixed swaps | $ | 5,617,235 | 3.31 | % | 0.22 | % | $ | 5,322,809 | 3.33 | % | 0.21 | % | |||||||||||||
Receive-fixed swaps | 2,949,000 | 0.83 | 3.6 | 3,124,000 | 0.85 | 3.62 | |||||||||||||||||||
Total interest rate swaps | $ | 8,566,235 | 2.45 | 1.38 | $ | 8,446,809 | 2.41 | 1.48 | |||||||||||||||||
Schedule of fair values and notional amounts of outstanding derivatives | The following table displays the fair value of the derivative assets and derivative liabilities recorded on our condensed consolidated balance sheets and the related outstanding notional amount of our interest rate swaps as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | 31-May-14 | ||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Notional Balance | Fair Value | Notional Balance | |||||||||||||||||||||
Derivative assets | $ | 139,377 | $ | 3,294,493 | $ | 209,759 | $ | 3,817,593 | |||||||||||||||||
Derivative liabilities | (400,687 | ) | 5,271,742 | (388,208 | ) | 4,629,216 | |||||||||||||||||||
Total | $ | (261,310 | ) | $ | 8,566,235 | $ | (178,449 | ) | $ | 8,446,809 | |||||||||||||||
Schedule of offsetting assets and liabilities | The following table presents the gross fair value of derivative assets and liabilities reported on our condensed consolidated balance sheets as of November 30, 2014 and May 31, 2014, and provides information on the impact of netting provisions and collateral pledged. | ||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 139,377 | $ | — | $ | 139,377 | $ | 137,508 | $ | — | $ | 1,869 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 400,687 | — | 400,687 | 137,508 | — | 263,179 | |||||||||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 209,759 | $ | — | $ | 209,759 | $ | 169,700 | $ | — | $ | 40,059 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 388,208 | — | 388,208 | 169,700 | — | 218,508 | |||||||||||||||||||
Schedule of offsetting assets and liabilities | The following table presents the gross fair value of derivative assets and liabilities reported on our condensed consolidated balance sheets as of November 30, 2014 and May 31, 2014, and provides information on the impact of netting provisions and collateral pledged. | ||||||||||||||||||||||||
November 30, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 139,377 | $ | — | $ | 139,377 | $ | 137,508 | $ | — | $ | 1,869 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 400,687 | — | 400,687 | 137,508 | — | 263,179 | |||||||||||||||||||
May 31, 2014 | |||||||||||||||||||||||||
Gross Amounts | Gross Amounts | Net Amounts of Assets/ Liabilities | Gross Amounts | ||||||||||||||||||||||
of Recognized | Offset in the | Presented | Not Offset in the | ||||||||||||||||||||||
Assets/ Liabilities | Balance Sheet | in the | Balance Sheet | ||||||||||||||||||||||
(Dollars in thousands) | Balance Sheet | Financial | Cash | Net | |||||||||||||||||||||
Instruments | Collateral | Amount | |||||||||||||||||||||||
Pledged | |||||||||||||||||||||||||
Derivative assets: | |||||||||||||||||||||||||
Interest rate swaps | $ | 209,759 | $ | — | $ | 209,759 | $ | 169,700 | $ | — | $ | 40,059 | |||||||||||||
Derivative liabilities: | |||||||||||||||||||||||||
Interest rate swaps | 388,208 | — | 388,208 | 169,700 | — | 218,508 | |||||||||||||||||||
Summary of gains and losses recorded on the consolidated statements of operations for the entity's interest rate swaps | The following table presents the components of the derivative gains (losses), net reported in our condensed consolidated statements of operations for our interest rate swaps for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||
Three Months Ended November 30, | Six Months Ended November 30, | ||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
Derivative cash settlements | $ | (21,764 | ) | $ | (19,471 | ) | $ | (41,865 | ) | $ | (36,156 | ) | |||||||||||||
Derivative forward value | (52,797 | ) | (11,309 | ) | (82,574 | ) | 111,760 | ||||||||||||||||||
Derivative gains (losses), net | $ | (74,561 | ) | $ | (30,780 | ) | $ | (124,439 | ) | $ | 75,604 | ||||||||||||||
Schedule of notional amounts of derivative instruments having rating triggers | The table below displays the notional amounts of our derivative contracts with rating triggers as of November 30, 2014 and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our senior unsecured credit ratings to or below Baa1/BBB+ or Baa3/BBB- by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assumed that the amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements for each counterparty. The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts. | ||||||||||||||||||||||||
(Dollars in thousands) | Notional | Payment | Payment Due to CFC | Net (Payable) | |||||||||||||||||||||
Amount | Required by CFC | Due | |||||||||||||||||||||||
Impact of mutual rating downgrade trigger: | |||||||||||||||||||||||||
falls below Baa1/BBB+ | $ | 4,431,017 | $ | (174,883 | ) | $ | 210 | $ | (174,673 | ) | |||||||||||||||
falls to Baa3/BBB- | 1,680,595 | — | 3,575 | 3,575 | |||||||||||||||||||||
falls below Baa3/BBB- | 601,345 | (21,663 | ) | — | (21,663 | ) | |||||||||||||||||||
Total | $ | 6,712,957 | $ | (196,546 | ) | $ | 3,785 | $ | (192,761 | ) | |||||||||||||||
Guarantees_Tables
Guarantees (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Guarantees [Abstract] | |||||||||
Summary of total guarantees by type of guarantee and member class | The following table summarizes total guarantees by type of guarantee and member class as of November 30, 2014 and May 31, 2014. | ||||||||
(Dollars in thousands) | 30-Nov-14 | 31-May-14 | |||||||
Total by type: | |||||||||
Long-term tax-exempt bonds | $ | 498,995 | $ | 518,360 | |||||
Letters of credit | 367,837 | 431,064 | |||||||
Other guarantees | 114,596 | 115,398 | |||||||
Total | $ | 981,428 | $ | 1,064,822 | |||||
Total by member class: | |||||||||
CFC: | |||||||||
Distribution | $ | 169,716 | $ | 165,559 | |||||
Power supply | 744,145 | 826,231 | |||||||
Statewide and associate | 5,264 | 5,397 | |||||||
CFC total | 919,125 | 997,187 | |||||||
RTFC | 2,465 | 2,304 | |||||||
NCSC | 59,838 | 65,331 | |||||||
Total | $ | 981,428 | $ | 1,064,822 | |||||
Summary of activity in the guarantee liability account | Activity in the guarantee liability account is summarized below as of and for the six months ended November 30, 2014. | ||||||||
(Dollars in thousands) | Six Months Ended November 30, 2014 | ||||||||
Beginning balance | $ | 22,091 | |||||||
Net change in non-contingent liability | (1,450 | ) | |||||||
Provision for contingent guarantee liability | (80 | ) | |||||||
Ending balance | $ | 20,561 | |||||||
Liability as a percentage of total guarantees | 2.1 | % | |||||||
Fair_Value_Measurement_Tables
Fair Value Measurement (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||
Schedule of the entity's assets and liabilities that are measured at fair value on a recurring basis | The following table presents our assets and liabilities that are measured at fair value on a recurring basis as of November 30, 2014 and May 31, 2014. | ||||||||||||||||||||||||
November 30, 2014 | May 31, 2014 | ||||||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 1 | Level 2 | |||||||||||||||||||||
Derivative assets | $ | — | $ | 139,377 | $ | — | $ | 209,759 | |||||||||||||||||
Derivative liabilities | — | 400,687 | — | 388,208 | |||||||||||||||||||||
Investments in common and preferred stock | 83,779 | — | 55,177 | — | |||||||||||||||||||||
Deferred compensation investments | 4,486 | — | 4,156 | — | |||||||||||||||||||||
Schedule of carrying/fair value of the related individual assets and the total losses | The following table displays the carrying value and fair value of these loans as of November 30, 2014 and May 31, 2014 and the total losses for the three and six months ended November 30, 2014 and 2013. | ||||||||||||||||||||||||
Level 3 Fair Value | Total Losses For The Three Months Ended November 30, | Total Losses For The Six Months Ended November 30, | |||||||||||||||||||||||
(Dollars in thousands) | November 30, 2014 | May 31, 2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Nonperforming loans, net of specific reserves | $ | 339 | $ | 1,669 | $ | (724 | ) | $ | — | $ | (950 | ) | $ | — | |||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 6 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||||||
Schedule of carrying and fair values for entity's financial instruments | The carrying and fair values of our financial instruments as of November 30, 2014 and May 31, 2014 are presented below. | ||||||||||||||||||||
November 30, 2014 | Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 512,501 | $ | 512,501 | $ | 512,501 | $ | — | $ | — | |||||||||||
Restricted cash | 1,532 | 1,532 | 1,532 | — | — | ||||||||||||||||
Investments | 83,779 | 83,779 | 83,779 | — | — | ||||||||||||||||
Time deposits | 495,000 | 495,000 | — | 495,000 | — | ||||||||||||||||
Deferred compensation investments | 4,486 | 4,486 | 4,486 | — | — | ||||||||||||||||
Loans to members, net | 20,732,229 | 21,338,380 | — | — | 21,338,380 | ||||||||||||||||
Debt service reserve funds | 25,602 | 25,602 | 25,602 | — | — | ||||||||||||||||
Derivative instruments | 139,377 | 139,377 | — | 139,377 | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Short-term debt | 4,222,404 | 4,222,522 | 2,627,592 | 1,594,930 | — | ||||||||||||||||
Long-term debt | 14,836,922 | 16,030,115 | — | 10,022,733 | 6,007,382 | ||||||||||||||||
Guarantee liability | 20,561 | 23,290 | — | — | 23,290 | ||||||||||||||||
Derivative instruments | 400,687 | 400,687 | — | 400,687 | — | ||||||||||||||||
Subordinated deferrable debt | 400,000 | 398,400 | — | 398,400 | — | ||||||||||||||||
Members’ subordinated certificates | 1,550,840 | 1,550,840 | — | — | 1,550,840 | ||||||||||||||||
May 31, 2014 | Fair Value Measurements Using | ||||||||||||||||||||
(Dollars in thousands) | Carrying Value | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 338,715 | $ | 338,715 | $ | 338,715 | $ | — | $ | — | |||||||||||
Restricted cash | 520 | 520 | 520 | — | — | ||||||||||||||||
Investments | 55,177 | 55,177 | 55,177 | — | — | ||||||||||||||||
