Cover Page
Cover Page | 12 Months Ended |
May 31, 2023 USD ($) shares | |
Cover [Abstract] | |
Document Type | 10-K |
Document Annual Report | true |
Current Fiscal Year End Date | --05-31 |
Document Period End Date | May 31, 2023 |
Document Transition Report | false |
Entity File Number | 1-7102 |
Entity Registrant Name | NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION |
Entity Incorporation, State or Country Code | DC |
Entity Tax Identification Number | 52-0891669 |
Entity Address, Address Line One | 20701 Cooperative Way, |
Entity Address, City or Town | Dulles, |
Entity Address, State or Province | VA |
Entity Address, Postal Zip Code | 20166 |
City Area Code | (703) |
Local Phone Number | 467-1800 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | false |
Document Financial Statement Error Correction [Flag] | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | shares | 0 |
Entity Public Float | $ | $ 0 |
Entity Central Index Key | 0000070502 |
Amendment Flag | false |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
7.35% Collateral Trust Bonds, due 2026 | |
Document Information [Line Items] | |
Title of 12(b) Security | 7.35% Collateral Trust Bonds, due 2026 |
Trading Symbol | NRUC 26 |
Security Exchange Name | NYSE |
5.50% issuance 2019 | |
Document Information [Line Items] | |
Title of 12(b) Security | 5.50% Subordinated Notes, due 2064 |
Trading Symbol | NRUC |
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
May 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | McLean, Virginia |
Auditor Firm ID | 185 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Income Statement [Abstract] | |||
Interest income | $ 1,351,729 | $ 1,141,243 | $ 1,116,601 |
Interest expense | (1,036,508) | (705,534) | (702,063) |
Net interest income | 315,221 | 435,709 | 414,538 |
Benefit (provision) for credit losses | (603) | 17,972 | (28,507) |
Net interest income after benefit (provision) for credit losses | 314,618 | 453,681 | 386,031 |
Non-interest income: | |||
Fee and other income | 18,134 | 17,193 | 18,929 |
Derivative gains | 285,844 | 456,482 | 506,301 |
Investment securities losses | (4,974) | (30,179) | 1,495 |
Total non-interest income | 299,004 | 443,496 | 526,725 |
Non-interest expense: | |||
Salaries and employee benefits | (59,011) | (51,863) | (55,258) |
Other general and administrative expenses | (50,620) | (43,323) | (39,447) |
Losses on early extinguishment of debt | (117) | (754) | (1,456) |
Other non-interest expense | (1,487) | (1,552) | (1,619) |
Total non-interest expense | (111,235) | (97,492) | (97,780) |
Income before income taxes | 502,387 | 799,685 | 814,976 |
Income tax provision | (800) | (1,148) | (998) |
Net income | 501,587 | 798,537 | 813,978 |
Less: Net income attributable to noncontrolling interests | (97) | (2,692) | (2,311) |
Net income attributable to CFC | $ 501,490 | $ 795,845 | $ 811,667 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 501,587 | $ 798,537 | $ 813,978 |
Other comprehensive income: | |||
Changes in unrealized gains on derivative cash flow hedges | 6,691 | 4,028 | 0 |
Reclassification to earnings of realized gains on derivatives | (712) | (623) | (412) |
Defined benefit plan adjustments | 106 | (1,122) | 2,297 |
Other comprehensive income | 6,085 | 2,283 | 1,885 |
Total comprehensive income | 507,672 | 800,820 | 815,863 |
Less: Total comprehensive income attributable to noncontrolling interests | (97) | (2,692) | (2,311) |
Total comprehensive income attributable to CFC | $ 507,575 | $ 798,128 | $ 813,552 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 198,936 | $ 153,551 |
Restricted cash | 8,301 | 7,563 |
Total cash, cash equivalents and restricted cash | 207,237 | 161,114 |
Investment securities: | ||
Debt securities trading, at fair value | 474,875 | 566,146 |
Equity securities, at fair value | 35,494 | 33,758 |
Total investment securities, at fair value | 510,369 | 599,904 |
Loans to members | 32,532,086 | 30,063,386 |
Less: Allowance for credit losses | (53,094) | (67,560) |
Loans to members, net | 32,478,992 | 29,995,826 |
Accrued interest receivable | 172,723 | 111,418 |
Other receivables | 31,243 | 35,431 |
Fixed assets, net | 86,011 | 101,762 |
Derivative assets | 460,762 | 222,042 |
Other assets | 64,723 | 23,885 |
Total assets | 34,012,060 | 31,251,382 |
Liabilities: | ||
Accrued interest payable | 212,340 | 131,950 |
Debt outstanding: | ||
Short-term borrowings | 4,546,275 | 4,981,167 |
Long-term debt | 23,946,548 | 21,545,440 |
Subordinated deferrable debt | 1,283,436 | 986,518 |
Members’ subordinated certificates: | ||
Membership subordinated certificates | 628,614 | 628,603 |
Loan and guarantee subordinated certificates | 348,349 | 365,388 |
Member capital securities | 246,163 | 240,170 |
Total members’ subordinated certificates | 1,223,126 | 1,234,161 |
Total debt outstanding | 30,999,385 | 28,747,286 |
Deferred income | 38,601 | 44,332 |
Derivative liabilities | 115,074 | 128,282 |
Other liabilities | 57,411 | 57,563 |
Total liabilities | 31,422,811 | 29,109,413 |
CFC equity: | ||
Retained equity | 2,553,716 | 2,112,315 |
Accumulated other comprehensive income | 8,343 | 2,258 |
Total CFC equity | 2,562,059 | 2,114,573 |
Noncontrolling interests | 27,190 | 27,396 |
Total equity | 2,589,249 | 2,141,969 |
Total liabilities and equity | $ 34,012,060 | $ 31,251,382 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Cumulative effect from adoption of new accounting standard | Adjusted Balance | Membership Fees and Educational Fund | Membership Fees and Educational Fund Adjusted Balance | Patronage Capital Allocated | Patronage Capital Allocated Adjusted Balance | Members’ Capital Reserve | Members’ Capital Reserve Adjusted Balance | Unallocated Net Income (Loss) | Unallocated Net Income (Loss) Cumulative effect from adoption of new accounting standard | Unallocated Net Income (Loss) Adjusted Balance | CFC Retained Equity | CFC Retained Equity Cumulative effect from adoption of new accounting standard | CFC Retained Equity Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Cumulative effect from adoption of new accounting standard | Accumulated Other Comprehensive Income (Loss) Adjusted Balance | Total CFC Equity | Total CFC Equity Cumulative effect from adoption of new accounting standard | Total CFC Equity Adjusted Balance | Non-controlling Interests | Non-controlling Interests Cumulative effect from adoption of new accounting standard | Non-controlling Interests Adjusted Balance |
Beginning balance at May. 31, 2020 | $ 648,822 | $ (3,900) | $ 644,922 | $ 3,193 | $ 3,193 | $ 894,066 | $ 894,066 | $ 807,320 | $ 807,320 | $ (1,076,548) | $ (3,900) | $ (1,080,448) | $ 628,031 | $ (3,900) | $ 624,131 | $ (1,910) | $ 0 | $ (1,910) | $ 626,121 | $ (3,900) | $ 622,221 | $ 22,701 | $ 0 | $ 22,701 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Net income | 813,978 | 900 | 89,761 | 102,429 | 618,577 | 811,667 | 811,667 | 2,311 | ||||||||||||||||
Other comprehensive income | 1,885 | 1,885 | 1,885 | |||||||||||||||||||||
Patronage capital retirement | (61,911) | (59,857) | (59,857) | (59,857) | (2,054) | |||||||||||||||||||
Other | 1,005 | (968) | 0 | 0 | (968) | (968) | 1,973 | |||||||||||||||||
Ending balance at May. 31, 2021 | 1,399,879 | 3,125 | 923,970 | 909,749 | (461,871) | 1,374,973 | (25) | 1,374,948 | 24,931 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Net income | 798,537 | 1,200 | 88,583 | 152,537 | 553,525 | 795,845 | 795,845 | 2,692 | ||||||||||||||||
Other comprehensive income | 2,283 | 2,283 | 2,283 | |||||||||||||||||||||
Patronage capital retirement | (59,979) | (57,565) | (57,565) | (57,565) | (2,414) | |||||||||||||||||||
Other | 1,249 | (938) | 0 | 0 | (938) | (938) | 2,187 | |||||||||||||||||
Ending balance at May. 31, 2022 | 2,141,969 | 3,387 | 954,988 | 1,062,286 | 91,654 | 2,112,315 | 2,258 | 2,114,573 | 27,396 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Net income | 501,587 | 1,100 | 110,273 | 139,856 | 250,261 | 501,490 | 501,490 | 97 | ||||||||||||||||
Other comprehensive income | 6,085 | 6,085 | 6,085 | |||||||||||||||||||||
Patronage capital retirement | (61,840) | (59,136) | (59,136) | (59,136) | (2,704) | |||||||||||||||||||
Other | 1,448 | (953) | (10) | 10 | (953) | (953) | 2,401 | |||||||||||||||||
Ending balance at May. 31, 2023 | $ 2,589,249 | $ 3,534 | $ 1,006,115 | $ 1,202,152 | $ 341,915 | $ 2,553,716 | $ 8,343 | $ 2,562,059 | $ 27,190 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 501,587 | $ 798,537 | $ 813,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of deferred loan fees | (7,500) | (8,211) | (9,390) |
Amortization of debt issuance costs and discount | 28,744 | 27,417 | 26,967 |
Amortization of guarantee fee | 19,300 | 18,763 | 18,687 |
Depreciation and amortization | 5,717 | 7,553 | 7,959 |
Provision (benefit) for credit losses | 603 | (17,972) | 28,507 |
Loss on early extinguishment of debt | 117 | 754 | 1,456 |
Unrealized (gains) losses on equity and debt securities | 1,090 | 28,742 | (1,015) |
Derivative forward value gains | (252,267) | (557,867) | (621,946) |
Advances on loans held for sale | (213,142) | (214,486) | (125,500) |
Proceeds from sales of loans held for sale | 256,942 | 170,686 | 125,500 |
Changes in operating assets and liabilities: | |||
Accrued interest receivable | (61,305) | (3,562) | 9,282 |
Accrued interest payable | 80,390 | 8,278 | (15,947) |
Deferred income | 1,769 | 1,345 | 1,285 |
Other | (24,272) | (9,184) | (19,868) |
Net cash provided by operating activities | 337,773 | 250,793 | 239,955 |
Cash flows from investing activities: | |||
Advances on loans held for investment, net | (2,534,642) | (1,592,447) | (1,724,253) |
Investments in fixed assets, net | (7,721) | (17,727) | (9,862) |
Purchase of trading securities | (117,288) | (181,545) | (397,522) |
Proceeds from sales and maturities of trading securities | 201,849 | 162,739 | 127,875 |
Proceeds from redemption of equity securities | 0 | 0 | 30,000 |
Net cash used in investing activities | (2,457,802) | (1,628,980) | (1,973,762) |
Cash flows from financing activities: | |||
Proceeds from (repayments of) short-term borrowings ≤ 90 days, net | (417,487) | 270,405 | 808,252 |
Proceeds from short-term borrowings with original maturity > 90 days | 2,864,699 | 2,693,256 | 3,081,069 |
Repayments of short-term borrowings with original maturity > 90 days | (2,882,104) | (2,564,590) | (3,269,210) |
Payments for issuance costs for revolving bank lines of credit | (2,108) | (3,563) | 0 |
Proceeds from issuance of long-term debt, net of discount and issuance costs | 4,293,185 | 3,973,810 | 3,055,220 |
Payments for retirement of long-term debt | (1,916,514) | (3,054,366) | (2,186,458) |
Payments made for early extinguishment of debt | 0 | (754) | (1,456) |
Payments for issuance costs for subordinated deferrable debt | (3,295) | 0 | 0 |
Proceeds from issuance of subordinated deferrable debt | 300,000 | 0 | 0 |
Proceeds from issuance of members’ subordinated certificates | 6,133 | 1,364 | 14,292 |
Payments for retirement of members’ subordinated certificates | (17,168) | (21,863) | (84,659) |
Payments for retirement of patronage capital | (59,189) | (57,761) | (59,889) |
Additions (repayments) for membership fees, net | 0 | 2 | (12) |
Net cash provided by financing activities | 2,166,152 | 1,235,940 | 1,357,149 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 46,123 | (142,247) | (376,658) |
Beginning cash, cash equivalents and restricted cash | 161,114 | 303,361 | 680,019 |
Ending cash, cash equivalents and restricted cash | 207,237 | 161,114 | 303,361 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 934,602 | 668,276 | 687,145 |
Cash paid for income taxes | 335 | 3 | 219 |
Noncash financing and investing activities: | |||
Equity investment, at cost, obtained in exchange for loan held for investment | $ 7,778 | $ 0 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company National Rural Utilities Cooperative Finance Corporation (“CFC”) is a tax-exempt 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 systems, electric generation and transmission (“power supply”) systems 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. National Cooperative Services Corporation (“NCSC”) is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. NCSC’s principal purpose is to provide financing to members of CFC, entities eligible to be members of CFC and the for-profit and not-for-profit entities that are owned, operated or controlled by or provide significant benefit to certain members of CFC. NCSC’s membership consists of distribution systems, power supply systems and statewide and regional associations that are members of CFC. CFC is the primary source of funding for NCSC and manages NCSC’s business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia. Rural Telephone Finance Cooperative (“RTFC”) is a taxable Subchapter T cooperative association originally incorporated in South Dakota in 1987 and reincorporated as a member-owned cooperative association in the District of Columbia in 2005. RTFC’s principal purpose is to provide financing for its rural telecommunications members and their affiliates. RTFC’s membership consists of a combination of not-for-profit and for-profit entities. CFC is the sole lender to and manages the business operations of RTFC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. RTFC pays CFC a fee and, in exchange, CFC reimburses RTFC for loan losses under a guarantee agreement. As permitted under Subchapter T of the Internal Revenue Code, RTFC pays income tax based on its net income, excluding patronage-sourced earnings allocated to its patrons. RTFC is headquartered with CFC in Dulles, Virginia. In April 2023 and June 2023, RTFC’s and NCSC’s members, respectively, approved the sale of RTFC’s business to NCSC. We intend to complete the consolidation of RTFC and NCSC over the next 12 months, subject to meeting certain closing conditions. As part of the consolidation, CFC intends to retire CFC’s allocated but unretired patronage capital to RTFC at a discount, which we expect to occur during the second quarter of fiscal year 2024, and subsequently, RTFC intends to retire the allocated but unretired patronage capital to its members at a discount. Basis of Presentation and Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures during the period. Management ’ s most significant estimates and assumptions involve determining the allowance for credit losses. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgments, actual amounts or results could differ from these estimates. Principles of Consolidation These consolidated financial statements include the accounts of CFC and variable interest entities (“VIEs”) where CFC is the primary beneficiary. NCSC and RTFC are VIEs that are required to be consolidated by CFC. All intercompany balances and transactions have been eliminated. Unless stated otherwise, references to “we, “our” or “us” relate to CFC and its consolidated entities. Variable Interest Entities A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its activities without additional subordinated financial support provided by another party, or where the group of equity holders does not have (i) the ability to make decisions about the entity’s activities that most significantly impact its economic performance; (ii) the obligation to absorb the entity’s expected losses; or (iii) the right to receive the entity’s expected residual returns. NCSC and RTFC meet the definition of VIEs because they do not have sufficient equity investment at risk to finance their activities without additional financial support. When evaluating an entity for possible consolidation, we must determine whether or not we have a variable interest in the entity. If it is determined that we do not have a variable interest in the entity, no further analysis is required and we do not consolidate the entity. If we have a variable interest in the entity, we must evaluate whether we are the primary beneficiary based on an assessment of quantitative and qualitative factors. We are considered the primary beneficiary holder if we have a controlling financial interest in the VIE that provides (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We consolidate the results of NCSC and RTFC with CFC because CFC is the primary beneficiary holder. Cash and Cash Equivalents Cash, certificates of deposit due from banks and other investments with original maturities of less than 90 days are classified as cash and cash equivalents. Restricted Cash Restricted cash, which consists primarily of member funds held in escrow for certain specifically designed cooperative programs, totaled $8 million as of both May 31, 2023 and 2022. Investment Securities Our investment securities portfolio consists of equity and debt securities. We record purchases and sales of securities on a trade-date basis. The accounting and measurement framework for investment securities differs depending on the security type and the classification. Equity securities are reported at fair value on our consolidated balance sheets with unrealized gains and losses recorded as a component of other non-interest income. All of our debt securities were classified as trading as of May 31, 2023 and 2022. Accordingly, we also report our debt securities at fair value on our consolidated balance sheets and record unrealized gains and losses as a component of non-interest income. Interest income is generally recognized over the contractual life of the securities based on the effective yield method. Loans to Members We originate loans to members and classify loans as held for investment or held for sale based on management’s intent and ability to sell or hold the loan for the foreseeable future or until maturity or payoff. Loans that we have the ability and intent to hold for the foreseeable future are classified as held for investment a nd are reported based on the unpaid principal balance, net of principal charge-offs, and deferred loan origination costs. Loans that we intend to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale and are recorded at the lower of cost or fair value. These loan sales are made at par value, concurrently or within a short period of time with the closing of the loan or participation agreement. Accrued Interest Receivable Accrued interest receivable amounts generally represent three months or less of accrued interest on loans outstanding, investments and derivative instruments. As permitted by the Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments—Credit Losses , the current expected credit loss (“CECL”) model, we elected to continue reporting accrued interest on loans separately on our consolidated balance sheets as a component of the line item accrued interest receivable rather than as a component of loans to members. Because our policy is to write off past-due accrued interest receivable in a timely manner, we elected not to measure an allowance for credit losses for accrued interest receivable on loans outstanding, which totaled $133 million and $94 million as of May 31, 2023 and 2022, respectively. We also elected to exclude accrued interest receivable from the credit quality disclosures required under CECL. Interest Income Interest income on performing loans is accrued and recognized as interest income based on the contractual rate of interest. Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method into interest income over the life of the loan. N onrefundable loan fees that meet the definition of loan origination fees are deferred and generally recognized in interest income as yield adjustments over the period to maturity of the loan using the effective interest method. Troubled Debt Restructurings A loan modification is considered a troubled debt restructuring (“TDR”) if the borrower is experiencing financial difficulties and a concession is granted to the borrower that we would not otherwise consider. Under CECL, we are required to estimate an allowance for lifetime expected credit losses for the loans in our portfolio, including TDR loans. As discussed below under “Allowance for Credit Losses—Loan Portfolio—Asset-Specific Allowance,” TDR loans are evaluated on an individual basis in estimating expected credit losses. Credit losses for anticipated TDRs are accounted for similarly to TDRs and are identified when there is a reasonable expectation that a TDR will be executed with the borrower and when we expect the modification to affect the timing or amount of payments and/or the payment term. We generally classify TDR loans as nonperforming and place the loan on nonaccrual status, although in many cases such loans were already classified as nonperforming prior to modification. These loans may be returned to performing status and the accrual of interest resumed if the borrower performs under the modified terms for an extended period of time, and we expect the borrower to continue to perform in accordance with the modified terms. In certain limited circumstances in which a TDR loan is current at the modification date, the loan may remain on accrual status at the time of modification. Nonperforming Loans We classify loans as nonperforming when contractual principal or interest is 90 days past due or when we believe the collection of principal and interest in full is not reasonably assured. When a loan is classified as nonperforming, we generally place the loan on nonaccrual status. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against current-period interest income. Interest income on nonaccrual loans is subsequently recognized only upon the receipt of cash payments. However, if we believe the ultimate collectability of the loan principal is in doubt, cash received is applied against the principal balance of the loan. Nonaccrual loans generally are returned to accrual status when principal and interest becomes and remains current for a specified period and repayment of the remaining contractual principal and interest is reasonably assured. Charge-Offs We charge off loans or a portion of a loan when we determine that the loan is uncollectible. The charge-off of uncollectible principal amounts results in a reduction to the allowance for credit losses for our loan portfolio. Recoveries of previously charged off principal amounts result in an increase to the allowance. Allowance for Credit Losses—Loan Portfolio Allowance Methodology The allowance for credit losses is determined based on management’s current estimate of expected credit losses over the remaining contractual term, adjusted as appropriate for estimated prepayments, of loans in our loan portfolio as of each balance sheet date. The allowance for credit losses for our loan portfolio is reported on our consolidated balance sheet as a valuation account that is deducted from loans to members to present the net amount we expect to collect over the life of our loans. We immediately recognize an allowance for expected credit losses upon origination of a loan. Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented on our consolidated statements of operations. We estimate our allowance for lifetime expected credit losses for our loan portfolio using a probability of default/loss given default methodology. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. The collective allowance is established for loans in our portfolio that share similar risk characteristics and are therefore evaluated on a collective, or pool, basis in measuring expected credit losses. The asset-specific allowance is established for loans in our portfolio that do not share similar risk characteristics with other loans in our portfolio and are therefore evaluated on an individual basis in measuring expected credit losses. Expected credit losses are estimated based on historical experience, current conditions and forecasts, if applicable, that affect the collectibility of the reported amount. Since inception in 1969, CFC has experienced limited defaults and losses as the utility sector generally tends to be less sensitive to changes in the economy than other sectors largely due to the essential nature of the service provided. The losses we have incurred were not tied to economic factors, but rather to distinct operating issues related to each borrower. Given that our borrowers’ creditworthiness, and accordingly our loss experience, has not correlated to specific underlying macroeconomic variables, such as U.S. unemployment rates or gross domestic product (“GDP”) growth, we have not made adjustments to our historical loss rates for any economic forecast. We consider the need, however, to adjust our historical loss information for differences in the specific characteristics of our existing loan portfolio based on an evaluation of relative qualitative factors, such as differences in the composition of our loan portfolio, our underwriting standards, problem loan trends, the quality of our credit review function, as well as changes in the regulatory environment and other pertinent external factors that may impact the amount of future credit losses. Collective Allowance We employ a quantitative methodology and a qualitative framework to measure the collective component of our allowance for expected credit losses. The first element in our quantitative methodology involves the segmentation of our loan portfolio into loan pools that share similar risk characteristics. We disaggregate our loan portfolio into segments that reflect the member borrower type, which is based on the utility sector of the borrower because the key operational, infrastructure, regulatory, environmental, customer and financial risks of each sector are similar in nature. Our primary member borrower types consist of CFC electric distribution, CFC electric power supply, CFC statewide and associate, NCSC and RTFC telecommunications. Our portfolio segments align with the sectors generally seen in the utilities industry. We further stratify each portfolio into loan pools based on our internal borrower risk ratings, as our borrower risk ratings provide important information on the collectibility of each of our loan portfolio segments. We then apply loss factors, consisting of the probability of default and loss given default, to the scheduled loan-level amortization amounts over the life of the loans for each of our loan pools. Below we discuss the source and basis for the key inputs, which include borrower risk ratings and the loss factors, in measuring expected credit losses for our loan portfolio. • Borrower Risk Ratings : We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following receipt of the borrower’s audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends. Our internally assigned borrower risk ratings are intended to assess the general creditworthiness of the borrower and probability of default. We use our internal borrower risk ratings, which we map to the equivalent credit ratings by external rating agencies, to differentiate risk within each of our portfolio segments and loan pools. We provide additional information on our borrower risk ratings below in “Note 4—Loans.” • Probability of Default : The probability of default, or default rate, represents the likelihood that a borrower will default over a particular time horizon. Because of our limited default history, we utilize third-party default data for the utility sector as a proxy to estimate default rates for each of our loan pools. The third-party default data provide historical default rates, based on credit ratings and remaining maturities of outstanding bonds, for the utility sector. Based on the mapping and alignment of our internal borrower risk ratings to equivalent credit ratings provided in the third-party utility default table, we apply the corresponding cumulative default rates to the scheduled amortization amounts over the remaining term of the loans in each of our loan pools. • Loss Given Default : The loss given default, or loss severity, represents the estimated loss, net of recoveries, on a loan that would be realized in the event of a borrower default. While we utilize third-party default data, we utilize our lifetime historical loss experience to estimate loss given default, or the recovery rate, for each of our loan portfolio segments. We believe our internal historical loss severity rates provide a more reliable estimate than third-party loss severity data due to the organizational structure and operating environment of rural utility cooperatives, our lending practice of generally requiring a senior security position on the assets and revenue of borrowers for long-term loans, the investment our member borrowers have in CFC and therefore the collaborative approach we generally take in working with members in the event that a default occurs. In addition to the quantitative methodology used in our collective measurement of expected credit losses, management performs a qualitative evaluation and analyses of relevant factors, such as changes in risk-management practices, current and past underwriting standards, specific industry issues and trends and other subjective factors. Based on our assessment, we did not make a qualitative adjustment to the collective allowance for credit losses measured under our quantitative methodology as of May 31, 2023 or May 31, 2022. Asset-Specific Allowance We generally consider nonperforming loans as well as loans that have been or are anticipated to be modified under a troubled debt restructuring for individual evaluation given the risk characteristics of such loans. Factors we consider in measuring the extent of expected credit loss include the payment status, the collateral value, the borrower’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated. We generally measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower, which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent. Unadvanced Loan Commitments Unadvanced commitments represent amounts for which we have approved and executed loan contracts, but the funds have not been advanced. The majority of the unadvanced commitments reported represent amounts that are subject to material adverse change clauses at the time of the loan advance. Prior to making an advance on these facilities, we would confirm 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 the borrower is currently in compliance with loan terms and conditions. The remaining unadvanced commitments relate to line of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we would be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the loan commitment. Unadvanced loan 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 fund construction work plans and other capital expenditures for periods of up to five years and draw down on the facility over that time. These factors contribute to our expectation that the majority of the unadvanced line of credit loan commitments will expire without being fully drawn upon and that the total unadvanced amount does not necessarily represent future cash funding requirements. Reserve for Credit Losses—Off-Balance Sheet Credit Exposures We also maintain a reserve for credit losses for our off-balance sheet credit exposures related to unadvanced loan commitments and financial guarantees. Because our business processes and credit risks associated with our off-balance sheet credit exposures are essentially the same as for our loans, we measure expected credit losses for our off-balance sheet exposures, after adjusting for the probability of funding these exposures, consistent with the methodology used for our funded outstanding exposures. We include the reserve for expected credit losses for our off-balance sheet credit exposures as a component of other liabilities on our consolidated balance sheets. Fixed Assets Fixed assets are recorded at cost less accumulated depreciation. We recognize depreciation expense for each category of our depreciable fixed assets on a straight-line basis over the estimated useful life, which ranges from three recognized depreciation expense of $5 million, $8 million a nd $8 million in the fiscal years ended May 31, 2023 (“fiscal year 2023”), May 31, 2022 (“fiscal year 2022”) and May 31, 2021 (“fiscal year 2021”), respectively. We perform a fixed assets impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Based on our annual impairment assessment for fiscal years 2023 and 2022, management determined that there were no indicators of impairment of our fixed assets as of May 31, 2023 or May 31, 2022. The following table displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment. Table 1.1: Fixed Assets May 31, (Dollars in thousands) 2023 2022 Building and building equipment $ 50,316 $ 50,177 Furniture and fixtures 6,332 6,254 Computer software and hardware 80,201 55,101 Other 1,126 1,024 Depreciable fixed assets 137,975 112,556 Less: Accumulated depreciation (77,508) (73,258) Net depreciable fixed assets 60,467 39,298 Land 23,796 23,796 Software development in progress 1,748 38,668 Fixed assets, net $ 86,011 $ 101,762 Cloud Computing Arrangements — Implementation Costs Eligible implementation costs associated with cloud computing arrangements that are service contracts are capitalized and amortized over future periods. These costs are recorded at cost less accumulated amortization and are included in other assets on the consolidated balance sheets. We recognize amortization expense for these capitalized implementation costs on a straight-line basis over the term of the hosting arrangements related to the cloud computing service contracts when ready for the intended use, and we include it in other general and administrative expenses in the consolidated statements of operations. We perform an impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount for the capitalized implementation costs for cloud computing service contracts may not be recoverable. Based on our annual impairment assessment for fiscal year 2023 management determined that there were no indicators of impairment of our capitalized implementation costs for cloud computing service contracts as of May 31, 2023. We had $29 million of unamortized capitalized implementation costs for cloud computing service contracts a s of May 31, 2023, which included accumulated amortization related to these costs of $1 million and we recognized amortization expense of $1 million in fisc al year 2023 for these costs. Securities Sold Under Repurchase Agreements We enter into repurchase agreements to sell investment securities. These transactions are accounted for as collateralized financing transactions and are recorded on our consolidated balance sheets as part of short-term borrowings at the amounts at which the securities were sold. Debt We report debt at cost net of unamortized issuance costs and discounts or premiums. Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue. Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt. Derivative Instruments 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. 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 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 consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our consolidated balance sheets as a component of either accrued interest receivable or accrued interest payable. If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of net accrued periodic derivative cash settlements expense and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses). If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of t he hedge relationship. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. 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 periodic cash settlements expense 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 or repricings. Changes in the fair value of Treasury locks designated as cash flow hedges are recorded as a component of OCI an d reclassified from AOCI into interest expense when the forecasted transaction occurs. Guarantee Liability We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members’ debt. The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations. The contingent portion of the guarantee liability represents management’s estimate of our exposure to losses within the guarantee portfolio. The methodology used to estimate the contingent guarantee liability is consistent with the methodology used to determine the allowance for credit losses under the CECL model. We record a noncontingent guarantee liability for all new or modified guarantees. Our noncontingent guarantee liability represents our 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. Our noncontingent obligation is estimated based on guarantee and liquidity fees charged for guarantees issued, which represents management’s estimate of the fair value of our obligation to stand ready to perform. The fees are deferred and amortized using the straight-line method into interest income over the term of the guarantee. Fair Value Valuation Processes We present certain financial instruments at fair value, including equity and debt securities, and derivatives. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (also referred to as an exit price). 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. 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 and our trading debt securities. Fair Value Hierarchy The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measur |
Interest Income and Interest Ex
Interest Income and Interest Expense | 12 Months Ended |
May 31, 2023 | |
Banking and Thrift, Interest [Abstract] | |