Time deposits | 550,000 | 550,000 | — | 550,000 | — | ||||||||||||||||
Deferred compensation investments | 4,156 | 4,156 | 4,156 | — | — | ||||||||||||||||
Loans to members, net | 20,420,213 | 21,000,687 | — | — | 21,000,687 | ||||||||||||||||
Debt service reserve funds | 39,353 | 39,353 | 39,353 | — | — | ||||||||||||||||
Derivative instruments | 209,759 | 209,759 | — | 209,759 | — | ||||||||||||||||
Liabilities: | |||||||||||||||||||||
Short-term debt | 4,099,331 | 4,099,534 | 2,480,166 | 1,619,368 | — | ||||||||||||||||
Long-term debt | 14,513,284 | 15,738,970 | — | 9,618,645 | 6,120,325 | ||||||||||||||||
Guarantee liability | 22,091 | 24,946 | — | — | 24,946 | ||||||||||||||||
Derivative instruments | 388,208 | 388,208 | — | 388,208 | — | ||||||||||||||||
Subordinated deferrable debt | 400,000 | 385,744 | — | 385,744 | — | ||||||||||||||||
Members’ subordinated certificates | 1,612,227 | 1,612,227 | — | — | 1,612,227 | ||||||||||||||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of segment presentation for the consolidated statements of operations and consolidated balance sheets | The following tables display segment results for the three and six months ended November 30, 2014 and 2013, and assets attributable to each segment as of November 30, 2014 and 2013. | ||||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 232,168 | $ | 11,328 | $ | (8,261 | ) | $ | 235,235 | ||||||||
Interest expense | (157,918 | ) | (8,618 | ) | 8,261 | (158,275 | ) | ||||||||||
Net interest income | 74,250 | 2,710 | — | 76,960 | |||||||||||||
Provision for loan losses | (992 | ) | — | — | (992 | ) | |||||||||||
Net interest income after provision for loan losses | 73,258 | 2,710 | — | 75,968 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 9,646 | 1,369 | (1,143 | ) | 9,872 | ||||||||||||
Derivative losses, net | (73,061 | ) | (1,500 | ) | — | (74,561 | ) | ||||||||||
Results of operations of foreclosed assets | (28,991 | ) | — | — | (28,991 | ) | |||||||||||
Total non-interest income | (92,406 | ) | (131 | ) | (1,143 | ) | (93,680 | ) | |||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (16,553 | ) | (1,940 | ) | 256 | (18,237 | ) | ||||||||||
Provision for guarantee liability | 13 | — | — | 13 | |||||||||||||
Other | (17 | ) | (887 | ) | 887 | (17 | ) | ||||||||||
Total non-interest expense | (16,557 | ) | (2,827 | ) | 1,143 | (18,241 | ) | ||||||||||
Loss before income taxes | (35,705 | ) | (248 | ) | — | (35,953 | ) | ||||||||||
Income tax benefit | — | 41 | — | 41 | |||||||||||||
Net loss | $ | (35,705 | ) | $ | (207 | ) | $ | — | $ | (35,912 | ) | ||||||
Three Months Ended November 30, 2013 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 235,505 | $ | 12,582 | $ | (8,833 | ) | $ | 239,254 | ||||||||
Interest expense | (164,980 | ) | (9,198 | ) | 8,833 | (165,345 | ) | ||||||||||
Net interest income | 70,525 | 3,384 | — | 73,909 | |||||||||||||
Provision for loan losses | (1,096 | ) | — | — | (1,096 | ) | |||||||||||
Net interest income after provision for loan losses | 69,429 | 3,384 | — | 72,813 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 4,163 | 342 | 620 | 5,125 | |||||||||||||
Derivative losses, net | (29,232 | ) | (1,548 | ) | — | (30,780 | ) | ||||||||||
Results of operations of foreclosed assets | (3,269 | ) | — | — | (3,269 | ) | |||||||||||
Total non-interest income | (28,338 | ) | (1,206 | ) | 620 | (28,924 | ) | ||||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (15,942 | ) | (2,011 | ) | (620 | ) | (18,573 | ) | |||||||||
Provision for guarantee liability | (73 | ) | — | — | (73 | ) | |||||||||||
Other | (151 | ) | 1 | — | (150 | ) | |||||||||||
Total non-interest expense | (16,166 | ) | (2,010 | ) | (620 | ) | (18,796 | ) | |||||||||
Income before income taxes | 24,925 | 168 | — | 25,093 | |||||||||||||
Income tax expense | — | (101 | ) | — | (101 | ) | |||||||||||
Net income | $ | 24,925 | $ | 67 | $ | — | $ | 24,992 | |||||||||
Six Months Ended November 30, 2014 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 466,308 | $ | 23,135 | $ | (16,917 | ) | $ | 472,526 | ||||||||
Interest expense | (314,146 | ) | (17,598 | ) | 16,917 | (314,827 | ) | ||||||||||
Net interest income | 152,162 | 5,537 | — | 157,699 | |||||||||||||
Provision for loan losses | 5,779 | — | — | 5,779 | |||||||||||||
Net interest income after provision for loan losses | 157,941 | 5,537 | — | 163,478 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 13,872 | 1,731 | (1,374 | ) | 14,229 | ||||||||||||
Derivative losses, net | (122,232 | ) | (2,207 | ) | — | (124,439 | ) | ||||||||||
Results of operations of foreclosed assets | (31,690 | ) | — | — | (31,690 | ) | |||||||||||
Total non-interest income | (140,050 | ) | (476 | ) | (1,374 | ) | (141,900 | ) | |||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (33,252 | ) | (4,015 | ) | 487 | (36,780 | ) | ||||||||||
Provision for guarantee liability | 80 | — | — | 80 | |||||||||||||
Other | (23 | ) | (887 | ) | 887 | (23 | ) | ||||||||||
Total non-interest expense | (33,195 | ) | (4,902 | ) | 1,374 | (36,723 | ) | ||||||||||
Income before income taxes | (15,304 | ) | 159 | — | (15,145 | ) | |||||||||||
Income tax expense | — | (155 | ) | — | (155 | ) | |||||||||||
Net income | $ | (15,304 | ) | $ | 4 | $ | — | $ | (15,300 | ) | |||||||
Assets: | |||||||||||||||||
Total loans outstanding | $ | 20,739,565 | $ | 1,098,127 | $ | (1,064,412 | ) | $ | 20,773,280 | ||||||||
Deferred origination costs | 9,706 | — | — | 9,706 | |||||||||||||
Less: Allowance for loan losses | (50,757 | ) | — | — | (50,757 | ) | |||||||||||
Loans to members, net | 20,698,514 | 1,098,127 | (1,064,412 | ) | 20,732,229 | ||||||||||||
Other assets | 1,818,603 | 137,686 | (115,415 | ) | 1,840,874 | ||||||||||||
Total assets | $ | 22,517,117 | $ | 1,235,813 | $ | (1,179,827 | ) | $ | 22,573,103 | ||||||||
Six Months Ended November 30, 2013 | |||||||||||||||||
(Dollars in thousands) | CFC | Other | Elimination | Consolidated Total | |||||||||||||
Statement of operations: | |||||||||||||||||
Interest income | $ | 472,831 | $ | 25,345 | $ | (17,851 | ) | $ | 480,325 | ||||||||
Interest expense | (332,200 | ) | (18,581 | ) | 17,851 | (332,930 | ) | ||||||||||
Net interest income | 140,631 | 6,764 | — | 147,395 | |||||||||||||
Provision for loan losses | (2,374 | ) | — | — | (2,374 | ) | |||||||||||
Net interest income after provision for loan losses | 138,257 | 6,764 | — | 145,021 | |||||||||||||
Non-interest income: | |||||||||||||||||
Fee and other income | 8,187 | 694 | 400 | 9,281 | |||||||||||||
Derivative gains, net | 74,351 | 1,253 | — | 75,604 | |||||||||||||
Results of operations of foreclosed assets | (7,318 | ) | — | — | (7,318 | ) | |||||||||||
Total non-interest income | 75,220 | 1,947 | 400 | 77,567 | |||||||||||||
Non-interest expense: | |||||||||||||||||
General and administrative expenses | (32,663 | ) | (4,125 | ) | (400 | ) | (37,188 | ) | |||||||||
Provision for guarantee liability | (42 | ) | — | — | (42 | ) | |||||||||||
Other | (299 | ) | 1 | — | (298 | ) | |||||||||||
Total non-interest expense | (33,004 | ) | (4,124 | ) | (400 | ) | (37,528 | ) | |||||||||
Income before income taxes | 180,473 | 4,587 | — | 185,060 | |||||||||||||
Income tax expense | — | (1,802 | ) | — | (1,802 | ) | |||||||||||
Net income | $ | 180,473 | $ | 2,785 | $ | — | $ | 183,258 | |||||||||
Assets: | |||||||||||||||||
Total loans outstanding | $ | 20,342,560 | $ | 1,199,116 | $ | (1,163,246 | ) | $ | 20,378,430 | ||||||||
Deferred origination costs | 9,790 | — | — | 9,790 | |||||||||||||
Less: Allowance for loan losses | (55,199 | ) | — | — | (55,199 | ) | |||||||||||
Loans to members, net | 20,297,151 | 1,199,116 | (1,163,246 | ) | 20,333,021 | ||||||||||||
Other assets | 2,079,206 | 140,738 | (121,601 | ) | 2,098,343 | ||||||||||||
Total assets | $ | 22,376,357 | $ | 1,339,854 | $ | (1,284,847 | ) | $ | 22,431,364 | ||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 |
General Information and Accounting Policies [Line Items] | |||
Loans to members, net | $20,732,229,000 | $20,420,213,000 | $20,333,021,000 |
Consolidated variable interest entities | RTFC | |||
General Information and Accounting Policies [Line Items] | |||
Guarantee amount | 2,000,000 | ||
Total assets including loans outstanding to members | 546,000,000 | ||
Loans to members, net | 429,000,000 | ||
Maximum amount committed to extend loan | 4,000,000,000 | ||
Commitment outstanding | 413,000,000 | ||
Consolidated variable interest entities | NCSC | |||
General Information and Accounting Policies [Line Items] | |||
Guarantee amount | 91,000,000 | ||
Maximum potential exposure | 97,000,000 | ||
Total assets including loans outstanding to members | 690,000,000 | ||
Loans to members, net | 669,000,000 | ||
Maximum amount committed to extend loan | 3,000,000,000 | ||
Commitment outstanding | 743,000,000 | ||
Loans outstanding | $652,000,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Interest Income Table (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |||||
Components of interest income | |||||||||
Interest income | $235,235,000 | $239,254,000 | $472,526,000 | $480,325,000 | |||||
Interest on investments | 1,549,000 | 1,817,000 | 4,121,000 | 3,753,000 | |||||
Fee income | 2,968,000 | [1] | 3,154,000 | [2] | 5,969,000 | [1] | 5,170,000 | [2] | |
Deferred conversion fees | 74,000,000 | 74,000,000 | 73,000,000 | ||||||
Long-term fixed-rate loans | |||||||||
Components of interest income | |||||||||
Interest income | 219,119,000 | 221,952,000 | 438,535,000 | 446,535,000 | |||||
Long-term variable-rate loans | |||||||||
Components of interest income | |||||||||
Interest income | 4,902,000 | 4,826,000 | 10,262,000 | 9,654,000 | |||||
Line of credit loans | |||||||||
Components of interest income | |||||||||
Interest income | 6,687,000 | 7,505,000 | 13,629,000 | 15,077,000 | |||||
Restructured loans | |||||||||
Components of interest income | |||||||||
Interest income | $10,000 | $0 | $10,000 | $136,000 | |||||
[1] | Represents interest expense and the amortization of discounts on debt. | ||||||||
[2] | Primarily related to conversion fees, which are deferred and recognized in interest income over the original loan interest rate pricing term using the effective interest method. Also includes a small portion of conversion fees that are intended to cover the administrative costs related to the conversion, which are recognized immediately. |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies - Interest Expense Table (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | ||||
Interest expense on debt: | ||||||||
Debt issuance costs | $1,932 | [1] | $1,782 | [1] | $3,725 | [1] | $3,647 | [1] |
Fee expense | 4,981 | [2] | 2,115 | [2] | 7,016 | [2] | 4,719 | [2] |
Total interest expense | 158,275 | 165,345 | 314,827 | 332,930 | ||||
Short-term debt | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | 1,432 | [3] | 1,607 | [3] | 2,706 | [3] | 3,039 | [3] |
Medium-term notes | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | 17,022 | [3] | 20,980 | [3] | 33,741 | [3] | 42,551 | [3] |
Collateral trust bonds | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | 75,219 | [3] | 74,858 | [3] | 149,986 | [3] | 151,656 | [3] |
Subordinated deferrable debt | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | 4,750 | [3] | 4,750 | [3] | 9,500 | [3] | 9,500 | [3] |
Subordinated certificates | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | 16,116 | [3] | 20,494 | [3] | 32,896 | [3] | 41,120 | [3] |
Long-term notes payable | ||||||||
Interest expense on debt: | ||||||||
Interest expense on debt | $36,823 | [3] | $38,759 | [3] | $75,257 | [3] | $76,698 | [3] |
[1] | Primarily consists of underwriter’s fees, legal fees, printing costs and certain accounting fees, which are deferred and recognized in interest expense using the effective interest method. Also includes issuance costs related to dealer commercial paper, which are recognized immediately as incurred. | |||||||
[2] | Reflects various fees related to funding activities, including fees paid to banks participating in our revolving credit agreements. Amounts are recognized as incurred or amortized on a straight-line basis over the life of the agreement. | |||||||
[3] | Represents interest expense and the amortization of discounts on debt. |
Investment_Securities_Details
Investment Securities (Details) (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Investments | ||
Amortized Cost | $80,538 | $55,538 |
Gross Unrealized Gains | 3,241 | 1,859 |
Gross Unrealized Losses | 0 | -2,220 |
Fair Value | 83,779 | 55,177 |
Preferred Stock | Federal Agricultural Mortgage Corporation Series A preferred stock | ||
Investments | ||
Amortized Cost | 30,000 | 30,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | -2,220 |
Fair Value | 30,000 | 27,780 |
Preferred Stock | Federal Agricultural Mortgage Corporation Series B Preferred Stock | ||
Investments | ||
Amortized Cost | 25,000 | 25,000 |
Gross Unrealized Gains | 1,300 | 500 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 26,300 | 25,500 |
Preferred Stock | Federal Agricultural Mortgage Corporation Series C Preferred Stock | ||
Investments | ||
Amortized Cost | 25,000 | |
Gross Unrealized Gains | 584 | |
Gross Unrealized Losses | 0 | |
Fair Value | 25,584 | |
Common Stock | Federal Agricultural Mortgage Corporation Class A common stock | ||
Investments | ||
Amortized Cost | 538 | 538 |
Gross Unrealized Gains | 1,357 | 1,359 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $1,895 | $1,897 |
Loans_and_Commitments_Details
Loans and Commitments (Details) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 | ||
In Thousands, unless otherwise specified | |||||
Loans outstanding | |||||
Total loans outstanding | $20,773,280 | [1],[2] | $20,466,925 | [1],[2] | $20,378,430 |
Deferred origination costs | 9,706 | [1] | 9,717 | [1] | 9,790 |
Loans to members | 20,782,986 | [1] | 20,476,642 | [1] | |
Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 13,862,528 | [1],[2],[3] | 13,912,078 | [1],[2],[3] | |
CFC | |||||
Loans outstanding | |||||
Total loans outstanding | 19,675,153 | [1] | 19,189,430 | [1] | |
CFC | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 12,530,988 | [1],[3] | 12,662,699 | [1],[3] | |
CFC | Distribution | |||||
Loans outstanding | |||||
Total loans outstanding | 15,386,626 | 15,035,365 | [1] | ||
CFC | Distribution | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 9,350,749 | [1],[3] | 9,531,315 | [1],[3] | |
CFC | Power supply | |||||
Loans outstanding | |||||
Total loans outstanding | 4,224,787 | 4,086,163 | [1] | ||
CFC | Power supply | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 3,051,250 | [1],[3] | 3,025,423 | [1],[3] | |
CFC | Statewide and associate | |||||
Loans outstanding | |||||
Total loans outstanding | 63,740 | 67,902 | [1] | ||
CFC | Statewide and associate | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 128,989 | [1],[3] | 105,961 | [1],[3] | |
RTFC | |||||
Loans outstanding | |||||
Total loans outstanding | 428,648 | 449,546 | [1] | ||
RTFC | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 290,284 | [1],[3] | 304,500 | [1],[3] | |
NCSC | |||||
Loans outstanding | |||||
Total loans outstanding | 669,479 | 827,949 | [1] | ||
NCSC | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 1,041,256 | [1],[3] | 944,879 | [1],[3] | |
Long-term fixed-rate loans | |||||
Loans outstanding | |||||
Total loans outstanding | 18,712,604 | [1] | 18,175,656 | [1] | |
Long-term variable-rate loans | |||||
Loans outstanding | |||||
Total loans outstanding | 689,878 | [1] | 753,918 | [1] | |
Long-term variable-rate loans | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | 4,484,225 | [1],[3] | 4,710,273 | [1],[3] | |
Loans guaranteed by RUS | |||||
Loans outstanding | |||||
Total loans outstanding | 181,986 | [1] | 201,863 | [1] | |
Line of credit loans | |||||
Loans outstanding | |||||
Total loans outstanding | 1,188,812 | [1] | 1,335,488 | [1] | |
Line of credit loans | Unadvanced commitments | |||||
Unadvanced commitments | |||||
Total Unadvanced commitments | $9,378,303 | [1],[3] | $9,201,805 | [1],[3] | |
[1] | Includes nonperforming and restructured loans. | ||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. | ||||
[3] | The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. |
Loans_and_Commitments_Details_
Loans and Commitments (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | 31-May-14 | ||||
Notional maturities of committed lines of credit | |||||||
Loans Receivable Cost of Loans Sold | $14,000,000 | $37,000,000 | |||||
Unadvanced commitments | |||||||
Notional maturities of committed lines of credit | |||||||
Total unadvanced commitments | 13,862,528,000 | [1],[2],[3] | 13,862,528,000 | [1],[2],[3] | 13,912,078,000 | [1],[2],[3] | |
Maximum period of commitments to fully fund agreements which have not yet been advanced | 5 years | ||||||
Unadvanced commitments not subject to material adverse change clauses | |||||||
Notional maturities of committed lines of credit | |||||||
2015 | 17,885,000 | 17,885,000 | |||||
2016 | 61,000,000 | 61,000,000 | |||||
2017 | 424,723,000 | 424,723,000 | |||||
2018 | 792,305,000 | 792,305,000 | |||||
2019 | 1,119,618,000 | 1,119,618,000 | |||||
Thereafter | 175,600,000 | 175,600,000 | |||||
Total unadvanced commitments | 2,591,131,000 | 2,591,131,000 | 2,274,000,000 | ||||
Maximum period of commitments to fully fund agreements which have not yet been advanced | 5 years | ||||||
Unadvanced commitments subject to material adverse change clauses | |||||||
Notional maturities of committed lines of credit | |||||||
Total unadvanced commitments | $11,272,000,000 | $11,272,000,000 | $11,638,000,000 | ||||
[1] | Includes nonperforming and restructured loans. | ||||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. | ||||||
[3] | The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. |
Loans_and_Commitments_Details_1
Loans and Commitments (Details 3) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 | ||
In Thousands, unless otherwise specified | |||||
Payment Status of Loans | |||||
Current | $20,773,087 | $20,466,925 | |||
30-89 days past due | 98 | 0 | |||
90 days or more past due | 95 | [1] | 0 | [1] | |
Total past due | 193 | 0 | |||
Total recorded investment in loans | 20,773,280 | [2],[3] | 20,466,925 | [2],[3] | 20,378,430 |
Non-accrual loans | 9,237 | 9,679 | |||
As a % of total loans | |||||
Current (percent) | 100.00% | 100.00% | |||
30-89 days past due (percent) | 0.00% | 0.00% | |||
90 days or more past due (percent) | 0.00% | [1] | 0.00% | [1] | |
Total past due (percent) | 0.00% | 0.00% | |||
Total financing receivables (percent) | 100.00% | 100.00% | |||
Non-accrual loans (percent) | 0.05% | 0.05% | |||
CFC | |||||
Payment Status of Loans | |||||
Current | 19,675,153 | 19,189,430 | |||
30-89 days past due | 0 | 0 | |||
90 days or more past due | 0 | [1] | 0 | [1] | |
Total past due | 0 | 0 | |||
Total recorded investment in loans | 19,675,153 | [2] | 19,189,430 | [2] | |
Non-accrual loans | 7,221 | 7,584 | |||
CFC | Distribution | |||||
Payment Status of Loans | |||||
Current | 15,386,626 | 15,035,365 | |||
30-89 days past due | 0 | 0 | |||
90 days or more past due | 0 | [1] | |||
Total past due | 0 | 0 | |||
Total recorded investment in loans | 15,386,626 | 15,035,365 | [2] | ||
Non-accrual loans | 7,221 | 7,584 | |||
CFC | Power supply | |||||
Payment Status of Loans | |||||
Current | 4,224,787 | 4,086,163 | |||
90 days or more past due | 0 | [1] | 0 | [1] | |
Total past due | 0 | 0 | |||
Total recorded investment in loans | 4,224,787 | 4,086,163 | [2] | ||
Non-accrual loans | 0 | 0 | |||
CFC | Statewide and associate | |||||
Payment Status of Loans | |||||
Current | 63,740 | 67,902 | |||
Total recorded investment in loans | 63,740 | 67,902 | [2] | ||
RTFC | |||||
Payment Status of Loans | |||||
Current | 428,455 | 449,546 | |||
30-89 days past due | 98 | 0 | |||
90 days or more past due | 95 | [1] | 0 | [1] | |
Total past due | 193 | 0 | |||
Total recorded investment in loans | 428,648 | 449,546 | [2] | ||
Non-accrual loans | 1,695 | 1,695 | |||
NCSC | |||||
Payment Status of Loans | |||||
Current | 669,479 | 827,949 | |||
Total recorded investment in loans | 669,479 | 827,949 | [2] | ||
Non-accrual loans | $321 | $400 | |||
[1] | All loans 90 days or more past due are on nonaccrual status. | ||||