INTEREST INCOME AND INTEREST EXPENSE | NOTE 2—INTEREST INCOME AND INTEREST EXPENSE The following table displays the components of interest income, by interest-earning asset type, and interest expense, by debt product type, presented on our consolidated statements of operations for fiscal years 2023, 2022 and 2021. Table 2.1: Interest Income and Interest Expense Year Ended May 31, (Dollars in thousands) 2023 2022 2021 Interest income: Loans (1) $ 1,330,144 $ 1,125,292 $ 1,101,505 Investment securities 21,585 15,951 15,096 Total interest income 1,351,729 1,141,243 1,116,601 Interest expense: (2)(3) Short-term borrowings (4) 165,961 18,265 14,730 Long-term debt (5) 763,700 581,748 581,292 Subordinated debt 106,847 105,521 106,041 Total interest expense 1,036,508 705,534 702,063 Net interest income $ 315,221 $ 435,709 $ 414,538 ____________________________ (1) Includes loan conversion fees, which are generally deferred and recognized in interest income over the period to maturity using the effective interest method, late payment fees, commitment fees and net amortization of deferred loan fees and loan origination costs. (2) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense over the period to maturity using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized in interest expense immediately as incurred. (3) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Based on the nature of the fees, the amount is either recognized immediately as incurred or deferred and recognized in interest expense ratably over the term of the arrangement. (4) Short-term borrowings consist of interest expense paid for commercial paper, select notes, daily liquidity fund notes and secured borrowings under repurchase agreements. (5) Long-term debt consists of interest expense paid for both long-term and short-term medium-term notes and Farmer Mac notes payable, and other long-term debt. Deferred income reported on our consolidated balance sheets of $39 million and $44 million as of May 31, 2023 and 2022, respectively, consists primarily of deferred loan conversion fees that totaled $30 million and $37 million as of each |
Investment Securities
Investment Securities | 12 Months Ended |
May 31, 2023 | |
Investments [Abstract] | |
INVESTMENT SECURITIES | NOTE 3—INVESTMENT SECURITIES Our investment securities portfolio consists of debt securities classified as trading and equity securities with readily determinable fair values. We therefore record changes in the fair value of our debt and equity securities in earnings and report these unrealized changes together with realized gains and losses from the sale of securities as a component of non-interest income in our consolidated statements of operations. For additional information on our investments in debt securities, see “Note 1—Summary of Significant Accounting Policies.” Debt Securities Our debt securities portfolio, which is intended to serve as a supplemental source of liquidity, consists of certificates of deposit with maturities greater than 90 days, commercial paper, corporate debt securities, municipality debt securities, commercial mortgage-backed securities (“MBS”), foreign government debt securities and other asset-backed securities (“ABS”). Pursuant to our investment policy guidelines, all fixed-income debt securities, at the time of purchase, must be rated at least investment grade based on external credit ratings from at least two of the leading global credit rating agencies, when available, or the corresponding equivalent, when not available. Securities rated investment grade, that is those rated Baa3 or higher by Moody’s Investors Service (“Moody’s”) or BBB- or higher by S&P Global Inc. (“S&P”) or BBB- or higher by Fitch Ratings Inc. (“Fitch”), are generally considered by the rating agencies to be of lower credit risk than non-investment-grade securities. The following table presents the composition of our investment debt securities portfolio and the fair value as of May 31, 2023 and 2022. Table 3.1: Investments in Debt Securities, at Fair Value May 31, (Dollars in thousands) 2023 2022 Debt securities, at fair value: Commercial paper $ — $ 9,985 Corporate debt securities 401,367 487,172 Commercial Agency MBS (1) 7,237 7,815 U.S. state and municipality debt securities 27,300 27,778 Foreign government debt securities 974 967 Other ABS (2) 37,997 32,429 Total debt securities trading, at fair value $ 474,875 $ 566,146 ____________________________ (1) Consists of securities backed by the Federal National Mortgage Association (“ Fannie Mae ”) and the Federal Home Loan Mortgage Corporation (“ Freddie Mac ”). (2) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. We recognized net unrealized losses on our debt securities of $3 million, $27 million and $3 million for the years ended May 31, 2023, 2022 and 2021, respectively. We sold $36 million of debt securities at fair value and recorded realized gains related to the sale of these securities of less than $1 million for the year ended May 31, 2023. We sold $5 million of debt securities at fair value and recorded realized gains on the sale of these securities of less than $1 million for the year ended May 31, 2022. We sold $6 million of debt securities at fair value and recorded realized losses on the sale of these securities of less than $1 million for the year ended May 31, 2021. Equity Securities The following table presents the composition of our equity security holdings and the fair value as of May 31, 2023 and 2022. Table 3.2: Investments in Equity Securities, at Fair Value May 31, (Dollars in thousands) 2023 2022 Equity securities, at fair value: Farmer Mac—Series C non-cumulative preferred stock $ 25,750 $ 25,520 Farmer Mac—Class A common stock 9,744 8,238 Total equity securities, at fair value $ 35,494 $ 33,758 |
Loans
Loans | 12 Months Ended |
May 31, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOANS | NOTE 4—LOANS We segregate our loan portfolio into segments, by legal entity, based on the borrower member class, which consists of CFC distribution, CFC power supply, CFC statewide and associate, NCSC and RTFC. We offer both long-term and line of credit loans to our borrowers. Under our long-term loan facilities, a borrower may select a fixed interest rate or a variable interest rate at the time of each loan advance. Line of credit loans are revolving loan facilities and generally have a variable interest rate. We offer loans under secured long-term facilities with terms generally up to 35 years a nd line of credit loans. Under secured long-term facilities, borrowers have the option of selecting a fixed or variable rate for a period of one Loans to Members Loans to members consist of loans held for investment and loans held for sale. The outstanding amount of loans held for investment is recorded based on the unpaid principal balance, net of discounts, net charge-offs and recoveries, of loans and deferred loan origination costs. The outstanding amount of loans held for sale is recorded based on the lower of cost or fair value. The following table presents loans to members by legal entity, member class and loan type, as of May 31, 2023 and 2022. Table 4.1: Loans to Members by Member Class and Loan Type May 31, 2023 2022 (Dollars in thousands) Amount % of Total Amount % of Total Member class: CFC: Distribution $ 25,437,077 78 % $ 23,844,242 79 % Power supply 5,437,242 17 4,901,770 17 Statewide and associate 200,368 1 126,863 — Total CFC 31,074,687 96 28,872,875 96 NCSC 956,874 3 710,878 2 RTFC 487,788 1 467,601 2 Total loans outstanding (1) 32,519,349 100 30,051,354 100 Deferred loan origination costs—CFC (2) 12,737 — 12,032 — Loans to members $ 32,532,086 100 % $ 30,063,386 100 % Loan type: Long-term loans: Fixed rate $ 28,371,358 87 % $ 26,952,372 90 % Variable rate 1,024,653 3 820,201 2 Total long-term loans 29,396,011 90 27,772,573 92 Lines of credit 3,123,338 10 2,278,781 8 Total loans outstanding (1) 32,519,349 100 30,051,354 100 Deferred loan origination costs—CFC (2) 12,737 — 12,032 — Loans to members $ 32,532,086 100 % $ 30,063,386 100 % ____________________________ (1) Represents the unpaid principal balance, net of discounts, charge-offs and recoveries, of loans as of the end of each period. (2) Deferred loan origination costs are recorded on the books of CFC. Loan Sales We may transfer whole loans and participating interests to third partie s. These transfers are typically made concurrently or within a short period of time with the closing of the loan sale or participation agreement at par value and meet the accounting criteria required for sale accounting. Therefore, we remove the transferred loans or participating interests from our consolidated balance sheets when control has been surrendered and recognize a gain or loss on the sale, if any. We retain a servicing performance obligation on the transferred loans and recognize related servicing fees on an accrual basis over the period for which servicing is provided, as we believe the servicing fee represents adequate compensation. Other than the servicing performance obligation, we have not retained any interest in the loans sold to date. In addition, we have no obligation to repurchase loans that are sold, except in the case of breaches of representations and warranties. We sold CFC and NCSC loans, at par for cash, totaling $257 million, $171 million and $126 million in fiscal years 2023, 2022 and 2021, respectively. We recorded immaterial losses on the sale of these loans attributable to the unamortized deferred loan origination costs associated with the transferred loans. We had no loans held for sale as of May 31, 2023. We had loans held for sale totaling $44 million as of May 31, 2022 which were sold at par for cash subsequent to year-end. Credit Concentration Concentrations of credit may exist when a lender has large credit exposures to single borrowers, large credit exposures to borrowers in the same industry sector or engaged in similar activities or large credit exposures to borrowers in a geographic region that would cause the borrowers to be similarly impacted by economic or other conditions in the region. As a tax-exempt, member-owned finance cooperative, CFC’s principal focus is to provide funding to its rural electric utility cooperative members to assist them in acquiring, constructing and operating electric distribution systems, power supply systems and related facilities. Because we lend primarily to our rural electric utility cooperative members, we have had a loan portfolio subject to single-industry and single-obligor concentration risks since our inception in 1969. Loans outstanding to electric utility organizations of $32,032 million and $29,584 million as of May 31, 2023 and 2022, respectively, accounted for 99% and 98% of total loans outstanding as of each respective date. The remaining loans outstanding in our portfolio were to RTFC members, affiliates and associates in the telecommunications industry. Our credit exposure is partially mitigated by long-term loans guaranteed by the RUS, which totaled $123 million and $131 million as of May 31, 2023 and 2022, respectivel y. Single-Obligor Concentration The outstanding loan exp osure for our 20 largest borrowers totaled $6,588 million and $6,220 million as of May 31, 2023 and 2022, respectively, representing 20% and 21% of total loans outstanding as of each respective date. Our 20 largest borrowers consisted of 10 distribution systems and 10 p ower supply systems as of May 31, 2023. In comparison, our 20 largest borrowers consisted of 12 distribution systems and eight power supply systems as of May 31, 2022. The largest total outstanding exposure to a single borrower or controlled group represented 1% of total loans outstanding as of both May 31, 2023 and 2022. We entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. We are required to pay Farmer Mac a monthly fee based on the unpaid principal balance of loans covered under the purchase commitment. The aggregate unpaid principal balance of designated and Farmer Mac-approved loan s was $436 million and $493 million as of May 31, 2023 and 2022, respectively. Loan exposure to our 20 largest borrowers covered under the Farmer Mac agreement totaled $267 million and $316 million as of May 31, 2023 and 2022, respectively, which reduced our exposure to the 20 largest borrowers to 19% and 20% as of each respective date. We have had no loan defaults for loans covered under this agreement; therefore, no loans have been put to Farme r Mac for purchase pursuant to the standby purchase agreement as of May 31, 2023. Geographic Concentration Although our organizational structure and mission results in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S. The consolidated number of borrowers with loans outstanding totaled 884 and 883 as of May 31, 2023 and 2022, respectively, located in 49 states and the District of Columbia. Of the 884 and 883 borrowers with loans outstanding as of May 31, 2023 and 2022, respectively, 52 and 49 were electric power supply borrowers as of each respective date. Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers. Texas accounted for the largest number of borrowers with loans outstanding in any one state as of both May 31, 2023 and 2022, as well as the largest concentration of loan exposure. The following table presents the Texas-based number of borrowers and loans outstanding by legal entity and member class, as of May 31, 2023 and 2022. Table 4.2: Loan Exposure to Texas-Based Borrowers May 31, 2023 May 31, 2022 (Dollars in thousands) Number of Borrowers Amount % of Total Number of Borrowers Amount % of Total Member class: CFC: Distribution 57 $ 4,319,937 13 % 57 $ 3,984,887 13 % Power supply 8 1,128,941 4 8 1,089,896 4 Statewide and associate 1 51,504 — 1 29,335 — Total CFC 66 5,500,382 17 66 5,104,118 17 NCSC 1 16,667 — 1 378 — RTFC 2 11,755 — 1 5,853 — Total loan exposure to Texas-based borrowers 69 5,528,804 17 68 5,110,349 17 Less: Loans covered under Farmer Mac standby purchase commitment (155,409) — (163,369) (1) Net loan exposure to Texas-based borrowers $ 5,373,395 17 % $ 4,946,980 16 % Credit Quality Indicators Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, TDRs, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk. We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors. Payment status trends and internal risk ratings are indicators, among others, of the probability of borrower default and overall credit quality of our loan portfolio. Payment Status of Loans Loans are considered delinquent when contractual principal or interest amounts become past due 30 days or more following the scheduled payment due date. Loans are placed on nonaccrual status when payment of principal or interest is 90 days or more past due or management determines that the full collection of principal and interest is doubtful. The following table presents the payment status, by legal entity and member class, of loans outstanding as of May 31, 2023 and 2022. Table 4.3: Payment Status of Loans Outstanding May 31, 2023 (Dollars in thousands) Current 30-89 Days Past Due > 90 Days Total Total Loans Outstanding Nonaccrual Loans Member class: CFC: Distribution $ 25,437,077 $ — $ — $ — $ 25,437,077 $ — Power supply 5,432,895 — 4,347 4,347 5,437,242 112,209 Statewide and associate 200,368 — — — 200,368 — CFC total 31,070,340 — 4,347 4,347 31,074,687 112,209 NCSC 920,159 36,715 — 36,715 956,874 — RTFC 487,788 — — — 487,788 — Total loans outstanding $ 32,478,287 $ 36,715 $ 4,347 $ 41,062 $ 32,519,349 $ 112,209 Percentage of total loans 99.87 % 0.11 % 0.02 % 0.13 % 100.00 % 0.35 % May 31, 2022 (Dollars in thousands) Current 30-89 Days Past Due > 90 Days Total Total Loans Outstanding Nonaccrual Loans Member class: CFC: Distribution $ 23,844,242 $ — $ — $ — $ 23,844,242 $ — Power supply 4,787,832 28,389 85,549 113,938 4,901,770 227,790 Statewide and associate 126,863 — — — 126,863 — CFC total 28,758,937 28,389 85,549 113,938 28,872,875 227,790 NCSC 710,878 — — — 710,878 — RTFC 467,601 — — — 467,601 — Total loans outstanding $ 29,937,416 $ 28,389 $ 85,549 $ 113,938 $ 30,051,354 $ 227,790 Percentage of total loans 99.62 % 0.09 % 0.29 % 0.38 % 100.00 % 0.76 % We had one CFC electric power supply borrower, Brazos Sandy Creek Electric Cooperative Inc. (“Brazos Sandy Creek”), with a delinquent loan of $4 million and one NCSC borrower with a delinquent loan of $37 million as of May 31, 2023. In comparison, we had two CFC electric power supply borrowers, Brazos Electric Power Cooperative, Inc. (“Brazos”) and Br azos Sandy Creek with delinquent loans totaling $114 million as of May 31, 2022. The decrease in loans on nonaccrual stat us of $116 million to $112 million as of May 31, 2023, from $228 million was due to the partial charge-offs related to the Brazos and Brazos Sandy Creek loans, and t he receipt of loan principal payments on the outstanding nonaccrual loans. See “Troubled Debt Restructurings,” “Nonperforming Loans” and “Net Charge-Offs” below for additional information. Troubled Debt Restructurings The following table presents the outstanding balance of modified loans accounted for as TDRs and the performance status, by legal entity and member class, of these loans as of May 31, 2023 and 2022. Table 4.4: Troubled Debt Restructurings May 31, 2023 2022 (Dollars in thousands) Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding TDR loans: Member class: CFC—Distribution 1 $ 4,638 0.02 % 1 $ 5,092 0.02 % CFC—Power Supply 1 22,875 0.07 — — — RTFC 1 3,592 0.01 1 4,092 0.01 Total TDR loans 3 $ 31,105 0.10 % 2 $ 9,184 0.03 % Performance status of TDR loans: Performing TDR loans 2 $ 8,230 0.03 % 2 $ 9,184 0.03 % Nonperforming TDR loans 1 22,875 0.07 — — — Total TDR loans 3 $ 31,105 0.10 % 2 $ 9,184 0.03 % ____________________________ (1) Represents the unpaid principal balance net of charge-offs and recoveries as of the end of each period. TDR loans totaled $31 million as of May 31, 2023, an increase of $22 million from May 31, 2022, primarily due to the classification of Brazos ’ nonperforming loans to nonperforming TDR loans during the quarter ended February 28, 2023 (“third quarter of fiscal year 2023”). There were no unadvanced commitments related to TDR loans as of May 31, 2023 or May 31, 2022. The performing TDR loans outstanding have been performing in accordance with the terms of their respective restructured loan agreements for an extended period of time and were on accrual status as of May 31, 2023 and 2022, respectively. The CFC distribution borrower with the performing TDR loan also had one line of credit as of both May 31, 2023 and 2022 . The line of credit facility for $6 million as of both May 31, 2023 and 2022, is restricted for fuel purchases only. Outstanding loans under this facility totaled $2 million and $1 million as of May 31, 2023 and 2022, respectively . We had nonperforming TDR loans outstanding to Brazos totaling $23 million as of May 31, 2023, which were on nonaccrual status as of May 31, 2023. Brazos, a CFC Texas-based electric power supply borrower, filed for bankruptcy in March 2021 due to its exposure to elevated wholesale electric power costs during the February 2021 polar vortex. On November 14, 2022, Brazos’ plan of reorganization was confirmed by the bankruptcy court and it became effective on December 15, 2022. Due to Brazos experiencing financial difficulty and the principal loan concession provided to Brazos by the bankruptcy court as part of its approval of Brazos’ plan of reorganization, which was effective on December 15, 2022, the remaining Brazos loans outstanding were moved from nonperforming loans and classified as nonperforming TDR loans during the third quarter of fiscal year 2023. We did not have any TDR loans classified as nonperforming as of May 31, 2022. Prior to the Brazos loan restructuring, we have not had any loan modifications that were required to be accounted for as TDRs since fiscal year 2016. In June 2023, we received the remaining payment of Brazos’ loans outstanding of $23 million in accordance with the provisions of Brazos’ plan of reorganization to repay its loans in full. Nonperforming Loans In addition to TDR loans that may be classified as nonperforming, we also may have nonperforming loans that have not been modified as a TDR. The following table presents the outstanding balance of nonperforming loans, by legal entity and member class, as of May 31, 2023 and 2022. Loans classified as nonperforming are placed on nonaccrual status. Table 4.5: Nonperforming Loans May 31, 2023 2022 (Dollars in thousands) Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Nonperforming loans: Member class: CFC—Power supply 2 $ 89,334 0.27 % 3 $ 227,790 0.76 % Total nonperforming loans 2 $ 89,334 0.27 % 3 $ 227,790 0.76 % _______________________ (1) Represents the unpaid principal balance net of charge-offs and recoveries as of the end of each period. Nonperforming loan s totaled $89 million as of May 31, 2023, a decrease of $139 million from May 31, 2022, due to the receipt of loan principal payments, the partial charge-offs related to the Brazos and Brazos Sandy Creek nonperforming loans, and the classification of Brazos ’ nonperforming loans to TDR loans during the third quarter of fiscal year 2023, as discussed above. Brazos’ loans outstanding accounted for $86 million of our total nonperforming loans as of May 31, 2022 and were delinquent and on nonaccrual as of this date. Brazos Sandy Creek, a wholly-owned subsidiary of Brazos and a CFC Texas-based electric power supply borrower, filed for bankruptcy in March 2022 following the filing of a motion by Brazos to reject its power purchase agreement with Brazos Sandy Creek as part of Brazos’ bankruptcy proceedings. Brazos Sandy Creek’s loan outstanding accounted for $4 million and $28 million of our total nonperforming loans as of May 31, 2023 and 2022, respectively, and was delinquent and on nonaccrual as of each date. The loan is secured by Brazos Sandy Creek’s 25% tenant-in-common (“TIC”) ownership interest in the Brazos Sandy Creek Energy Station (“the Plant”), and its rights under a power purchase agreement (“PPA”) with Brazos for the output of the Brazos Sandy Creek Energy Station attributable to the TIC interest. On December 20, 2022, Brazos Sandy Creek’s 25% TIC ownership interest in the Plant was sold for a credit bid of $105 million to Riesel HoldCo, LLC (“HoldCo,”) an entity formed by the Brazos Sandy Creek noteholders. CFC was allocated ownership shares in HoldCo based on its 7.41% share in the $105 million credit bid, which totaled $8 million that was recorded as an equity investment in HoldCo during the current year in the other assets line of our consolidated balance sheets and reduced the Brazos Sandy Creek loan balance by the same amount. HoldCo intends to manage its ownership interest in the Plant directly and potentially sell it at a future dat e; however, HoldCo has no current timeline for its disposition. In July 2023, we received the remaining payment of Brazos Sandy Creek’s loan outstanding of $4 million to repay its loans in full. Net Charge-Offs Charge-offs represent the amount of a loan that has been removed from our consolidated balance sheet when the loan is deemed uncollectible. Generally the amount of a charge-off is the recorded investment in excess of the discounted expected cash flows from the loan, or, if the loan is collateral dependent, the fair value of the underlying collateral securing the loan. We report charge-offs net of amounts recovered on previously charged-off loans. We experienced charge-offs totaling $15 million for the CFC electric power supply loan portfolio related to Brazos and Brazos Sandy Creek loans during fiscal year 2023, which resulted in a net charge-off rate of 0.05%. In comparison, we had no loan charge-offs during fiscal years ended May 31, 2022 and 2021. Prior to Brazos’ and Brazos Sandy Creek’s bankruptcy filings, we had not experienced any defaults or charge-offs in our electric utility and telecommunications loan portfolios since fiscal years 2013 and 2017, respectively. Borrower Risk Ratings As part of our management of credit risk, we maintain a credit risk-rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio. We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following the receipt of the borrower’s audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends. We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default. Our borrower risk ratings align with the U.S. federal banking regulatory agencies’ credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default. The following is a description of the borrower risk-rating categories. • Pass : Borrowers that are not included in the categories of special mention, substandard or doubtful. • 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 credit weakness or weaknesses that make full collection of principal and interest, on the basis of currently known facts, conditions and collateral values, highly questionable and improbable. Our internally assigned borrower risk ratings serve as the primary credit quality indicator for our loan portfolio. Because our internal borrower risk ratings provide important information on the probability of default, they are a key input in determining our allowance for credit losses. Table 4.6 displays total loans outstanding, by borrower risk-rating category and by legal entity and member class, as of May 31, 2023 and 2022. The borrower risk-rating categories presented below correspond to the borrower risk-rating categories used in calculating our collective allowance for credit losses. If a parent company provides a guarantee of full repayment of loans of a subsidiary borrower, we include the loans outstanding in the borrower risk-rating category of the guarantor parent company rather than the risk-rating category of the subsidiary borrower for purposes of calculating the collective allowance. We present term loans outstanding as of May 31, 2023, by fiscal year of origination for each year during the five-year annual reporting period beginning in fiscal year 2019, and in the aggregate for periods prior to fiscal year 2019. The origination period represents the date CFC advances funds to a borrower, rather than the execution date of a loan facility for a borrower. Revolving loans are presented separately due to the nature of revolving loans. The substantial majority of loans in our portfolio represent fixed-rate advances under secured long-term facilities with terms up to 35 years and as indicated in Table 4.6 below, term loan advances made to borrowers prior to fiscal year 2019 totaled $17,123 million, representing 52% of our total loans outstanding as of May 31, 2023. The average remaining maturity of our long-term loans, which accounted for 90% of total loans outstanding as of May 31, 2023, was 19 years. Table 4.6: Loans Outstanding by Borrower Risk Ratings and Origination Year May 31, 2023 Term Loans by Fiscal Year of Origination (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total May 31, 2022 Pass CFC: Distribution $ 2,453,999 $ 2,404,404 $ 1,643,838 $ 1,822,745 $ 1,153,864 $ 13,838,304 $ 1,925,554 $ 25,242,708 $ 23,596,004 Power supply 465,638 348,333 547,897 179,150 375,738 2,687,787 720,490 5,325,033 4,673,980 Statewide and associate 61,671 23,538 1,938 14,732 2,863 16,418 66,150 187,310 112,610 CFC total 2,981,308 2,776,275 2,193,673 2,016,627 1,532,465 16,542,509 2,712,194 30,755,051 28,382,594 NCSC 268,157 24,066 5,678 193,267 3,741 274,826 187,139 956,874 710,878 RTFC 52,015 84,624 75,057 39,157 7,825 192,543 32,975 484,196 463,509 Total pass $ 3,301,480 $ 2,884,965 $ 2,274,408 $ 2,249,051 $ 1,544,031 $ 17,009,878 $ 2,932,308 $ 32,196,121 $ 29,556,981 Special mention CFC: Distribution $ 4,226 $ — $ 4,775 $ — $ 5,003 $ 12,210 $ 168,155 $ 194,369 $ 248,238 Power supply — — — — — — — — — Statewide and associate — — — — 4,755 8,303 — 13,058 14,253 CFC total 4,226 — 4,775 — 9,758 20,513 168,155 207,427 262,491 RTFC — — — — — 3,592 — 3,592 4,092 Total special mention $ 4,226 $ — $ 4,775 $ — $ 9,758 $ 24,105 $ 168,155 $ 211,019 $ 266,583 Substandard CFC: Power supply $ — $ — $ — $ — $ — $ — $ — $ — $ — Total substandard $ — $ — $ — $ — $ — $ — $ — $ — $ — Doubtful CFC: Power supply $ — $ — $ — $ — $ — $ 89,334 $ 22,875 $ 112,209 $ 227,790 CFC total — — — — — 89,334 22,875 112,209 227,790 RTFC — — — — — — — — — Total doubtful $ — $ — $ — $ — $ — $ 89,334 $ 22,875 $ 112,209 $ 227,790 Total criticized loans $ 4,226 $ — $ 4,775 $ — $ 9,758 $ 113,439 $ 191,030 $ 323,228 $ 494,373 Total loans outstanding $ 3,305,706 $ 2,884,965 $ 2,279,183 $ 2,249,051 $ 1,553,789 $ 17,123,317 $ 3,123,338 $ 32,519,349 $ 30,051,354 Criticized loans totaled $323 million and $494 million as of May 31, 2023 and 2022, respectively, and represented approximately 1% and 2% of total loans outstanding as of each respective date. The decrease of $171 million in criticized loans was due primarily to loan payments received from a CFC electric distribution borrower in the special mention category, and from a CFC electric power supply borrower, Brazos and Brazos Sandy Creek in the doubtful category, and the partial charge-offs related to Brazos and Brazos Sandy Creek loans during fiscal year 2023 . Each of the borrowers with loans outstanding in the criticized category, with the exception of Brazos Sandy Creek, was current with regard to all principal and interest amounts due to us as of May 31, 2023. In contrast, each of the borrowers with loans outstanding in the criticized category, with the exception of Brazos and Brazos Sandy Creek, which filed for bankruptcy in March 2021 and March 2022, respectively, was current with regard to all principal and interest amounts due to us as of May 31, 2022. As mentioned above, s ubsequent to the year ended May 31, 2023, we received the remaining loan payments of $23 million and $4 million from Brazos and Brazos Sandy Creek, respectively, to repay their loans in full. See “ Troubled Debt Restructurings ” and “N onperforming Loans ” above for additional information on Brazos and Brazos Sandy Creek, respectively. Special Mention One CFC electric distribution borrower with loans out standing of $194 million and $248 million as of May 31, 2023 and 2022, respectively, accounted for the substantial majority of loans in the special mention loan category amount of $211 million and $267 million as of each respective date. This borrower experienced an adverse financial impact from restoration costs incurred to repair damage caused by two successive hurricanes. We expect that the borrower will continue to receive grant funds from the Federal Emergency Management Agency and the state where it is located for the full reimbursement of the hurricane damage-related restoration costs. Substandard We did not have any loans classified as sub standard as of May 31, 2023 or May 31, 2022. Doubtful Loans outstanding classified as doubtful totaled $112 million and $228 million as of May 31, 2023 and 2022, respectively, consisting of total loans outstanding to Brazos and Brazos Sandy Creek totaling $27 million an d $114 million as of each respective date and loans outstanding to a CFC electric power supply borrower of $85 million and $114 million as of each respective date. See “ Troubled Debt Restructurings ” and “N onperforming Loans ” above for additional information on these loans. Unadvanced Loan Commitments Unadvanced loan commitments represent approved and executed loan contracts for which funds have not been advanced to borrowers. The following table presents unadvanced loan commitments, by member class and by loan type, as of May 31, 2023 and 2022. Table 4.7: Unadvanced Commitments by Member Class and Loan Type May 31, (Dollars in thousands) 2023 2022 Member class: CFC: Distribution $ 9,673,712 $ 9,230,197 Power supply 3,995,128 3,835,535 Statewide and associate 175,150 183,845 Total CFC 13,843,990 13,249,577 NCSC 604,436 551,901 RTFC 340,135 309,724 Total unadvanced commitments $ 14,788,561 $ 14,111,202 Loan type: (1) Long-term loans: Fixed rate $ — $ — Variable rate 5,669,634 5,357,205 Total long-term loans 5,669,634 5,357,205 Lines of credit 9,118,927 8,753,997 Total unadvanced commitments $ 14,788,561 $ 14,111,202 ____________________________ (1) The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all unadvanced long-term loan commitments are reported as variable rate. However, the borrower may select either a fixed or a variable rate when an advance is drawn under a loan commitment. The following table displays, by loan type, the available balance under unadvanced loan commitments as of May 31, 2023 and the related maturities in each fiscal year during the five-year period ende d May 31, 2028, and thereafter. Table 4.8: Unadvanced Loan Commitments Available Notional Maturities of Unadvanced Loan Commitments (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Line of credit loans $ 9,118,927 $ 5,055,192 $ 1,238,285 $ 788,561 $ 1,238,399 $ 662,086 $ 136,404 Long-term loans 5,669,634 1,019,262 704,667 794,595 1,339,212 1,595,844 216,054 Total $ 14,788,561 $ 6,074,454 $ 1,942,952 $ 1,583,156 $ 2,577,611 $ 2,257,930 $ 352,458 Unadvanced line of credit commitments accounted for 62% of total unadvanced loan commitments as of May 31, 2023, while unadvanced long-term loan commitments accounted for 38% of total unadvanced loan commitments. Unadvanced line of credit commitments are typically revolving facilities for periods not to ex ceed five years and generally serve as supplemental back-up liquidity to our borrowers. Historically, borrowers have not drawn the full commitment amount for line of credit facilities, and we have experienced a very low utilization rate on line of credit loan facilities regardless of whether or not we are obligated to fund the facility where a material adverse change exists. Our unadvanced long-term loan commitments typically have a five-year draw period under which a borrower may draw funds prior to the expiration of the commitment. We expect that the majority of the long-term unadvanced loan commitments of $5,670 million will be advanced prior to the expiration of the commitment. Because we historically have experienced a very low utilization rate on line of credit loan facilities, which account for the majority of our total unadvanced loan commitments, we believe the unadvanced loan commitment total of $14,789 million as of May 31, 2023 is not necessarily representative of our future funding requirements. Unadvanced Loan Commitments—Conditional The substantial majority of our line of credit commitments and all of our unadvanced long-term loan commitments include material adverse change clauses. Unadvanced loan commitments subject to material adverse change clauses totaled $11,617 million and $10,908 million as of May 31, 2023 and 2022, respectively. 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 Loan Commitments—Unconditional Unadvanced loan commitments not subject to material adverse change clauses at the time of each advance consisted of unadvanced committed lines of credit totaling $3,172 million and $3,203 million as of May 31, 2023 and 2022, respectively. As such, we are 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 unconditional committed lines of credit and the related maturity amounts in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 4.9: Unconditional Committed Lines of Credit—Available Balance Available Notional Maturities of Unconditional Committed Lines of Credit (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Committed lines of credit $ 3,171,563 $ 216,750 $ 742,876 $ 548,980 $ 929,415 $ 693,542 $ 40,000 Pledged Collateral— Loans We are required to pledge eligible mortgage notes or other collateral in an amount at least e |
Allowance for Credit Losses
Allowance for Credit Losses | 12 Months Ended |
May 31, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