[2] | Includes nonperforming and restructured loans. | ||||
[3] | Represents the unpaid principal balance excluding deferred loan origination costs. |
Loans_and_Commitments_Details_2
Loans and Commitments (Details 4) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 | ||
In Thousands, unless otherwise specified | |||||
Credit Quality | |||||
Total loans outstanding | $20,773,280 | [1],[2] | $20,466,925 | [1],[2] | $20,378,430 |
CFC | |||||
Credit Quality | |||||
Total loans outstanding | 19,675,153 | [1] | 19,189,430 | [1] | |
CFC | Distribution | |||||
Credit Quality | |||||
Total loans outstanding | 15,386,626 | 15,035,365 | [1] | ||
CFC | Power supply | |||||
Credit Quality | |||||
Total loans outstanding | 4,224,787 | 4,086,163 | [1] | ||
CFC | Statewide and associate | |||||
Credit Quality | |||||
Total loans outstanding | 63,740 | 67,902 | [1] | ||
RTFC | |||||
Credit Quality | |||||
Total loans outstanding | 428,648 | 449,546 | [1] | ||
NCSC | |||||
Credit Quality | |||||
Total loans outstanding | 669,479 | 827,949 | [1] | ||
Pass | |||||
Credit Quality | |||||
Total loans outstanding | 20,740,457 | 20,446,017 | |||
Pass | CFC | |||||
Credit Quality | |||||
Total loans outstanding | 19,646,065 | 19,172,430 | |||
Pass | CFC | Distribution | |||||
Credit Quality | |||||
Total loans outstanding | 15,357,810 | 15,018,642 | |||
Pass | CFC | Power supply | |||||
Credit Quality | |||||
Total loans outstanding | 4,224,787 | 4,086,163 | |||
Pass | CFC | Statewide and associate | |||||
Credit Quality | |||||
Total loans outstanding | 63,468 | 67,625 | |||
Pass | RTFC | |||||
Credit Quality | |||||
Total loans outstanding | 426,953 | 447,851 | |||
Pass | NCSC | |||||
Credit Quality | |||||
Total loans outstanding | 667,439 | 825,736 | |||
Criticized | |||||
Credit Quality | |||||
Total loans outstanding | 32,823 | 20,908 | |||
Criticized | CFC | |||||
Credit Quality | |||||
Total loans outstanding | 29,088 | 17,000 | |||
Criticized | CFC | Distribution | |||||
Credit Quality | |||||
Total loans outstanding | 28,816 | 16,723 | |||
Criticized | CFC | Power supply | |||||
Credit Quality | |||||
Total loans outstanding | 0 | 0 | |||
Criticized | CFC | Statewide and associate | |||||
Credit Quality | |||||
Total loans outstanding | 272 | 277 | |||
Criticized | RTFC | |||||
Credit Quality | |||||
Total loans outstanding | 1,695 | 1,695 | |||
Criticized | NCSC | |||||
Credit Quality | |||||
Total loans outstanding | $2,040 | $2,213 | |||
[1] | Includes nonperforming and restructured loans. | ||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. |
Loans_and_Commitments_Details_3
Loans and Commitments (Details 8) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 | ||
In Thousands, unless otherwise specified | |||||
Loan Security | |||||
Total loans outstanding | $20,773,280 | [1],[2] | $20,466,925 | [1],[2] | $20,378,430 |
Loans receivable as a percentage of total loan (percent) | 100.00% | 100.00% | |||
CFC | |||||
Loan Security | |||||
Total loans outstanding | 19,675,153 | [1] | 19,189,430 | [1] | |
RTFC | |||||
Loan Security | |||||
Total loans outstanding | 428,648 | 449,546 | [1] | ||
NCSC | |||||
Loan Security | |||||
Total loans outstanding | 669,479 | 827,949 | [1] | ||
Secured | |||||
Loan Security | |||||
Total loans outstanding | 18,709,322 | 18,348,633 | |||
Loans receivable as a percentage of total loan (percent) | 90.00% | 90.00% | |||
Secured | CFC | |||||
Loan Security | |||||
Total loans outstanding | 17,838,337 | 17,313,990 | |||
Loans receivable as a percentage of total loan (percent) | 91.00% | 90.00% | |||
Secured | RTFC | |||||
Loan Security | |||||
Total loans outstanding | 411,169 | 429,626 | |||
Loans receivable as a percentage of total loan (percent) | 96.00% | 96.00% | |||
Secured | NCSC | |||||
Loan Security | |||||
Total loans outstanding | 459,816 | 605,017 | |||
Loans receivable as a percentage of total loan (percent) | 69.00% | 73.00% | |||
Unsecured | |||||
Loan Security | |||||
Total loans outstanding | 2,063,958 | 2,118,292 | |||
Loans receivable as a percentage of total loan (percent) | 10.00% | 10.00% | |||
Unsecured | CFC | |||||
Loan Security | |||||
Total loans outstanding | 1,836,816 | 1,875,440 | |||
Loans receivable as a percentage of total loan (percent) | 9.00% | 10.00% | |||
Unsecured | RTFC | |||||
Loan Security | |||||
Total loans outstanding | 17,479 | 19,920 | |||
Loans receivable as a percentage of total loan (percent) | 4.00% | 4.00% | |||
Unsecured | NCSC | |||||
Loan Security | |||||
Total loans outstanding | 209,663 | 222,932 | |||
Loans receivable as a percentage of total loan (percent) | 31.00% | 27.00% | |||
Long-term fixed-rate loans | |||||
Loan Security | |||||
Total loans outstanding | 18,712,604 | [1] | 18,175,656 | [1] | |
Long-term fixed-rate loans | Secured | |||||
Loan Security | |||||
Total loans outstanding | 17,725,009 | 17,185,456 | |||
Loans receivable as a percentage of total loan (percent) | 95.00% | 95.00% | |||
Long-term fixed-rate loans | Unsecured | |||||
Loan Security | |||||
Total loans outstanding | 987,595 | 990,200 | |||
Loans receivable as a percentage of total loan (percent) | 5.00% | 5.00% | |||
Long-term variable-rate loans | |||||
Loan Security | |||||
Total loans outstanding | 689,878 | [1] | 753,918 | [1] | |
Long-term variable-rate loans | Secured | |||||
Loan Security | |||||
Total loans outstanding | 598,981 | 650,211 | |||
Loans receivable as a percentage of total loan (percent) | 87.00% | 86.00% | |||
Long-term variable-rate loans | Unsecured | |||||
Loan Security | |||||
Total loans outstanding | 90,897 | 103,707 | |||
Loans receivable as a percentage of total loan (percent) | 13.00% | 14.00% | |||
Loans guaranteed by RUS | |||||
Loan Security | |||||
Total loans outstanding | 181,986 | [1] | 201,863 | [1] | |
Loans guaranteed by RUS | Secured | |||||
Loan Security | |||||
Total loans outstanding | 181,986 | 201,863 | |||
Loans receivable as a percentage of total loan (percent) | 100.00% | 100.00% | |||
Line of credit loans | |||||
Loan Security | |||||
Total loans outstanding | 1,188,812 | [1] | 1,335,488 | [1] | |
Line of credit loans | Secured | |||||
Loan Security | |||||
Total loans outstanding | 203,346 | 311,103 | |||
Loans receivable as a percentage of total loan (percent) | 17.00% | 23.00% | |||
Line of credit loans | Unsecured | |||||
Loan Security | |||||
Total loans outstanding | $985,466 | $1,024,385 | |||
Loans receivable as a percentage of total loan (percent) | 83.00% | 77.00% | |||
[1] | Includes nonperforming and restructured loans. | ||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. |
Loans_and_Commitments_Details_4
Loans and Commitments (Details 9) (USD $) | 3 Months Ended | 6 Months Ended | ||||||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |||||
Activity in the loan loss allowance | ||||||||||
Balance at the beginning of the period | $49,711 | $55,656 | $56,429 | $54,325 | ||||||
(Recovery of) provision for loan losses | 992 | 1,096 | -5,779 | 2,374 | ||||||
Allowance for Loan and Lease Losses, Write-offs | -1,606 | 1,606 | ||||||||
Recoveries of loans previously charged-off | 54 | 53 | 107 | 106 | ||||||
Balance at the end of the period | 50,757 | 55,199 | 50,757 | 55,199 | ||||||
Ending balance of the allowance: | ||||||||||
Collectively evaluated | 49,241 | 49,241 | 56,003 | |||||||
Individually evaluated | 1,516 | 1,516 | 426 | |||||||
Total ending balance of the allowance | 50,757 | 55,199 | 50,757 | 55,199 | ||||||
Recorded investment in loans: | ||||||||||
Collectively evaluated | 20,764,043 | 20,764,043 | 20,457,246 | |||||||
Individually evaluated | 9,237 | 9,237 | 9,679 | |||||||
Total recorded investment in loans | 20,773,280 | [1],[2] | 20,378,430 | 20,773,280 | [1],[2] | 20,378,430 | 20,466,925 | [1],[2] | ||
Loans to members, net | 20,722,523 | [3] | 20,722,523 | [3] | 20,410,496 | [3] | ||||
Deferred origination costs | 9,706 | [1] | 9,790 | 9,706 | [1] | 9,790 | 9,717 | [1] | ||
CFC | ||||||||||
Activity in the loan loss allowance | ||||||||||
Balance at the beginning of the period | 40,461 | 43,336 | 45,600 | 41,246 | ||||||
(Recovery of) provision for loan losses | 670 | -627 | -4,522 | 1,410 | ||||||
Allowance for Loan and Lease Losses, Write-offs | 0 | 0 | ||||||||
Recoveries of loans previously charged-off | 54 | 53 | 107 | 106 | ||||||
Balance at the end of the period | 41,185 | 42,762 | 41,185 | 42,762 | ||||||
Ending balance of the allowance: | ||||||||||
Collectively evaluated | 41,185 | 41,185 | 45,600 | |||||||
Individually evaluated | 0 | |||||||||
Total ending balance of the allowance | 41,185 | 42,762 | 41,185 | 42,762 | ||||||
Recorded investment in loans: | ||||||||||
Collectively evaluated | 19,667,932 | 19,667,932 | 19,181,846 | |||||||
Individually evaluated | 7,221 | 7,221 | 7,584 | |||||||
Total recorded investment in loans | 19,675,153 | [1] | 19,675,153 | [1] | 19,189,430 | [1] | ||||
Loans to members, net | 19,633,968 | [3] | 19,633,968 | [3] | 19,143,830 | [3] | ||||
NCSC | ||||||||||
Activity in the loan loss allowance | ||||||||||
Balance at the beginning of the period | 4,962 | [4] | 3,823 | [4] | 6,547 | 3,921 | [4] | |||
(Recovery of) provision for loan losses | -417 | [4] | 755 | [4] | -2,002 | 657 | ||||
Allowance for Loan and Lease Losses, Write-offs | 0 | 0 | ||||||||
Balance at the end of the period | 4,545 | [4] | 4,578 | [4] | 4,545 | [4] | 4,578 | [4] | ||
Ending balance of the allowance: | ||||||||||
Collectively evaluated | 4,385 | 4,385 | 6,527 | |||||||
Individually evaluated | 160 | 160 | 20 | |||||||
Total ending balance of the allowance | 4,545 | [4] | 4,578 | [4] | 4,545 | [4] | 4,578 | [4] | ||
Recorded investment in loans: | ||||||||||
Collectively evaluated | 669,158 | 669,158 | 827,549 | |||||||
Individually evaluated | 321 | 321 | 400 | |||||||
Total recorded investment in loans | 669,479 | 669,479 | 827,949 | [1] | ||||||
Loans to members, net | 664,934 | [3] | 664,934 | [3] | 821,402 | [3] | ||||
RTFC | ||||||||||
Activity in the loan loss allowance | ||||||||||
Balance at the beginning of the period | 4,288 | [4] | 8,497 | [4] | 4,282 | 9,158 | [4] | |||
(Recovery of) provision for loan losses | 739 | [4] | 968 | [4] | 745 | 307 | ||||
Allowance for Loan and Lease Losses, Write-offs | -1,606 | 1,606 | ||||||||
Balance at the end of the period | 5,027 | [4] | 7,859 | [4] | 5,027 | [4] | 7,859 | [4] | ||
Ending balance of the allowance: | ||||||||||
Collectively evaluated | 3,671 | 3,671 | 3,876 | |||||||
Individually evaluated | 1,356 | 1,356 | 406 | |||||||
Total ending balance of the allowance | 5,027 | [4] | 7,859 | [4] | 5,027 | [4] | 7,859 | [4] | ||
Recorded investment in loans: | ||||||||||
Collectively evaluated | 426,953 | 426,953 | 447,851 | |||||||
Individually evaluated | 1,695 | 1,695 | 1,695 | |||||||
Total recorded investment in loans | 428,648 | 428,648 | 449,546 | [1] | ||||||
Loans to members, net | $423,621 | [3] | $423,621 | [3] | $445,264 | [3] | ||||
[1] | Includes nonperforming and restructured loans. | |||||||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. | |||||||||
[3] | Excludes deferred origination costs of $10 million as of November 30, 2014 and May 31, 2014 | |||||||||
[4] | The allowance for loan losses recorded for RTFC and NCSC are held at CFC. |
Loans_and_Commitments_Details_5
Loans and Commitments (Details 10) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||||||||
With a specific allowance recorded | $2,016 | $2,016 | $2,095 | |||||
Total impaired loans | 9,237 | 9,237 | 9,679 | |||||
Related allowance | 1,516 | 1,516 | 426 | |||||
Average recorded investment | ||||||||
Total impaired loans | 9,241 | 19,879 | 9,442 | 27,954 | ||||
Interest income recognized | ||||||||
Interest impaired loans | 10 | 0 | 10 | 136 | ||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Interest income reduced | 152 | 264 | 315 | 565 | ||||
Loans receivable as a percentage of total loan (percent) | 100.00% | 100.00% | 100.00% | |||||
Total loans outstanding | 20,773,280 | [1],[2] | 20,378,430 | 20,773,280 | [1],[2] | 20,378,430 | 20,466,925 | [1],[2] |
Non-performing loans | ||||||||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||||||||
With a specific allowance recorded | 1,695 | 1,695 | 2,095 | |||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Interest income reduced | 25 | 142 | 51 | 321 | ||||
Loans receivable as a percentage of total loan (percent) | 0.01% | 0.01% | 0.01% | |||||
Financing Receivable Impaired Number of Borrowers in Bankruptcy (number) | 1 | 1 | ||||||
Total loans outstanding | 2,000 | 2,000 | 2,000 | |||||
Restructured loans | ||||||||
Interest income recognized | ||||||||
Interest impaired loans | 0 | |||||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Loans receivable as a percentage of total loan (percent) | 0.04% | 0.04% | 0.04% | |||||
Total loans outstanding | 8,000 | 8,000 | 8,000 | |||||
Restructured Financing Receivable [Member] | ||||||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Interest income reduced | 127 | 122 | 264 | 244 | ||||
CFC | ||||||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Total loans outstanding | 19,675,153 | [1] | 19,675,153 | [1] | 19,189,430 | [1] | ||
CFC | Distribution | ||||||||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||||||||
With no specific allowance recorded | 7,221 | 7,221 | 7,584 | |||||
Average recorded investment | ||||||||
Total impaired loans | 7,221 | 7,584 | 7,403 | 14,116 | ||||
Interest income recognized | ||||||||
Interest impaired loans | 0 | 0 | 0 | 136 | ||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Total loans outstanding | 15,386,626 | 15,386,626 | 15,035,365 | [1] | ||||
CFC | Power supply | ||||||||
Average recorded investment | ||||||||
Total impaired loans | 0 | 5,000 | 0 | 5,000 | ||||
Interest income recognized | ||||||||
Interest impaired loans | 0 | 0 | 0 | |||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Total loans outstanding | 4,224,787 | 4,224,787 | 4,086,163 | [1] | ||||
NCSC | ||||||||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||||||||
With a specific allowance recorded | 321 | 321 | 400 | |||||
Related allowance | 160 | 160 | 20 | |||||
Average recorded investment | ||||||||
Total impaired loans | 325 | 344 | ||||||
Interest income recognized | ||||||||
Interest impaired loans | 10 | 0 | ||||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Total loans outstanding | 669,479 | 669,479 | 827,949 | [1] | ||||
RTFC | ||||||||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||||||||
With a specific allowance recorded | 1,695 | 1,695 | 1,695 | |||||
Related allowance | 1,356 | 1,356 | 406 | |||||
Average recorded investment | ||||||||
Total impaired loans | 1,695 | 7,295 | 1,695 | 8,838 | ||||
Interest income recognized | ||||||||
Interest impaired loans | 0 | 0 | 0 | |||||
Interest income reduction as a result of holding loans on non-accrual status | ||||||||
Total loans outstanding | 428,648 | 428,648 | 449,546 | [1] | ||||
Maximum | Restructured loans | ||||||||
Interest income recognized | ||||||||
Interest impaired loans | $1,000 | $1,000 | $1,000 | $1,000 | ||||
[1] | Includes nonperforming and restructured loans. | |||||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. |
Loans_and_Commitments_Details_6
Loans and Commitments (Details 11) (USD $) | Nov. 30, 2014 | 31-May-14 | |
In Thousands, unless otherwise specified | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | $2,016 | $2,095 | |
Loans outstanding | 7,542 | 7,584 | |
Unadvanced commitments | 0 | [1] | |
Non-performing loans | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 1,695 | 2,095 | |
CFC | Long-term fixed-rate loans | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 7,221 | 7,584 | |
RTFC | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 1,695 | 1,695 | |
RTFC | Long-term variable-rate loans | Non-performing loans | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 1,695 | 1,695 | |
NCSC | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 321 | 400 | |
NCSC | Line of credit loans | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | 321 | ||
NCSC | Line of credit loans | Non-performing loans | |||
Financing Receivable, Modifications [Line Items] | |||
Loans outstanding | $0 | $400 | |
[1] | The interest rate on unadvanced commitments is not set until drawn; therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan. |
Loans_and_Commitments_Details_7
Loans and Commitments (Details 12) (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Pledging of Loans and Loans on Deposit | ||
Cash | $1,532 | $520 |
Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 6,303,490 | 6,149,139 |
Debt outstanding | 5,697,711 | 5,397,711 |
Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 855,000 | 860,000 |
Notes payable | Federal Agricultural Mortgage Corporation | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 1,527,643 | 1,667,505 |
Notes payable | Federal Financing Bank | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 4,291,500 | 4,299,000 |
Clean Renewable Energy Bonds Series 2009A | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 18,230 | 18,230 |
Cash | 1,098 | 520 |
Total pledged collateral | 21,427 | 21,918 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 6,144,439 | 5,987,767 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 967,604 | 1,005,058 |
Mortgage notes | Distribution and power supply system mortgage notes | Federal Agricultural Mortgage Corporation | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 1,853,003 | 1,907,607 |
Mortgage notes | Distribution and power supply system mortgage notes | Clean Renewable Energy Bonds Series 2009A | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 20,329 | 21,398 |
RUS guaranteed loans qualifying as permitted investments | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 159,051 | 161,372 |
Mortgage notes receivable on deposit | Distribution and power supply system mortgage notes | Federal Financing Bank | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | $4,876,247 | $5,076,428 |
Foreclosed_Assets_Details
Foreclosed Assets (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 38 Months Ended | ||||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | 31-May-12 | 31-May-14 | Mar. 31, 2011 | |
Activity for foreclosed assets | ||||||||
Beginning balance | $245,651,000 | |||||||
Results of operations of foreclosed assets | -28,991,000 | -3,269,000 | -31,690,000 | -7,318,000 | ||||
Ending balance | 213,207,000 | 213,207,000 | ||||||
Assets | 22,573,103,000 | 22,431,364,000 | 22,573,103,000 | 22,431,364,000 | 22,232,743,000 | 22,232,743,000 | ||
Liabilities | 21,654,277,000 | 21,654,277,000 | 21,262,369,000 | 21,262,369,000 | ||||
CAH | ||||||||
Activity for foreclosed assets | ||||||||
Results of operations | 44,000,000 | |||||||
Goodwill and Intangible Asset Impairment | -1,000,000 | -45,000,000 | -46,000,000 | |||||
Subsequent investment in subsidiary | 75,000,000 | |||||||
Assets | 267,000,000 | 267,000,000 | 295,000,000 | 295,000,000 | ||||
Liabilities | 242,000,000 | 242,000,000 | 236,000,000 | 236,000,000 | ||||
Net equity | 25,000,000 | 25,000,000 | 59,000,000 | 59,000,000 | ||||
Loans and Interest Payable | 185,000,000 | 185,000,000 | 180,000,000 | 180,000,000 | ||||
Foreclosed Assets | ||||||||
Activity for foreclosed assets | ||||||||
Beginning balance | 245,651,000 | |||||||
Results of operations | -4,687,000 | |||||||
Goodwill and Intangible Asset Impairment | -27,003,000 | |||||||
Results of operations of foreclosed assets | -31,690,000 | |||||||
Net cash investments | -754,000 | |||||||
Ending balance | 213,207,000 | 213,207,000 | ||||||
Foreclosed Assets | CAH | ||||||||
Activity for foreclosed assets | ||||||||
Beginning balance | 239,119,000 | 254,000,000 | ||||||
Results of operations | -4,438,000 | |||||||
Goodwill and Intangible Asset Impairment | -27,000,000 | -27,003,000 | ||||||
Results of operations of foreclosed assets | -31,441,000 | |||||||
Net cash investments | 2,246,000 | |||||||
Ending balance | 209,924,000 | 209,924,000 | 254,000,000 | |||||
Foreclosed Assets | DRP | ||||||||
Activity for foreclosed assets | ||||||||
Beginning balance | 6,532,000 | |||||||
Results of operations | -249,000 | |||||||
Goodwill and Intangible Asset Impairment | 0 | |||||||
Results of operations of foreclosed assets | -249,000 | |||||||