ALLOWANCE FOR CREDIT LOSSES | NOTE 5—ALLOWANCE FOR CREDIT LOSSES We are required to maintain an allowance based on a current estimate of credit losses that are expected to occur over the remaining term of the loans in our portfolio. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. Additional information on our current CECL allowance methodology is provided in “Note 1—Summary of Significant Accounting Policies.” Allowance for Credit Losses—Loan Portfolio The following tables summarize, by legal entity and member class, changes in the allowance for credit losses for our loan portfolio and present the allowance components for the years ended May 31, 2023, 2022 and 2021. Table 5.1: Changes in Allowance for Credit Losses Year Ended May 31, 2023 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2022 $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Provision (benefit) for credit losses (857) 582 (57) (332) 1,015 (80) 603 Charge-offs — (15,069) — (15,069) — — (15,069) Balance as of May 31, 2023 $ 14,924 $ 33,306 $ 1,194 $ 49,424 $ 2,464 $ 1,206 $ 53,094 Year Ended May 31, 2022 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2021 $ 13,426 $ 64,646 $ 1,391 $ 79,463 $ 1,374 $ 4,695 $ 85,532 Provision (benefit) for credit losses 2,355 (16,853) (140) (14,638) 75 (3,409) (17,972) Balance as of May 31, 2022 $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Year Ended May 31, 2021 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2020 $ 8,002 $ 38,027 $ 1,409 $ 47,438 $ 806 $ 4,881 $ 53,125 Cumulative-effect adjustment from adoption of CECL accounting standard 3,586 2,034 25 5,645 (15) (1,730) 3,900 Balance as of June 1, 2020 11,588 40,061 1,434 53,083 791 3,151 57,025 Provision (benefit) for credit losses 1,838 24,585 (43) 26,380 583 1,544 28,507 Balance as of May 31, 2021 $ 13,426 $ 64,646 $ 1,391 $ 79,463 $ 1,374 $ 4,695 $ 85,532 The following tables present, by legal entity and member class, the components of our allowance for credit losses as of May 31, 2023 and 2022. Table 5.2: Allowance for Credit Losses Components May 31, 2023 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Allowance components: Collective allowance $ 14,924 $ 7,837 $ 1,194 $ 23,955 $ 2,464 $ 916 $ 27,335 Asset-specific allowance — 25,469 — 25,469 — 290 25,759 Total allowance for credit losses $ 14,924 $ 33,306 $ 1,194 $ 49,424 $ 2,464 $ 1,206 $ 53,094 Loans outstanding: (1) Collectively evaluated loans $ 25,432,439 $ 5,325,033 $ 200,368 $ 30,957,840 $ 956,874 $ 484,196 $ 32,398,910 Individually evaluated loans 4,638 112,209 — 116,847 — 3,592 120,439 Total loans outstanding $ 25,437,077 $ 5,437,242 $ 200,368 $ 31,074,687 $ 956,874 $ 487,788 $ 32,519,349 Allowance ratios: Collective allowance coverage ratio (2) 0.06 % 0.15 % 0.60 % 0.08 % 0.26 % 0.19 % 0.08 % Asset-specific allowance coverage ratio (3) — 22.70 — 21.80 — 8.07 21.39 Total allowance coverage ratio (4) 0.06 0.61 0.60 0.16 0.26 0.25 0.16 May 31, 2022 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Allowance components: Collective allowance $ 15,781 $ 9,355 $ 1,251 $ 26,387 $ 1,449 $ 1,040 $ 28,876 Asset-specific allowance — 38,438 — 38,438 — 246 38,684 Total allowance for credit losses $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Loans outstanding: (1) Collectively evaluated loans $ 23,839,150 $ 4,673,980 $ 126,863 $ 28,639,993 $ 710,878 $ 463,509 $ 29,814,380 Individually evaluated loans 5,092 227,790 — 232,882 — 4,092 236,974 Total loans outstanding $ 23,844,242 $ 4,901,770 $ 126,863 $ 28,872,875 $ 710,878 $ 467,601 $ 30,051,354 Allowance coverage ratios: Collective allowance coverage ratio (2) 0.07 % 0.20 % 0.99 % 0.09 % 0.20 % 0.22 % 0.10 % Asset-specific allowance coverage ratio (3) — 16.87 — 16.51 — 6.01 16.32 Total allowance coverage ratio (4) 0.07 0.98 0.99 0.22 0.20 0.28 0.22 ___________________________ (1) Represents the unpaid principal amount of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $13 million and $12 million as of May 31, 2023 and 2022, respectively. (2) Calculated based on the collective allowance component at period-end divided by collectively evaluated loans outstanding at period-end. (3) Calculated based on the asset-specific allowance component at period-end divided by individually evaluated loans outstanding at period-end. (4) Calculated based on the total allowance for credit losses at period-end divided by total loans outstanding at period-end. The allowance for credit losses and allowance coverage ratio was $53 million and 0.16%, respectively, as of May 31, 2023, a decrease of $15 million and 6 basis points, respectively, from May 31, 2022, due to reductions in the asset-specific allowance and the collective allowance of $13 million and $2 million, respectively. The decrease in asset-specific allowance was primarily attributable to charge-offs totaling $15 million related to the Brazos and Brazos Sandy Creek loans, partially offset by an increase in the asset-specific allowance for Brazos, Brazos Sandy Creek and a nonperforming CFC power supply loan, due to a reduction and timing change in the expected payments on this loan. The decrease in the collective allowance was primarily attributable to an improvement in the credit quality and risk profile of our loan portfolio, and in the timing of the scheduled loan-level amortization amounts of our loan portfolio, partially offset by an increase in the collective allowance due to the loan portfolio growth. Reserve for Credit Losses—Unadvanced Loan Commitments In addition to the allowance for credit losses f or our loan portfolio, we maintain an allowance for credit losses for unadvanced loan commitments, which we refer to as our “reserve for credit losses” bec ause this amount is reported as a component of other liabilities on our consolidated balance sheets. We measure the reserve for credit losses for unadvanced loan commitments based on expected credit losses over the contractual period of our exposure to credit risk arising from our obligation to extend credit, unless that obligation is unconditionally cancellable by us. The reserve for credit losses related to our off-balance sheet exposure for unadvanced loan commitments was less than $1 million as of both May 31, 2023 and 2022. |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | NOTE 6—SHORT-TERM BORROWINGS Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Our short-term borrowings totaled $4,546 million and accounted for 15% of total debt outstanding as of May 31, 2023, compared with $4,981 million, or 17% of total debt outstanding, as of May 31, 2022. The following table provides comparative information on our short-term borrowings and weighted-average interest rates as of May 31, 2023 and 2022. Table 6.1: Short-Term Borrowings Sources and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amount Weighted- Average Amount Weighted-Average Short-term borrowings: Commercial paper: Commercial paper dealers, net of discounts $ 1,293,167 5.32 % $ 1,024,813 0.96 % Commercial paper members, at par 1,017,431 4.76 1,358,069 0.92 Total commercial paper 2,310,598 5.07 2,382,882 0.94 Select notes to members 1,630,799 4.96 1,753,441 1.11 Daily liquidity fund notes to members 238,329 4.35 427,790 0.80 Medium-term notes to members 366,549 4.64 417,054 0.66 Total short-term borrowings $ 4,546,275 4.96 $ 4,981,167 0.97 We issue commercial paper for periods of one Subsequent to the year ended May 31, 2023, we borrowed $500 million in short-term notes payable under the note purchase agreement with Farmer Mac. We provide additional information on this revolving note purchase agreement below in “Note 7—Long-Term Debt.” Committed Bank Revolving Line of Credit Agreements The following table presents the amount available for access under our bank revolving line of credit agreements as of May 31, 2023. Table 6.2: Committed Bank Revolving Line of Credit Agreements Available Amounts May 31, 2023 (Dollars in millions) Total Commitment Letters of Credit Outstanding Available Amount Maturity Annual Facility Fee (1) Bank revolving agreements: 3-year agreement $ 1,245 $ — $ 1,245 November 28, 2025 7.5 bps 4-year agreement 1,355 2 1,353 November 28, 2026 10.0 bps Total $ 2,600 $ 2 $ 2,598 ___________________________ (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 20, 2022, we amended the three-year and four-year committed bank revolving line of credit agreements to extend the maturity dates to November 28, 2025 and November 28, 2026, respectively, and to replace LIBOR with Term Secured Overnight Financing Rate (“SOFR”). The total commitment amount under the three-year facility and the four-year facility remained unchanged at $1,245 million and $1,355 million, respectively, resulting in a combined total commitment amount under the two facilities of $2,600 million. These agreements allow us to request up to $300 million of letters of credit, which, if requested, results in a reduction in the total amount available for our use. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
May 31, 2023 | |
Debt Instruments [Abstract] | |
LONG-TERM DEBT | NOTE 7—LONG-TERM DEBT The following table displays, by debt product type, long-term debt outstanding, and the weighted-average interest rate and maturity date as of May 31, 2023 and 2022. Long-term debt outstanding totaled $23,947 million and accounted for 77% of total debt outstanding as of May 31, 2023, compared with $21,545 million and 75% of total debt outstanding as of May 31, 2022. Long-term debt with fixed- and variable-interest rate accounted for 93% and 7%, respectively, of our total long-term debt outstanding as of May 31, 2023, compared with 90% and 10%, respectively, of our total long-term debt outstanding as of May 31, 2022. Table 7.1: Long-Term Debt—Debt Product Types and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amount Weighted- Average Maturity Amount Weighted- Average Maturity Secured long-term debt: Collateral trust bonds $ 7,792,711 3.46 % 2023-2049 $ 7,097,711 3.17 % 2023-2049 Unamortized discount, net (178,832) (216,608) Debt issuance costs (35,906) (32,613) Total collateral trust bonds 7,577,973 6,848,490 Guaranteed Underwriter Program notes payable 6,720,643 3.09 2025-2053 6,105,473 2.69 2025-2052 Farmer Mac notes payable 3,149,898 3.92 2023-2049 3,094,679 2.33 2022-2049 Other secured notes payable 1,098 3.06 2023 2,755 3.10 2022-2023 Debt issuance costs (2) (9) Total other secured notes payable 1,096 2,746 Total secured notes payable 9,871,637 9,202,898 Total secured long-term debt 17,449,610 3.40 16,051,388 2.83 Unsecured long-term debt: Medium-term notes sold through dealers 6,152,726 3.52 2023-2037 5,263,496 2.20 2022-2032 Medium-term notes sold to members 365,260 3.98 2023-2037 250,397 2.70 2022-2037 Medium-term notes sold through dealers and to members 6,517,986 3.55 5,513,893 2.22 Unamortized premium (discount), net 4 (2,086) Debt issuance costs (21,122) (19,723) Total unsecured medium-term notes 6,496,868 5,492,084 Unsecured notes payable 71 — 2023 1,979 — 2022-2023 Unamortized discount (1) (10) Debt issuance costs — (1) Total unsecured notes payable 70 1,968 Total unsecured long-term debt 6,496,938 3.55 5,494,052 2.22 Total long-term debt $ 23,946,548 3.44 $ 21,545,440 2.68 The following table presents the principal amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 7.2: Long-Term Debt—Maturities and Weighted-Average Interest Rates (Dollars in thousands) Maturity Amount Weighted-Average 2024 $ 2,277,050 3.00 % 2025 2,286,088 2.73 2026 3,527,228 3.77 2027 1,631,434 2.11 2028 2,156,615 3.74 Thereafter 12,303,992 3.68 Total $ 24,182,407 3.44 Secured Debt Long-term secured debt of $17,450 million and $16,051 million as of May 31, 2023 and 2022, respectively, represented 73% and 75% of total long-term debt outstanding as of each respective date. We discuss below our long-term secured debt types and the activity during fiscal year 2023. We were in compliance with all covenants and conditions under our secured debt indentures as of May 31, 2023 and 2022. We are required to pledge eligible mortgage notes in an amount at least equal to the outstanding balance of our secured debt. See “Note 4—Loans” for information on pledged collateral under our secured debt agreements. Collateral Trust Bonds Collateral trust bonds represent secured obligations sold to investors in the capital markets. Collateral trust bonds are secured by the pledge of mortgage notes or eligible securities in an amount at least equal to the principal balance of the bonds outstanding. We issued aggregate principal amount of collateral trust bonds totaling $1,050 million with an average fixed interest rate of 5.17% and an average term of 10 years during fiscal year 2023. Guaranteed Underwriter Program Notes Payable We borrowed $800 million and repaid $185 million of notes payable outstanding under the Guaranteed Underwriter Program during fiscal year 2023 . We had up to $1,025 million available for access under the Guaranteed Underwriter Program as of May 31, 2023. On December 15, 2022, we closed on a $750 million committed loan facility (“Series T”) from the Federal Financing Bank under the Guar anteed Underwriter Program. Pursuant to this facility, we may borrow any time before July 15, 2027. Each advance is subject to quarterly amortization and a final maturity not longer than 30 years from the date of the a dvance. The notes outstanding under the Guaranteed Underwriter Program contain a provision that if during any portion of the fiscal year, our senior secured credit ratings do not have at least two of the following ratings: (i) A3 or higher from Moody’s, (ii) A- or higher from S&P, (iii) A- or higher from Fitch or (iv) an equivalent rating from a successor rating agency to any of the above rating agencies, we may not make cash patronage capital distributions in excess of 5% of total patronage capital. 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 Guaranteed Underwriter Program. Farmer Mac Notes Payable We have a revolving note purchase agreement with Farmer Mac, under which we can borrow up to $6,000 million from Farmer Mac, at any time, subject to market conditions through June 30, 2027. The agreement has successive automatic one-year renewals beginning June 30, 2026, unless Farmer Mac provides 425 days’ written notice of non-renewal. Pursuant to this revolving note purchase agreement, we can borrow, repay and re-borrow funds at any time through maturity, as market conditions permit, provided that the outstanding principal amount at any time does not exceed the total available under the agreement. Each borrowing under the revolving note purchase agreement is evidenced by a pricing agreement setting forth the interest rate, maturity date and other related terms as we may negotiate with Farmer Mac at the time of each such borrowing. We may select a fixed rate or variable rate at the time of each advance with a maturity as determined in the applicable pricing agreement. The amount outstanding under this agreement included $3,150 million of long-term debt as of May 31, 2023. We borrowed and repaid $500 million in short-term notes payable and borrowed $550 million in long-term notes payable under the note purchase agreement with Farmer Mac during fiscal year 2023. The amount available for borrowing totaled $2,850 million as of May 31, 2023. Unsecured Debt Long-term unsecured debt of $6,497 million and $5,494 million as of May 31, 2023 and 2022, respectively, represented 27% and 25% of total long-term debt outstanding as of each respective date. The increase in long-term unsecured debt of $1,003 million for fiscal year 2023 was primarily attributable to dealer medium-term notes issuance, as described below, partially offset by dealer medium-term notes repayments. Medium-Term Notes Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members. We issued aggregate principal amount of dealer medium-term notes totaling $1,700 million with an average fixed interest rate of 4.87% and an average term of four years during the year ended May 31, 2023. Subsequent to the year ended May 31, 2023, we issued $400 million |
Subordinated Deferrable Debt
Subordinated Deferrable Debt | 12 Months Ended |
May 31, 2023 | |
Subordinated Debt [Abstract] | |
SUBORDINATED DEFERRABLE DEBT | NOTE 8—SUBORDINATED DEFERRABLE DEBT Subordinated deferrable debt represents long-term debt that is subordinated to all debt other than subordinated certificates held by our members. Our 4.75% and 5.25% subordinated deferrable debt due 2043 and 2046, respectively, was issued for a term of up to 30 years, pays interest semiannually, may be called at par after 10 years, converts to a variable rate after 10 years and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding five In April 2023, our 4.75% subordinated deferrable debt due 2043 converted to a variable rate based on 3-month LIBOR plus 2.91%. The variable-rate index on this subordinated deferrable debt was converted from 3-month LIBOR to 3-month Term SOFR plus the Alternative Reference Rates Committee (“ARRC”) recommended credit spread adjustment of 26.161 basis points at the variable-rate reset date effective in July 2023. Our 5.25% subordinated deferrable debt due 2046 will convert to a variable rate in April 2026 based on 3-month Term SOFR plus the ARRC recommended credit spread adjustment of 26.161 basis points plus 3.63%. Our 5.50% subordinated deferrable debt due 2064 was issued for a term of up to 45 years, pays interest quarterly, may be called at par after five years and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding 40 consecutive quarterly periods. On May 26, 2023, we issued $300 million of 7.125% subordinated deferrable debt due 2053 for a term of up to 30 years, which pays interest semiannually, may be called at par every five years, resets to a new fixed rate every five years based on the five-year U.S. Treasury rate plus a spread of 3.533% and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding 20 consecutive semiannual periods. To date, we have not exercised our right to defer interest payments. On June 26, 2023, we redeemed $100 million in principal amount of our $400 million subordinated deferrable debt due 2043, at par plus accrued interest. The following table presents, by issuance, subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2023 and 2022. Table 8.1: Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates May 31, 2023 2022 Maturity and Call Dates (Dollars in thousands) Outstanding Amount Weighted- Average Outstanding Amount Weighted-Average Term in Years Maturity Call Date Issuances of subordinated notes: Variable issuance 2013 $ 400,000 8.21 % $ 400,000 4.75 % 30 2043 April 30, 2023 5.25% issuance 2016 350,000 5.25 350,000 5.25 30 2046 April 20, 2026 5.50% issuance 2019 250,000 5.50 250,000 5.50 45 2064 May 15, 2024 7.125% issuance 2023 300,000 7.13 — — 30 2053 June 15, 2028 Total aggregate principal amount 1,300,000 1,000,000 Debt issuance costs (16,564) (13,482) Total subordinated deferrable debt $ 1,283,436 6.64 $ 986,518 5.11 |
Members' Subordinated Certifica
Members' Subordinated Certificates | 12 Months Ended |
May 31, 2023 | |
Subordinated Borrowings [Abstract] | |
MEMBERS’ SUBORDINATED CERTIFICATES | NOTE 9—MEMBERS’ SUBORDINATED CERTIFICATES Membership Subordinated Certificates Prior to June 2009, CFC members were required to purchase membership subordinated certificates as a condition of membership. Such certificates are interest-bearing, unsecured, subordinated debt. Membership certificates typically have an original maturity of 100 years and pay interest at 5% semiannually. No requ irement to purchase membership certificates has existed for NCSC or RTFC members. Loan and Guarantee Subordinated Certificates Members obtaining long-term loans, certain line of credit loans or guarantees may be required to purchase additional loan or guarantee subordinated certificates with each such loan or guarantee based on the borrower’s debt-to-equity ratio with CFC. These certificates are unsecured, subordinated debt and may be interest bearing or non-interest bearing. Under our current policy, most borrowers requesting standard loans are not required to buy subordinated certificates as a condition of a loan or guarantee. Borrowers meeting certain criteria, including but not limited to, high leverage ratios, or borrowers requesting large facilities, may be required to purchase loan or guarantee subordinated certificates or member capital securities (described below) as a condition of the loan. Loan subordinated certificates have the same maturity as the related long-term loan. Some certificates may amortize annually based on the outstanding loan balance. The interest rates payable on guarantee subordinated certificates purchased in conjunction with our guarantee program vary in accordance with applicable CFC policy. Guarantee subordinated certificates have the same maturity as the related guarantee. Member Capital Securities CFC offers member capital securities to its voting members. Member capital securities are interest-bearing, unsecured obligations of CFC, which are subordinate to all existing and future senior and subordinated indebtedness of CFC held by non-members of CFC, but rank proportionally to our member subordinated certificates. Member capital securities mature 30 years from the date of issuance and are callable at par at our option five years from the date of issuance and anytime thereafter. The interest rate for new member capital securities issuance is set at the time of issuance. These securities represent voluntary investments in CFC by the members. Member capital securities issued prior to fiscal year 2023 have a call option of 10 years from the date of issuance and anytime thereafter. The following table displays members’ subordinated certificates and the weighted-average interest rates as of May 31, 2023 and 2022. Table 9.1: Members’ Subordinated Certificates Outstanding and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amounts Weighted- Amounts Weighted- Membership subordinated certificates: Certificates maturing 2025 through 2119 $ 628,595 $ 628,591 Subscribed and unissued (1) 19 12 Total membership subordinated certificates 628,614 4.94 % 628,603 4.95 % Loan and guarantee subordinated certificates: Interest-bearing loan subordinated certificates maturing through 2045 208,192 216,266 Non-interest-bearing loan subordinated certificates maturing through 2047 112,978 121,744 Subscribed and unissued (1) 41 45 Total loan subordinated certificates 321,211 2.65 338,055 2.64 Interest-bearing guarantee subordinated certificates maturing through 2044 27,138 5.91 27,333 5.90 Total loan and guarantee subordinated certificates 348,349 2.91 365,388 2.88 Member capital securities: Securities maturing through 2052 246,163 5.01 240,170 5.00 Total members’ subordinated certificates $ 1,223,126 4.38 $ 1,234,161 4.35 ___________________________ (1) The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding. The weighted-average maturity for all membership subordinated certificates outstan ding was 54 and 55 yea rs as of May 31, 2023 and 2022, respectively . The following table presents the amount of members’ subordinated certificates maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 9.2: Members’ Subordinated Certificate Maturities and Weighted-Average Interest Rates (Dollars in thousands) Amount Maturing (1) Weighted-Average 2024 $ 5,861 2.22 % 2025 7,481 2.71 2026 63,078 3.24 2027 8,052 2.00 2028 5,487 3.04 Thereafter 1,133,107 4.49 Total $ 1,223,066 4.38 ___________________________ (1) E xcludes $0.06 million in subscribed and unissued member subordinated certificates for which a payment has been received, but no certificate has been issued. Amortizing member loan subordinated certificates totaling $159 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $12 million in fiscal year 2023 and represented 8% of amortizing loan subordinated certificates outstanding. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
May 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 10—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are an end user of derivative financial instruments and do not engage in derivative trading. Derivatives may be privately negotiated contracts, which are often referred to as OTC derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. Our derivative instruments are an integral part of our interest rate risk-management strategy. Our principal purpose in using derivatives is to manage our aggregate interest rate risk profile within prescribed risk parameters. The derivative instruments we use primarily consist of interest rate swaps, which we typically hold to maturity. In addition, we may use Treasury locks to manage the interest rate risk associated with future debt issuance or debt that is scheduled to reprice in the future. Notional Amount and Maturities of Derivatives Not Designated as Accounting Hedges The notional amount is used only as the basis on which interest payments are determined and is not the amount exchanged, nor recorded on our consolidated balance sheets. The following table shows, by derivative instrument type, the notional amount, the weighted-average rate paid and the weighted-average interest rate received for our interest rate swaps as of May 31, 2023 and 2022. For the substantial majority of interest rate swap agreements, a LIBOR index is currently used as the basis for determining variable interest payment amounts each period. Table 10.1: Derivative Notional Amount and Weighted-Average Rates May 31, 2023 2022 (Dollars in thousands) Notional Weighted- Weighted- Notional Weighted- Weighted- Pay-fixed swaps $ 5,920,269 2.75 % 5.26 % $ 5,957,631 2.60 % 1.24 % Receive-fixed swaps 1,700,000 6.05 2.97 1,980,000 1.53 2.86 Subtotal 7,620,269 3.49 4.75 7,937,631 2.33 1.64 Forward pay-fixed swaps 195,845 124,000 Total interest rate swaps $ 7,816,114 $ 8,061,631 The following table presents the notional amount of our interest rate swaps maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 10.2: Derivative Notional Amount Maturities Notional Amount Notional Amortization and Maturities (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Interest rate swaps $7,816,114 $823,574 $418,928 $1,066,485 $343,661 $604,200 $4,559,266 Cash Flow Hedges During fiscal year 2023, we executed three Treasury lock agreements with an aggregate notional amount of $400 million to hedge interest rate risk by locking in the underlying U.S. Treasury interest rate component of interest expense payments on anticipated debt issuances. The Treasury locks were designated and qualified as cash flow hedges. We terminated these Treasury locks in February 2023 and recorded a net settlement gain of $7 million in AOCI, which will be reclassified into interest expense over the term that the hedged debt transaction affects earnings. We did not have any derivatives designated as accounting hedges as of May 31, 2023 or May 31, 2022. Impact of Derivatives on Consolidated Balance Sheets The following table displays the fair value of the derivative assets and derivative liabilities, by derivatives type, recorded on our consolidated balance sheets and the related outstanding notional amount as of May 31, 2023 and 2022. May 31, 2023 2022 (Dollars in thousands) Fair Value Notional Amount (1) Fair Value Notional Amount (1) Derivative assets: Interest rate swaps $ 460,762 $ 5,405,274 $ 222,042 $ 4,791,699 Total derivative assets $ 460,762 $ 5,405,274 $ 222,042 $ 4,791,699 Derivative liabilities: Interest rate swaps $ 115,074 $ 2,410,840 $ 128,282 $ 3,269,932 Total derivative liabilities $ 115,074 $ 2,410,840 $ 128,282 $ 3,269,932 ____________________________ (1) The notional amount includes $196 million and $124 million notional amount of forward starting swaps, as shown above in Table 10.1: Derivative Notional Amount and Weighted-Average Rates, with an effective start date subsequent to May 31, 2023 and May 31, 2022, respectively, outstanding as of May 31, 2023 and May 31, 2022, respectively. The fair value of these swaps as of May 31, 2023 and May 31, 2022 is included in the above table and in our consolidated financial statements. All of our master swap agreements include 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, in “Note 1—Summary of Significant Accounting Policies,” we report derivative asset and liability amounts on a gross basis by individual contract. The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2023 and 2022, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any. Table 10.4: Derivative Gross and Net Amounts May 31, 2023 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 460,762 $ — $ 460,762 $ 112,047 $ — $ 348,715 Derivative liabilities: Interest rate swaps 115,074 — 115,074 112,047 — 3,027 May 31, 2022 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 222,042 $ — $ 222,042 $ 103,228 $ — $ 118,814 Derivative liabilities: Interest rate swaps 128,282 — 128,282 103,228 — 25,054 Impact of Derivatives on Consolidated Statements of Operations The primary factors affecting the fair value of our derivatives and the derivative gains (losses) recorded in our consolidated statements of operations include changes in interest rates, the shape of the swap curve and the composition of our derivative portfolio. We generally record derivative losses when interest rates decline and derivative gains when interest rates rise, as our derivative portfolio consists of a higher proportion of pay-fixed swaps than receive-fixed swaps. The following table presents the components of the derivative gains (losses) reported in our consolidated statements of operations for fiscal years 2023, 2022 and 2021. Derivative cash settlements interest expense represents the net periodic contractual interest amount for our interest rate swaps during the reporting period. Derivative forward value gains (losses) represent the change in fair value of our interest rate swaps during the reporting period due to changes in expected future interest rates over the remaining life of our derivative contracts. We classify the derivative cash settlement amounts for the net periodic contractual interest expense on our interest rate swaps as an operating activity in our consolidated statements of cash flows. Table 10.5: Derivative Gains (Losses) Year Ended May 31, (Dollars in thousands) 2023 2022 2021 Derivative gains (losses) attributable to: Derivative cash settlements interest income (expense) $ 33,577 $ (101,385) $ (115,645) Derivative forward value gains 252,267 557,867 621,946 Derivative gains $ 285,844 $ 456,482 $ 506,301 Credit Risk-Related Contingent Features Our derivative contracts typically contain mutual early-termination provisions, generally in the form of a credit rating trigger. Under the mutual credit rating trigger provisions, either counterparty may, but is not obligated to, terminate and settle the agreement if the credit rating of the other counterparty falls below a level specified in the agreement. If a derivative contract is terminated, the amount to be received or paid by us would be equal to the prevailing fair value, as defined in the agreement, as of the termination date. During fiscal year 2023, Moody’s, S&P and Fitch affirmed CFC’s credit ratings and stable outlook. Our senior unsecured credit ratings from Moody’s, S&P and Fitch were A2, A- and A, respectively, as of May 31, 2023. Moody’s, S&P and Fitch had our ratings on stable outlook as of May 31, 2023. Our credit ratings and outlook remain unchanged as of the date of this Report. The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2023, and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, or to or below Ba2/BB+ by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assume that amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements with the 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. Table 10.6: Derivative Credit Rating Trigger Exposure (Dollars in thousands) Notional Payable Due from CFC Receivable Due to CFC Net Receivable (Payable) Impact of rating downgrade trigger: Falls below A3/A- (1) $ 30,930 $ (1,450) $ — $ (1,450) Falls below Baa1/BBB+ 5,336,304 (1,607) 227,613 226,006 Falls to or below Baa2/BBB (2) 320,589 — 17,865 17,865 Total $ 5,687,823 $ (3,057) $ 245,478 $ 242,421 ___________________________ (1) Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. (2) Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody’s or S&P, respectively. We have interest rate swaps with one counterparty that are subject to a ratings trigger and early termination provision in the event of a downgrade of CFC’s senior unsecured credit ratings below Baa3, BBB- or BBB- by Moody’s, S&P or Fitch, respectively. The outstanding notional amount of these swaps, which is not included in the above table , totaled $227 million as of May 31, 2023. These swaps were in an unrealized gain position of $26 million as of May 31, 2023. Our largest counterparty exposure, based on the outstanding notional amount, accounted for approximately 23% and 24% of the total outstanding notional amount of derivatives as of May 31, 2023 and 2022, respectively. The aggregate fair value amount, including the credit valuation adjustment, of all interest rate swaps with rating triggers that were in a net liability position was $3 million |
Equity
Equity | 12 Months Ended |
May 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | NOTE 11—EQUITY Total equity increased $447 million to $2,589 million as of May 31, 2023, attributable primarily to our reported net income of $502 million for the year ended May 31, 2023, partially offset by the patronage capital retirement of $59 million authorized by the CFC Board of Directors in July 2022. Table 11.1: Equity May 31, (Dollars in thousands) 2023 2022 Membership fees $ 969 $ 970 Educational fund 2,565 2,417 Total membership fees and educational fund 3,534 3,387 Patronage capital allocated 1,006,115 954,988 Members’ capital reserve 1,202,152 1,062,286 Unallocated net income (loss): Prior year-end cumulative derivative forward value gains (losses) 92,363 (461,162) Current-year derivative forward value gains (1) 250,261 553,525 Current year-end cumulative derivative forward value gains 342,624 92,363 Other unallocated net loss (709) (709) Unallocated net gain 341,915 91,654 CFC retained equity 2,553,716 2,112,315 Accumulated other comprehensive income 8,343 2,258 Total CFC equity 2,562,059 2,114,573 Noncontrolling interests 27,190 27,396 Total equity $ 2,589,249 $ 2,141,969 ____________________________ (1) Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the consolidated variable interest entities NCSC and RTFC. See “Note 16—Business Segments” for the statements of operations for CFC. Allocation of Net Earnings and Retirement of Patronage Capital—CFC District of Columbia cooperative law requires cooperatives to allocate net earnings to patrons, to a general reserve in an amount sufficient to maintain a balance of at least 50% of paid-in capital and to a cooperative educational fund, as well as permits additional allocations to board-approved reserves. District of Columbia cooperative law also requires that a cooperative’s net earnings be allocated to all patrons in proportion to their individual patronage and each patron’s allocation be distributed to the patron unless the patron agrees that the cooperative may retain its share as additional capital. Annually, the CFC Board of Directors allocates its net earnings to its patrons in the form of patronage capital, to a cooperative educational fund, to a general reserve, if necessary, and to board-approved reserves. An allocation to the general reserve is made, if necessary, to maintain the balance of the general reserve at 50% of the membership fees c ollected. The general reserve is included in the patronage capital allocated component of CFC’s retained equity. CFC’s bylaws require the allocation to the cooperative educational fund to be at least 0.25% of its net earnings. Funds from the coopera tive educational fund are disbursed annually to statewide cooperative organizations to fund the teaching of cooperative principles and for other cooperative education programs. Currently, CFC has one additional board-approved reserve, the members’ capital reserve. The CFC Board of Directors determines the amount of net earnings that is allocated to the members’ capital reserve, if any. The members’ capital reserve represents net earnings that CFC holds to increase equity retention. The net earnings held in the members’ capital reserve have not been specifically allocated to members, but may be allocated to individual members in the future as patronage capital if authorized by the CFC Board of Directors. All remaining net earnings are allocated to CFC’s members in the form of patronage capital. The amount of net earnings allocated to each member is based on the member’s patronage of CFC’s lending programs during the year. No interest is earned by members on allocated patronage capital. There is no effect on CFC’s total equity as a result of allocating net earnings to members in the form of patronage capital or to board-approved reserves. The CFC Board of Directors has voted annually to retire a portion of the patronage capital allocation. Upon retirement, patronage capital is paid out in cash to the members to whom it was allocated. CFC’s total equity is reduced by the amount of patronage capital retired to its members and by amounts disbursed from board-approved reserves. CFC’s net earnings for determining allocations are based on CFC’s non-GAAP adjusted net income, which excludes the impact of derivative forward value gains and losses. The current policy of the CFC Board of Directors is to retire 50% of the prior year’s allocated patronage capital and hold the remaining 50% for 25 years. The retirement amount and timing is subject to annual approval by the CFC Board of Directors. In May 2023, the CFC Board of Directors authorized the allocation of $1 million of net earnings for fiscal year 2023 to the cooperative educational fund. In July 2023, the CFC Board of Directors authorized the allocation of net earnings for fiscal year 2023 as follows: $110 million to members in the form of patronage capital and $140 million to the members’ capital reserve. The amount of patronage capital allocated each year by the CFC Board of Directors is based on adjusted net income, which excludes the impact of derivative forward value gains (losses). See “Item 7. MD&A—Non-GAAP Financial Measures” for information on adjusted net income. In July 2023, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $72 million, of which $55 million represented 50% of the patronage capital allocation for fiscal year 2023 and $17 million represented the portion of the allocation from net earnings for fiscal year 1998 that had been held for 25 years pursuant to the CFC Board of Directors’ policy. We expect to return the authorized patronage capital retirement amount of $72 million to members in cash in the second quarter of fiscal year 2024. The remaining portion of the patronage capital allocation for fiscal year 2023 will be retained by CFC for 25 years pursuant to the guidelines adopted by the CFC Board of Directors in June 2009. In May 2022, the CFC Board of Directors authorized the allocation of $1 million of net earnings for fiscal year 2022 to the cooperative educational fund. In July 2022 the CFC Board of Directors authorized the allocation of net earnings for fiscal year 2022 as follows: $89 million to members in the form of patronage capital and $153 million to the members’ capital reserve. In July 2022, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $59 million, of which $44 million represented 50% of the patronage capital allocation for fiscal year 2022 and $15 million represented the portion of the allocation from net earnings for fiscal year 1997 that had been held for 25 years pursuant to the CFC Board of Directors’ policy. The authorized patronage capital retirement amount of $59 million was returned to members in cash in September 2022. The remaining portion of the amount allocated for fiscal year 2022 will be retained by CFC for 25 years under current guidelines adopted by the CFC Board of Directors in June 2009. 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. CFC’s total equity includes noncontrolling interests, which consist of 100% of the equity of NCSC and RTFC, as the members of NCSC and RTFC own or control 100% of the interests in their respective companies. NCSC and RTFC also allocate annual net earnings, subject to approval by the board of directors for each company. The allocation of net earnings by NCSC and RTFC to members or board-approved reserves does not affect noncontrolling interests; however, the cash retirement of amounts allocated to members or to disbursements from board-approved reserves results in a reduction to noncontrolling interests. Allocation of Net Earnings and Retirement of Patronage Capital—RTFC In accordance with District of Columbia cooperative law and its bylaws and board policies, RTFC allocates its net earnings to its patrons, to a cooperative educational fund and to a general reserve, if necessary. RTFC’s bylaws require that it allocate at least 1% of net income to a cooperative educational fund. Funds from the cooperative educational fund are disbursed annually to fund the teaching of cooperative principles and for other cooperative education programs. An allocation to the general reserve is made, if necessary, to maintain the balance of the general reserve at 50% of the membership fees collected. The remainder is allocated to borrowers in proportion to their patronage. RTFC retires at least 20% of its annual allocation, if any, to members in cash prior to filing the applicable tax return. Any additional amounts are retired as determined by the RTFC Board of Directors, taking into consideration RTFC’s financial condition. Allocation of Net Earnings—NCSC NCSC’s bylaws require that it allocate at least 0.25% of its net earnings to a cooperative educational fund and an amount to the general reserve required to maintain the general reserve balance at 50% of membership fees collected. Funds from the cooperative educational fund are disbursed annually to fund the teaching of cooperative principles and for other cooperative education programs. Accumulated Other Comprehensive Income (Loss) The following table presents, by component, changes in AOCI for the years ended May 31, 2023 and 2022 and the balance of each component as of the end of each respective period. Table 11.2: Changes in Accumulated Other Comprehensive Income (Loss) Year Ended May 31, 2023 2022 (Dollars in thousands) Unrealized Gains on Derivative Hedges (1) Unrealized Losses on Defined Benefit Plans (2) Total Unrealized Gains on Derivative Hedges (1) Unrealized Losses on Defined Benefit Plans (2) Total Beginning balance $ 5,123 $ (2,865) $ 2,258 $ 1,718 $ (1,743) $ (25) Changes in unrealized gains (losses) 6,691 (213) 6,478 4,028 (1,409) 2,619 Realized (gains) losses reclassified to earnings (712) 319 (393) (623) 287 (336) Ending balance $ 11,102 $ (2,759) $ 8,343 $ 5,123 $ (2,865) $ 2,258 ____________________________ (1) Of the derivative gains reclassified to earnings, a portion is reclassified as a component of the derivative gains (losses) line item and the remainder is reclassified as a component of the interest expense line item on our consolidated statements of operations. (2) Reclassified to earnings as a component of the other non-interest expense line item presented on our consolidated statements of operations. We expect to reclassify reali zed net gains of $1 million attributa ble to derivative cash flow hedges from AOCI into earnings over the next 12 months. |
Employee Benefits
Employee Benefits | 12 Months Ended |
May 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFITS | NOTE 12—EMPLOYEE BENEFITS National Rural Electric Cooperative Association (“NRECA”) Retirement Security Plan CFC is a participant in the NRECA Retirement Security Plan (“the Retirement Security Plan”), a multiple-employer defined benefit pension plan. The employer identification number of the Retirement Security Plan is 53-0116145, and the plan number is 333. Plan information is available publicly through the annual Form 5500, including attachments. The Retirement Security Plan is a qualified plan in which all employees are eligible to participate upon completion of one year of service. Under this plan, participating employees are entitled to receive annually, under a 50% joint and surviving spouse annuity, 1.70% of the average of their five highest base salaries during their participation in the plan, multiplied by the number of years of participation in the plan. The risks of participating in the multiple-employer plan are different from the risks of single-employer plans due to the following characteristics of the plan: • Assets contributed to the multiple-employer plan by one participating employer may be used to provide benefits to employees of other participating employers. • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If CFC chooses to stop participating in the plan, CFC may be required to pay a withdrawal liability representing an amount based on the underfunded status of the plan. Because of the current funding status of the Retirement Security Plan, it is not subject to a certified zone status determination under the Pension Protection Act of 2006 (“PPA”). Based on the PPA target and PPA actuarial value of the pl an assets, it was more than 80% funded as of January 1, 2023, 2022 and 2021. We made contributions to the Retirement Security Plan of $5 million, $5 million and $4 million in fiscal years 2023, 2022 and 2021, respectively. In each of these years, our contribution represented less than 5% of total contributions made to the plan by all participating employers. Our contribution did not include a surcharge. CFC’s expense is limited to the annual premium to participate in the Retirement Security Plan. Because it is a multiple-employer plan, there is no funding liability for CFC for the plan. There were no funding improvement plans, rehabilitation plans implemented or pending, and no required minimum contributions. There are no collective bargaining agreements in place that cover CFC’s employees. Executive Benefit Restoration Plan We adopted a supplemental top-hat Executive Benefit Restoration (“EBR”) Plan, effective January 1, 2015. The EBR Plan is a nonqualified, unfunded plan maintained by CFC to provide retirement benefits to a select group of executive officers whose compensation exceeds Internal Revenue Service limits for qualified defined benefit plans. There is a risk of forfeiture if participants leave the company prior to becoming fully vested in the EBR Plan. This plan included seven and three participants as of May 31, 2023 and 2022, respectively. We recognized net periodic pension expense for this plan of approximately $1 million, $1 million and $2 million in fiscal years 2023, 2022 and 2021, respectively. The unfunded projected benefit obligation of this plan, which is included on our consolidated balance sheets as a component of other liabilities, was $5 million as of both May 31, 2023 and 2022. CFC made contributions to the plan of $1 million, $2 million and $1 million in fiscal years 2023, 2022 and 2021, respectively, for lump-sum settlement payments to fully vested participants of $1 million, $2 million and $1 million in each respective year. Unrecognized pension costs recorded in accumulated other comprehensive income were $3 million as of both May 31, 2023 and 2022. We expect to amortize less than $1 million of the unrecognized pension costs as a component of our net periodic pension benefit expense in fiscal year 2024. As a result of the settlement payments in fiscal years 2023, 2022 and 2021, we recognized a settlement loss of less than $1 million in both fiscal years 2023 and 2022, and a combined settlement and curtailment loss of approximately $1 million in fiscal year 2021. The curtailment and settlement losses are recorded as a component of non-interest expense Defined Contribution Plan CFC offers a 401(k) defined contribution savings program, the 401(k) Pension Plan, to all employees who have completed a minimum of 1,000 hours of service in either the first 12 consecutive months or first full calendar year of employment. We contribute an amount up to 2% of an employee’s salary each year for all employees participating in the program with a minimum 2% employee contribution. We contributed approximately $1 million to the plan in each of fiscal years 2023, 2022 and 2021. |
Guarantees
Guarantees | 12 Months Ended |
May 31, 2023 | |
Guarantees [Abstract] | |
GUARANTEES | NOTE 13—GUARANTEES We guarantee certain contractual obligations of our members so they may obtain various forms of financing. We use the same credit policies and monitoring procedures in providing guarantees as we do for loans and commitments. If a member system defaults on its obligation to pay debt service, then we are obligated to pay any required amounts under our guarantees. Meeting our guarantee obligations satisfies the underlying obligation of our member systems and prevents the exercise of remedies by the guarantee beneficiary based upon a payment default by a member system. In general, the member system is required to repay any amount advanced by us with interest, pursuant to the documents evidencing the member system’s reimbursement obligation. The following table displays the notional amount of our outstanding guarantee obligations, by guarantee type and by member class, as of May 31, 2023 and 2022. Table 13.1: Guarantees Outstanding by Type and Member Class May 31, (Dollars in thousands) 2023 2022 Guarantee type: Long-term tax-exempt bonds (1) $ 98,405 $ 122,150 Letters of credit (2)(3) 538,393 450,354 Other guarantees 160,023 158,279 Total $ 796,821 $ 730,783 Member class: CFC: Distribution $ 383,644 $ 314,925 Power supply 380,382 378,516 Statewide and associate (4) 17,532 13,372 CFC total 781,558 706,813 NCSC 15,263 23,970 Total $ 796,821 $ 730,783 ____________________________ (1) Represents the outstanding principal amount of long-term variable-rate guaranteed bonds. (2) Reflects our maximum potential exposure for letters of credit. (3) Under a hybrid letter of credit facility we had $35 million of commitments that may be used for the issuance of letters of credit as of May 31, 2023. (4) Includes CFC guarantees to NCSC and RTFC members totaling $16 million and $11 million as of May 31, 2023 and 2022, respectively. We guarantee debt issued in connection with the construction or acquisition of pollution control, solid waste disposal, industrial development and electric distribution facilities, classified as long-term tax-exempt bonds in the table above. We unconditionally guarantee to the holders or to trustees for the benefit of holders of these bonds the full principal, interest, and in most cases, premium, if any, on each bond when due. We had guarantees outstanding totaling $797 million and $731 million as of May 31, 2023 and 2022 , respectively. Gu arantees under which our right of recovery from our members was not secured totaled $535 million and $466 million and represented 67% and 64% of total guarantees as of May 31, 2023 and 2022, respectively. We were not required to perform pursuant to any of our guarantee obligations during fiscal years 2023 or 2022. Long-term tax-exempt bonds of $98 million and $122 million as of May 31, 2023 and 2022, respectively, consist of adjustable or variable-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 may be required to pay related to the remaining adjustable and variable-rate bonds. Many of these bonds have a call provision that allows us to call the bond in the event of a default, which would limit our exposure to future interest payments on these bonds. Our maximum potential exposure generally is secured by mortgage liens on the members’ assets and future revenue. If a member’s debt is accelerated because of a determination that the interest thereon is not tax-exempt, the member’s obligation to reimburse us for any guarantee payments will be treated a s a long-term loan. The maturities for long-term tax-exempt bonds and the related guarantees extend through calendar year 2037 . Of the outstanding letters of credit of $538 million and $450 million as of May 31, 2023 and 2022, respectively, $138 million and $118 million were secured as of each respective date. The maturities for the outstanding letters of credit as of May 31, 2023 extend through calenda r yea r 2043 . In addition to the letters of credit listed in the table above, under master letter of credit facilities in place as of May 31, 2023, we may be required to issue up to an additional $126 million in letters of credit to third parties for the benefit of our members. All of our master letter of credit facilities were subject to material adverse change clauses at the time of issuance as of May 31, 2023. 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 master letter of credit facility was approved and confirm that the borrower is currently in compliance with the terms and conditions of the agreement governing the facility. The maximum potential exposure for other guarantees was $160 million and $158 million as of May 31, 2023 and 2022, respectively, of which $25 million was secured as of both May 31, 2023 and 2022. The maturities for these other guarantees listed in the table above extend through calendar year 2025. In addition to the guarantees described above, we were also the liquidity provide r for $98 million of variable-rate tax-exempt bonds as of May 31, 2023, 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 rem arketing agents are unable to sell such bonds to other investors. We were not required to perform as liquidity provider pursuant to these obligations during fiscal years 2023, 2022 or 2021. Guarantee Liability We recorded a total guarantee liability for noncontingent and contingent exposures related to guarantees and liquidity obligations of $13 million as of both May 31, 2023 and 2022. The noncontingent guarantee liability, which pertains to our obligation to stand ready to perform over the term of our guarantees and liquidity obligations we have entered into or modified since January 1, 2003, and accounts for the substantial majority of our guarantee liability, totaled $12 million as of both May 31, 2023 and 2022, respectively. The remaining amount pertains to our contingent guarantee exposures. The following table details the scheduled maturities of our outstanding guarantees in each of the five fiscal years following May 31, 2023 and thereafter: Table 13.2: Guarantees Outstanding Maturities (Dollars in thousands) Amount 2024 $ 252,082 2025 82,317 2026 191,422 2027 39,286 2028 109,820 Thereafter 121,894 Total $ 796,821 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
May 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 14—FAIR VALUE MEASUREMENT Fair value, also referred to as an exit price, is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. The fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The levels, in priority order based on the extent to which observable inputs are available to measure fair value, are Level 1, Level 2 and Level 3. The accounting guidance for fair value measurements requires that we maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. We describe the valuation technique for each level in “Note 1—Summary of Significant Accounting Policies.” The following table presents the carrying value and estimated fair value of all of our financial instruments, including those carried at amortized cost, as of May 31, 2023 and 2022. The table also displays the classification level within the fair value hierarchy based on the degree of observability of the inputs used in the valuation technique for estimating fair value. Table 14.1: Fair Value of Financial Instruments May 31, 2023 Fair Value Measurement Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 198,936 $ 198,936 $ 198,936 $ — $ — Restricted cash 8,301 8,301 8,301 — — Equity securities, at fair value 35,494 35,494 35,494 — — Debt securities trading, at fair value 474,875 474,875 — 474,875 — Deferred compensation investments 6,660 6,660 6,660 — — Loans to members, net 32,478,992 29,308,647 — — 29,308,647 Accrued interest receivable 172,723 172,723 — 172,723 — Derivative assets 460,762 460,762 — 460,762 — Total financial assets $ 33,836,743 $ 30,666,398 $ 249,391 $ 1,108,360 $ 29,308,647 Liabilities: Short-term borrowings $ 4,546,275 $ 4,547,333 $ — $ 4,547,333 $ — Long-term debt 23,946,548 22,665,551 — 13,527,393 9,138,158 Accrued interest payable 212,340 212,340 — 212,340 — Guarantee liability 12,973 12,475 — — 12,475 Derivative liabilities 115,074 115,074 — 115,074 — Subordinated deferrable debt 1,283,436 1,261,141 240,831 1,020,310 — Members’ subordinated certificates 1,223,126 1,223,126 — — 1,223,126 Total financial liabilities $ 31,339,772 $ 30,037,040 $ 240,831 $ 19,422,450 $ 10,373,759 May 31, 2022 Fair Value Measurement Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 153,551 $ 153,551 $ 153,551 $ — $ — Restricted cash 7,563 7,563 7,563 — — Equity securities, at fair value 33,758 33,758 33,758 — — Debt securities trading, at fair value 566,146 566,146 — 566,146 — Deferred compensation investments 6,710 6,710 6,710 — — Loans to members, net 29,995,826 28,595,111 — — 28,595,111 Accrued interest receivable 111,418 111,418 — 111,418 — Derivative assets 222,042 222,042 — 222,042 — Total financial assets $ 31,097,014 $ 29,696,299 $ 201,582 $ 899,606 $ 28,595,111 Liabilities: Short-term borrowings $ 4,981,167 $ 4,978,580 $ — $ 4,978,580 $ — Long-term debt 21,545,440 21,106,750 — 12,248,695 8,858,055 Accrued interest payable 131,950 131,950 — 131,950 — Guarantee liability 12,764 13,083 — — 13,083 Derivative liabilities 128,282 128,282 — 128,282 — Subordinated deferrable debt 986,518 960,869 250,800 710,069 — Members’ subordinated certificates 1,234,161 1,234,161 — — 1,234,161 Total financial liabilities $ 29,020,282 $ 28,553,675 $ 250,800 $ 18,197,576 $ 10,105,299 Loans to Members, Net Because of the interest rate repricing options we provide to borrowers on loan advances and other characteristics of our loans, there is no ready market from which to obtain fair value quotes or observable inputs for similar loans. As a result, we are unable to use the exit price to estimate the fair value of loans to members. We therefore estimate fair value for fixed-rate loans by discounting the expected future cash flows based on the current rate at which we would make a similar new loan for the same remaining maturity to a borrower. The assumed maturity date used in estimating the fair value of loans with a fixed rate for a selected rate term is the next repricing date because at the repricing date, the loan will reprice at the current market rate. 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. The fair value of loans with different risk characteristics, specifically nonperforming and restructured loans, is estimated 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. The fair value of loans held for sale is determined based on the cost, which approximates the fair value, as we sell these loans at par value, concurrently or within a short period of time with the closing of the loan or participation agreement. See below for information on how we estimate the fair value of certain individually evaluated loans. Transfers Between Levels We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2 and Level 3 accordingly. Observable market data include but is not limited to quoted prices and market transactions. Changes in economic conditions or market liquidity generally will drive changes in availability of observable market data. Changes in availability of observable market data, which also may result in changes in the valuation technique used, are generally the cause of transfers between levels. We did not have any transfers into or out of Level 3 of the fair value hierarchy during fiscal years ended May 31, 2023 and 2022. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of May 31, 2023 and 2022, and the classification of the valuation technique within the fair value hierarchy. We did not have any assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs during the years ended May 31, 2023 and 2022. Table 14.2: Assets and Liabilities Measured at Fair Value on a Recurring Basis May 31, 2023 2022 (Dollars in thousands) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Equity securities, at fair value $ 35,494 $ — $ 35,494 $ 33,758 $ — $ 33,758 Debt securities trading, at fair value — 474,875 474,875 — 566,146 566,146 Deferred compensation investments 6,660 — 6,660 6,710 — 6,710 Derivative assets — 460,762 460,762 — 222,042 222,042 Liabilities: Derivative liabilities — 115,074 115,074 — 128,282 128,282 Below is a description of the valuation techniques we use to estimate fair value of our financial assets and liabilities recorded at fair value on a recurring basis, the significant inputs used in those techniques, if applicable, and the classification within the fair value hierarchy. Equity Securities Our investments in equity securities consist of investments in Farmer Mac Class A common stock and Series C preferred stock. These securities are reported at fair value in our consolidated balance sheets. We determine the fair value based on quoted prices on the stock exchange where the stock is traded. That stock exchange with respect to Farmer Mac Class A common stock is an active market based on the volume of shares transacted. Because quoted market prices are the key input in deriving fair value for these securities, the valuation methodology is classified as Level 1. Debt Securities Trading As discussed above in “Note 1—Summary of Significant Accounting Policies” our debt securities consist of investments in certificates of deposit with maturities greater than 90 days, commercial paper, corporate debt securities, municipality debt securities, commercial MBS, foreign government debt securities and other ABS and were classified as trading as of May 31, 2023. Management estimates the fair value of our debt securities utilizing the assistance of third-party pricing services. Methodologies employed, controls relied upon and inputs used by third-party pricing vendors are subject to management review when such services are provided. This review may consist of, in part, obtaining and evaluating control reports issued and pricing methodology materials distributed. We review the pricing methodologies provided by the vendors in order to determine if observable market information is being used to determine the fair value versus unobservable inputs. Investment securities traded in secondary markets are typically valued using unadjusted vendor prices. These investment securities, which include those measured using unadjusted vendor prices, are generally classified as Level 2 because the valuation typically involves using quoted market prices for similar securities, pricing models, discounted cash flow analyses using significant observable market inputs where available or a combination of multiple valuation techniques for which all significant assumptions are observable in the market. Deferred Compensation Investments CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees and board members. Such amounts deferred by employees are invested by the company. The deferred compensation investments are presented as other assets in the consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the daily published and quoted net asset value. Because quoted market prices are the key input in deriving fair value for this plan, the valuation methodology is classified as Level 1. Derivative Instruments Our derivatives primarily consist of OTC interest rate swaps executed under master netting swap agreements that do not have readily available quoted market prices. We derive the fair value of our derivatives using a vendor provided derivative system, which is based on industry-standard discounted cash flow models. We rely primarily on market-observable inputs for these models, including market interest rates and forward swap yield curves, as well as the contractual terms of the derivative instrument, as of the valuation date. We include a credit risk valuation adjustment in our valuation of derivatives, which takes into consideration the effect of nonperformance credit risk of the counterparty or our own nonperformance risk and depends on whether the derivative instrument is in a gain, or asset, financial position or in a loss, or liability, financial position. We corroborate our derivative valuations by comparing the amounts to counterparty valuations and third-party pricing sources. We analyze and validate pricing variances, if material, among different external pricing sources. Because observable market data serve as the key inputs in valuing our interest rate swaps, the valuation methodology is classified as Level 2. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis on our consolidated balance sheets. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as in the application of the lower of cost or fair value accounting or when we evaluate assets for impairment. We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of May 31, 2023 or May 31, 2022. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
May 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | NOTE 15—VARIABLE INTEREST ENTITIES NCSC and RTFC meet the definition of a VIE because they do not have sufficient equity investment at risk to finance their activities without financial support. CFC is the primary source of funding for NCSC and the sole source of funding for RTFC. Under the terms of management agreements with each company, CFC manages the business operations of NCSC and RTFC. CFC also unconditionally guarantees full indemnification for any loan losses of NCSC and RTFC pursuant to guarantee agreements with each company. CFC earns management and guarantee fees from its agreements with NCSC and RTFC. All loans that require NCSC board approval also require CFC board approval. CFC is not a member of NCSC and does not elect directors to the NCSC board. If CFC becomes a member of NCSC, it would control the nomination process for one NCSC director. NCSC members elect directors to the NCSC board based on one vote for each member. NCSC is a Class C member of CFC. All loans that require RTFC board approval also require approval by CFC for funding under RTFC’s credit facilities with CFC. CFC is not a member of RTFC and does not elect directors to the RTFC board. RTFC is a nonvoting associate of CFC. RTFC members elect directors to the RTFC board based on one vote for each member. NCSC and RTFC creditors have no recourse against CFC in the event of a default by NCSC and RTFC, unless there is a guarantee agreement under which CFC has guaranteed NCSC or RTFC debt obligations to a third party. The following table provides information on incremental consolidated assets and liabilities of VIEs included in CFC’s consolidated financial statements, after intercompany eliminations, as of May 31, 2023 and 2022. Table 15.1: Consolidated Assets and Liabilities of Variable Interest Entities May 31, (Dollars in thousands) 2023 2022 Assets: Loans outstanding $ 1,444,662 $ 1,178,479 Other assets 12,612 9,672 Total assets $ 1,457,274 $ 1,188,151 Liabilities: Total liabilities $ 19,704 $ 22,958 The following table provides information on CFC’s credit commitments to NCSC and RTFC, and potential exposure to loss under these commitments as of May 31, 2023 and 2022. Table 15.2: CFC Exposure Under Credit Commitments to NCSC and RTFC May 31, (Dollars in thousands) 2023 2022 CFC credit commitments to NCSC and RTFC: Total CFC credit commitments $ 5,500,000 $ 5,500,000 Outstanding commitments: Borrowings payable to CFC (1) 1,428,886 1,158,583 Credit enhancements: CFC third-party guarantees 15,263 23,970 Other credit enhancements 2,038 4,044 Total credit enhancements (2) 17,301 28,014 Total outstanding commitments 1,446,187 1,186,597 CFC credit commitments available (3) $ 4,053,813 $ 4,313,403 ____________________________ (1) Intercompany borrowings payable by NCSC and RTFC to CFC are eliminated in consolidation. (2) Excludes interest due on these instruments. (3) Represents total CFC credit commitments less outstanding commitments as of each period-end. |
Business Segments
Business Segments | 12 Months Ended |
May 31, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 16—BUSINESS SEGMENTS Our activities are conducted through three operating segments, which are based on each of the legal entities included in our consolidated financial statements: CFC, NCSC and RTFC. We report segment information for CFC separately; however, we aggregate segment information for NCSC and RTFC into one reportable segment because neither entity meets the quantitative materiality threshold for separate reporting under the accounting guidance governing segment reporting. Basis of Presentation We present the results of our business segments on the basis in which management internally evaluates operating performance to establish short- and long-term performance goals, develop budgets and forecasts, identify potential trends, allocate resources and make compensation decisions. Business Segment Reporting Methodology The results of our business segments are intended to present the separate results for each of the legal entities included in our consolidated financial statements. As discussed in “Note 15—Variable Interest Entities,” all of NCSC’s and RTFC’s funding is either provided by CFC or guaranteed by CFC, the terms and conditions of which are stipulated in a loan and security agreement and a guarantee agreement between CFC and each legal entity. Pursuant to the guarantee agreement, CFC unconditionally guarantees full indemnification to NCSC and RTFC for any credit losses. In addition, CFC manages the business operations of NCSC and RTFC under a management agreement that automatically renews on an annual basis unless the agreement is terminated by either party. We report loans and interest and fees earned on loans based on the legal entity that holds the loans. CFC borrows from various sources to fund the operations of CFC, NCSC and RTFC, the cost of which is reflected in CFC’s interest expense. NCSC and RTFC each borrow from CFC to fund loans to their members, the cost of which is reported as interest expense by each legal entity. CFC charges NCSC and RTFC a management fee, which CFC reports as a component of fee and other income. NCSC and RTFC report the management fee charged by CFC as a component of non-interest expense. CFC and NCSC use derivatives, primarily interest rate sw aps, to manage interest rate risk. Because we generally do not elect to apply hedge accounting to our interest rate swaps, changes in the fair value of our interest rate swaps are recorded in earnings in our consolidated total results of operations. However, management excludes the impact of derivative forward value gains and losses and includes the net periodic derivative cash settlement interest expense amounts as a component of interest expense in reporting our segment results of operations, which represents the only difference between the accounting and reporting for our business segment results of operations and our consolidated total results of operations. Segment Results and Reconciliation The following tables display segment results of operations for the years ended May 31, 2023, 2022 and 2021, assets attributable to each segment as of May 31, 2023 and 2022 and a reconciliation of total segment amounts to our consolidated total amounts. Table 16.1: Business Segment Information Year Ended May 31, 2023 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Results of operations: Interest income $ 1,343,215 $ 61,716 $ 1,404,931 $ — $ (53,202) $ 1,351,729 Interest expense (1,036,499) (53,211) (1,089,710) — 53,202 (1,036,508) Derivative cash settlements interest income (expense) 34,021 (444) 33,577 (33,577) — — Interest expense (1,002,478) (53,655) (1,056,133) (33,577) 53,202 (1,036,508) Net interest income 340,737 8,061 348,798 (33,577) — 315,221 Provision for credit losses (603) (935) (1,538) — 935 (603) Net interest income after provision for credit losses 340,134 7,126 347,260 (33,577) 935 314,618 Non-interest income: Fee and other income 24,880 3,922 28,802 — (10,668) 18,134 Derivative gains: Derivative cash settlements interest income — — — 33,577 — 33,577 Derivative forward value gains — — — 252,267 — 252,267 Derivative gains — — — 285,844 — 285,844 Investment securities losses (4,974) — (4,974) — — (4,974) Total non-interest income 19,906 3,922 23,828 285,844 (10,668) 299,004 Non-interest expense: General and administrative expenses (107,209) (10,522) (117,731) — 8,100 (109,631) Losses on early extinguishment of debt (117) — (117) — — (117) Other non-interest expense (1,484) (1,636) (3,120) — 1,633 (1,487) Total non-interest expense (108,810) (12,158) (120,968) — 9,733 (111,235) Income (loss) before income taxes 251,230 (1,110) 250,120 252,267 — 502,387 Income tax provision — (800) (800) — — (800) Net income (loss) $ 251,230 $ (1,910) $ 249,320 $ 252,267 $ — $ 501,587 May 31, 2023 CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Assets: Total loans outstanding $ 32,503,574 $ 1,444,662 $ 33,948,236 $ — $ (1,428,887) $ 32,519,349 Deferred loan origination costs 12,737 — 12,737 — — 12,737 Loans to members 32,516,311 1,444,662 33,960,973 — (1,428,887) 32,532,086 Less: Allowance for credit losses (53,094) (3,670) (56,764) — 3,670 (53,094) Loans to members, net 32,463,217 1,440,992 33,904,209 — (1,425,217) 32,478,992 Other assets 1,520,456 77,628 1,598,084 — (65,016) 1,533,068 Total assets $ 33,983,673 $ 1,518,620 $ 35,502,293 $ — $ (1,490,233) $ 34,012,060 Year Ended May 31, 2022 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Results of operations: Interest income $ 1,133,173 $ 43,295 $ 1,176,468 $ — $ (35,225) $ 1,141,243 Interest expense (705,534) (35,225) (740,759) — 35,225 (705,534) Derivative cash settlements interest expense (99,768) (1,617) (101,385) 101,385 — — Interest expense (805,302) (36,842) (842,144) 101,385 35,225 (705,534) Net interest income 327,871 6,453 334,324 101,385 — 435,709 Benefit for credit losses 17,972 3,334 21,306 — (3,334) 17,972 Net interest income after benefit for credit losses 345,843 9,787 355,630 101,385 (3,334) 453,681 Non-interest income: Fee and other income 22,426 70 22,496 — (5,303) 17,193 Derivative gains: Derivative cash settlements interest expense — — — (101,385) — (101,385) Derivative forward value gains — — — 557,867 — 557,867 Derivative gains — — — 456,482 — 456,482 Investment securities losses (30,179) — (30,179) — — (30,179) Total non-interest income (7,753) 70 (7,683) 456,482 (5,303) 443,496 Non-interest expense: General and administrative expenses (93,465) (8,102) (101,567) — 6,381 (95,186) Losses on early extinguishment of debt (754) — (754) — — (754) Other non-interest expense (1,552) (2,256) (3,808) — 2,256 (1,552) Total non-interest expense (95,771) (10,358) (106,129) — 8,637 (97,492) Income (loss) before income taxes 242,319 (501) 241,818 557,867 — 799,685 Income tax provision — (1,148) (1,148) — — (1,148) Net income (loss) $ 242,319 $ (1,649) $ 240,670 $ 557,867 $ — $ 798,537 May 31, 2022 CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Assets: Total loans outstanding $ 30,031,459 $ 1,178,479 $ 31,209,938 $ — $ (1,158,584) $ 30,051,354 Deferred loan origination costs 12,032 — 12,032 — — 12,032 Loans to members 30,043,491 1,178,479 31,221,970 — (1,158,584) 30,063,386 Less: Allowance for credit losses (67,560) (2,735) (70,295) — 2,735 (67,560) Loans to members, net 29,975,931 1,175,744 31,151,675 — (1,155,849) 29,995,826 Other assets 1,245,884 97,394 1,343,278 — (87,722) 1,255,556 Total assets $ 31,221,815 $ 1,273,138 $ 32,494,953 $ — $ (1,243,571) $ 31,251,382 Year Ended May 31, 2021 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Results of operations: Interest income $ 1,108,543 $ 43,632 $ 1,152,175 $ — $ (35,574) $ 1,116,601 Interest expense (702,063) (35,574) (737,637) — 35,574 (702,063) Derivative cash settlements interest expense (113,951) (1,694) (115,645) 115,645 — — Interest expense (816,014) (37,268) (853,282) 115,645 35,574 (702,063) Net interest income 292,529 6,364 298,893 115,645 — 414,538 Provision for credit losses (28,507) (3,163) (31,670) — 3,163 (28,507) Net interest income after provision for credit losses 264,022 3,201 267,223 115,645 3,163 386,031 Non-interest income: Fee and other income 23,732 5,963 29,695 — (10,766) 18,929 Derivative gains: Derivative cash settlements interest expense — — — (115,645) — (115,645) Derivative forward value gains — — — 621,946 — 621,946 Derivative gains — — — 506,301 — 506,301 Investment securities gains 1,495 — 1,495 — — 1,495 Total non-interest income 25,227 5,963 31,190 506,301 (10,766) 526,725 Non-interest expense: General and administrative expenses (93,085) (7,849) (100,934) — 6,229 (94,705) Losses on early extinguishment of debt (1,456) — (1,456) — — (1,456) Other non-interest expense (1,619) (1,374) (2,993) — 1,374 (1,619) Total non-interest expense (96,160) (9,223) (105,383) — 7,603 (97,780) Income (loss) before income taxes 193,089 (59) 193,030 621,946 — 814,976 Income tax provision — (998) (998) — — (998) Net income (loss) $ 193,089 $ (1,057) $ 192,032 $ 621,946 $ — $ 813,978 ____________________________ (1) Consists of (i) the reclassification of net periodic derivative settlement interest expense amounts, which we report as a component of interest expense for business segment reporting purposes but is included in derivatives gains (losses) in our consolidated total results and (ii) derivative forward value gains and losses, which we exclude from our business segment results but is included in derivatives gains (losses) in our consolidated total results. (2) Consists of intercompany borrowings payable by NCSC and RTFC to CFC and the interest related to those borrowings, management fees paid by NCSC and RTFC to CFC and other intercompany amounts, all of which are eliminated in consolidation. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