Net cash investments | -3,000,000 | |||||||
Ending balance | 3,283,000 | 3,283,000 | ||||||
Proceeds from sale of interest in bond reimbursement receivables | 2,000,000 | |||||||
Maximum | Foreclosed Assets | DRP | ||||||||
Activity for foreclosed assets | ||||||||
Results of operations | $1,000,000 | $1,000,000 |
ShortTerm_Debt_and_Credit_Arra2
Short-Term Debt and Credit Arrangements - Short-Term Debt Table (Details) (USD $) | Nov. 30, 2014 | 31-May-14 | ||
Short-Term Debt Outstanding | ||||
Short-term debt | $4,222,404,000 | $4,099,331,000 | ||
Long-term Debt, Reclassified from Short-term | 1,300,000,000 | |||
Short-term debt | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 4,222,404,000 | 4,099,331,000 | ||
Short-term debt | Select notes | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 634,851,000 | 548,610,000 | ||
Short-term debt | Daily liquidity fund notes | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 586,592,000 | 486,501,000 | ||
Short-term debt | Bank bid notes | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 0 | 20,000,000 | ||
Short-term debt | Commercial paper sold through dealers, net of discounts | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 2,040,851,000 | [1] | 1,973,557,000 | [1] |
Short-term debt | Commercial paper sold directly to members, at par | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 720,176,000 | [1] | 838,074,000 | [1] |
Short-term debt | Commercial paper sold directly to non-members, at par | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | 21,371,000 | [1] | 20,315,000 | [1] |
Short-term debt | Medium Term Notes Sold to Members | ||||
Short-Term Debt Outstanding | ||||
Short-term debt | $218,563,000 | $212,274,000 | ||
[1] | Backup liquidity is provided by our revolving credit agreements. |
ShortTerm_Debt_and_Credit_Arra3
Short-Term Debt and Credit Arrangements (Details 2) (USD $) | 6 Months Ended | 12 Months Ended | 3 Months Ended | ||||
Nov. 30, 2014 | 31-May-14 | Nov. 30, 2014 | Oct. 28, 2014 | ||||
Requirement | |||||||
Minimum average adjusted TIER over the six most recent fiscal quarters (ratio) | 1.025 | [1] | 1.025 | [1] | |||
Minimum adjusted TIER for the most recent fiscal year (ratio) | 1.05 | [1],[2] | 1.05 | [1],[2] | |||
Maximum ratio of adjusted senior debt to total equity (ratio) | 10 | [1] | 10 | [1] | |||
Actual | |||||||
Minimum average adjusted TIER over the six most recent fiscal quarters (ratio) | 1.24 | [1] | 1.28 | [1] | |||
Minimum adjusted TIER for the most recent fiscal year (ratio) | 1.23 | [1],[2] | 1.23 | [1],[2] | |||
Maximum ratio of adjusted senior debt to total equity (ratio) | 5.93 | [1] | 5.79 | [1] | |||
Borrowings outstandings under revised agreements | $4,222,404,000 | $4,099,331,000 | $4,222,404,000 | ||||
Revolving credit agreements | |||||||
Revolving Credit Agreements | |||||||
Maximum borrowing capacity | 3,420,000,000 | 3,226,000,000 | 3,420,000,000 | ||||
Maximum borrowing capacity | 150,000,000 | 100,000,000 | 150,000,000 | ||||
Total available | 3,418,109,000 | 3,224,109,000 | 3,418,109,000 | ||||
Letters of credit outstanding | 1,891,000 | 1,891,000 | 1,891,000 | ||||
Actual | |||||||
Borrowings outstandings under revised agreements | 0 | 0 | 0 | ||||
Revolving credit agreements | Three-year agreement maturing on October 28, 2016 | |||||||
Revolving Credit Agreements | |||||||
Maximum borrowing capacity | 1,036,000,000 | ||||||
Total available | 0 | 1,036,000,000 | 0 | ||||
Line of Credit Facility Commitment Fee Percentage (percent) | 0.10% | [3] | 0.10% | [3] | |||
Revolving credit agreements | Four-year agreement maturing on October 28, 2017 | |||||||
Revolving Credit Agreements | |||||||
Maximum borrowing capacity | 1,123,000,000 | 1,720,000,000 | |||||
Total available | 1,720,000,000 | 1,122,500,000 | 1,720,000,000 | ||||
Line of Credit Facility Commitment Fee Percentage (percent) | 0.10% | [3] | 0.08% | [3] | |||
Revolving credit agreements | Five-year agreement maturing on October 28, 2018 | |||||||
Revolving Credit Agreements | |||||||
Maximum borrowing capacity | 1,068,000,000 | 1,700,000,000 | |||||
Total available | 1,698,109,000 | 1,065,609,000 | 1,698,109,000 | ||||
Letters of credit outstanding | $1,891,000 | $1,891,000 | $1,891,000 | ||||
Line of Credit Facility Commitment Fee Percentage (percent) | 0.10% | [3] | 0.10% | [3] | |||
[1] | In addition to the adjustments made to the leverage ratio set forth in “Item 7. MD&A—Non-GAAP Financial Measures,†senior debt excludes guarantees to member systems that have certain investment-grade ratings by Moody’s Investors Service (“Moody'sâ€) and Standard & Poor’s Corporation (“S&Pâ€). The TIER and debt-to-equity calculations include the adjustments set forth in “Item 7. MD&A—Non-GAAP Financial Measures†and exclude the results of operations and other comprehensive income for CAH. | ||||||
[2] | We must meet this requirement to retire patronage capital. | ||||||
[3] | Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement. |
LongTerm_Debt_LongTerm_Debt_Ta
Long-Term Debt - Long-Term Debt Table (Details) (USD $) | Nov. 30, 2014 | 31-May-14 |
In Thousands, unless otherwise specified | ||
Long-term debt | ||
Long-term debt | $14,836,922 | $14,513,284 |
Long-Term Debt, excluding subordinated debt | ||
Long-term debt | ||
Long-term debt | 14,836,922 | 14,513,284 |
Unsecured long-term debt | ||
Long-term debt | ||
Total long-term debt | 7,012,310 | 6,847,334 |
Unsecured medium-term notes | ||
Long-term debt | ||
Long-term debt before unamortized discount | 2,686,842 | 2,514,447 |
Unamortized discount | -413 | -418 |
Total long-term debt | 2,686,429 | 2,514,029 |
Medium-term notes sold through dealers | ||
Long-term debt | ||
Long-term debt before unamortized discount | 2,293,995 | 2,228,459 |
Medium Term Notes Sold to Members | ||
Long-term debt | ||
Long-term debt before unamortized discount | 392,847 | 285,988 |
Unsecured notes payable | ||
Long-term debt | ||
Long-term debt before unamortized discount | 4,326,575 | 4,334,075 |
Unamortized discount | -694 | -770 |
Total long-term debt | 4,325,881 | 4,333,305 |
Secured long-term debt | ||
Long-term debt | ||
Total long-term debt | 7,824,612 | 7,665,950 |
Collateral trust bonds | ||
Long-term debt | ||
Long-term debt before unamortized discount | 6,552,711 | 6,257,711 |
Unamortized discount | -273,972 | -277,496 |
Total long-term debt | 6,278,739 | 5,980,215 |
Secured notes payable | ||
Long-term debt | ||
Total long-term debt | 1,545,873 | 1,685,735 |
Guaranteed Underwriter Program Notes Payable | ||
Long-term debt | ||
Long-term debt before unamortized discount | 4,291,500 | 4,299,000 |
Other Unsecured Notes Payable | ||
Long-term debt | ||
Long-term debt before unamortized discount | 35,075 | 35,075 |
Federal Agricultural Mortgage Corporation Notes Payable | ||
Long-term debt | ||
Long-term debt before unamortized discount | 1,527,643 | 1,667,505 |
Other Secured Notes Payable | ||
Long-term debt | ||
Long-term debt before unamortized discount | $18,230 | $18,230 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 6 Months Ended | 0 Months Ended | 1 Months Ended | |||
Nov. 30, 2014 | Nov. 18, 2014 | Oct. 31, 2014 | Dec. 31, 2014 | 31-May-14 | Jan. 08, 2015 | |
Unsecured notes payable | ||||||
Long-term debt | ||||||
Long-term debt before unamortized discount | 4,326,575,000 | $4,334,075,000 | ||||
Unsecured notes payable | RUS | ||||||
Long-term debt | ||||||
Debt Instrument Fee (percent) | 0.30% | |||||
Unsecured notes payable | Federal Financing Bank | RUS | ||||||
Long-term debt | ||||||
Long-term debt before unamortized discount | 4,292,000,000 | 4,299,000,000 | ||||
Committed loan facilities | Federal Financing Bank | ||||||
Long-term debt | ||||||
Debt Instrument, Unused Borrowing Capacity, Additional Amount | 250,000,000 | |||||
Maturity period (duration) | 20 years | |||||
Committed loan facilities | Federal Financing Bank | Maximum | ||||||
Long-term debt | ||||||
Available under committed loan facilities | 874,000,000 | |||||
Secured notes payable | Federal Agricultural Mortgage Corporation | ||||||
Long-term debt | ||||||
Long-term debt before unamortized discount | 1,528,000,000 | 1,668,000,000 | ||||
Maximum borrowing capacity | 3,900,000,000 | |||||
Proceeds from borrowings under purchase agreement | 80,000,000 | |||||
Subsequent Event | Secured notes payable | Federal Agricultural Mortgage Corporation | ||||||
Long-term debt | ||||||
Debt Instrument, Unused Borrowing Capacity, Additional Amount | 600,000,000 | |||||
Maximum borrowing capacity | 4,500,000,000 | |||||
Subsequent Event | Long-term notes payable | Federal Agricultural Mortgage Corporation | ||||||
Long-term debt | ||||||
Proceeds from borrowings under purchase agreement | 200,000,000 | |||||
Collateral Trust Bonds, 2.30% Due 2019 | Bonds [Member] | ||||||
Long-term debt | ||||||
Collateral bonds issued | 300,000,000 | |||||
Stated rate on collateral bonds issued (percent) | 2.30% |
Subordinated_Deferrable_Debt_D
Subordinated Deferrable Debt (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Nov. 30, 2014 | 31-May-14 |
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $400,000 | $400,000 |
4.75 percent due 2043 | ||
Subordinated Deferrable Debt | ||
Interest rate (as a percent) | 4.75% | 4.75% |
Subordinated deferrable debt | $400,000 | $400,000 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |
Derivative Financial Instruments | |||||
Notional amount | $8,566,235,000 | $8,566,235,000 | $8,446,809,000 | ||
Notional balance of derivative assets | 3,294,493,000 | 3,294,493,000 | 3,817,593,000 | ||
Notional balance of derivative liabilities | 5,271,742,000 | 5,271,742,000 | 4,629,216,000 | ||
Derivative assets | 139,377,000 | 139,377,000 | 209,759,000 | ||
Derivative liabilities | -400,687,000 | -400,687,000 | -388,208,000 | ||
Total fair value | -261,310,000 | -261,310,000 | -178,449,000 | ||
Derivative forward value | -82,574,000 | 111,760,000 | |||
Derivative gains (losses) | -74,561,000 | -30,780,000 | -124,439,000 | 75,604,000 | |
Notional amount | 8,566,235,000 | 8,566,235,000 | 8,446,809,000 | ||
Interest rate swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 8,566,235,000 | 8,566,235,000 | 8,446,809,000 | ||