The Company | The Company National Rural Utilities Cooperative Finance Corporation (“CFC”) is a tax-exempt 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 systems, electric generation and transmission (“power supply”) systems 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. National Cooperative Services Corporation (“NCSC”) is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. NCSC’s principal purpose is to provide financing to members of CFC, entities eligible to be members of CFC and the for-profit and not-for-profit entities that are owned, operated or controlled by or provide significant benefit to certain members of CFC. NCSC’s membership consists of distribution systems, power supply systems and statewide and regional associations that are members of CFC. CFC is the primary source of funding for NCSC and manages NCSC’s business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia. Rural Telephone Finance Cooperative (“RTFC”) is a taxable Subchapter T cooperative association originally incorporated in South Dakota in 1987 and reincorporated as a member-owned cooperative association in the District of Columbia in 2005. RTFC’s principal purpose is to provide financing for its rural telecommunications members and their affiliates. RTFC’s membership consists of a combination of not-for-profit and for-profit entities. CFC is the sole lender to and manages the business operations of RTFC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. RTFC pays CFC a fee and, in exchange, CFC reimburses RTFC for loan losses under a guarantee agreement. As permitted under Subchapter T of the Internal Revenue Code, RTFC pays income tax based on its net income, excluding patronage-sourced earnings allocated to its patrons. RTFC is headquartered with CFC in Dulles, Virginia. In April 2023 and June 2023, RTFC’s and NCSC’s members, respectively, approved the sale of RTFC’s business to NCSC. We intend to complete the consolidation of RTFC and NCSC over the next 12 months, subject to meeting certain closing conditions. As part of the consolidation, CFC intends to retire CFC’s allocated but unretired patronage capital to RTFC at a discount, which we expect to occur during the second quarter of fiscal year 2024, and subsequently, RTFC intends to retire the allocated but unretired patronage capital to its members at a discount. |
Basis of Presentation | Basis of Presentation and Use of EstimatesThe accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures during the period. Management ’ s most significant estimates and assumptions involve determining the allowance for credit losses. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgments, actual amounts or results could differ from these estimates. |
Principles of Consolidation | Principles of ConsolidationThese consolidated financial statements include the accounts of CFC and variable interest entities (“VIEs”) where CFC is the primary beneficiary. NCSC and RTFC are VIEs that are required to be consolidated by CFC. All intercompany balances and transactions have been eliminated. Unless stated otherwise, references to “we, “our” or “us” relate to CFC and its consolidated entities. |
Variable Interest Entities | Variable Interest Entities A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its activities without additional subordinated financial support provided by another party, or where the group of equity holders does not have (i) the ability to make decisions about the entity’s activities that most significantly impact its economic performance; (ii) the obligation to absorb the entity’s expected losses; or (iii) the right to receive the entity’s expected residual returns. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash, certificates of deposit due from banks and other investments with original maturities of less than 90 days are classified as cash and cash equivalents. |
Restricted Cash | Restricted CashRestricted cash, which consists primarily of member funds held in escrow for certain specifically designed cooperative programs, totaled $8 million as of both May 31, 2023 and 2022. |
Investment Securities | Investment Securities Our investment securities portfolio consists of equity and debt securities. We record purchases and sales of securities on a trade-date basis. The accounting and measurement framework for investment securities differs depending on the security type and the classification. Equity securities are reported at fair value on our consolidated balance sheets with unrealized gains and losses recorded as a component of other non-interest income. All of our debt securities were classified as trading as of May 31, 2023 and 2022. Accordingly, we also report our debt securities at fair value on our consolidated balance sheets and record unrealized gains and losses as a component of non-interest income. Interest income is generally recognized over the contractual life of the securities based on the effective yield method. |
Loans to Members | Loans to Members We originate loans to members and classify loans as held for investment or held for sale based on management’s intent and ability to sell or hold the loan for the foreseeable future or until maturity or payoff. Loans that we have the ability and intent to hold for the foreseeable future are classified as held for investment a nd are reported based on the unpaid principal balance, net of principal charge-offs, and deferred loan origination costs. Loans that we intend to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale and are recorded at the lower of |
Accrued Interest Receivable | Accrued Interest Receivable Accrued interest receivable amounts generally represent three months or less of accrued interest on loans outstanding, investments and derivative instruments. As permitted by the Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments—Credit Losses , the current expected credit loss (“CECL”) model, we elected to continue reporting accrued interest on loans separately on our consolidated balance sheets as a component of the line item accrued interest receivable rather than as a component of loans to members. Because our policy is to write off past-due accrued interest receivable in a timely manner, we elected not to measure an allowance for credit losses for accrued interest receivable on loans outstanding, which totaled $133 million and $94 million as of May 31, 2023 and 2022, respectively. We also elected to exclude accrued interest receivable from the credit quality disclosures required under CECL. |
Interest Income | Interest Income Interest income on performing loans is accrued and recognized as interest income based on the contractual rate of interest. Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method into interest income over the life of the loan. N onrefundable loan fees that meet the definition of loan origination fees are deferred and generally recognized in interest income as yield adjustments over the period to maturity of the loan using the effective interest method. |
Troubled Debt Restructurings | Troubled Debt Restructurings A loan modification is considered a troubled debt restructuring (“TDR”) if the borrower is experiencing financial difficulties and a concession is granted to the borrower that we would not otherwise consider. Under CECL, we are required to estimate an allowance for lifetime expected credit losses for the loans in our portfolio, including TDR loans. As discussed below under “Allowance for Credit Losses—Loan Portfolio—Asset-Specific Allowance,” TDR loans are evaluated on an individual basis in estimating expected credit losses. Credit losses for anticipated TDRs are accounted for similarly to TDRs and are identified when there is a reasonable expectation that a TDR will be executed with the borrower and when we expect the modification to affect the timing or amount of payments and/or the payment term. We generally classify TDR loans as nonperforming and place the loan on nonaccrual status, although in many cases such loans were already classified as nonperforming prior to modification. These loans may be returned to performing status and the accrual of interest resumed if the borrower performs under the modified terms for an extended period of time, and we expect the borrower to continue to perform in accordance with the modified terms. In certain limited circumstances in which a TDR loan is current at the modification date, the loan may remain on accrual status at the time of modification. |
Nonperforming Loans and Charge-Offs | Nonperforming Loans We classify loans as nonperforming when contractual principal or interest is 90 days past due or when we believe the collection of principal and interest in full is not reasonably assured. When a loan is classified as nonperforming, we generally place the loan on nonaccrual status. Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against current-period interest income. Interest income on nonaccrual loans is subsequently recognized only upon the receipt of cash payments. However, if we believe the ultimate collectability of the loan principal is in doubt, cash received is applied against the principal balance of the loan. Nonaccrual loans generally are returned to accrual status when principal and interest becomes and remains current for a specified period and repayment of the remaining contractual principal and interest is reasonably assured. |
Allowance for Credit Losses—Loan Portfolio | Allowance for Credit Losses—Loan Portfolio Allowance Methodology The allowance for credit losses is determined based on management’s current estimate of expected credit losses over the remaining contractual term, adjusted as appropriate for estimated prepayments, of loans in our loan portfolio as of each balance sheet date. The allowance for credit losses for our loan portfolio is reported on our consolidated balance sheet as a valuation account that is deducted from loans to members to present the net amount we expect to collect over the life of our loans. We immediately recognize an allowance for expected credit losses upon origination of a loan. Adjustments to the allowance each period for changes in our estimate of lifetime expected credit losses are recognized in earnings through the provision for credit losses presented on our consolidated statements of operations. We estimate our allowance for lifetime expected credit losses for our loan portfolio using a probability of default/loss given default methodology. Our allowance for credit losses consists of a collective allowance and an asset-specific allowance. The collective allowance is established for loans in our portfolio that share similar risk characteristics and are therefore evaluated on a collective, or pool, basis in measuring expected credit losses. The asset-specific allowance is established for loans in our portfolio that do not share similar risk characteristics with other loans in our portfolio and are therefore evaluated on an individual basis in measuring expected credit losses. Expected credit losses are estimated based on historical experience, current conditions and forecasts, if applicable, that affect the collectibility of the reported amount. Since inception in 1969, CFC has experienced limited defaults and losses as the utility sector generally tends to be less sensitive to changes in the economy than other sectors largely due to the essential nature of the service provided. The losses we have incurred were not tied to economic factors, but rather to distinct operating issues related to each borrower. Given that our borrowers’ creditworthiness, and accordingly our loss experience, has not correlated to specific underlying macroeconomic variables, such as U.S. unemployment rates or gross domestic product (“GDP”) growth, we have not made adjustments to our historical loss rates for any economic forecast. We consider the need, however, to adjust our historical loss information for differences in the specific characteristics of our existing loan portfolio based on an evaluation of relative qualitative factors, such as differences in the composition of our loan portfolio, our underwriting standards, problem loan trends, the quality of our credit review function, as well as changes in the regulatory environment and other pertinent external factors that may impact the amount of future credit losses. Collective Allowance We employ a quantitative methodology and a qualitative framework to measure the collective component of our allowance for expected credit losses. The first element in our quantitative methodology involves the segmentation of our loan portfolio into loan pools that share similar risk characteristics. We disaggregate our loan portfolio into segments that reflect the member borrower type, which is based on the utility sector of the borrower because the key operational, infrastructure, regulatory, environmental, customer and financial risks of each sector are similar in nature. Our primary member borrower types consist of CFC electric distribution, CFC electric power supply, CFC statewide and associate, NCSC and RTFC telecommunications. Our portfolio segments align with the sectors generally seen in the utilities industry. We further stratify each portfolio into loan pools based on our internal borrower risk ratings, as our borrower risk ratings provide important information on the collectibility of each of our loan portfolio segments. We then apply loss factors, consisting of the probability of default and loss given default, to the scheduled loan-level amortization amounts over the life of the loans for each of our loan pools. Below we discuss the source and basis for the key inputs, which include borrower risk ratings and the loss factors, in measuring expected credit losses for our loan portfolio. • Borrower Risk Ratings : We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following receipt of the borrower’s audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends. Our internally assigned borrower risk ratings are intended to assess the general creditworthiness of the borrower and probability of default. We use our internal borrower risk ratings, which we map to the equivalent credit ratings by external rating agencies, to differentiate risk within each of our portfolio segments and loan pools. We provide additional information on our borrower risk ratings below in “Note 4—Loans.” • Probability of Default : The probability of default, or default rate, represents the likelihood that a borrower will default over a particular time horizon. Because of our limited default history, we utilize third-party default data for the utility sector as a proxy to estimate default rates for each of our loan pools. The third-party default data provide historical default rates, based on credit ratings and remaining maturities of outstanding bonds, for the utility sector. Based on the mapping and alignment of our internal borrower risk ratings to equivalent credit ratings provided in the third-party utility default table, we apply the corresponding cumulative default rates to the scheduled amortization amounts over the remaining term of the loans in each of our loan pools. • Loss Given Default : The loss given default, or loss severity, represents the estimated loss, net of recoveries, on a loan that would be realized in the event of a borrower default. While we utilize third-party default data, we utilize our lifetime historical loss experience to estimate loss given default, or the recovery rate, for each of our loan portfolio segments. We believe our internal historical loss severity rates provide a more reliable estimate than third-party loss severity data due to the organizational structure and operating environment of rural utility cooperatives, our lending practice of generally requiring a senior security position on the assets and revenue of borrowers for long-term loans, the investment our member borrowers have in CFC and therefore the collaborative approach we generally take in working with members in the event that a default occurs. In addition to the quantitative methodology used in our collective measurement of expected credit losses, management performs a qualitative evaluation and analyses of relevant factors, such as changes in risk-management practices, current and past underwriting standards, specific industry issues and trends and other subjective factors. Based on our assessment, we did not make a qualitative adjustment to the collective allowance for credit losses measured under our quantitative methodology as of May 31, 2023 or May 31, 2022. Asset-Specific Allowance |
Unadvanced Loan Commitments | Unadvanced Loan Commitments Unadvanced commitments represent amounts for which we have approved and executed loan contracts, but the funds have not been advanced. The majority of the unadvanced commitments reported represent amounts that are subject to material adverse change clauses at the time of the loan advance. Prior to making an advance on these facilities, we would confirm 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 the borrower is currently in compliance with loan terms and conditions. The remaining unadvanced commitments relate to line of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we would be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the loan commitment. Unadvanced loan 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 fund construction work plans and other capital expenditures for periods of up to five years and draw down on the facility over that time. These factors contribute to our expectation that the majority of the unadvanced line of credit loan commitments will expire without being fully drawn upon and that the total unadvanced amount does not necessarily represent future cash funding requirements. |
Reserve for Credit Losses—Off-Balance Sheet Credit Exposures and Financial Instruments with Off-Balance Sheet Risk | Reserve for Credit Losses—Off-Balance Sheet Credit ExposuresWe also maintain a reserve for credit losses for our off-balance sheet credit exposures related to unadvanced loan commitments and financial guarantees. Because our business processes and credit risks associated with our off-balance sheet credit exposures are essentially the same as for our loans, we measure expected credit losses for our off-balance sheet exposures, after adjusting for the probability of funding these exposures, consistent with the methodology used for our funded outstanding exposures. We include the reserve for expected credit losses for our off-balance sheet credit exposures as a component of other liabilities on our consolidated balance sheets. Financial Instruments with Off-Balance Sheet Risk In the normal course of business, we are a party to financial instruments with off-balance sheet risk to meet the financing needs of our member borrowers. These financial instruments include committed lines of credit, standby letters of credit and guarantees of members’ obligations. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost less accumulated depreciation. We recognize depreciation expense for each category of our depreciable fixed assets on a straight-line basis over the estimated useful life, which ranges from three recognized depreciation expense of $5 million, $8 million a nd $8 million in the fiscal years ended May 31, 2023 (“fiscal year 2023”), May 31, 2022 (“fiscal year 2022”) and May 31, 2021 (“fiscal year 2021”), respectively. We perform a fixed assets impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Based on our annual impairment assessment for fiscal years 2023 and 2022, management determined that there were no indicators of impairment of our fixed assets as of May 31, 2023 or May 31, 2022. The following table displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment. Table 1.1: Fixed Assets May 31, (Dollars in thousands) 2023 2022 Building and building equipment $ 50,316 $ 50,177 Furniture and fixtures 6,332 6,254 Computer software and hardware 80,201 55,101 Other 1,126 1,024 Depreciable fixed assets 137,975 112,556 Less: Accumulated depreciation (77,508) (73,258) Net depreciable fixed assets 60,467 39,298 Land 23,796 23,796 Software development in progress 1,748 38,668 Fixed assets, net $ 86,011 $ 101,762 |
Cloud Computing Arrangements—Implementation Costs | Cloud Computing Arrangements — Implementation Costs Eligible implementation costs associated with cloud computing arrangements that are service contracts are capitalized and amortized over future periods. These costs are recorded at cost less accumulated amortization and are included in other assets on the consolidated balance sheets. We recognize amortization expense for these capitalized implementation costs on a straight-line basis over the term of the hosting arrangements related to the cloud computing service contracts when ready for the intended use, and we include it in other general and administrative expenses in the consolidated statements of operations. We perform an impairment assessment annually or more frequently, whenever events or circumstances indicate that the carrying amount for the capitalized implementation costs for cloud computing service contracts may not be recoverable. Based on our annual impairment assessment for fiscal year 2023 management determined that there were no indicators of impairment of our capitalized implementation costs for cloud computing service contracts as of May 31, 2023. We had $29 million of unamortized capitalized implementation costs for cloud computing service contracts a s of May 31, 2023, which included accumulated amortization related to these costs of $1 million and we recognized amortization expense of $1 million in fisc al year 2023 for these costs. |
Securities Sold Under Repurchase Agreements | Securities Sold Under Repurchase AgreementsWe enter into repurchase agreements to sell investment securities. These transactions are accounted for as collateralized financing transactions and are recorded on our consolidated balance sheets as part of short-term borrowings at the amounts at which the securities were sold. |
Debt | DebtWe report debt at cost net of unamortized issuance costs and discounts or premiums. Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue. Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt. |
Derivative Instruments | Derivative Instruments 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. 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 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 consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our consolidated balance sheets as a component of either accrued interest receivable or accrued interest payable. If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of net accrued periodic derivative cash settlements expense and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses). If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of t he hedge relationship. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. 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 periodic cash settlements expense related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows. |
Guarantee Liability | Guarantee Liability We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members’ debt. The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations. The contingent portion of the guarantee liability represents management’s estimate of our exposure to losses within the guarantee portfolio. The methodology used to estimate the contingent guarantee liability is consistent with the methodology used to determine the allowance for credit losses under the CECL model. We record a noncontingent guarantee liability for all new or modified guarantees. Our noncontingent guarantee liability represents our 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. Our noncontingent obligation is estimated based on guarantee and liquidity fees charged for guarantees issued, which represents management’s estimate of the fair value of our obligation to stand ready to perform. The fees are deferred and amortized using the straight-line method into interest income over the term of the guarantee. |
Fair Value Valuation Processes and Fair Value Hierarchy | Fair Value Valuation Processes We present certain financial instruments at fair value, including equity and debt securities, and derivatives. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (also referred to as an exit price). 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. 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 and our trading debt securities. Fair Value Hierarchy The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. Fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized below: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: Observable market-based inputs, other than quoted prices in active markets for identical assets or liabilities Level 3: Unobservable inputs |
Membership Fees | Membership Fees Members are charged a one-time membership fee based on member class. CFC distribution system members, power supply system members and national associations of cooperatives pay a $1,000 membership fee. CFC service organization members pay a $200 membership fee and CFC associates pay a $1,000 fee. RTFC voting members pay a $1,000 membership fee and RTFC associates pay a $100 fee. NCSC members pay a $100 membership fee. Membership fees are accounted for as members’ equity. |
Early Extinguishment of Debt | Early Extinguishment of DebtWe redeem outstanding debt early from time to time to manage liquidity and interest rate risk. When we redeem outstanding debt early, we recognize a gain or loss related to the difference between the amount paid to redeem the debt and the net book value of the extinguished debt as a component of non-interest expense in the gain (loss). |
Income Taxes | Income Taxes While CFC is exempt under Section 501(c)(4) of the Internal Revenue Code, it is subject to tax on unrelated business taxable income. NCSC is a taxable cooperative that pays income tax on the full amount of its reportable taxable income and allowable deductions. RTFC is a taxable cooperative under Subchapter T of the Internal Revenue Code and is not subject to income taxes on income from patronage sources that is allocated to its borrowers, as long as the allocation is properly noticed and at least 20% of the amount allocated is retired in cash prior to filing the applicable tax return. The income tax benefit (expense) recorded in the consolidated statement of operations represents the income tax benefit (expense) at the applicable combined federal and state income tax rates resulting from a statutory tax rate. The federal statutory tax rate for both NCSC and RTFC was 21% for each of fiscal years 2023, 2022 and 2021. Substantially all of the income tax expense recorded in our consolidated statements of operations relates to NCSC. NCSC had a deferred tax asset of $1 million as of both of May 31, 2023 and 2022, primarily arising from differences in the accounting and tax treatment for derivatives. We believe that it is more likely than not that the deferred tax asset s will be realized through taxable earnings. RTFC had a deferred tax asset of $8 million as of May 31, 2023, primarily arising from CFC ’s early retirement of its allocated but unretired patronage capital to RTFC at a discount as discussed above under “The Company” section. |
New Accounting Standards Adopted in Fiscal Year 2023 and New Accounting Standards Issued But Not Yet Adopted | New Accounting Standards Adopted in Fiscal Year 2023 Reference Rate Reform In March 2020, the Financial Accounting Standards Board (“FASB”) issu ed ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides temporary optional expedients and exceptions for applying U.S. GAAP on contracts, hedging relationships and other transactions subject to modification due to the expected discontinuance of the London Interbank Offered Rate (“LIBOR”) and other reference rate reform changes to ease the potential accounting and financial burdens related to the expected transition in market reference rates. This guidance permits entities to elect not to apply certain modification accounting requirements to contracts affected by reference rate transition, if certain criteria are met. An entity that makes this election would not be required to remeasure modified contracts at the modification date or reassess a previous accounting determination. The guidance was effective upon issuance on March 12, 2020, and was applicable through December 31, 2022. On December 21, 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. Upon issuance of ASU 2020-04, we elected to apply certain of the optional expedients for contract modifications to our financial instruments impacted by the LIBOR discontinuance. We continued to elect to apply various optional expedients for contract modifications to our financial instruments affected by the reference rate reform, as extended by ASU 2022-06, through June 30, 2023 when the transition from LIBOR to the new market reference rate was completed. The application of this guidance did not have a material impact on our consolidated financial statements. New Accounting Standards Issued But Not Yet Adopted Financial Instruments—Credit Losses, Troubled Debt Restructurings and Vintage Disclosures In March 2022, the FASB issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which addresses and amends areas identified by the FASB as part of its post-implementation review of the accounting standard that introduced the CECL model. The amendments eliminate the accounting guidance for TDRs by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. ASU 2022-02 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for entities, such as CFC, that have adopted the CECL accounting standard. Early adoption, however, is permitted if an entity has adopted the CECL accounting standard. We adopted the guidance for our fiscal y |
Transfers Between Levels | Transfers Between Levels We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2 and Level 3 accordingly. Observable market data include but |
Basis of Presentation and Business Segment Reporting Methodology | Basis of Presentation We present the results of our business segments on the basis in which management internally evaluates operating performance to establish short- and long-term performance goals, develop budgets and forecasts, identify potential trends, allocate resources and make compensation decisions. Business Segment Reporting Methodology The results of our business segments are intended to present the separate results for each of the legal entities included in our consolidated financial statements. As discussed in “Note 15—Variable Interest Entities,” all of NCSC’s and RTFC’s funding is either provided by CFC or guaranteed by CFC, the terms and conditions of which are stipulated in a loan and security agreement and a guarantee agreement between CFC and each legal entity. Pursuant to the guarantee agreement, CFC unconditionally guarantees full indemnification to NCSC and RTFC for any credit losses. In addition, CFC manages the business operations of NCSC and RTFC under a management agreement that automatically renews on an annual basis unless the agreement is terminated by either party. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of fixed assets | The following table displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment. Table 1.1: Fixed Assets May 31, (Dollars in thousands) 2023 2022 Building and building equipment $ 50,316 $ 50,177 Furniture and fixtures 6,332 6,254 Computer software and hardware 80,201 55,101 Other 1,126 1,024 Depreciable fixed assets 137,975 112,556 Less: Accumulated depreciation (77,508) (73,258) Net depreciable fixed assets 60,467 39,298 Land 23,796 23,796 Software development in progress 1,748 38,668 Fixed assets, net $ 86,011 $ 101,762 |
Interest Income and Interest _2
Interest Income and Interest Expense (Tables) | 12 Months Ended |
May 31, 2023 | |
Banking and Thrift, Interest [Abstract] | |
Schedule of interest income and expense | The following table displays the components of interest income, by interest-earning asset type, and interest expense, by debt product type, presented on our consolidated statements of operations for fiscal years 2023, 2022 and 2021. Table 2.1: Interest Income and Interest Expense Year Ended May 31, (Dollars in thousands) 2023 2022 2021 Interest income: Loans (1) $ 1,330,144 $ 1,125,292 $ 1,101,505 Investment securities 21,585 15,951 15,096 Total interest income 1,351,729 1,141,243 1,116,601 Interest expense: (2)(3) Short-term borrowings (4) 165,961 18,265 14,730 Long-term debt (5) 763,700 581,748 581,292 Subordinated debt 106,847 105,521 106,041 Total interest expense 1,036,508 705,534 702,063 Net interest income $ 315,221 $ 435,709 $ 414,538 ____________________________ (1) Includes loan conversion fees, which are generally deferred and recognized in interest income over the period to maturity using the effective interest method, late payment fees, commitment fees and net amortization of deferred loan fees and loan origination costs. (2) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense over the period to maturity using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized in interest expense immediately as incurred. (3) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Based on the nature of the fees, the amount is either recognized immediately as incurred or deferred and recognized in interest expense ratably over the term of the arrangement. (4) Short-term borrowings consist of interest expense paid for commercial paper, select notes, daily liquidity fund notes and secured borrowings under repurchase agreements. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
May 31, 2023 | |
Investments [Abstract] | |
Schedule of composition of investments in trading securities | The following table presents the composition of our investment debt securities portfolio and the fair value as of May 31, 2023 and 2022. Table 3.1: Investments in Debt Securities, at Fair Value May 31, (Dollars in thousands) 2023 2022 Debt securities, at fair value: Commercial paper $ — $ 9,985 Corporate debt securities 401,367 487,172 Commercial Agency MBS (1) 7,237 7,815 U.S. state and municipality debt securities 27,300 27,778 Foreign government debt securities 974 967 Other ABS (2) 37,997 32,429 Total debt securities trading, at fair value $ 474,875 $ 566,146 ____________________________ (1) Consists of securities backed by the Federal National Mortgage Association (“ Fannie Mae ”) and the Federal Home Loan Mortgage Corporation (“ Freddie Mac ”). (2) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. |
Schedule of investments in equity securities | The following table presents the composition of our equity security holdings and the fair value as of May 31, 2023 and 2022. Table 3.2: Investments in Equity Securities, at Fair Value May 31, (Dollars in thousands) 2023 2022 Equity securities, at fair value: Farmer Mac—Series C non-cumulative preferred stock $ 25,750 $ 25,520 Farmer Mac—Class A common stock 9,744 8,238 Total equity securities, at fair value $ 35,494 $ 33,758 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
May 31, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of loans outstanding to members and unadvanced commitments by loan type and by member class | The following table presents loans to members by legal entity, member class and loan type, as of May 31, 2023 and 2022. Table 4.1: Loans to Members by Member Class and Loan Type May 31, 2023 2022 (Dollars in thousands) Amount % of Total Amount % of Total Member class: CFC: Distribution $ 25,437,077 78 % $ 23,844,242 79 % Power supply 5,437,242 17 4,901,770 17 Statewide and associate 200,368 1 126,863 — Total CFC 31,074,687 96 28,872,875 96 NCSC 956,874 3 710,878 2 RTFC 487,788 1 467,601 2 Total loans outstanding (1) 32,519,349 100 30,051,354 100 Deferred loan origination costs—CFC (2) 12,737 — 12,032 — Loans to members $ 32,532,086 100 % $ 30,063,386 100 % Loan type: Long-term loans: Fixed rate $ 28,371,358 87 % $ 26,952,372 90 % Variable rate 1,024,653 3 820,201 2 Total long-term loans 29,396,011 90 27,772,573 92 Lines of credit 3,123,338 10 2,278,781 8 Total loans outstanding (1) 32,519,349 100 30,051,354 100 Deferred loan origination costs—CFC (2) 12,737 — 12,032 — Loans to members $ 32,532,086 100 % $ 30,063,386 100 % ____________________________ (1) Represents the unpaid principal balance, net of discounts, charge-offs and recoveries, of loans as of the end of each period. (2) Deferred loan origination costs are recorded on the books of CFC. |
Schedules of concentration of risk | The following table presents the Texas-based number of borrowers and loans outstanding by legal entity and member class, as of May 31, 2023 and 2022. Table 4.2: Loan Exposure to Texas-Based Borrowers May 31, 2023 May 31, 2022 (Dollars in thousands) Number of Borrowers Amount % of Total Number of Borrowers Amount % of Total Member class: CFC: Distribution 57 $ 4,319,937 13 % 57 $ 3,984,887 13 % Power supply 8 1,128,941 4 8 1,089,896 4 Statewide and associate 1 51,504 — 1 29,335 — Total CFC 66 5,500,382 17 66 5,104,118 17 NCSC 1 16,667 — 1 378 — RTFC 2 11,755 — 1 5,853 — Total loan exposure to Texas-based borrowers 69 5,528,804 17 68 5,110,349 17 Less: Loans covered under Farmer Mac standby purchase commitment (155,409) — (163,369) (1) Net loan exposure to Texas-based borrowers $ 5,373,395 17 % $ 4,946,980 16 % |
Schedule of analysis of the age of the recorded investment in loans outstanding by member class | The following table presents the payment status, by legal entity and member class, of loans outstanding as of May 31, 2023 and 2022. Table 4.3: Payment Status of Loans Outstanding May 31, 2023 (Dollars in thousands) Current 30-89 Days Past Due > 90 Days Total Total Loans Outstanding Nonaccrual Loans Member class: CFC: Distribution $ 25,437,077 $ — $ — $ — $ 25,437,077 $ — Power supply 5,432,895 — 4,347 4,347 5,437,242 112,209 Statewide and associate 200,368 — — — 200,368 — CFC total 31,070,340 — 4,347 4,347 31,074,687 112,209 NCSC 920,159 36,715 — 36,715 956,874 — RTFC 487,788 — — — 487,788 — Total loans outstanding $ 32,478,287 $ 36,715 $ 4,347 $ 41,062 $ 32,519,349 $ 112,209 Percentage of total loans 99.87 % 0.11 % 0.02 % 0.13 % 100.00 % 0.35 % May 31, 2022 (Dollars in thousands) Current 30-89 Days Past Due > 90 Days Total Total Loans Outstanding Nonaccrual Loans Member class: CFC: Distribution $ 23,844,242 $ — $ — $ — $ 23,844,242 $ — Power supply 4,787,832 28,389 85,549 113,938 4,901,770 227,790 Statewide and associate 126,863 — — — 126,863 — CFC total 28,758,937 28,389 85,549 113,938 28,872,875 227,790 NCSC 710,878 — — — 710,878 — RTFC 467,601 — — — 467,601 — Total loans outstanding $ 29,937,416 $ 28,389 $ 85,549 $ 113,938 $ 30,051,354 $ 227,790 Percentage of total loans 99.62 % 0.09 % 0.29 % 0.38 % 100.00 % 0.76 % |
Schedule of troubled debt restructured loans | The following table presents the outstanding balance of modified loans accounted for as TDRs and the performance status, by legal entity and member class, of these loans as of May 31, 2023 and 2022. Table 4.4: Troubled Debt Restructurings May 31, 2023 2022 (Dollars in thousands) Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding TDR loans: Member class: CFC—Distribution 1 $ 4,638 0.02 % 1 $ 5,092 0.02 % CFC—Power Supply 1 22,875 0.07 — — — RTFC 1 3,592 0.01 1 4,092 0.01 Total TDR loans 3 $ 31,105 0.10 % 2 $ 9,184 0.03 % Performance status of TDR loans: Performing TDR loans 2 $ 8,230 0.03 % 2 $ 9,184 0.03 % Nonperforming TDR loans 1 22,875 0.07 — — — Total TDR loans 3 $ 31,105 0.10 % 2 $ 9,184 0.03 % ____________________________ |
Schedule of non-performing loans | The following table presents the outstanding balance of nonperforming loans, by legal entity and member class, as of May 31, 2023 and 2022. Loans classified as nonperforming are placed on nonaccrual status. Table 4.5: Nonperforming Loans May 31, 2023 2022 (Dollars in thousands) Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Number of Borrowers Outstanding Amount (1) % of Total Loans Outstanding Nonperforming loans: Member class: CFC—Power supply 2 $ 89,334 0.27 % 3 $ 227,790 0.76 % Total nonperforming loans 2 $ 89,334 0.27 % 3 $ 227,790 0.76 % _______________________ |
Schedule of loan portfolio by risk rating category and member class based on available data | Table 4.6: Loans Outstanding by Borrower Risk Ratings and Origination Year May 31, 2023 Term Loans by Fiscal Year of Origination (Dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Total May 31, 2022 Pass CFC: Distribution $ 2,453,999 $ 2,404,404 $ 1,643,838 $ 1,822,745 $ 1,153,864 $ 13,838,304 $ 1,925,554 $ 25,242,708 $ 23,596,004 Power supply 465,638 348,333 547,897 179,150 375,738 2,687,787 720,490 5,325,033 4,673,980 Statewide and associate 61,671 23,538 1,938 14,732 2,863 16,418 66,150 187,310 112,610 CFC total 2,981,308 2,776,275 2,193,673 2,016,627 1,532,465 16,542,509 2,712,194 30,755,051 28,382,594 NCSC 268,157 24,066 5,678 193,267 3,741 274,826 187,139 956,874 710,878 RTFC 52,015 84,624 75,057 39,157 7,825 192,543 32,975 484,196 463,509 Total pass $ 3,301,480 $ 2,884,965 $ 2,274,408 $ 2,249,051 $ 1,544,031 $ 17,009,878 $ 2,932,308 $ 32,196,121 $ 29,556,981 Special mention CFC: Distribution $ 4,226 $ — $ 4,775 $ — $ 5,003 $ 12,210 $ 168,155 $ 194,369 $ 248,238 Power supply — — — — — — — — — Statewide and associate — — — — 4,755 8,303 — 13,058 14,253 CFC total 4,226 — 4,775 — 9,758 20,513 168,155 207,427 262,491 RTFC — — — — — 3,592 — 3,592 4,092 Total special mention $ 4,226 $ — $ 4,775 $ — $ 9,758 $ 24,105 $ 168,155 $ 211,019 $ 266,583 Substandard CFC: Power supply $ — $ — $ — $ — $ — $ — $ — $ — $ — Total substandard $ — $ — $ — $ — $ — $ — $ — $ — $ — Doubtful CFC: Power supply $ — $ — $ — $ — $ — $ 89,334 $ 22,875 $ 112,209 $ 227,790 CFC total — — — — — 89,334 22,875 112,209 227,790 RTFC — — — — — — — — — Total doubtful $ — $ — $ — $ — $ — $ 89,334 $ 22,875 $ 112,209 $ 227,790 Total criticized loans $ 4,226 $ — $ 4,775 $ — $ 9,758 $ 113,439 $ 191,030 $ 323,228 $ 494,373 Total loans outstanding $ 3,305,706 $ 2,884,965 $ 2,279,183 $ 2,249,051 $ 1,553,789 $ 17,123,317 $ 3,123,338 $ 32,519,349 $ 30,051,354 |
Schedule of unadvanced commitments | The following table presents unadvanced loan commitments, by member class and by loan type, as of May 31, 2023 and 2022. Table 4.7: Unadvanced Commitments by Member Class and Loan Type May 31, (Dollars in thousands) 2023 2022 Member class: CFC: Distribution $ 9,673,712 $ 9,230,197 Power supply 3,995,128 3,835,535 Statewide and associate 175,150 183,845 Total CFC 13,843,990 13,249,577 NCSC 604,436 551,901 RTFC 340,135 309,724 Total unadvanced commitments $ 14,788,561 $ 14,111,202 Loan type: (1) Long-term loans: Fixed rate $ — $ — Variable rate 5,669,634 5,357,205 Total long-term loans 5,669,634 5,357,205 Lines of credit 9,118,927 8,753,997 Total unadvanced commitments $ 14,788,561 $ 14,111,202 ____________________________ (1) The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all unadvanced long-term loan commitments are reported as variable rate. However, the borrower may select either a fixed or a variable rate when an advance is drawn under a loan commitment. |
Schedule of available balances under unadvanced loan commitments | The following table displays, by loan type, the available balance under unadvanced loan commitments as of May 31, 2023 and the related maturities in each fiscal year during the five-year period ende d May 31, 2028, and thereafter. Table 4.8: Unadvanced Loan Commitments Available Notional Maturities of Unadvanced Loan Commitments (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Line of credit loans $ 9,118,927 $ 5,055,192 $ 1,238,285 $ 788,561 $ 1,238,399 $ 662,086 $ 136,404 Long-term loans 5,669,634 1,019,262 704,667 794,595 1,339,212 1,595,844 216,054 Total $ 14,788,561 $ 6,074,454 $ 1,942,952 $ 1,583,156 $ 2,577,611 $ 2,257,930 $ 352,458 |
Summary of available balance under committed lines of credit and the related maturities by fiscal year | The following table summarizes the available balance under unconditional committed lines of credit and the related maturity amounts in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 4.9: Unconditional Committed Lines of Credit—Available Balance Available Notional Maturities of Unconditional Committed Lines of Credit (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Committed lines of credit $ 3,171,563 $ 216,750 $ 742,876 $ 548,980 $ 929,415 $ 693,542 $ 40,000 |
Summary of pledged loans | Table 4.10 displays the borrowing amount under each of our secured borrowing agreements and the corresponding loans outstanding pledged as collateral as of May 31, 2023 and 2022. See “Note 6—Short-Term Borrowings” and “Note 7—Long-Term Debt” for information on our secured borrowings and other borrowings. Table 4.10: Pledged Loans May 31, (Dollars in thousands) 2023 2022 Collateral trust bonds: 2007 indenture: Collateral trust bonds outstanding $ 7,772,711 $ 7,072,711 Pledged collateral: Distribution system mortgage notes pledged 8,719,287 8,564,596 RUS-guaranteed loans qualifying as permitted investments 122,874 114,654 Total pledged collateral 8,842,161 8,679,250 1994 indenture: Collateral trust bonds outstanding $ 20,000 $ 25,000 Pledged collateral: Distribution system mortgage notes pledged 22,900 29,616 Guaranteed Underwriter Program: Notes payable outstanding $ 6,720,643 $ 6,105,473 Pledged collateral: Distribution and power supply system mortgage notes pledged 7,877,558 6,904,591 Farmer Mac: Notes payable outstanding $ 3,149,898 $ 3,094,679 Pledged collateral: Distribution and power supply system mortgage notes pledged 4,294,282 3,445,358 Clean Renewable Energy Bonds Series 2009A: Notes payable outstanding $ 1,098 $ 2,755 Pledged collateral: Distribution and power supply system mortgage notes pledged 1,029 3,138 Cash 391 392 Total pledged collateral 1,420 3,530 |
Allowance for Credit Losses - (
Allowance for Credit Losses - (Tables) | 12 Months Ended |
May 31, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of changes in allowance for credit losses | Table 5.1: Changes in Allowance for Credit Losses Year Ended May 31, 2023 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2022 $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Provision (benefit) for credit losses (857) 582 (57) (332) 1,015 (80) 603 Charge-offs — (15,069) — (15,069) — — (15,069) Balance as of May 31, 2023 $ 14,924 $ 33,306 $ 1,194 $ 49,424 $ 2,464 $ 1,206 $ 53,094 Year Ended May 31, 2022 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2021 $ 13,426 $ 64,646 $ 1,391 $ 79,463 $ 1,374 $ 4,695 $ 85,532 Provision (benefit) for credit losses 2,355 (16,853) (140) (14,638) 75 (3,409) (17,972) Balance as of May 31, 2022 $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Year Ended May 31, 2021 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Balance as of May 31, 2020 $ 8,002 $ 38,027 $ 1,409 $ 47,438 $ 806 $ 4,881 $ 53,125 Cumulative-effect adjustment from adoption of CECL accounting standard 3,586 2,034 25 5,645 (15) (1,730) 3,900 Balance as of June 1, 2020 11,588 40,061 1,434 53,083 791 3,151 57,025 Provision (benefit) for credit losses 1,838 24,585 (43) 26,380 583 1,544 28,507 Balance as of May 31, 2021 $ 13,426 $ 64,646 $ 1,391 $ 79,463 $ 1,374 $ 4,695 $ 85,532 |
Schedule of allowance for credit losses components | The following tables present, by legal entity and member class, the components of our allowance for credit losses as of May 31, 2023 and 2022. Table 5.2: Allowance for Credit Losses Components May 31, 2023 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Allowance components: Collective allowance $ 14,924 $ 7,837 $ 1,194 $ 23,955 $ 2,464 $ 916 $ 27,335 Asset-specific allowance — 25,469 — 25,469 — 290 25,759 Total allowance for credit losses $ 14,924 $ 33,306 $ 1,194 $ 49,424 $ 2,464 $ 1,206 $ 53,094 Loans outstanding: (1) Collectively evaluated loans $ 25,432,439 $ 5,325,033 $ 200,368 $ 30,957,840 $ 956,874 $ 484,196 $ 32,398,910 Individually evaluated loans 4,638 112,209 — 116,847 — 3,592 120,439 Total loans outstanding $ 25,437,077 $ 5,437,242 $ 200,368 $ 31,074,687 $ 956,874 $ 487,788 $ 32,519,349 Allowance ratios: Collective allowance coverage ratio (2) 0.06 % 0.15 % 0.60 % 0.08 % 0.26 % 0.19 % 0.08 % Asset-specific allowance coverage ratio (3) — 22.70 — 21.80 — 8.07 21.39 Total allowance coverage ratio (4) 0.06 0.61 0.60 0.16 0.26 0.25 0.16 May 31, 2022 (Dollars in thousands) CFC Distribution CFC Power Supply CFC Statewide & Associate CFC Total NCSC RTFC Total Allowance components: Collective allowance $ 15,781 $ 9,355 $ 1,251 $ 26,387 $ 1,449 $ 1,040 $ 28,876 Asset-specific allowance — 38,438 — 38,438 — 246 38,684 Total allowance for credit losses $ 15,781 $ 47,793 $ 1,251 $ 64,825 $ 1,449 $ 1,286 $ 67,560 Loans outstanding: (1) Collectively evaluated loans $ 23,839,150 $ 4,673,980 $ 126,863 $ 28,639,993 $ 710,878 $ 463,509 $ 29,814,380 Individually evaluated loans 5,092 227,790 — 232,882 — 4,092 236,974 Total loans outstanding $ 23,844,242 $ 4,901,770 $ 126,863 $ 28,872,875 $ 710,878 $ 467,601 $ 30,051,354 Allowance coverage ratios: Collective allowance coverage ratio (2) 0.07 % 0.20 % 0.99 % 0.09 % 0.20 % 0.22 % 0.10 % Asset-specific allowance coverage ratio (3) — 16.87 — 16.51 — 6.01 16.32 Total allowance coverage ratio (4) 0.07 0.98 0.99 0.22 0.20 0.28 0.22 ___________________________ (1) Represents the unpaid principal amount of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $13 million and $12 million as of May 31, 2023 and 2022, respectively. (2) Calculated based on the collective allowance component at period-end divided by collectively evaluated loans outstanding at period-end. (3) Calculated based on the asset-specific allowance component at period-end divided by individually evaluated loans outstanding at period-end. (4) Calculated based on the total allowance for credit losses at period-end divided by total loans outstanding at period-end. |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of short-term debt outstanding and the weighted-average effective interest rates | The following table provides comparative information on our short-term borrowings and weighted-average interest rates as of May 31, 2023 and 2022. Table 6.1: Short-Term Borrowings Sources and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amount Weighted- Average Amount Weighted-Average Short-term borrowings: Commercial paper: Commercial paper dealers, net of discounts $ 1,293,167 5.32 % $ 1,024,813 0.96 % Commercial paper members, at par 1,017,431 4.76 1,358,069 0.92 Total commercial paper 2,310,598 5.07 2,382,882 0.94 Select notes to members 1,630,799 4.96 1,753,441 1.11 Daily liquidity fund notes to members 238,329 4.35 427,790 0.80 Medium-term notes to members 366,549 4.64 417,054 0.66 Total short-term borrowings $ 4,546,275 4.96 $ 4,981,167 0.97 |
Schedule of total available and outstanding letters of credit under the revolving credit agreements | The following table presents the amount available for access under our bank revolving line of credit agreements as of May 31, 2023. Table 6.2: Committed Bank Revolving Line of Credit Agreements Available Amounts May 31, 2023 (Dollars in millions) Total Commitment Letters of Credit Outstanding Available Amount Maturity Annual Facility Fee (1) Bank revolving agreements: 3-year agreement $ 1,245 $ — $ 1,245 November 28, 2025 7.5 bps 4-year agreement 1,355 2 1,353 November 28, 2026 10.0 bps Total $ 2,600 $ 2 $ 2,598 ___________________________ (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. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
May 31, 2023 | |
Debt Instruments [Abstract] | |
Summary of long-term debt outstanding and the weighted-average effective interest rates | The following table displays, by debt product type, long-term debt outstanding, and the weighted-average interest rate and maturity date as of May 31, 2023 and 2022. Long-term debt outstanding totaled $23,947 million and accounted for 77% of total debt outstanding as of May 31, 2023, compared with $21,545 million and 75% of total debt outstanding as of May 31, 2022. Long-term debt with fixed- and variable-interest rate accounted for 93% and 7%, respectively, of our total long-term debt outstanding as of May 31, 2023, compared with 90% and 10%, respectively, of our total long-term debt outstanding as of May 31, 2022. Table 7.1: Long-Term Debt—Debt Product Types and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amount Weighted- Average Maturity Amount Weighted- Average Maturity Secured long-term debt: Collateral trust bonds $ 7,792,711 3.46 % 2023-2049 $ 7,097,711 3.17 % 2023-2049 Unamortized discount, net (178,832) (216,608) Debt issuance costs (35,906) (32,613) Total collateral trust bonds 7,577,973 6,848,490 Guaranteed Underwriter Program notes payable 6,720,643 3.09 2025-2053 6,105,473 2.69 2025-2052 Farmer Mac notes payable 3,149,898 3.92 2023-2049 3,094,679 2.33 2022-2049 Other secured notes payable 1,098 3.06 2023 2,755 3.10 2022-2023 Debt issuance costs (2) (9) Total other secured notes payable 1,096 2,746 Total secured notes payable 9,871,637 9,202,898 Total secured long-term debt 17,449,610 3.40 16,051,388 2.83 Unsecured long-term debt: Medium-term notes sold through dealers 6,152,726 3.52 2023-2037 5,263,496 2.20 2022-2032 Medium-term notes sold to members 365,260 3.98 2023-2037 250,397 2.70 2022-2037 Medium-term notes sold through dealers and to members 6,517,986 3.55 5,513,893 2.22 Unamortized premium (discount), net 4 (2,086) Debt issuance costs (21,122) (19,723) Total unsecured medium-term notes 6,496,868 5,492,084 Unsecured notes payable 71 — 2023 1,979 — 2022-2023 Unamortized discount (1) (10) Debt issuance costs — (1) Total unsecured notes payable 70 1,968 Total unsecured long-term debt 6,496,938 3.55 5,494,052 2.22 Total long-term debt $ 23,946,548 3.44 $ 21,545,440 2.68 |
Schedule of amount of long-term debt maturities | The following table presents the principal amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 7.2: Long-Term Debt—Maturities and Weighted-Average Interest Rates (Dollars in thousands) Maturity Amount Weighted-Average 2024 $ 2,277,050 3.00 % 2025 2,286,088 2.73 2026 3,527,228 3.77 2027 1,631,434 2.11 2028 2,156,615 3.74 Thereafter 12,303,992 3.68 Total $ 24,182,407 3.44 |
Subordinated Deferrable Debt (T
Subordinated Deferrable Debt (Tables) | 12 Months Ended |
May 31, 2023 | |
Subordinated Debt [Abstract] | |
Schedule of subordinated borrowing | The following table presents, by issuance, subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2023 and 2022. Table 8.1: Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates May 31, 2023 2022 Maturity and Call Dates (Dollars in thousands) Outstanding Amount Weighted- Average Outstanding Amount Weighted-Average Term in Years Maturity Call Date Issuances of subordinated notes: Variable issuance 2013 $ 400,000 8.21 % $ 400,000 4.75 % 30 2043 April 30, 2023 5.25% issuance 2016 350,000 5.25 350,000 5.25 30 2046 April 20, 2026 5.50% issuance 2019 250,000 5.50 250,000 5.50 45 2064 May 15, 2024 7.125% issuance 2023 300,000 7.13 — — 30 2053 June 15, 2028 Total aggregate principal amount 1,300,000 1,000,000 Debt issuance costs (16,564) (13,482) Total subordinated deferrable debt $ 1,283,436 6.64 $ 986,518 5.11 |
Members' Subordinated Certifi_2
Members' Subordinated Certificates (Tables) | 12 Months Ended |
May 31, 2023 | |
Members' subordinated certificates | |
Schedule of subordinated borrowing | The following table presents, by issuance, subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2023 and 2022. Table 8.1: Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates May 31, 2023 2022 Maturity and Call Dates (Dollars in thousands) Outstanding Amount Weighted- Average Outstanding Amount Weighted-Average Term in Years Maturity Call Date Issuances of subordinated notes: Variable issuance 2013 $ 400,000 8.21 % $ 400,000 4.75 % 30 2043 April 30, 2023 5.25% issuance 2016 350,000 5.25 350,000 5.25 30 2046 April 20, 2026 5.50% issuance 2019 250,000 5.50 250,000 5.50 45 2064 May 15, 2024 7.125% issuance 2023 300,000 7.13 — — 30 2053 June 15, 2028 Total aggregate principal amount 1,300,000 1,000,000 Debt issuance costs (16,564) (13,482) Total subordinated deferrable debt $ 1,283,436 6.64 $ 986,518 5.11 |
Schedule of amount of members' subordinated certificates maturing in each of the five fiscal years | The following table presents the principal amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 7.2: Long-Term Debt—Maturities and Weighted-Average Interest Rates (Dollars in thousands) Maturity Amount Weighted-Average 2024 $ 2,277,050 3.00 % 2025 2,286,088 2.73 2026 3,527,228 3.77 2027 1,631,434 2.11 2028 2,156,615 3.74 Thereafter 12,303,992 3.68 Total $ 24,182,407 3.44 |
Subordinated certificates | |
Members' subordinated certificates | |
Schedule of subordinated borrowing | The following table displays members’ subordinated certificates and the weighted-average interest rates as of May 31, 2023 and 2022. Table 9.1: Members’ Subordinated Certificates Outstanding and Weighted-Average Interest Rates May 31, 2023 2022 (Dollars in thousands) Amounts Weighted- Amounts Weighted- Membership subordinated certificates: Certificates maturing 2025 through 2119 $ 628,595 $ 628,591 Subscribed and unissued (1) 19 12 Total membership subordinated certificates 628,614 4.94 % 628,603 4.95 % Loan and guarantee subordinated certificates: Interest-bearing loan subordinated certificates maturing through 2045 208,192 216,266 Non-interest-bearing loan subordinated certificates maturing through 2047 112,978 121,744 Subscribed and unissued (1) 41 45 Total loan subordinated certificates 321,211 2.65 338,055 2.64 Interest-bearing guarantee subordinated certificates maturing through 2044 27,138 5.91 27,333 5.90 Total loan and guarantee subordinated certificates 348,349 2.91 365,388 2.88 Member capital securities: Securities maturing through 2052 246,163 5.01 240,170 5.00 Total members’ subordinated certificates $ 1,223,126 4.38 $ 1,234,161 4.35 ___________________________ (1) The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding. |
Schedule of amount of members' subordinated certificates maturing in each of the five fiscal years | The following table presents the amount of members’ subordinated certificates maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 9.2: Members’ Subordinated Certificate Maturities and Weighted-Average Interest Rates (Dollars in thousands) Amount Maturing (1) Weighted-Average 2024 $ 5,861 2.22 % 2025 7,481 2.71 2026 63,078 3.24 2027 8,052 2.00 2028 5,487 3.04 Thereafter 1,133,107 4.49 Total $ 1,223,066 4.38 ___________________________ (1) E xcludes $0.06 million in subscribed and unissued member subordinated certificates for which a payment has been received, but no certificate has been issued. Amortizing member loan subordinated certificates totaling $159 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $12 million in fiscal year 2023 and represented 8% of amortizing loan subordinated certificates outstanding. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
May 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative notional amount and weighted-average rates | The following table shows, by derivative instrument type, the notional amount, the weighted-average rate paid and the weighted-average interest rate received for our interest rate swaps as of May 31, 2023 and 2022. For the substantial majority of interest rate swap agreements, a LIBOR index is currently used as the basis for determining variable interest payment amounts each period. Table 10.1: Derivative Notional Amount and Weighted-Average Rates May 31, 2023 2022 (Dollars in thousands) Notional Weighted- Weighted- Notional Weighted- Weighted- Pay-fixed swaps $ 5,920,269 2.75 % 5.26 % $ 5,957,631 2.60 % 1.24 % Receive-fixed swaps 1,700,000 6.05 2.97 1,980,000 1.53 2.86 Subtotal 7,620,269 3.49 4.75 7,937,631 2.33 1.64 Forward pay-fixed swaps 195,845 124,000 Total interest rate swaps $ 7,816,114 $ 8,061,631 |
Schedule of derivative instruments maturity | The following table presents the notional amount of our interest rate swaps maturing in each of the five fiscal years subsequent to May 31, 2023 and thereafter. Table 10.2: Derivative Notional Amount Maturities Notional Amount Notional Amortization and Maturities (Dollars in thousands) 2024 2025 2026 2027 2028 Thereafter Interest rate swaps $7,816,114 $823,574 $418,928 $1,066,485 $343,661 $604,200 $4,559,266 |
Schedule of derivative instruments on consolidated balance sheets | The following table displays the fair value of the derivative assets and derivative liabilities, by derivatives type, recorded on our consolidated balance sheets and the related outstanding notional amount as of May 31, 2023 and 2022. May 31, 2023 2022 (Dollars in thousands) Fair Value Notional Amount (1) Fair Value Notional Amount (1) Derivative assets: Interest rate swaps $ 460,762 $ 5,405,274 $ 222,042 $ 4,791,699 Total derivative assets $ 460,762 $ 5,405,274 $ 222,042 $ 4,791,699 Derivative liabilities: Interest rate swaps $ 115,074 $ 2,410,840 $ 128,282 $ 3,269,932 Total derivative liabilities $ 115,074 $ 2,410,840 $ 128,282 $ 3,269,932 ____________________________ (1) The notional amount includes $196 million and $124 million notional amount of forward starting swaps, as shown above in Table 10.1: Derivative Notional Amount and Weighted-Average Rates, with an effective start date subsequent to May 31, 2023 and May 31, 2022, respectively, outstanding as of May 31, 2023 and May 31, 2022, respectively. The fair value of these swaps as of May 31, 2023 and May 31, 2022 is included in the above table and in our consolidated financial statements. |
Schedule of offsetting assets | The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2023 and 2022, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any. Table 10.4: Derivative Gross and Net Amounts May 31, 2023 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 460,762 $ — $ 460,762 $ 112,047 $ — $ 348,715 Derivative liabilities: Interest rate swaps 115,074 — 115,074 112,047 — 3,027 May 31, 2022 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 222,042 $ — $ 222,042 $ 103,228 $ — $ 118,814 Derivative liabilities: Interest rate swaps 128,282 — 128,282 103,228 — 25,054 |
Schedule of offsetting liabilities | The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2023 and 2022, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any. Table 10.4: Derivative Gross and Net Amounts May 31, 2023 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 460,762 $ — $ 460,762 $ 112,047 $ — $ 348,715 Derivative liabilities: Interest rate swaps 115,074 — 115,074 112,047 — 3,027 May 31, 2022 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 222,042 $ — $ 222,042 $ 103,228 $ — $ 118,814 Derivative liabilities: Interest rate swaps 128,282 — 128,282 103,228 — 25,054 |
Summary of gains and losses recorded on the consolidated statements of operations for the entity's derivatives | The following table presents the components of the derivative gains (losses) reported in our consolidated statements of operations for fiscal years 2023, 2022 and 2021. Derivative cash settlements interest expense represents the net periodic contractual interest amount for our interest rate swaps during the reporting period. Derivative forward value gains (losses) represent the change in fair value of our interest rate swaps during the reporting period due to changes in expected future interest rates over the remaining life of our derivative contracts. We classify the derivative cash settlement amounts for the net periodic contractual interest expense on our interest rate swaps as an operating activity in our consolidated statements of cash flows. Table 10.5: Derivative Gains (Losses) Year Ended May 31, (Dollars in thousands) 2023 2022 2021 Derivative gains (losses) attributable to: Derivative cash settlements interest income (expense) $ 33,577 $ (101,385) $ (115,645) Derivative forward value gains 252,267 557,867 621,946 Derivative gains $ 285,844 $ 456,482 $ 506,301 |
Schedule of notional amounts of derivative instruments having rating triggers | The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2023, and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, or to or below Ba2/BB+ by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assume that amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements with the 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. Table 10.6: Derivative Credit Rating Trigger Exposure (Dollars in thousands) Notional Payable Due from CFC Receivable Due to CFC Net Receivable (Payable) Impact of rating downgrade trigger: Falls below A3/A- (1) $ 30,930 $ (1,450) $ — $ (1,450) Falls below Baa1/BBB+ 5,336,304 (1,607) 227,613 226,006 Falls to or below Baa2/BBB (2) 320,589 — 17,865 17,865 Total $ 5,687,823 $ (3,057) $ 245,478 $ 242,421 ___________________________ (1) Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
May 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of components of equity | Table 11.1: Equity May 31, (Dollars in thousands) 2023 2022 Membership fees $ 969 $ 970 Educational fund 2,565 2,417 Total membership fees and educational fund 3,534 3,387 Patronage capital allocated 1,006,115 954,988 Members’ capital reserve 1,202,152 1,062,286 Unallocated net income (loss): Prior year-end cumulative derivative forward value gains (losses) 92,363 (461,162) Current-year derivative forward value gains (1) 250,261 553,525 Current year-end cumulative derivative forward value gains 342,624 92,363 Other unallocated net loss (709) (709) Unallocated net gain 341,915 91,654 CFC retained equity 2,553,716 2,112,315 Accumulated other comprehensive income 8,343 2,258 Total CFC equity 2,562,059 2,114,573 Noncontrolling interests 27,190 27,396 Total equity $ 2,589,249 $ 2,141,969 ____________________________ |
Summary of activity in accumulated other comprehensive income account by component | The following table presents, by component, changes in AOCI for the years ended May 31, 2023 and 2022 and the balance of each component as of the end of each respective period. Table 11.2: Changes in Accumulated Other Comprehensive Income (Loss) Year Ended May 31, 2023 2022 (Dollars in thousands) Unrealized Gains on Derivative Hedges (1) Unrealized Losses on Defined Benefit Plans (2) Total Unrealized Gains on Derivative Hedges (1) Unrealized Losses on Defined Benefit Plans (2) Total Beginning balance $ 5,123 $ (2,865) $ 2,258 $ 1,718 $ (1,743) $ (25) Changes in unrealized gains (losses) 6,691 (213) 6,478 4,028 (1,409) 2,619 Realized (gains) losses reclassified to earnings (712) 319 (393) (623) 287 (336) Ending balance $ 11,102 $ (2,759) $ 8,343 $ 5,123 $ (2,865) $ 2,258 ____________________________ (1) Of the derivative gains reclassified to earnings, a portion is reclassified as a component of the derivative gains (losses) line item and the remainder is reclassified as a component of the interest expense line item on our consolidated statements of operations. (2) Reclassified to earnings as a component of the other non-interest expense line item presented on our consolidated statements of operations. |
Guarantees (Tables)
Guarantees (Tables) | 12 Months Ended |
May 31, 2023 | |
Guarantees [Abstract] | |
Summary of total guarantees by type of guarantee and member class | The following table displays the notional amount of our outstanding guarantee obligations, by guarantee type and by member class, as of May 31, 2023 and 2022. Table 13.1: Guarantees Outstanding by Type and Member Class May 31, (Dollars in thousands) 2023 2022 Guarantee type: Long-term tax-exempt bonds (1) $ 98,405 $ 122,150 Letters of credit (2)(3) 538,393 450,354 Other guarantees 160,023 158,279 Total $ 796,821 $ 730,783 Member class: CFC: Distribution $ 383,644 $ 314,925 Power supply 380,382 378,516 Statewide and associate (4) 17,532 13,372 CFC total 781,558 706,813 NCSC 15,263 23,970 Total $ 796,821 $ 730,783 ____________________________ (1) Represents the outstanding principal amount of long-term variable-rate guaranteed bonds. (2) Reflects our maximum potential exposure for letters of credit. (3) Under a hybrid letter of credit facility we had $35 million of commitments that may be used for the issuance of letters of credit as of May 31, 2023. |
Schedule of maturities of outstanding guarantees | The following table details the scheduled maturities of our outstanding guarantees in each of the five fiscal years following May 31, 2023 and thereafter: Table 13.2: Guarantees Outstanding Maturities (Dollars in thousands) Amount 2024 $ 252,082 2025 82,317 2026 191,422 2027 39,286 2028 109,820 Thereafter 121,894 Total $ 796,821 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
May 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying and fair values for entity's financial instruments | The following table presents the carrying value and estimated fair value of all of our financial instruments, including those carried at amortized cost, as of May 31, 2023 and 2022. The table also displays the classification level within the fair value hierarchy based on the degree of observability of the inputs used in the valuation technique for estimating fair value. Table 14.1: Fair Value of Financial Instruments May 31, 2023 Fair Value Measurement Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 198,936 $ 198,936 $ 198,936 $ — $ — Restricted cash 8,301 8,301 8,301 — — Equity securities, at fair value 35,494 35,494 35,494 — — Debt securities trading, at fair value 474,875 474,875 — 474,875 — Deferred compensation investments 6,660 6,660 6,660 — — Loans to members, net 32,478,992 29,308,647 — — 29,308,647 Accrued interest receivable 172,723 172,723 — 172,723 — Derivative assets 460,762 460,762 — 460,762 — Total financial assets $ 33,836,743 $ 30,666,398 $ 249,391 $ 1,108,360 $ 29,308,647 Liabilities: Short-term borrowings $ 4,546,275 $ 4,547,333 $ — $ 4,547,333 $ — Long-term debt 23,946,548 22,665,551 — 13,527,393 9,138,158 Accrued interest payable 212,340 212,340 — 212,340 — Guarantee liability 12,973 12,475 — — 12,475 Derivative liabilities 115,074 115,074 — 115,074 — Subordinated deferrable debt 1,283,436 1,261,141 240,831 1,020,310 — Members’ subordinated certificates 1,223,126 1,223,126 — — 1,223,126 Total financial liabilities $ 31,339,772 $ 30,037,040 $ 240,831 $ 19,422,450 $ 10,373,759 May 31, 2022 Fair Value Measurement Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 153,551 $ 153,551 $ 153,551 $ — $ — Restricted cash 7,563 7,563 7,563 — — Equity securities, at fair value 33,758 33,758 33,758 — — Debt securities trading, at fair value 566,146 566,146 — 566,146 — Deferred compensation investments 6,710 6,710 6,710 — — Loans to members, net 29,995,826 28,595,111 — — 28,595,111 Accrued interest receivable 111,418 111,418 — 111,418 — Derivative assets 222,042 222,042 — 222,042 — Total financial assets $ 31,097,014 $ 29,696,299 $ 201,582 $ 899,606 $ 28,595,111 Liabilities: Short-term borrowings $ 4,981,167 $ 4,978,580 $ — $ 4,978,580 $ — Long-term debt 21,545,440 21,106,750 — 12,248,695 8,858,055 Accrued interest payable 131,950 131,950 — 131,950 — Guarantee liability 12,764 13,083 — — 13,083 Derivative liabilities 128,282 128,282 — 128,282 — Subordinated deferrable debt 986,518 960,869 250,800 710,069 — Members’ subordinated certificates 1,234,161 1,234,161 — — 1,234,161 Total financial liabilities $ 29,020,282 $ 28,553,675 $ 250,800 $ 18,197,576 $ 10,105,299 |
Schedule of fair value, assets and liabilities measured on recurring basis | The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of May 31, 2023 and 2022, and the classification of the valuation technique within the fair value hierarchy. We did not have any assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs during the years ended May 31, 2023 and 2022. Table 14.2: Assets and Liabilities Measured at Fair Value on a Recurring Basis May 31, 2023 2022 (Dollars in thousands) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Equity securities, at fair value $ 35,494 $ — $ 35,494 $ 33,758 $ — $ 33,758 Debt securities trading, at fair value — 474,875 474,875 — 566,146 566,146 Deferred compensation investments 6,660 — 6,660 6,710 — 6,710 Derivative assets — 460,762 460,762 — 222,042 222,042 Liabilities: Derivative liabilities — 115,074 115,074 — 128,282 128,282 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
May 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of variable interest entities | The following table provides information on incremental consolidated assets and liabilities of VIEs included in CFC’s consolidated financial statements, after intercompany eliminations, as of May 31, 2023 and 2022. Table 15.1: Consolidated Assets and Liabilities of Variable Interest Entities May 31, (Dollars in thousands) 2023 2022 Assets: Loans outstanding $ 1,444,662 $ 1,178,479 Other assets 12,612 9,672 Total assets $ 1,457,274 $ 1,188,151 Liabilities: Total liabilities $ 19,704 $ 22,958 |
Schedule of variable interest entities, credit commitments | The following table provides information on CFC’s credit commitments to NCSC and RTFC, and potential exposure to loss under these commitments as of May 31, 2023 and 2022. Table 15.2: CFC Exposure Under Credit Commitments to NCSC and RTFC May 31, (Dollars in thousands) 2023 2022 CFC credit commitments to NCSC and RTFC: Total CFC credit commitments $ 5,500,000 $ 5,500,000 Outstanding commitments: Borrowings payable to CFC (1) 1,428,886 1,158,583 Credit enhancements: CFC third-party guarantees 15,263 23,970 Other credit enhancements 2,038 4,044 Total credit enhancements (2) 17,301 28,014 Total outstanding commitments 1,446,187 1,186,597 CFC credit commitments available (3) $ 4,053,813 $ 4,313,403 ____________________________ (1) Intercompany borrowings payable by NCSC and RTFC to CFC are eliminated in consolidation. (2) Excludes interest due on these instruments. (3) Represents total CFC credit commitments less outstanding commitments as of each period-end. |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