Weighted-average rate paid (as a percent) | 2.45% | 2.41% | |||
Weighted-average rate received (as a percent) | 1.38% | 1.48% | |||
Derivative liabilities | -400,687,000 | -400,687,000 | |||
Gross amounts of recognized assets/liabilities | 139,377,000 | 139,377,000 | 209,759,000 | ||
Gross amount of derivative asset offset | 0 | 0 | 0 | ||
Net amount of derivative asset presented on the balance sheet | 139,377,000 | 139,377,000 | 209,759,000 | ||
Gross amount of derivative asset's pledged securities not offset | 137,508,000 | 137,508,000 | 169,700,000 | ||
Gross amount of derivative asset's pledged cash not offset | 0 | 0 | 0 | ||
Net amount of derivative asset | 1,869,000 | 1,869,000 | 40,059,000 | ||
Gross amounts of recognized assets/liabilities | 400,687,000 | 400,687,000 | 388,208,000 | ||
Gross amount offset against derivative liability | 0 | 0 | 0 | ||
Net amount of derivative liabilities presented on the balance sheet | 400,687,000 | 400,687,000 | 388,208,000 | ||
Gross amount of derivative liability's right to reclaim securities not offset | 137,508,000 | 137,508,000 | 169,700,000 | ||
Gross amount of derivative liability's right to reclaim cash not offset | 0 | 0 | 0 | ||
Net amount of derivative liabilities | 263,179,000 | 263,179,000 | 218,508,000 | ||
Derivative cash settlements | -21,764,000 | -19,471,000 | -41,865,000 | -36,156,000 | |
Derivative forward value | -52,797,000 | -11,309,000 | -82,574,000 | 111,760,000 | |
Derivative gains (losses) | -74,561,000 | -30,780,000 | -124,439,000 | 75,604,000 | |
Notional amount | 8,566,235,000 | 8,566,235,000 | 8,446,809,000 | ||
Aggregate fair value of interest rate swaps with rating triggers that were in net liability position | 198,000,000 | 198,000,000 | |||
Derivative, Net Asset Position, Aggregate Fair Value | 2,000,000 | 2,000,000 | |||
Interest rate swaps | Counterparty Group | |||||
Derivative Financial Instruments | |||||
Notional amount | 6,712,957,000 | 6,712,957,000 | |||
Notional amount | 6,712,957,000 | 6,712,957,000 | |||
Entity's required payment | -196,546,000 | -196,546,000 | |||
Entity's amount collected | 3,785,000 | 3,785,000 | |||
Entity's net payment | -192,761,000 | -192,761,000 | |||
Pay-fixed swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 5,617,235,000 | 5,617,235,000 | 5,322,809,000 | ||
Weighted-average rate paid (as a percent) | 3.31% | 3.33% | |||
Weighted-average rate received (as a percent) | 0.22% | 0.21% | |||
Notional amount | 5,617,235,000 | 5,617,235,000 | 5,322,809,000 | ||
Receive-fixed swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 2,949,000,000 | 2,949,000,000 | 3,124,000,000 | ||
Weighted-average rate paid (as a percent) | 0.83% | 0.85% | |||
Weighted-average rate received (as a percent) | 3.60% | 3.62% | |||
Notional amount | 2,949,000,000 | 2,949,000,000 | 3,124,000,000 | ||
Forward starting swaps | |||||
Derivative Financial Instruments | |||||
Notional amount | 50,000,000 | 50,000,000 | |||
Total fair value | 2,000,000 | 2,000,000 | |||
Notional amount | 50,000,000 | 50,000,000 | |||
Baa1 | Interest rate swaps | Counterparty Group | Mutual rating trigger falls to | |||||
Derivative Financial Instruments | |||||
Notional amount | 4,431,017,000 | 4,431,017,000 | |||
Notional amount | 4,431,017,000 | 4,431,017,000 | |||
Entity's required payment | -174,883,000 | -174,883,000 | |||
Entity's amount collected | 210,000 | 210,000 | |||
Entity's net payment | -174,673,000 | -174,673,000 | |||
Moodys Baa 3 Rating Standard Poor's BBB- Plus Rating [Member] [Domain] | Interest rate swaps | Counterparty Group | Mutual rating trigger falls to | |||||
Derivative Financial Instruments | |||||
Notional amount | 601,345,000 | 601,345,000 | |||
Notional amount | 601,345,000 | 601,345,000 | |||
Entity's required payment | -21,663,000 | -21,663,000 | |||
Entity's amount collected | 0 | 0 | |||
Entity's net payment | -21,663,000 | -21,663,000 | |||
Moodys Baa 3 Rating Standard Poor's BBB- Plus Rating [Member] [Domain] | Interest rate swaps | Counterparty Group | Mutual rating trigger falls below | |||||
Derivative Financial Instruments | |||||
Notional amount | 1,680,595,000 | 1,680,595,000 | |||
Notional amount | 1,680,595,000 | 1,680,595,000 | |||
Entity's required payment | 0 | 0 | |||
Entity's amount collected | 3,575,000 | 3,575,000 | |||
Entity's net payment | $3,575,000 | $3,575,000 |
Equity_Details
Equity (Details) (USD $) | 6 Months Ended | 1 Months Ended | ||
Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | Jul. 31, 2014 | |
Equity | ||||
Retirement/allocation of net earnings authorized | ($39,662,000) | ($40,724,000) | ||
Patronage Capital Allocated | ||||
Equity | ||||
Retirement/allocation of net earnings authorized | -39,662,000 | -40,724,000 | ||
CFC | Cooperative educational fund | Authorized Allocations | ||||
Equity | ||||
Allocation of net earnings | 1,000,000 | |||
CFC | Patronage Capital Allocated | Authorized Allocations | ||||
Equity | ||||
Allocation of net earnings | 79,000,000 | |||
Retirement/allocation of net earnings authorized | -40,000,000 | |||
Retirement of allocated net earnings (percentage) | 50.00% | |||
CFC | Members’ Capital Reserve | ||||
Equity | ||||
Allocation of net earnings | $75,000,000 |
Guarantees_Details
Guarantees (Details) (USD $) | 6 Months Ended | |
Nov. 30, 2014 | 31-May-14 | |
Guarantees | ||
Total | $981,428,000 | $1,064,822,000 |
Amount of unsecured guarantees | 400,000,000 | 418,000,000 |
Unsecured guarantees as a percentage of total guarantees (percent) | 41.00% | 39.00% |
Long-term variable-rate bonds | ||
Guarantees | ||
Value of bonds issued under liquidity provider obligations | 503,000,000 | |
CFC | ||
Guarantees | ||
Total | 919,125,000 | 997,187,000 |
CFC | Distribution | ||
Guarantees | ||
Total | 169,716,000 | 165,559,000 |
CFC | Power supply | ||
Guarantees | ||
Total | 744,145,000 | 826,231,000 |
CFC | Statewide and associate | ||
Guarantees | ||
Total | 5,264,000 | 5,397,000 |
RTFC | ||
Guarantees | ||
Total | 2,465,000 | 2,304,000 |
NCSC | ||
Guarantees | ||
Total | 59,838,000 | 65,331,000 |
Financial guarantees | Long-term tax-exempt bonds | ||
Guarantees | ||
Total | 498,995,000 | 518,360,000 |
Financial guarantees | Long-term fixed-rate bonds | ||
Guarantees | ||
Total | 72,000,000 | |
Maximum potential exposure | 103,000,000 | |
Financial guarantees | Long-term variable-rate bonds | ||
Guarantees | ||
Total | 427,000,000 | 445,000,000 |
Letters of credit | Master letter of credit | ||
Guarantees | ||
Maximum additional amount potentially required to be issued | 121,000,000 | |
Letters of credit | Letters of credit | ||
Guarantees | ||
Total | 367,837,000 | 431,064,000 |
Letters of credit | Letters of credit, secured | ||
Guarantees | ||
Amount of guarantee secured | 82,000,000 | |
Letters of credit | Hybrid letter of credit | ||
Guarantees | ||
Commitments that may be used for the issuance of letters of credit or line of credit loan advances | 1,741,000,000 | |
Commitment remaining under letter of credit facility | 1,326,000,000 | |
Letters of credit | Hybrid letter of credit facility subject to material adverse change clauses | ||
Guarantees | ||
Commitments that may be used for the issuance of letters of credit or line of credit loan advances | 415,000,000 | |
Letters of credit | Adjustable and floating-rate tax-exempt bonds | ||
Guarantees | ||
Total | 76,000,000 | 125,000,000 |
Other guarantees | ||
Guarantees | ||
Total | 114,596,000 | 115,398,000 |
Maximum potential exposure | $115,000,000 |
Guarantees_Guarantee_Liability
Guarantees - Guarantee Liability (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 | |
Guarantee Liability | |||||
Guarantee liability recorded | $21,000,000 | $21,000,000 | $22,000,000 | ||
Contingent guarantee liability | 2,000,000 | 2,000,000 | 2,000,000 | ||
Non-contingent guarantee liability | 19,000,000 | 19,000,000 | 20,000,000 | ||
Activity in the guarantee liability account | |||||
Beginning balance | 22,091,000 | ||||
Net change in non-contingent liability | -1,450,000 | ||||
Provision for contingent guarantee liability | -13,000 | 73,000 | -80,000 | 42,000 | |
Ending balance | $20,561,000 | $20,561,000 | |||
Liability as a percentage of total guarantees (percent) | 2.10% | 2.10% |
Fair_Value_Measurement_Details
Fair Value Measurement (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | 31-May-14 |
Fair value of assets and liabilities | |||||
Unrealized gains on securities | $902 | ($1,335) | $3,602 | ($5,244) | |
Derivative assets | 139,377 | 139,377 | 209,759 | ||
Derivative liabilities | 400,687 | 400,687 | 388,208 | ||
Investments | 83,779 | 83,779 | 55,177 | ||
Investments in common and preferred stock | 83,779 | 83,779 | 55,177 | ||
Deferred compensation investments | 4,486 | 4,486 | 4,156 | ||
Level 1 | |||||
Fair value of assets and liabilities | |||||
Deferred compensation investments | 4,486 | 4,486 | 4,156 | ||
Level 2 | |||||
Fair value of assets and liabilities | |||||
Derivative assets | 139,377 | 139,377 | 209,759 | ||
Derivative liabilities | 400,687 | 400,687 | 388,208 | ||
Recurring basis | Level 1 | |||||
Fair value of assets and liabilities | |||||
Investments | 83,779 | 83,779 | 55,177 | ||
Non-recurring basis | Level 3 | |||||
Fair value of assets and liabilities | |||||
Non-performing loans, net of specific reserves | 339 | 339 | 1,669 | ||
Total losses | -724 | 0 | -950 | 0 | |
Accumulated other comprehensive income | |||||
Fair value of assets and liabilities | |||||
Unrealized gains on securities | 1,000 | 1,000 | -4,000 | -5,000 | |
Minimum | Non-recurring basis | Level 3 | |||||
Fair value of assets and liabilities | |||||
EBITDA multiples (ratio) | 3.5 | 3.5 | |||
Interest rate swaps | |||||
Fair value of assets and liabilities | |||||
Derivative liabilities | 400,687 | 400,687 | |||
Interest rate swaps | Level 2 | |||||
Fair value of assets and liabilities | |||||
Derivative assets | 139,377 | 139,377 | 209,759 | ||
Derivative liabilities | 400,687 | 400,687 | 388,208 | ||
Fair value | |||||
Fair value of assets and liabilities | |||||
Derivative assets | 139,377 | 139,377 | 209,759 | ||
Derivative liabilities | 400,687 | 400,687 | 388,208 | ||