May 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment presentation for the consolidated statements of operations and consolidated balance sheets | The following tables display segment results of operations for the years ended May 31, 2023, 2022 and 2021, assets attributable to each segment as of May 31, 2023 and 2022 and a reconciliation of total segment amounts to our consolidated total amounts. Table 16.1: Business Segment Information Year Ended May 31, 2023 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Results of operations: Interest income $ 1,343,215 $ 61,716 $ 1,404,931 $ — $ (53,202) $ 1,351,729 Interest expense (1,036,499) (53,211) (1,089,710) — 53,202 (1,036,508) Derivative cash settlements interest income (expense) 34,021 (444) 33,577 (33,577) — — Interest expense (1,002,478) (53,655) (1,056,133) (33,577) 53,202 (1,036,508) Net interest income 340,737 8,061 348,798 (33,577) — 315,221 Provision for credit losses (603) (935) (1,538) — 935 (603) Net interest income after provision for credit losses 340,134 7,126 347,260 (33,577) 935 314,618 Non-interest income: Fee and other income 24,880 3,922 28,802 — (10,668) 18,134 Derivative gains: Derivative cash settlements interest income — — — 33,577 — 33,577 Derivative forward value gains — — — 252,267 — 252,267 Derivative gains — — — 285,844 — 285,844 Investment securities losses (4,974) — (4,974) — — (4,974) Total non-interest income 19,906 3,922 23,828 285,844 (10,668) 299,004 Non-interest expense: General and administrative expenses (107,209) (10,522) (117,731) — 8,100 (109,631) Losses on early extinguishment of debt (117) — (117) — — (117) Other non-interest expense (1,484) (1,636) (3,120) — 1,633 (1,487) Total non-interest expense (108,810) (12,158) (120,968) — 9,733 (111,235) Income (loss) before income taxes 251,230 (1,110) 250,120 252,267 — 502,387 Income tax provision — (800) (800) — — (800) Net income (loss) $ 251,230 $ (1,910) $ 249,320 $ 252,267 $ — $ 501,587 May 31, 2023 CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Assets: Total loans outstanding $ 32,503,574 $ 1,444,662 $ 33,948,236 $ — $ (1,428,887) $ 32,519,349 Deferred loan origination costs 12,737 — 12,737 — — 12,737 Loans to members 32,516,311 1,444,662 33,960,973 — (1,428,887) 32,532,086 Less: Allowance for credit losses (53,094) (3,670) (56,764) — 3,670 (53,094) Loans to members, net 32,463,217 1,440,992 33,904,209 — (1,425,217) 32,478,992 Other assets 1,520,456 77,628 1,598,084 — (65,016) 1,533,068 Total assets $ 33,983,673 $ 1,518,620 $ 35,502,293 $ — $ (1,490,233) $ 34,012,060 Year Ended May 31, 2022 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Results of operations: Interest income $ 1,133,173 $ 43,295 $ 1,176,468 $ — $ (35,225) $ 1,141,243 Interest expense (705,534) (35,225) (740,759) — 35,225 (705,534) Derivative cash settlements interest expense (99,768) (1,617) (101,385) 101,385 — — Interest expense (805,302) (36,842) (842,144) 101,385 35,225 (705,534) Net interest income 327,871 6,453 334,324 101,385 — 435,709 Benefit for credit losses 17,972 3,334 21,306 — (3,334) 17,972 Net interest income after benefit for credit losses 345,843 9,787 355,630 101,385 (3,334) 453,681 Non-interest income: Fee and other income 22,426 70 22,496 — (5,303) 17,193 Derivative gains: Derivative cash settlements interest expense — — — (101,385) — (101,385) Derivative forward value gains — — — 557,867 — 557,867 Derivative gains — — — 456,482 — 456,482 Investment securities losses (30,179) — (30,179) — — (30,179) Total non-interest income (7,753) 70 (7,683) 456,482 (5,303) 443,496 Non-interest expense: General and administrative expenses (93,465) (8,102) (101,567) — 6,381 (95,186) Losses on early extinguishment of debt (754) — (754) — — (754) Other non-interest expense (1,552) (2,256) (3,808) — 2,256 (1,552) Total non-interest expense (95,771) (10,358) (106,129) — 8,637 (97,492) Income (loss) before income taxes 242,319 (501) 241,818 557,867 — 799,685 Income tax provision — (1,148) (1,148) — — (1,148) Net income (loss) $ 242,319 $ (1,649) $ 240,670 $ 557,867 $ — $ 798,537 May 31, 2022 CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Assets: Total loans outstanding $ 30,031,459 $ 1,178,479 $ 31,209,938 $ — $ (1,158,584) $ 30,051,354 Deferred loan origination costs 12,032 — 12,032 — — 12,032 Loans to members 30,043,491 1,178,479 31,221,970 — (1,158,584) 30,063,386 Less: Allowance for credit losses (67,560) (2,735) (70,295) — 2,735 (67,560) Loans to members, net 29,975,931 1,175,744 31,151,675 — (1,155,849) 29,995,826 Other assets 1,245,884 97,394 1,343,278 — (87,722) 1,255,556 Total assets $ 31,221,815 $ 1,273,138 $ 32,494,953 $ — $ (1,243,571) $ 31,251,382 Year Ended May 31, 2021 (Dollars in thousands) CFC NCSC and RTFC Segments Total Reclasses and Adjustments (1) Intersegment Eliminations (2) Consolidated Total Results of operations: Interest income $ 1,108,543 $ 43,632 $ 1,152,175 $ — $ (35,574) $ 1,116,601 Interest expense (702,063) (35,574) (737,637) — 35,574 (702,063) Derivative cash settlements interest expense (113,951) (1,694) (115,645) 115,645 — — Interest expense (816,014) (37,268) (853,282) 115,645 35,574 (702,063) Net interest income 292,529 6,364 298,893 115,645 — 414,538 Provision for credit losses (28,507) (3,163) (31,670) — 3,163 (28,507) Net interest income after provision for credit losses 264,022 3,201 267,223 115,645 3,163 386,031 Non-interest income: Fee and other income 23,732 5,963 29,695 — (10,766) 18,929 Derivative gains: Derivative cash settlements interest expense — — — (115,645) — (115,645) Derivative forward value gains — — — 621,946 — 621,946 Derivative gains — — — 506,301 — 506,301 Investment securities gains 1,495 — 1,495 — — 1,495 Total non-interest income 25,227 5,963 31,190 506,301 (10,766) 526,725 Non-interest expense: General and administrative expenses (93,085) (7,849) (100,934) — 6,229 (94,705) Losses on early extinguishment of debt (1,456) — (1,456) — — (1,456) Other non-interest expense (1,619) (1,374) (2,993) — 1,374 (1,619) Total non-interest expense (96,160) (9,223) (105,383) — 7,603 (97,780) Income (loss) before income taxes 193,089 (59) 193,030 621,946 — 814,976 Income tax provision — (998) (998) — — (998) Net income (loss) $ 193,089 $ (1,057) $ 192,032 $ 621,946 $ — $ 813,978 ____________________________ (1) Consists of (i) the reclassification of net periodic derivative settlement interest expense amounts, which we report as a component of interest expense for business segment reporting purposes but is included in derivatives gains (losses) in our consolidated total results and (ii) derivative forward value gains and losses, which we exclude from our business segment results but is included in derivatives gains (losses) in our consolidated total results. (2) Consists of intercompany borrowings payable by NCSC and RTFC to CFC and the interest related to those borrowings, management fees paid by NCSC and RTFC to CFC and other intercompany amounts, all of which are eliminated in consolidation. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Summary of Significant Accounting Policies [Line Items] | |||
Restricted cash | $ 8,301 | $ 7,563 | |
Accrued interest receivable | 133,000 | 94,000 | |
Depreciation and amortization | 5,000 | $ 8,000 | $ 8,000 |
Unamortized capitalized implementation costs | 29,000 | ||
Capitalized implementation costs, accumulated amortization | 1,000 | ||
Capitalized implementation costs, amortization | $ 1,000 | ||
Minimum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Estimated useful lives | 40 years | ||
RTFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Effective percentage of tax rate | 21% | 21% | 21% |
Deferred tax assets, net (less than $1 million as of May 31, 2022 for RTFC) | $ 8,000 | $ 1,000 | |
Deferred tax assets, valuation allowance (less than $1 million as of May 31, 2022) | $ 8,000 | $ 1,000 | |
RTFC | Minimum | |||
Summary of Significant Accounting Policies [Line Items] | |||
Percentage of income from patronage sources allocated to borrowers to be retired in cash prior to filing the applicable tax return | 20% | ||
NCSC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | $ 100 | ||
Effective percentage of tax rate | 21% | 21% | 21% |
Deferred tax assets, net (less than $1 million as of May 31, 2022 for RTFC) | $ 1,000 | $ 1,000 | |
Distribution system members | CFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | $ 1,000 | ||
Service organization members | CFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | 200 | ||
Associates | CFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | 1,000 | ||
Associates | RTFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | 100 | ||
Voting members | RTFC | |||
Summary of Significant Accounting Policies [Line Items] | |||
Membership fees (in dollars per share) | $ 1,000 | ||
Unadvanced commitments not subject to material adverse change clauses | |||
Summary of Significant Accounting Policies [Line Items] | |||
Loans and leases receivable unadvanced commitments period, maximum | 5 years | ||
Unadvanced commitments | |||
Summary of Significant Accounting Policies [Line Items] | |||
Loans and leases receivable unadvanced commitments period, maximum | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of fixed assets (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Fixed Assets | ||
Fixed assets, gross | $ 137,975 | $ 112,556 |
Less: accumulated depreciation | (77,508) | (73,258) |
Net depreciable fixed assets | 60,467 | 39,298 |
Fixed assets, net | 86,011 | 101,762 |
Building and building equipment | ||
Fixed Assets | ||
Fixed assets, gross | 50,316 | 50,177 |
Furniture and fixtures | ||
Fixed Assets | ||
Fixed assets, gross | 6,332 | 6,254 |
Computer software and hardware | ||
Fixed Assets | ||
Fixed assets, gross | 80,201 | 55,101 |
Other | ||
Fixed Assets | ||
Fixed assets, gross | 1,126 | 1,024 |
Land | ||
Fixed Assets | ||
Fixed assets, gross | 23,796 | 23,796 |
Software development in progress | ||
Fixed Assets | ||
Fixed assets, gross | $ 1,748 | $ 38,668 |
Interest Income and Interest _3
Interest Income and Interest Expense - Schedule of interest income and expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Interest income: | |||
Investment securities | $ 21,585 | $ 15,951 | $ 15,096 |
Interest income | 1,351,729 | 1,141,243 | 1,116,601 |
Interest expense | |||
Short-term borrowings | 165,961 | 18,265 | 14,730 |
Total interest expense | 1,036,508 | 705,534 | 702,063 |
Net interest income | 315,221 | 435,709 | 414,538 |
Loans | |||
Interest income: | |||
Loans | 1,330,144 | 1,125,292 | 1,101,505 |
Long-term debt | |||
Interest expense | |||
Debt | 763,700 | 581,748 | 581,292 |
Subordinated debt | |||
Interest expense | |||
Debt | $ 106,847 | $ 105,521 | $ 106,041 |
Interest Income and Interest _4
Interest Income and Interest Expense - Narrative (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Banking and Thrift, Interest [Abstract] | ||
Deferred income | $ 38,601 | $ 44,332 |
Deferred loan conversion fees | $ 30,000 | $ 37,000 |
Investment Securities - Schedul
Investment Securities - Schedule of composition of investments in debt securities (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | $ 474,875 | $ 566,146 |
Commercial paper | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | 0 | 9,985 |
Corporate debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | 401,367 | 487,172 |
Commercial Agency MBS | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | 7,237 | 7,815 |
U.S. state and municipality debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | 27,300 | 27,778 |
Foreign government debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | 974 | 967 |
Other ABS | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Debt securities trading, at fair value | $ 37,997 | $ 32,429 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||
Debt securities, trading, unrealized gain (loss) | $ (3) | $ (27) | $ (3) |
Proceeds from sale of debt securities | 36 | 5 | 6 |
Debt securities, trading, realized gain (less than $0.1 million for the year ended May 31, 2023 and 2022) | 1 | 1 | |
Debt securities, trading, realized loss (less than $0.1 million for the year ended May 31, 2021) | 1 | ||
Equity securities, unrealized gain | $ 2 | $ 4 | |
Investment securities losses | $ 1 |
Investment Securities - Sched_2
Investment Securities - Schedule of investments in equity securities (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at fair value | $ 35,494 | $ 33,758 |
Noncumulative Preferred Stock | Series C Preferred Stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at fair value | 25,750 | 25,520 |
Common Stock | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Equity securities, at fair value | $ 9,744 | $ 8,238 |
Loans - Narrative (Details)
Loans - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Aug. 31, 2022 | May 31, 2023 USD ($) borrower loan distribution_system power_supply_system line_of_credit | May 31, 2022 USD ($) borrower distribution_system power_supply_system line_of_credit | May 31, 2021 USD ($) | Dec. 20, 2022 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Term of Loans | 35 years | ||||||
Loans receivable cost of loans sold | $ 257,000,000 | $ 171,000,000 | $ 126,000,000 | ||||
Financing receivable, held-for-sale | 0 | 44,000,000 | |||||
Loans outstanding | $ 32,532,086,000 | $ 30,063,386,000 | |||||
Number of active borrowers | borrower | 884 | 883 | |||||
Number of states with active borrowers | borrower | 49 | 49 | |||||
Increase (decrease) in financing receivable, nonaccrual | $ (116,000,000) | ||||||
Financing receivable, nonaccrual | 112,209,000 | $ 227,790,000 | |||||
Financing receivable, troubled debt restructuring, commitment to lend | 0 | 0 | |||||
Financing receivable, originated, more than five years before current fiscal year | 17,123,317,000 | ||||||
Charge-offs | $ 15,069,000 | ||||||
Financing Receivable, percent originated, more than five years before current fiscal year | 52% | ||||||
Long-term financing receivable, before allowance for credit loss, average remaining maturity | 19 years | ||||||
Financing receivable, loan commitment, term | 5 years | ||||||
Unadvanced line of credit commitments as percentage of unadvanced loan commitments | 62% | ||||||
Unadvanced long-term loans commitments percentage of unadvanced loan commitments | 38% | ||||||
Net charge-off rate | 0.05% | ||||||
Brazos Sandy Creek Energy Station | Brazos Sandy Creek | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Tenant in common ownership, percentage | 25% | ||||||
Sale of tenant in common ownership, percentage | 25% | ||||||
Riesel HoldCo, LLC | Brazos Sandy Creek | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Sale of tenant in common ownership interest, credit bid amount | $ 105,000,000 | ||||||
Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | $ 14,788,561,000 | 14,111,202,000 | |||||
Commitments to extend credit subject to material adverse change clause | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 11,617,000,000 | 10,908,000,000 | |||||
Unadvanced commitments not subject to material adverse change clauses | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 3,171,563,000 | 3,203,000,000 | |||||
Nonperforming TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
TDR loans, amount | 22,875,000 | 0 | |||||
Financing receivable, troubled debt restructuring | 0 | ||||||
Performing line of credit for troubled debt restructuring borrower | Line of credit restricted for fuel purchases | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 2,000,000 | $ 1,000,000 | |||||
Number of lines of credit | line_of_credit | 1 | 1 | |||||
Available balance | $ 6,000,000 | $ 6,000,000 | |||||
Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 89,334,000 | 227,790,000 | |||||
Increase (decrease) in finance receivables | (139,000,000) | ||||||
Loan defaults | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 0 | $ 0 | |||||
Criticized | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 323,000,000 | $ 494,000,000 | |||||
Increase (decrease) in finance receivables | (171,000,000) | ||||||
Financing receivable, originated, more than five years before current fiscal year | $ 113,439,000 | ||||||
Financing receivable, before allowance for credit loss, percentage | 1% | 2% | |||||
Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 211,000,000 | $ 267,000,000 | |||||
Financing receivable, originated, more than five years before current fiscal year | 24,105,000 | ||||||
Substandard | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 0 | ||||||
Doubtful | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 112,000,000 | 228,000,000 | |||||
Financing receivable, originated, more than five years before current fiscal year | 89,334,000 | ||||||
Total TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
TDR loans, amount | 31,105,000 | 9,184,000 | |||||
Increase in TDR loans | 22,000,000 | ||||||
CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, nonaccrual | 112,209,000 | 227,790,000 | |||||
Charge-offs | 15,069,000 | ||||||
CFC | Riesel HoldCo, LLC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Sale of tenant in common ownership interest, credit bid amount | $ 8,000,000 | ||||||
Sale of tenant in common ownership interest, credit bid ownership percentage | 7.41% | ||||||
CFC | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 13,843,990,000 | 13,249,577,000 | |||||
CFC | Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 20,513,000 | ||||||
CFC | Substandard | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 0 | 0 | |||||
CFC | Doubtful | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 89,334,000 | ||||||
RTFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, nonaccrual | 0 | 0 | |||||
Charge-offs | 0 | ||||||
RTFC | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 340,135,000 | 309,724,000 | |||||
RTFC | Loan defaults | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 0 | ||||||
RTFC | Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 3,592,000 | ||||||
RTFC | Doubtful | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 0 | ||||||
RTFC | Total TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
TDR loans, amount | 3,592,000 | 4,092,000 | |||||
NCSC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, nonaccrual | 0 | 0 | |||||
Charge-offs | 0 | ||||||
NCSC | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 604,436,000 | $ 551,901,000 | |||||
NCSC | Total Past Due | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 37,000,000 | ||||||
Financing receivable, number of loans outstanding | borrower | 1 | ||||||
Loans receivable commercial and industrial | Loans | Credit concentration | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Concentration risk number of borrowers | borrower | 20 | 20 | |||||
Loans outstanding | Loans | Credit concentration | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Concentration percentage | 99% | 98% | |||||
Loans guaranteed by Farmer Mac | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 436,000,000 | $ 493,000,000 | |||||
Number of loans that defaulted | loan | 0 | ||||||
Number of defaulted loans put to Farmer Mac for purchase | loan | 0 | ||||||
Loans guaranteed by Farmer Mac | Loans | Credit concentration | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 267,000,000 | $ 316,000,000 | |||||
Concentration percentage | 19% | 20% | |||||
Loans guaranteed by rural utilities service | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 123,000,000 | $ 131,000,000 | |||||
Long-term loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, before allowance for credit loss, percentage | 90% | 92% | |||||
Long-term loans | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | $ 5,669,634,000 | $ 5,357,205,000 | |||||
TEXAS | Loans | Geographic concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 5,528,804,000 | $ 5,110,349,000 | |||||
Concentration percentage | 17% | 17% | |||||
Number of active borrowers | borrower | 69 | 68 | |||||
TEXAS | Loans | Geographic concentration risk | CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 5,500,382,000 | $ 5,104,118,000 | |||||
Concentration percentage | 17% | 17% | |||||
Number of active borrowers | borrower | 66 | 66 | |||||
TEXAS | Loans | Geographic concentration risk | RTFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 11,755,000 | $ 5,853,000 | |||||
Concentration percentage | 0% | 0% | |||||
Number of active borrowers | borrower | 2 | 1 | |||||
TEXAS | Loans | Geographic concentration risk | NCSC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 16,667,000 | $ 378,000 | |||||
Concentration percentage | 0% | 0% | |||||
Number of active borrowers | borrower | 1 | 1 | |||||
TEXAS | Loans guaranteed by Farmer Mac | Loans | Geographic concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 155,409,000 | $ 163,369,000 | |||||
Concentration percentage | 1% | 0% | |||||
20 largest borrowers | Loans receivable commercial and industrial | Loans | Customer concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 6,588,000,000 | $ 6,220,000,000 | |||||
Concentration percentage | 20% | 21% | |||||
Concentration risk number of borrowers | borrower | 20 | 20 | |||||
Largest single borrower or controlled group | Loans receivable commercial and industrial | Loans | Customer concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Concentration percentage | 1% | 1% | |||||
Brazos Electric Power Cooperative and Brazos Sandy Creek Electric Cooperative Inc. | CFC | Total Past Due | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, number of loans outstanding | borrower | 2 | ||||||
Electric utility | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Charge-offs | $ 0 | ||||||
Electric utility | Loan defaults | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 0 | ||||||
Electric utility | Loans receivable commercial and industrial | Loans | Credit concentration | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 32,032,000,000 | $ 29,584,000,000 | |||||
Distribution | CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, nonaccrual | 0 | 0 | |||||
Charge-offs | 0 | ||||||
Distribution | CFC | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 9,673,712,000 | 9,230,197,000 | |||||
Distribution | CFC | Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 12,210,000 | ||||||
Distribution | CFC | Total TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
TDR loans, amount | 4,638,000 | 5,092,000 | |||||
Distribution | TEXAS | Loans | Geographic concentration risk | CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 4,319,937,000 | $ 3,984,887,000 | |||||
Concentration percentage | 13% | 13% | |||||
Number of active borrowers | borrower | 57 | 57 | |||||
Distribution | 20 largest borrowers | Loans receivable commercial and industrial | Loans | Customer concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Concentration risk number of borrowers | distribution_system | 10 | 12 | |||||
Distribution | CFC electric distribution borrower | CFC | Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 194,000,000 | $ 248,000,000 | |||||
Number of active borrowers | borrower | 1 | 1 | |||||
Power supply | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Number of active borrowers | borrower | 52 | 49 | |||||
Power supply | CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, nonaccrual | $ 112,209,000 | $ 227,790,000 | |||||
Charge-offs | 15,069,000 | ||||||
Power supply | CFC | Unadvanced commitments | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Available balance | 3,995,128,000 | 3,835,535,000 | |||||
Power supply | CFC | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 89,334,000 | 227,790,000 | |||||
Power supply | CFC | Special mention | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 0 | ||||||
Power supply | CFC | Substandard | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 0 | ||||||
Power supply | CFC | Doubtful | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, originated, more than five years before current fiscal year | 89,334,000 | ||||||
Power supply | CFC | Total TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
TDR loans, amount | 22,875,000 | 0 | |||||
Power supply | TEXAS | Loans | Geographic concentration risk | CFC | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 1,128,941,000 | $ 1,089,896,000 | |||||
Concentration percentage | 4% | 4% | |||||
Number of active borrowers | borrower | 8 | 8 | |||||
Power supply | 20 largest borrowers | Loans receivable commercial and industrial | Loans | Customer concentration risk | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Concentration risk number of borrowers | power_supply_system | 10 | 8 | |||||
Power supply | Brazos and Brazos Sandy Creek | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Charge-offs | $ 15,000,000 | ||||||
Power supply | Brazos and Brazos Sandy Creek | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Charge-offs | 15,000,000 | ||||||
Power supply | Brazos electric power cooperative | CFC | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 86,000,000 | ||||||
Power supply | Brazos electric power cooperative | CFC | Nonperforming TDR loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Financing receivable, troubled debt restructuring | 23,000,000 | ||||||
Power supply | Brazos electric power cooperative | CFC | Nonperforming TDR loans | Subsequent event | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Proceeds from collection of finance receivables | $ 23,000,000 | ||||||
Power supply | Brazos Sandy Creek | CFC | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | 4,000,000 | 28,000,000 | |||||
Power supply | Brazos Sandy Creek | CFC | Nonperforming TDR loans | Subsequent event | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Proceeds from collection of finance receivables | $ 4,000,000 | ||||||
Power supply | Brazos Sandy Creek | CFC | Total Past Due | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 4,000,000 | ||||||
Financing receivable, number of loans outstanding | borrower | 1 | ||||||
Power supply | One CFC Electric Power Supply Borrower | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 85,000,000 | 114,000,000 | |||||
Power supply | Brazos Electric Power Cooperative and Brazos Sandy Creek Electric Cooperative Inc. | CFC | Total Past Due | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 114,000,000 | ||||||
Power supply | Brazos Electric Power Cooperative and Brazos Sandy Creek Electric Cooperative Inc. | CFC | Total Past Due | Non-performing loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Loans outstanding | $ 27,000,000 | ||||||
Minimum | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Term of Loans | 1 year | ||||||
Maximum | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Term of Loans | 35 years |
Loans - Schedule of loans outst
Loans - Schedule of loans outstanding to members and unadvanced commitments by loan type and by member class (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 32,519,349 | $ 30,051,354 |
Deferred loan origination costs | 12,737 | 12,032 |
Loans to members | $ 32,532,086 | $ 30,063,386 |
% of Total Loans Outstanding | 100% | 100% |
CFC | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 31,074,687 | $ 28,872,875 |
% of Total Loans Outstanding | 96% | 96% |
CFC | Distribution | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 25,437,077 | $ 23,844,242 |
% of Total Loans Outstanding | 78% | 79% |
CFC | Power supply | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 5,437,242 | $ 4,901,770 |
% of Total Loans Outstanding | 17% | 17% |
CFC | Statewide and associate | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 200,368 | $ 126,863 |
% of Total Loans Outstanding | 1% | 0% |
NCSC | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 956,874 | $ 710,878 |
% of Total Loans Outstanding | 3% | 2% |
RTFC | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 487,788 | $ 467,601 |
% of Total Loans Outstanding | 1% | 2% |
Long-term loans | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 29,396,011 | $ 27,772,573 |
Fixed rate | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 28,371,358 | $ 26,952,372 |
% of Total Loans Outstanding | 87% | 90% |
Variable rate | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 1,024,653 | $ 820,201 |
% of Total Loans Outstanding | 3% | 2% |
Lines of credit | ||
Unadvanced Loan Commitments | ||
Total loans outstanding | $ 3,123,338 | $ 2,278,781 |
% of Total Loans Outstanding | 10% | 8% |
Unamortized loan commitment and origination fees | ||
Unadvanced Loan Commitments | ||
Deferred loan origination costs | $ 12,737 | $ 12,032 |
% of Total Loans Outstanding | 0% | 0% |
Loans - Schedules of concentrat
Loans - Schedules of concentration of risk (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2022 | May 31, 2023 USD ($) borrower | May 31, 2022 USD ($) borrower | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 884 | 883 | |
Loans to members | $ 32,532,086 | $ 30,063,386 | |
Power supply | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 52 | 49 | |
Loans covered under Farmer Mac standby purchase commitment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans to members | $ 436,000 | $ 493,000 | |
TEXAS | Loans | Geographic concentration risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 69 | 68 | |
Loans to members | $ 5,528,804 | $ 5,110,349 | |
Concentration percentage | 17% | 17% | |
TEXAS | Loans | Geographic concentration risk | Loans covered under Farmer Mac standby purchase commitment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans to members | $ 155,409 | 163,369 | |
Concentration percentage | 1% | 0% | |
TEXAS | Loans | Geographic concentration risk | Loans not covered under Farmer Mac standby purchase commitment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans to members | $ 5,373,395 | $ 4,946,980 | |
Concentration percentage | 16% | 17% | |
CFC | TEXAS | Loans | Geographic concentration risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 66 | 66 | |
Loans to members | $ 5,500,382 | $ 5,104,118 | |
Concentration percentage | 17% | 17% | |
CFC | TEXAS | Loans | Geographic concentration risk | Distribution | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 57 | 57 | |
Loans to members | $ 4,319,937 | $ 3,984,887 | |
Concentration percentage | 13% | 13% | |
CFC | TEXAS | Loans | Geographic concentration risk | Power supply | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 8 | 8 | |
Loans to members | $ 1,128,941 | $ 1,089,896 | |
Concentration percentage | 4% | 4% | |
CFC | TEXAS | Loans | Geographic concentration risk | Statewide and associate | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 1 | 1 | |
Loans to members | $ 51,504 | $ 29,335 | |
Concentration percentage | 0% | 0% | |
NCSC | TEXAS | Loans | Geographic concentration risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 1 | 1 | |
Loans to members | $ 16,667 | $ 378 | |
Concentration percentage | 0% | 0% | |
RTFC | TEXAS | Loans | Geographic concentration risk | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of active borrowers | borrower | 2 | 1 | |
Loans to members | $ 11,755 | $ 5,853 | |
Concentration percentage | 0% | 0% |
Loans - Schedule of analysis of
Loans - Schedule of analysis of the age of the recorded investment in loans outstanding by member class (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Payment Status of Loans | ||
Total loans outstanding | $ 32,519,349 | $ 30,051,354 |
Nonaccrual Loans | $ 112,209 | $ 227,790 |
As a % of total loans | ||
Current | 99.87% | 99.62% |
30-89 Days Past Due | 0.11% | 0.09% |
> 90 Days Past Due | 0.02% | 0.29% |
Total Past Due | 0.13% | 0.38% |
Total Loans Outstanding | 100% | 100% |
Nonaccrual Loans | 0.35% | 0.76% |
CFC | ||
Payment Status of Loans | ||
Total loans outstanding | $ 31,074,687 | $ 28,872,875 |
Nonaccrual Loans | 112,209 | 227,790 |
CFC | Distribution | ||
Payment Status of Loans | ||
Total loans outstanding | 25,437,077 | 23,844,242 |
Nonaccrual Loans | 0 | 0 |
CFC | Power supply | ||
Payment Status of Loans | ||
Total loans outstanding | 5,437,242 | 4,901,770 |
Nonaccrual Loans | 112,209 | 227,790 |
CFC | Statewide and associate | ||
Payment Status of Loans | ||
Total loans outstanding | 200,368 | 126,863 |
Nonaccrual Loans | 0 | 0 |
NCSC | ||
Payment Status of Loans | ||
Total loans outstanding | 956,874 | 710,878 |
Nonaccrual Loans | 0 | 0 |
RTFC | ||
Payment Status of Loans | ||
Total loans outstanding | 487,788 | 467,601 |
Nonaccrual Loans | 0 | 0 |
Current | ||
Payment Status of Loans | ||
Total loans outstanding | 32,478,287 | 29,937,416 |
Current | CFC | ||
Payment Status of Loans | ||
Total loans outstanding | 31,070,340 | 28,758,937 |
Current | CFC | Distribution | ||
Payment Status of Loans | ||
Total loans outstanding | 25,437,077 | 23,844,242 |
Current | CFC | Power supply | ||
Payment Status of Loans | ||
Total loans outstanding | 5,432,895 | 4,787,832 |
Current | CFC | Statewide and associate | ||
Payment Status of Loans | ||
Total loans outstanding | 200,368 | 126,863 |
Current | NCSC | ||
Payment Status of Loans | ||
Total loans outstanding | 920,159 | 710,878 |
Current | RTFC | ||
Payment Status of Loans | ||
Total loans outstanding | 487,788 | 467,601 |
30-89 Days Past Due | ||
Payment Status of Loans | ||
Total loans outstanding | 36,715 | 28,389 |
30-89 Days Past Due | CFC | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 28,389 |
30-89 Days Past Due | CFC | Distribution | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
30-89 Days Past Due | CFC | Power supply | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 28,389 |
30-89 Days Past Due | CFC | Statewide and associate | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
30-89 Days Past Due | NCSC | ||
Payment Status of Loans | ||
Total loans outstanding | 36,715 | 0 |
30-89 Days Past Due | RTFC | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
> 90 Days Past Due | ||
Payment Status of Loans | ||
Total loans outstanding | 4,347 | 85,549 |
> 90 Days Past Due | CFC | ||
Payment Status of Loans | ||
Total loans outstanding | 4,347 | 85,549 |
> 90 Days Past Due | CFC | Distribution | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
> 90 Days Past Due | CFC | Power supply | ||
Payment Status of Loans | ||
Total loans outstanding | 4,347 | 85,549 |
> 90 Days Past Due | CFC | Statewide and associate | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
> 90 Days Past Due | NCSC | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
> 90 Days Past Due | RTFC | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
Total Past Due | ||
Payment Status of Loans | ||
Total loans outstanding | 41,062 | 113,938 |
Total Past Due | CFC | ||
Payment Status of Loans | ||
Total loans outstanding | 4,347 | 113,938 |
Total Past Due | CFC | Distribution | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
Total Past Due | CFC | Power supply | ||
Payment Status of Loans | ||
Total loans outstanding | 4,347 | 113,938 |
Total Past Due | CFC | Statewide and associate | ||
Payment Status of Loans | ||
Total loans outstanding | 0 | 0 |
Total Past Due | NCSC | ||
Payment Status of Loans | ||
Total loans outstanding | 36,715 | 0 |
Total Past Due | RTFC | ||
Payment Status of Loans | ||
Total loans outstanding | $ 0 | $ 0 |
Loans - Schedule of troubled de
Loans - Schedule of troubled debt restructured loans (Details) $ in Thousands | 12 Months Ended | |
May 31, 2023 USD ($) borrower | May 31, 2022 USD ($) borrower | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
% of Total Loans Outstanding | 100% | 100% |
Total TDR loans | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 3 | 2 |
Outstanding Amount | $ | $ 31,105 | $ 9,184 |
% of Total Loans Outstanding | 0.10% | 0.03% |
Performing TDR loans | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 2 | 2 |
Outstanding Amount | $ | $ 8,230 | $ 9,184 |
% of Total Loans Outstanding | 0.03% | 0.03% |
Nonperforming TDR loans | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 1 | 0 |
Outstanding Amount | $ | $ 22,875 | $ 0 |
% of Total Loans Outstanding | 0.07% | 0% |
CFC | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
% of Total Loans Outstanding | 96% | 96% |
CFC | Distribution | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
% of Total Loans Outstanding | 78% | 79% |
CFC | Power supply | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
% of Total Loans Outstanding | 17% | 17% |
CFC | Total TDR loans | Distribution | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 1 | 1 |
Outstanding Amount | $ | $ 4,638 | $ 5,092 |
% of Total Loans Outstanding | 0.02% | 0.02% |
CFC | Total TDR loans | Power supply | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 1 | 0 |
Outstanding Amount | $ | $ 22,875 | $ 0 |
% of Total Loans Outstanding | 0.07% | 0% |
RTFC | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
% of Total Loans Outstanding | 1% | 2% |
RTFC | Total TDR loans | ||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Number of Borrowers | borrower | 1 | 1 |
Outstanding Amount | $ | $ 3,592 | $ 4,092 |
% of Total Loans Outstanding | 0.01% | 0.01% |
Loans - Schedule of non-perform
Loans - Schedule of non-performing loans (Details) $ in Thousands | 12 Months Ended | |
May 31, 2023 USD ($) borrower | May 31, 2022 USD ($) borrower | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Outstanding amount | $ 32,532,086 | $ 30,063,386 |
% of Total Loans Outstanding | 100% | 100% |
Non-performing loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of Borrowers, Nonperforming Loans | borrower | 2 | 3 |
Outstanding amount | $ 89,334 | $ 227,790 |
% of Total Loans Outstanding | 0.27% | 0.76% |
CFC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of Total Loans Outstanding | 96% | 96% |
CFC | Power supply | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
% of Total Loans Outstanding | 17% | 17% |
CFC | Non-performing loans | Power supply | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of Borrowers, Nonperforming Loans | borrower | 2 | 3 |
Outstanding amount | $ 89,334 | $ 227,790 |
% of Total Loans Outstanding | 0.27% | 0.76% |
Loans - Schedule of loan portfo
Loans - Schedule of loan portfolio by risk rating category and member class based on available data (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Credit Quality | ||
2023 | $ 3,305,706 | |
2022 | 2,884,965 | |
2021 | 2,279,183 | |
2020 | 2,249,051 | |
2019 | 1,553,789 | |
Prior | 17,123,317 | |
Revolving Loans | 3,123,338 | |