Deferred compensation investments | $4,486 | $4,486 | 4,156 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (USD $) | Nov. 30, 2014 | 31-May-14 | Nov. 30, 2013 | 31-May-13 |
Fair value of Financial Instruments | ||||
Cash and cash equivalents | $512,501,000 | $338,715,000 | $301,377,000 | $177,062,000 |
Assets: | ||||
Restricted cash | 1,532,000 | 520,000 | ||
Investments | 83,779,000 | 55,177,000 | ||
Time deposits | 495,000,000 | 550,000,000 | ||
Deferred compensation investments | 4,486,000 | 4,156,000 | ||
Loans to members, net | 20,732,229,000 | 20,420,213,000 | 20,333,021,000 | |
Debt service reserve funds | 25,602,000 | 39,353,000 | ||
Derivative instruments | 139,377,000 | 209,759,000 | ||
Short-term debt | 4,222,404,000 | 4,099,331,000 | ||
Liabilities: | ||||
Long-term debt | 14,836,922,000 | 14,513,284,000 | ||
Guaranty Liabilities Contingent and Noncontingent | 20,561,000 | 22,091,000 | ||
Derivative instruments | 400,687,000 | 388,208,000 | ||
Subordinated debt | 400,000,000 | 400,000,000 | ||
Members Subordinated Certificates, Total | 1,550,840,000 | 1,612,227,000 | ||
Level 1 | ||||
Assets: | ||||
Cash and cash equivalents | 512,501,000 | 338,715,000 | ||
Restricted cash | 1,532,000 | 520,000 | ||
Investments | 83,779,000 | 55,177,000 | ||
Deferred compensation investments | 4,486,000 | 4,156,000 | ||
Debt service reserve funds | 25,602,000 | 39,353,000 | ||
Liabilities: | ||||
Short-term debt | 2,627,592,000 | 2,480,166,000 | ||
Level 2 | ||||
Assets: | ||||
Time deposits | 495,000,000 | 550,000,000 | ||
Derivative instruments | 139,377,000 | 209,759,000 | ||
Liabilities: | ||||
Short-term debt | 1,594,930,000 | 1,619,368,000 | ||
Long-term debt | 10,022,733,000 | 9,618,645,000 | ||
Derivative instruments | 400,687,000 | 388,208,000 | ||
Level 3 | ||||
Assets: | ||||
Loans to members, net | 21,338,380,000 | 21,000,687,000 | ||
Liabilities: | ||||
Short-term debt | 0 | 0 | ||
Long-term debt | 6,007,382,000 | 6,120,325,000 | ||
Guarantee liability | 23,290,000 | 24,946,000 | ||
Members Subordinated Certificates, At Fair Value | 1,550,840,000 | 1,612,227,000 | ||
Subordinated deferrable debt | ||||
Liabilities: | ||||
Subordinated debt | 400,000,000 | |||
Subordinated deferrable debt | Level 2 | ||||
Liabilities: | ||||
Subordinated debt | 398,400,000 | 385,744,000 | ||
Subordinated certificates | ||||
Liabilities: | ||||
Members Subordinated Certificates, Total | 1,550,840,000 | 1,612,227,000 | ||
Fair value | ||||
Assets: | ||||
Cash and cash equivalents | 512,501,000 | 338,715,000 | ||
Restricted cash | 1,532,000 | 520,000 | ||
Investments | 83,779,000 | 55,177,000 | ||
Time deposits | 495,000,000 | 550,000,000 | ||
Deferred compensation investments | 4,486,000 | 4,156,000 | ||
Loans to members, net | 21,338,380,000 | 21,000,687,000 | ||
Debt service reserve funds | 25,602,000 | 39,353,000 | ||
Derivative instruments | 139,377,000 | 209,759,000 | ||
Short-term debt | 4,099,534,000 | |||
Liabilities: | ||||
Short-term debt | 4,222,522,000 | |||
Long-term Debt, Fair Value | 16,030,115,000 | 15,738,970,000 | ||
Guarantee liability | 23,290,000 | 24,946,000 | ||
Derivative instruments | 400,687,000 | 388,208,000 | ||
Fair value | Subordinated deferrable debt | ||||
Liabilities: | ||||
Subordinated debt | 398,400,000 | 385,744,000 | ||
Fair value | Subordinated certificates | ||||
Liabilities: | ||||
Members Subordinated Certificates, At Fair Value | 1,550,840,000 | 1,612,227,000 | ||
Recurring basis | Level 1 | ||||
Assets: | ||||
Investments | 83,779,000 | 55,177,000 | ||
Interest rate swaps | ||||
Assets: | ||||
Fair value of derivative assets | 139,377,000 | 209,759,000 | ||
Liabilities: | ||||
Derivative instruments | 400,687,000 | 388,208,000 | ||
Derivative instruments | 400,687,000 | |||
Interest rate swaps | Level 2 | ||||
Assets: | ||||
Derivative instruments | 139,377,000 | 209,759,000 | ||
Liabilities: | ||||
Derivative instruments | $400,687,000 | $388,208,000 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||||||||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | 31-May-14 | Aug. 31, 2013 | 31-May-13 | |||
Statement of operations: | |||||||||||
Interest income | $235,235 | $239,254 | $472,526 | $480,325 | |||||||
Interest expense | -158,275 | -165,345 | -314,827 | -332,930 | |||||||
Net interest income | 76,960 | 73,909 | 157,699 | 147,395 | |||||||
Provision for loan losses | -992 | -1,096 | 5,779 | -2,374 | |||||||
Net interest income after provision for loan losses | 75,968 | 72,813 | 163,478 | 145,021 | |||||||
Non-interest income: | |||||||||||
Fee and other income | 9,872 | 5,125 | 14,229 | 9,281 | |||||||
Derivative gains (losses), net | -74,561 | -30,780 | -124,439 | 75,604 | |||||||
Results of operations from foreclosed assets | -28,991 | -3,269 | -31,690 | -7,318 | |||||||
Total non-interest income | -93,680 | -28,924 | -141,900 | 77,567 | |||||||
Non-interest expense: | |||||||||||
General and administrative expenses | -18,237 | -18,573 | -36,780 | -37,188 | |||||||
Provision for guarantee liability | 13 | -73 | 80 | -42 | |||||||
Other | -17 | -150 | -23 | -298 | |||||||
Total non-interest expense | -18,241 | -18,796 | -36,723 | -37,528 | |||||||
Income (loss) before income taxes | -35,953 | 25,093 | -15,145 | 185,060 | |||||||
Income tax (expense) benefit | 41 | -101 | -155 | -1,802 | |||||||
Net income (loss) | -35,912 | 24,992 | -15,300 | 183,258 | |||||||
Assets: | |||||||||||
Total loans outstanding | 20,773,280 | [1],[2] | 20,378,430 | 20,773,280 | [1],[2] | 20,378,430 | 20,466,925 | [1],[2] | |||
Deferred origination costs | 9,706 | [1] | 9,790 | 9,706 | [1] | 9,790 | 9,717 | [1] | |||
Less: Allowance for loan losses | -50,757 | -55,199 | -50,757 | -55,199 | -49,711 | -56,429 | -55,656 | -54,325 | |||
Loans to members, net | 20,732,229 | 20,333,021 | 20,732,229 | 20,333,021 | 20,420,213 | ||||||
Other assets | 1,840,874 | 2,098,343 | 1,840,874 | 2,098,343 | |||||||
Total assets | 22,573,103 | 22,431,364 | 22,573,103 | 22,431,364 | 22,232,743 | ||||||
CFC | |||||||||||
Statement of operations: | |||||||||||
Interest income | 232,168 | 235,505 | 466,308 | 472,831 | |||||||
Interest expense | -157,918 | -164,980 | -314,146 | -332,200 | |||||||
Net interest income | 74,250 | 70,525 | 152,162 | 140,631 | |||||||
Provision for loan losses | -992 | -1,096 | 5,779 | -2,374 | |||||||
Net interest income after provision for loan losses | 73,258 | 69,429 | 157,941 | 138,257 | |||||||
Non-interest income: | |||||||||||
Fee and other income | 9,646 | 4,163 | 13,872 | 8,187 | |||||||
Derivative gains (losses), net | -73,061 | -29,232 | -122,232 | 74,351 | |||||||
Results of operations from foreclosed assets | -28,991 | -3,269 | -31,690 | -7,318 | |||||||
Total non-interest income | -92,406 | -28,338 | -140,050 | 75,220 | |||||||
Non-interest expense: | |||||||||||
General and administrative expenses | -16,553 | -15,942 | -33,252 | -32,663 | |||||||
Provision for guarantee liability | 13 | -73 | 80 | -42 | |||||||
Other | -17 | -151 | -23 | -299 | |||||||
Total non-interest expense | -16,557 | -16,166 | -33,195 | -33,004 | |||||||
Income (loss) before income taxes | -35,705 | 24,925 | -15,304 | 180,473 | |||||||
Net income (loss) | -35,705 | 24,925 | -15,304 | 180,473 | |||||||
Assets: | |||||||||||
Total loans outstanding | 20,739,565 | 20,342,560 | 20,739,565 | 20,342,560 | |||||||
Deferred origination costs | 9,706 | 9,790 | 9,706 | 9,790 | |||||||
Less: Allowance for loan losses | -50,757 | -55,199 | -50,757 | -55,199 | |||||||
Loans to members, net | 20,698,514 | 20,297,151 | 20,698,514 | 20,297,151 | |||||||
Other assets | 1,818,603 | 2,079,206 | 1,818,603 | 2,079,206 | |||||||
Total assets | 22,517,117 | 22,376,357 | 22,517,117 | 22,376,357 | |||||||
Other | |||||||||||
Statement of operations: | |||||||||||
Interest income | 11,328 | 12,582 | 23,135 | 25,345 | |||||||
Interest expense | -8,618 | -9,198 | -17,598 | -18,581 | |||||||
Net interest income | 2,710 | 3,384 | 5,537 | 6,764 | |||||||
Net interest income after provision for loan losses | 2,710 | 3,384 | 5,537 | 6,764 | |||||||
Non-interest income: | |||||||||||
Fee and other income | 1,369 | 342 | 1,731 | 694 | |||||||
Derivative gains (losses), net | -1,500 | -1,548 | -2,207 | 1,253 | |||||||
Total non-interest income | -131 | -1,206 | -476 | 1,947 | |||||||
Non-interest expense: | |||||||||||
General and administrative expenses | -1,940 | -2,011 | -4,015 | -4,125 | |||||||
Other | -887 | 1 | -887 | 1 | |||||||
Total non-interest expense | -2,827 | -2,010 | -4,902 | -4,124 | |||||||
Income (loss) before income taxes | -248 | 168 | 159 | 4,587 | |||||||
Income tax (expense) benefit | 41 | -101 | -155 | -1,802 | |||||||
Net income (loss) | -207 | 67 | 4 | 2,785 | |||||||
Assets: | |||||||||||
Total loans outstanding | 1,098,127 | 1,199,116 | 1,098,127 | 1,199,116 | |||||||
Loans to members, net | 1,098,127 | 1,199,116 | 1,098,127 | 1,199,116 | |||||||
Other assets | 137,686 | 140,738 | 137,686 | 140,738 | |||||||
Total assets | 1,235,813 | 1,339,854 | 1,235,813 | 1,339,854 | |||||||
Elimination | |||||||||||
Statement of operations: | |||||||||||
Interest income | -8,261 | -8,833 | -16,917 | -17,851 | |||||||
Interest expense | 8,261 | 8,833 | 16,917 | 17,851 | |||||||
Non-interest income: | |||||||||||
Fee and other income | -1,143 | 620 | -1,374 | 400 | |||||||
Derivative gains (losses), net | 0 | 0 | 0 | 0 | |||||||
Total non-interest income | -1,143 | 620 | -1,374 | 400 | |||||||
Non-interest expense: | |||||||||||
General and administrative expenses | 256 | -620 | 487 | -400 | |||||||
Other | 887 | 0 | 887 | 0 | |||||||
Total non-interest expense | 1,143 | -620 | 1,374 | -400 | |||||||
Assets: | |||||||||||
Total loans outstanding | -1,064,412 | -1,163,246 | -1,064,412 | -1,163,246 | |||||||
Loans to members, net | -1,064,412 | -1,163,246 | -1,064,412 | -1,163,246 | |||||||
Other assets | -115,415 | -121,601 | -115,415 | -121,601 | |||||||
Total assets | ($1,179,827) | ($1,284,847) | ($1,179,827) | ($1,284,847) | |||||||
[1] | Includes nonperforming and restructured loans. | ||||||||||
[2] | Represents the unpaid principal balance excluding deferred loan origination costs. |