Total loan outstanding | 32,519,349 | $ 30,051,354 |
Pass | ||
Credit Quality | ||
2023 | 3,301,480 | |
2022 | 2,884,965 | |
2021 | 2,274,408 | |
2020 | 2,249,051 | |
2019 | 1,544,031 | |
Prior | 17,009,878 | |
Revolving Loans | 2,932,308 | |
Total loan outstanding | 32,196,121 | 29,556,981 |
Special Mention | ||
Credit Quality | ||
2023 | 4,226 | |
2022 | 0 | |
2021 | 4,775 | |
2020 | 0 | |
2019 | 9,758 | |
Prior | 24,105 | |
Revolving Loans | 168,155 | |
Total loan outstanding | 211,019 | 266,583 |
Substandard | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Total loan outstanding | 0 | 0 |
Doubtful | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 89,334 | |
Revolving Loans | 22,875 | |
Total loan outstanding | 112,209 | 227,790 |
Criticized | ||
Credit Quality | ||
2023 | 4,226 | |
2022 | 0 | |
2021 | 4,775 | |
2020 | 0 | |
2019 | 9,758 | |
Prior | 113,439 | |
Revolving Loans | 191,030 | |
Total loan outstanding | 323,228 | 494,373 |
CFC | ||
Credit Quality | ||
Total loan outstanding | 31,074,687 | 28,872,875 |
CFC | Pass | ||
Credit Quality | ||
2023 | 2,981,308 | |
2022 | 2,776,275 | |
2021 | 2,193,673 | |
2020 | 2,016,627 | |
2019 | 1,532,465 | |
Prior | 16,542,509 | |
Revolving Loans | 2,712,194 | |
Total loan outstanding | 30,755,051 | 28,382,594 |
CFC | Special Mention | ||
Credit Quality | ||
2023 | 4,226 | |
2022 | 0 | |
2021 | 4,775 | |
2020 | 0 | |
2019 | 9,758 | |
Prior | 20,513 | |
Revolving Loans | 168,155 | |
Total loan outstanding | 207,427 | 262,491 |
CFC | Doubtful | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 89,334 | |
Revolving Loans | 22,875 | |
Total loan outstanding | 112,209 | 227,790 |
CFC | Distribution | ||
Credit Quality | ||
Total loan outstanding | 25,437,077 | 23,844,242 |
CFC | Distribution | Pass | ||
Credit Quality | ||
2023 | 2,453,999 | |
2022 | 2,404,404 | |
2021 | 1,643,838 | |
2020 | 1,822,745 | |
2019 | 1,153,864 | |
Prior | 13,838,304 | |
Revolving Loans | 1,925,554 | |
Total loan outstanding | 25,242,708 | 23,596,004 |
CFC | Distribution | Special Mention | ||
Credit Quality | ||
2023 | 4,226 | |
2022 | 0 | |
2021 | 4,775 | |
2020 | 0 | |
2019 | 5,003 | |
Prior | 12,210 | |
Revolving Loans | 168,155 | |
Total loan outstanding | 194,369 | 248,238 |
CFC | Power supply | ||
Credit Quality | ||
Total loan outstanding | 5,437,242 | 4,901,770 |
CFC | Power supply | Pass | ||
Credit Quality | ||
2023 | 465,638 | |
2022 | 348,333 | |
2021 | 547,897 | |
2020 | 179,150 | |
2019 | 375,738 | |
Prior | 2,687,787 | |
Revolving Loans | 720,490 | |
Total loan outstanding | 5,325,033 | 4,673,980 |
CFC | Power supply | Special Mention | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Total loan outstanding | 0 | 0 |
CFC | Power supply | Substandard | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Total loan outstanding | 0 | 0 |
CFC | Power supply | Doubtful | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 89,334 | |
Revolving Loans | 22,875 | |
Total loan outstanding | 112,209 | 227,790 |
CFC | Statewide and associate | ||
Credit Quality | ||
Total loan outstanding | 200,368 | 126,863 |
CFC | Statewide and associate | Pass | ||
Credit Quality | ||
2023 | 61,671 | |
2022 | 23,538 | |
2021 | 1,938 | |
2020 | 14,732 | |
2019 | 2,863 | |
Prior | 16,418 | |
Revolving Loans | 66,150 | |
Total loan outstanding | 187,310 | 112,610 |
CFC | Statewide and associate | Special Mention | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 4,755 | |
Prior | 8,303 | |
Revolving Loans | 0 | |
Total loan outstanding | 13,058 | 14,253 |
NCSC | ||
Credit Quality | ||
Total loan outstanding | 956,874 | 710,878 |
NCSC | Pass | ||
Credit Quality | ||
2023 | 268,157 | |
2022 | 24,066 | |
2021 | 5,678 | |
2020 | 193,267 | |
2019 | 3,741 | |
Prior | 274,826 | |
Revolving Loans | 187,139 | |
Total loan outstanding | 956,874 | 710,878 |
RTFC | ||
Credit Quality | ||
Total loan outstanding | 487,788 | 467,601 |
RTFC | Pass | ||
Credit Quality | ||
2023 | 52,015 | |
2022 | 84,624 | |
2021 | 75,057 | |
2020 | 39,157 | |
2019 | 7,825 | |
Prior | 192,543 | |
Revolving Loans | 32,975 | |
Total loan outstanding | 484,196 | 463,509 |
RTFC | Special Mention | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 3,592 | |
Revolving Loans | 0 | |
Total loan outstanding | 3,592 | 4,092 |
RTFC | Doubtful | ||
Credit Quality | ||
2023 | 0 | |
2022 | 0 | |
2021 | 0 | |
2020 | 0 | |
2019 | 0 | |
Prior | 0 | |
Revolving Loans | 0 | |
Total loan outstanding | $ 0 | $ 0 |
Loans - Schedule of unadvanced
Loans - Schedule of unadvanced commitments (Details) - Unadvanced commitments - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | $ 14,788,561 | $ 14,111,202 |
Long-term loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 5,669,634 | 5,357,205 |
Fixed rate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 0 | 0 |
Variable rate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 5,669,634 | 5,357,205 |
Lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 9,118,927 | 8,753,997 |
CFC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 13,843,990 | 13,249,577 |
CFC | Distribution | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 9,673,712 | 9,230,197 |
CFC | Power supply | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 3,995,128 | 3,835,535 |
CFC | Statewide and associate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 175,150 | 183,845 |
NCSC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | 604,436 | 551,901 |
RTFC | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available balance | $ 340,135 | $ 309,724 |
Loans - Schedule of available b
Loans - Schedule of available balances under unadvanced loan commitments (Details) - Unadvanced commitments - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available Balance | $ 14,788,561 | $ 14,111,202 |
2024 | 6,074,454 | |
2025 | 1,942,952 | |
2026 | 1,583,156 | |
2027 | 2,577,611 | |
2028 | 2,257,930 | |
Thereafter | 352,458 | |
Lines of credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available Balance | 9,118,927 | 8,753,997 |
2024 | 5,055,192 | |
2025 | 1,238,285 | |
2026 | 788,561 | |
2027 | 1,238,399 | |
2028 | 662,086 | |
Thereafter | 136,404 | |
Long-term loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Available Balance | 5,669,634 | $ 5,357,205 |
2024 | 1,019,262 | |
2025 | 704,667 | |
2026 | 794,595 | |
2027 | 1,339,212 | |
2028 | 1,595,844 | |
Thereafter | $ 216,054 |
Loans - Summary of available ba
Loans - Summary of available balance under committed lines of credit and the related maturities by fiscal year (Details) - Unadvanced commitments not subject to material adverse change clauses - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Unadvanced Loan Commitments | ||
Available balance | $ 3,171,563 | $ 3,203,000 |
2024 | 216,750 | |
2025 | 742,876 | |
2026 | 548,980 | |
2027 | 929,415 | |
2028 | 693,542 | |
Thereafter | $ 40,000 |
Loans - Summary of pledged loan
Loans - Summary of pledged loans (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Pledging of Loans and Loans on Deposit | ||
Cash | $ 8,301 | $ 7,563 |
Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 8,842,161 | 8,679,250 |
Notes payable outstanding | 7,772,711 | 7,072,711 |
Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Notes payable outstanding | 20,000 | 25,000 |
Notes payable | Federal Financing Bank | ||
Pledging of Loans and Loans on Deposit | ||
Notes payable outstanding | 6,720,643 | 6,105,473 |
Notes payable | Federal Agricultural Mortgage Corporation | ||
Pledging of Loans and Loans on Deposit | ||
Notes payable outstanding | 3,149,898 | 3,094,679 |
Clean renewable energy bonds series 2009 A | ||
Pledging of Loans and Loans on Deposit | ||
Notes payable outstanding | 1,098 | 2,755 |
Cash | 391 | 392 |
Total pledged collateral | 1,420 | 3,530 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 8,719,287 | 8,564,596 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 22,900 | 29,616 |
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 | 4,294,282 | 3,445,358 |
Mortgage notes | Distribution and power supply system mortgage notes | Clean renewable energy bonds series 2009 A | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 1,029 | 3,138 |
Loans guaranteed by rural utilities service | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 122,874 | 114,654 |
Mortgage receivables 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 | $ 7,877,558 | $ 6,904,591 |
Allowance for Credit Losses - S
Allowance for Credit Losses - Schedule of changes in allowance for credit losses (Details) - USD ($) | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | $ 67,560,000 | $ 85,532,000 | $ 53,125,000 |
Provision (benefit) for credit losses | 603,000 | (17,972,000) | 28,507,000 |
Charge-offs | (15,069,000) | ||
Balance at the end of the period | 53,094,000 | 67,560,000 | 85,532,000 |
Cumulative effect from adoption of new accounting standard | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 3,900,000 | ||
Adjusted Balance | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 57,025,000 | ||
CFC | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 64,825,000 | 79,463,000 | 47,438,000 |
Provision (benefit) for credit losses | (332,000) | (14,638,000) | 26,380,000 |
Charge-offs | (15,069,000) | ||
Balance at the end of the period | 49,424,000 | 64,825,000 | 79,463,000 |
CFC | Distribution | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 15,781,000 | 13,426,000 | 8,002,000 |
Provision (benefit) for credit losses | (857,000) | 2,355,000 | 1,838,000 |
Charge-offs | 0 | ||
Balance at the end of the period | 14,924,000 | 15,781,000 | 13,426,000 |
CFC | Power supply | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 47,793,000 | 64,646,000 | 38,027,000 |
Provision (benefit) for credit losses | 582,000 | (16,853,000) | 24,585,000 |
Charge-offs | (15,069,000) | ||
Balance at the end of the period | 33,306,000 | 47,793,000 | 64,646,000 |
CFC | Statewide and associate | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,251,000 | 1,391,000 | 1,409,000 |
Provision (benefit) for credit losses | (57,000) | (140,000) | (43,000) |
Charge-offs | 0 | ||
Balance at the end of the period | 1,194,000 | 1,251,000 | 1,391,000 |
CFC | Cumulative effect from adoption of new accounting standard | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 5,645,000 | ||
CFC | Cumulative effect from adoption of new accounting standard | Distribution | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 3,586,000 | ||
CFC | Cumulative effect from adoption of new accounting standard | Power supply | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 2,034,000 | ||
CFC | Cumulative effect from adoption of new accounting standard | Statewide and associate | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 25,000 | ||
CFC | Adjusted Balance | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 53,083,000 | ||
CFC | Adjusted Balance | Distribution | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 11,588,000 | ||
CFC | Adjusted Balance | Power supply | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 40,061,000 | ||
CFC | Adjusted Balance | Statewide and associate | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,434,000 | ||
NCSC | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,449,000 | 1,374,000 | 806,000 |
Provision (benefit) for credit losses | 1,015,000 | 75,000 | 583,000 |
Charge-offs | 0 | ||
Balance at the end of the period | 2,464,000 | 1,449,000 | 1,374,000 |
NCSC | Cumulative effect from adoption of new accounting standard | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | (15,000) | ||
NCSC | Adjusted Balance | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 791,000 | ||
RTFC | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | 1,286,000 | 4,695,000 | 4,881,000 |
Provision (benefit) for credit losses | 80,000 | (3,409,000) | 1,544,000 |
Charge-offs | 0 | ||
Balance at the end of the period | $ 1,206,000 | $ 1,286,000 | 4,695,000 |
RTFC | Cumulative effect from adoption of new accounting standard | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | (1,730,000) | ||
RTFC | Adjusted Balance | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at the beginning of the period | $ 3,151,000 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) $ in Thousands | 12 Months Ended | |||
May 31, 2023 USD ($) | May 31, 2022 USD ($) | May 31, 2021 USD ($) | May 31, 2020 USD ($) | |
Loan Loss Allowance | ||||
Total allowance for credit losses | $ 53,094 | $ 67,560 | $ 85,532 | $ 53,125 |
Allowance coverage ratio | 0.0016 | 0.0022 | ||
Financing receivable, allowance for credit loss, period increase (decrease) | $ (15,000) | |||
Allowance coverage ratio, increase (decrease) in period, percentage | (0.06%) | |||
Charge-offs | $ 15,069 | |||
Credit reserve for unadvanced loan commitments | 1,000 | $ 1,000 | ||
Brazos and Brazos Sandy Creek | Power supply | ||||
Loan Loss Allowance | ||||
Charge-offs | 15,000 | |||
Asset-Specific Allowance | ||||
Loan Loss Allowance | ||||
Financing receivable, allowance for credit loss, period increase (decrease) | (13,000) | |||
Collective Allowance | ||||
Loan Loss Allowance | ||||
Financing receivable, allowance for credit loss, period increase (decrease) | (2,000) | |||
CFC | ||||
Loan Loss Allowance | ||||
Total allowance for credit losses | $ 49,424 | $ 64,825 | 79,463 | 47,438 |
Allowance coverage ratio | 0.0016 | 0.0022 | ||
Charge-offs | $ 15,069 | |||
CFC | Power supply | ||||
Loan Loss Allowance | ||||
Total allowance for credit losses | $ 33,306 | $ 47,793 | $ 64,646 | $ 38,027 |
Allowance coverage ratio | 0.0061 | 0.0098 | ||
Charge-offs | $ 15,069 |
Allowance for Credit Losses -_2
Allowance for Credit Losses - Schedule of allowance for credit losses components (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Allowance components: | ||||
Collective allowance | $ 27,335 | $ 28,876 | ||
Asset-specific allowance | 25,759 | 38,684 | ||
Total allowance for credit losses | 53,094 | 67,560 | $ 85,532 | $ 53,125 |
Loans outstanding | ||||
Collectively evaluated loans | 32,398,910 | 29,814,380 | ||
Individually evaluated loans | 120,439 | 236,974 | ||
Total loan outstanding | $ 32,519,349 | $ 30,051,354 | ||
Collective allowance coverage ratio | 0.08% | 0.10% | ||
Asset-specific allowance coverage ratio | 0.2139 | 0.1632 | ||
Total allowance coverage ratio | 0.0016 | 0.0022 | ||
CFC | ||||
Allowance components: | ||||
Collective allowance | $ 23,955 | $ 26,387 | ||
Asset-specific allowance | 25,469 | 38,438 | ||
Total allowance for credit losses | 49,424 | 64,825 | 79,463 | 47,438 |
Loans outstanding | ||||
Collectively evaluated loans | 30,957,840 | 28,639,993 | ||
Individually evaluated loans | 116,847 | 232,882 | ||
Total loan outstanding | $ 31,074,687 | $ 28,872,875 | ||
Collective allowance coverage ratio | 0.08% | 0.09% | ||
Asset-specific allowance coverage ratio | 0.2180 | 0.1651 | ||
Total allowance coverage ratio | 0.0016 | 0.0022 | ||
Deferred loan origination costs | $ 13,000 | $ 12,000 | ||
CFC | Distribution | ||||
Allowance components: | ||||
Collective allowance | 14,924 | 15,781 | ||
Asset-specific allowance | 0 | 0 | ||
Total allowance for credit losses | 14,924 | 15,781 | 13,426 | 8,002 |
Loans outstanding | ||||
Collectively evaluated loans | 25,432,439 | 23,839,150 | ||
Individually evaluated loans | 4,638 | 5,092 | ||
Total loan outstanding | $ 25,437,077 | $ 23,844,242 | ||
Collective allowance coverage ratio | 0.06% | 0.07% | ||
Asset-specific allowance coverage ratio | 0 | 0 | ||
Total allowance coverage ratio | 0.0006 | 0.0007 | ||
CFC | Power supply | ||||
Allowance components: | ||||
Collective allowance | $ 7,837 | $ 9,355 | ||
Asset-specific allowance | 25,469 | 38,438 | ||
Total allowance for credit losses | 33,306 | 47,793 | 64,646 | 38,027 |
Loans outstanding | ||||
Collectively evaluated loans | 5,325,033 | 4,673,980 | ||
Individually evaluated loans | 112,209 | 227,790 | ||
Total loan outstanding | $ 5,437,242 | $ 4,901,770 | ||
Collective allowance coverage ratio | 0.15% | 0.20% | ||
Asset-specific allowance coverage ratio | 0.2270 | 0.1687 | ||
Total allowance coverage ratio | 0.0061 | 0.0098 | ||
CFC | Statewide and associate | ||||
Allowance components: | ||||
Collective allowance | $ 1,194 | $ 1,251 | ||
Asset-specific allowance | 0 | 0 | ||
Total allowance for credit losses | 1,194 | 1,251 | 1,391 | 1,409 |
Loans outstanding | ||||
Collectively evaluated loans | 200,368 | 126,863 | ||
Individually evaluated loans | 0 | 0 | ||
Total loan outstanding | $ 200,368 | $ 126,863 | ||
Collective allowance coverage ratio | 0.60% | 0.99% | ||
Asset-specific allowance coverage ratio | 0 | 0 | ||
Total allowance coverage ratio | 0.0060 | 0.0099 | ||
NCSC | ||||
Allowance components: | ||||
Collective allowance | $ 2,464 | $ 1,449 | ||
Asset-specific allowance | 0 | 0 | ||
Total allowance for credit losses | 2,464 | 1,449 | 1,374 | 806 |
Loans outstanding | ||||
Collectively evaluated loans | 956,874 | 710,878 | ||
Individually evaluated loans | 0 | 0 | ||
Total loan outstanding | $ 956,874 | $ 710,878 | ||
Collective allowance coverage ratio | 0.26% | 0.20% | ||
Asset-specific allowance coverage ratio | 0 | 0 | ||
Total allowance coverage ratio | 0.0026 | 0.0020 | ||
RTFC | ||||
Allowance components: | ||||
Collective allowance | $ 916 | $ 1,040 | ||
Asset-specific allowance | 290 | 246 | ||
Total allowance for credit losses | 1,206 | 1,286 | $ 4,695 | $ 4,881 |
Loans outstanding | ||||
Collectively evaluated loans | 484,196 | 463,509 | ||
Individually evaluated loans | 3,592 | 4,092 | ||
Total loan outstanding | $ 487,788 | $ 467,601 | ||
Collective allowance coverage ratio | 0.19% | 0.22% | ||
Asset-specific allowance coverage ratio | 0.0807 | 0.0601 | ||
Total allowance coverage ratio | 0.0025 | 0.0028 |
Short-Term Borrowings - Narrati
Short-Term Borrowings - Narrative (Details) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Aug. 02, 2023 USD ($) | May 31, 2023 USD ($) | May 31, 2022 USD ($) | Jun. 07, 2021 USD ($) facility | |
Short-term Debt [Line Items] | ||||
Amount | $ 4,546,275 | $ 4,981,167 | ||
Line of credit facility, number of active facilities | facility | 2 | |||
Subsequent event | Farmer Mac notes payable | ||||
Short-term Debt [Line Items] | ||||
Proceeds from short-term note | $ 500,000 | |||
Revolving credit agreements | ||||
Short-term Debt [Line Items] | ||||
Amount | 0 | |||
Letter of credit maximum amount available | 300,000 | |||
Total Commitment | $ 2,600,000 | $ 2,600,000 | ||
Short-term borrowings | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 1 year | |||
Short-term borrowings | Debt | Credit availability concentration risk | ||||
Short-term Debt [Line Items] | ||||
Concentration percentage | 15% | 17% | ||
Total commercial paper | ||||
Short-term Debt [Line Items] | ||||
Amount | $ 2,310,598 | $ 2,382,882 | ||
Total commercial paper | Minimum | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 1 day | |||
Total commercial paper | Maximum | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 270 days | |||
Select notes to members | ||||
Short-term Debt [Line Items] | ||||
Amount | $ 1,630,799 | $ 1,753,441 | ||
Select notes to members | Minimum | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 30 days | |||
Select notes to members | Maximum | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 270 days | |||
Three year agreement | Revolving credit agreements | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 3 years | |||
Total Commitment | $ 1,245,000 | 1,245,000 | ||
Five year agreement | Revolving credit agreements | ||||
Short-term Debt [Line Items] | ||||
Term of debt | 4 years | |||
Total Commitment | $ 1,355,000 | $ 1,355,000 |
Short-Term Borrowings - Summary
Short-Term Borrowings - Summary of short-term debt outstanding and the weighted-average effective interest rates (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Short-term Debt [Line Items] | ||
Amount | $ 4,546,275 | $ 4,981,167 |
Weighted- Average Interest Rate | 4.96% | 0.97% |
Commercial paper dealers, net of discounts | ||
Short-term Debt [Line Items] | ||
Amount | $ 1,293,167 | $ 1,024,813 |
Weighted- Average Interest Rate | 5.32% | 0.96% |
Commercial paper members, at par | ||
Short-term Debt [Line Items] | ||
Amount | $ 1,017,431 | $ 1,358,069 |
Weighted- Average Interest Rate | 4.76% | 0.92% |
Total commercial paper | ||
Short-term Debt [Line Items] | ||
Amount | $ 2,310,598 | $ 2,382,882 |
Weighted- Average Interest Rate | 5.07% | 0.94% |
Select notes to members | ||
Short-term Debt [Line Items] | ||
Amount | $ 1,630,799 | $ 1,753,441 |
Weighted- Average Interest Rate | 4.96% | 1.11% |
Daily liquidity fund notes to members | ||
Short-term Debt [Line Items] | ||
Amount | $ 238,329 | $ 427,790 |
Weighted- Average Interest Rate | 4.35% | 0.80% |
Medium-term notes to members | ||
Short-term Debt [Line Items] | ||
Amount | $ 366,549 | $ 417,054 |
Weighted- Average Interest Rate | 4.64% | 0.66% |
Short-Term Borrowings - Schedul
Short-Term Borrowings - Schedule of total available and outstanding letters of credit under the revolving credit agreements (Details) - Revolving credit agreements - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2023 | Jun. 07, 2021 | |
Short-term Debt [Line Items] | ||
Total Commitment | $ 2,600 | $ 2,600 |
Letters of Credit Outstanding | 2 | |
Available Amount | 2,598 | |
Three year agreement | ||
Short-term Debt [Line Items] | ||
Total Commitment | 1,245 | 1,245 |
Letters of Credit Outstanding | 0 | |
Available Amount | $ 1,245 | |
Maturity | Nov. 28, 2025 | |
Annual facility fee | 750% | |
Five year agreement | ||
Short-term Debt [Line Items] | ||
Total Commitment | $ 1,355 | $ 1,355 |
Letters of Credit Outstanding | 2 | |
Available Amount | $ 1,353 | |
Maturity | Nov. 28, 2026 | |
Annual facility fee | 1,000% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 2 Months Ended | 12 Months Ended | ||
Dec. 15, 2022 | Aug. 02, 2023 | May 31, 2023 | May 31, 2022 | |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 23,946,548,000 | $ 21,545,440,000 | ||
Debt, weighted average interest rate | 6.64% | 5.11% | ||
Debt | Credit availability concentration risk | Long-term debt | ||||
Debt Instrument [Line Items] | ||||
Concentration percentage | 77% | 75% | ||
Fixed rate debt | Long-term debt | Credit availability concentration risk | ||||
Debt Instrument [Line Items] | ||||
Concentration percentage | 93% | 90% | ||
Variable rate debt | Long-term debt | Credit availability concentration risk | ||||
Debt Instrument [Line Items] | ||||
Concentration percentage | 7% | 10% | ||
Guaranteed Underwriter Program notes payable | ||||
Debt Instrument [Line Items] | ||||
Unused borrowing capacity, amount | $ 1,025,000,000 | |||
Maximum percentage of patronage capital distribution allowed | 5% | |||
Guaranteed Underwriter Program notes payable | Committed loan facility | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of long-term debt | $ 800,000,000 | |||
Repayments of notes payable | 185,000,000 | |||
Guaranteed Underwriter Program notes payable | Committed Loan Facility, Series T | ||||
Debt Instrument [Line Items] | ||||
Term of debt | 30 years | |||
Debt Instrument maximum borrowing capacity | $ 750,000,000 | |||
Secured long-term debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 17,449,610,000 | $ 16,051,388,000 | ||
Long term debt, percentage | 73% | 75% | ||
Collateral trust bonds | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 7,577,973,000 | $ 6,848,490,000 | ||
Term of debt | 10 years | |||
Proceeds from issuance of long-term debt | $ 1,050,000,000 | |||
Debt, weighted average interest rate | 5.17% | |||
Unsecured long-term debt | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 6,496,938,000 | $ 5,494,052,000 | ||
Long term debt, percentage | 27% | 25% | ||
Debt instrument, increase (decrease) | $ 1,003,000,000 | |||
Medium-term notes | Medium-term Notes 4.87% | ||||
Debt Instrument [Line Items] | ||||
Term of debt | 4 years | |||
Proceeds from issuance of long-term debt | $ 1,700,000,000 | |||
Debt, weighted average interest rate | 4.87% | |||
Medium-term notes | Medium-term Notes 5.05% | Subsequent event | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of long-term debt | $ 400,000,000 | |||
Debt instrument, fixed interest rate | 5.05% | |||
Federal Agricultural Mortgage Corporation | Farmer Mac notes payable | ||||
Debt Instrument [Line Items] | ||||
Proceeds from short-term note | $ 500,000,000 | |||
Repayments of short-term debt | 500,000,000 | |||
Federal Agricultural Mortgage Corporation | Revolving credit agreements | Farmer Mac notes payable | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 3,150,000,000 | |||
Unused borrowing capacity, amount | 2,850,000,000 | |||
Debt Instrument maximum borrowing capacity | $ 6,000,000,000 | |||
Debt instrument, renewal term | 1 year | |||
Debt instrument, termination written notice, term | 425 days | |||
Proceeds from notes payable | $ 550,000,000 |
Long-Term Debt - Summary of lon
Long-Term Debt - Summary of long-term debt outstanding and the weighted-average effective interest rates (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Debt Instrument [Line Items] | ||
Total | $ 23,946,548 | $ 21,545,440 |
Weighted- Average Interest Rate | 3.44% | 2.68% |
Collateral trust bonds | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 7,792,711 | $ 7,097,711 |
Unamortized discount | (178,832) | (216,608) |
Debt issuance costs | (35,906) | (32,613) |
Total | $ 7,577,973 | $ 6,848,490 |
Weighted- Average Interest Rate | 3.46% | 3.17% |
Guaranteed Underwriter Program notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,720,643 | $ 6,105,473 |
Weighted- Average Interest Rate | 3.09% | 2.69% |
Farmer Mac notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 3,094,679 | |
Total | $ 3,149,898 | |
Weighted- Average Interest Rate | 3.92% | 2.33% |
Other secured notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 1,098 | $ 2,755 |
Debt issuance costs | (2) | (9) |
Total | $ 1,096 | $ 2,746 |
Weighted- Average Interest Rate | 3.06% | 3.10% |
Secured notes payable | ||
Debt Instrument [Line Items] | ||
Total | $ 9,871,637 | $ 9,202,898 |
Secured long-term debt | ||
Debt Instrument [Line Items] | ||
Total | $ 17,449,610 | $ 16,051,388 |
Weighted- Average Interest Rate | 3.40% | 2.83% |
Medium-term notes sold through dealers | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,152,726 | $ 5,263,496 |
Weighted- Average Interest Rate | 3.52% | 2.20% |
Medium-term notes to members | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 365,260 | $ 250,397 |
Weighted- Average Interest Rate | 3.98% | 2.70% |
Unsecured medium-term notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,517,986 | $ 5,513,893 |
Unamortized premium (discount), net | 4 | (2,086) |
Debt issuance costs | (21,122) | (19,723) |
Total | $ 6,496,868 | $ 5,492,084 |
Weighted- Average Interest Rate | 3.55% | 2.22% |
Unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 71 | $ 1,979 |
Unamortized discount | (1) | (10) |
Debt issuance costs | $ 0 | $ (1) |
Weighted- Average Interest Rate | 0% | 0% |
Total unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Total | $ 70 | $ 1,968 |
Unsecured long-term debt | ||
Debt Instrument [Line Items] | ||
Total | $ 6,496,938 | $ 5,494,052 |
Weighted- Average Interest Rate | 3.55% | 2.22% |
Long-Term Debt - Schedule of am
Long-Term Debt - Schedule of amount of long-term debt maturities (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Weighted-Average Interest Rate | ||
Total | 3.44% | 2.68% |
Long-term debt | ||
Amount Maturing | ||
2024 | $ 2,277,050 | |
2025 | 2,286,088 | |
2026 | 3,527,228 | |
2027 | 1,631,434 | |
2028 | 2,156,615 | |
Thereafter | 12,303,992 | |
Total | $ 24,182,407 | |
Weighted-Average Interest Rate | ||
2024 | 3% | |
2025 | 2.73% | |
2026 | 3.77% | |
2027 | 2.11% | |
2028 | 3.74% | |
Thereafter | 3.68% | |
Total | 3.44% |
Subordinated Deferrable Debt -
Subordinated Deferrable Debt - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jun. 26, 2023 | May 26, 2023 | Apr. 30, 2026 | Jul. 31, 2023 | Apr. 30, 2023 | Mar. 31, 2023 | May 31, 2023 | May 31, 2022 | |
Maximum | ||||||||
Subordinated Deferrable Debt | ||||||||
Consecutive period for which interest payment can be deferred | 5 years | |||||||
Subordinated debt | ||||||||
Subordinated Deferrable Debt | ||||||||
Period after which debt can be called at par | 10 years | |||||||
Debt instrument, period after which debt can be converted | 10 years | |||||||
Debt instrument, face amount | $ 1,300,000 | $ 1,000,000 | ||||||
Subordinated debt | Maximum | ||||||||
Subordinated Deferrable Debt | ||||||||
Term of debt | 30 years | |||||||
4.75% subordinated debt | ||||||||
Subordinated Deferrable Debt | ||||||||
Interest rate | 4.75% | |||||||
Term of debt | 30 years | |||||||
Debt instrument, face amount | $ 400,000 | |||||||
5.25% issuance 2016 | ||||||||
Subordinated Deferrable Debt | ||||||||
Interest rate | 5.25% | |||||||
Term of debt | 30 years | 30 years | ||||||
Debt instrument, face amount | $ 350,000 | $ 350,000 | ||||||
Subordinated notes with variable interest rates due 2043 | ||||||||
Subordinated Deferrable Debt | ||||||||
Term of debt | 30 years | |||||||
Debt instrument, face amount | $ 400,000 | |||||||
Subordinated notes with variable interest rates due 2043 | LIBOR | ||||||||
Subordinated Deferrable Debt | ||||||||
Debt instrument, basis spread on variable rate | 2.91% | |||||||
Subordinated notes with variable interest rates due 2043 | Subsequent event | ||||||||
Subordinated Deferrable Debt | ||||||||
Redemption of debt, amount | $ 100,000 | |||||||
Subordinated notes with variable interest rates due 2043 | Subsequent event | SOFR | ||||||||
Subordinated Deferrable Debt | ||||||||
Debt instrument, basis spread on variable rate | 0.26161% | |||||||
Subordinated notes with variable interest rates due 2046 | Forecast | ||||||||
Subordinated Deferrable Debt | ||||||||
Debt instrument, additional adjustment on variable rate | 3.63% | |||||||
Subordinated notes with variable interest rates due 2046 | SOFR | Forecast | ||||||||
Subordinated Deferrable Debt | ||||||||
Debt instrument, basis spread on variable rate | 0.26161% | |||||||
5.50% issuance 2019 | ||||||||
Subordinated Deferrable Debt | ||||||||
Interest rate | 5.50% | |||||||
Term of debt | 45 years | 45 years | ||||||
Period after which debt can be called at par | 5 years | |||||||
Debt instrument, face amount | $ 250,000 | $ 250,000 | ||||||
5.50% issuance 2019 | Maximum | ||||||||
Subordinated Deferrable Debt | ||||||||
Term of debt | 45 years | |||||||
Consecutive period for which interest payment can be deferred | 40 years | |||||||
7.125% issuance 2023 | ||||||||
Subordinated Deferrable Debt | ||||||||
Interest rate | 7.125% | 7.125% | ||||||
Term of debt | 30 years | 30 years | ||||||
Period after which debt can be called at par | 5 years | |||||||
Debt instrument, period after which debt can be converted | 5 years | |||||||
Debt instrument, face amount | $ 300,000 | $ 300,000 | $ 0 | |||||
7.125% issuance 2023 | Five-year U.S. Treasury rate | ||||||||
Subordinated Deferrable Debt | ||||||||
Debt instrument, basis spread on variable rate | 3.533% | |||||||
7.125% issuance 2023 | Maximum | ||||||||
Subordinated Deferrable Debt | ||||||||
Term of debt | 30 years | |||||||
Consecutive period for which interest payment can be deferred | 20 years |
Subordinated Deferrable Debt _2
Subordinated Deferrable Debt - Subordinated deferrable debt outstanding and weighted-average interest rates (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
May 26, 2023 | Mar. 31, 2023 | May 31, 2023 | May 31, 2022 | |
Debt Instrument [Line Items] | ||||
Subordinated debt | $ 1,283,436 | $ 986,518 | ||
Debt, weighted average interest rate | 6.64% | 5.11% | ||
Subordinated debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 1,300,000 | $ 1,000,000 | ||
Debt issuance costs | (16,564) | (13,482) | ||
Variable issuance 2013 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400,000 | |||
Debt, weighted average interest rate | 8.21% | |||
Term of debt | 30 years | |||
Period after which debt can be called at par | Apr. 30, 2023 | |||
4.75% subordinated debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 400,000 | |||
Interest rate | 4.75% | |||
Debt, weighted average interest rate | 4.75% | |||
Term of debt | 30 years | |||
Period after which debt can be called at par | Apr. 30, 2023 | |||
5.25% issuance 2016 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 350,000 | $ 350,000 | ||
Interest rate | 5.25% | |||
Debt, weighted average interest rate | 5.25% | 5.25% | ||
Term of debt | 30 years | 30 years | ||
Period after which debt can be called at par | Apr. 20, 2026 | Apr. 20, 2026 | ||
5.50% issuance 2019 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 250,000 | $ 250,000 | ||
Interest rate | 5.50% | |||
Debt, weighted average interest rate | 5.50% | 5.50% | ||
Term of debt | 45 years | 45 years | ||
Period after which debt can be called at par | May 15, 2024 | May 15, 2024 | ||
7.125% issuance 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 300,000 | $ 300,000 | $ 0 | |
Interest rate | 7.125% | 7.125% | ||
Debt, weighted average interest rate | 7.13% | 0% | ||
Term of debt | 30 years | 30 years | ||
Period after which debt can be called at par | Jun. 15, 2028 | Jun. 15, 2028 |
Members' Subordinated Certifi_3
Members' Subordinated Certificates - Narrative (Details) | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Membership subordinated certificates | ||
Members' subordinated certificates | ||
Maturity period | 100 years | |
Interest rate | 5% | |
Member capital security, call option term | 5 years | 10 years |
Securities maturing through 2052 | ||
Members' subordinated certificates | ||
Maturity period | 30 years | |
Weighted average | Membership subordinated certificates | ||
Members' subordinated certificates | ||
Maturity period | 54 years | 55 years |
Members' Subordinated Certifi_4
Members' Subordinated Certificates - Schedule of subordinated borrowing (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 1,283,436 | $ 986,518 |
Weighted- Average Interest Rate | 3.44% | 2.68% |
Subordinated certificates | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 1,223,126 | $ 1,234,161 |
Weighted- Average Interest Rate | 4.38% | 4.35% |
Certificates maturing 2025 through 2119 | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 628,595 | $ 628,591 |
Subscribed and unissued | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | 19 | 12 |
Total membership subordinated certificates | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 628,614 | $ 628,603 |
Weighted- Average Interest Rate | 4.94% | 4.95% |
Interest-bearing loan subordinated certificates maturing through 2045 | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 208,192 | $ 216,266 |
Non-interest-bearing loan subordinated certificates maturing through 2047 | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | 112,978 | 121,744 |
Subscribed and unissued | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | 41 | 45 |
Loan subordinated certificates | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 321,211 | $ 338,055 |
Weighted- Average Interest Rate | 2.65% | 2.64% |
Interest-bearing guarantee subordinated certificates maturing through 2044 | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 27,138 | $ 27,333 |
Weighted- Average Interest Rate | 5.91% | 5.90% |
Loan and guarantee subordinated certificates | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 348,349 | $ 365,388 |
Weighted- Average Interest Rate | 2.91% | 2.88% |
Securities maturing through 2052 | ||
Subordinated Deferrable Debt | ||
Subordinated deferrable debt | $ 246,163 | $ 240,170 |
Weighted- Average Interest Rate | 5.01% | 5% |
Members' Subordinated Certifi_5
Members' Subordinated Certificates - Schedule of amount of members' subordinated certificates maturing in each of the five fiscal years (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Amount Maturing | ||
Total long-term debt | $ 1,283,436 | $ 986,518 |
Members' certificates, exclusive of certificates amortized annually | ||
Amount Maturing | ||
2024 | 5,861 | |
2025 | 7,481 | |
2026 | 63,078 | |
2027 | 8,052 | |
2028 | 5,487 | |
Thereafter | 1,133,107 | |
Total long-term debt | $ 1,223,066 | |
Weighted-Average Interest Rate | ||
2024 | 2.22% | |
2025 | 2.71% | |
2026 | 3.24% | |
2027 | 2% | |
2028 | 3.04% | |
Thereafter | 4.49% | |
Total (as a percent) | 4.38% | |
Loan subordinated certificates | ||
Amount Maturing | ||
Total long-term debt | $ 321,211 | $ 338,055 |
Other information | ||
Payments not received on certificates subscribed and unissued | 60 | |
Average amortization of debt | $ 12,000 | |
Amortization as a percentage of amortizing loan subordinated debt outstanding | 8% | |
Amortizing member loan subordinated certificates | ||
Amount Maturing | ||
Total long-term debt | $ 159,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Schedule of derivative notional amount and weighted-average rates (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 7,816,114 | $ 8,061,631 |
Pay-fixed swaps and Receive-fixed swaps, Subtotal | ||
Derivative [Line Items] | ||
Notional Amount | $ 7,620,269 | $ 7,937,631 |
Weighted- Average Rate Paid | 3.49% | 2.33% |
Weighted- Average Rate Received | 4.75% | 1.64% |
Pay-fixed swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 5,920,269 | $ 5,957,631 |
Weighted- Average Rate Paid | 2.75% | 2.60% |
Weighted- Average Rate Received | 5.26% | 1.24% |
Receive-fixed swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 1,700,000 | $ 1,980,000 |
Weighted- Average Rate Paid | 6.05% | 1.53% |
Weighted- Average Rate Received | 2.97% | 2.86% |
Forward pay-fixed swaps | ||
Derivative [Line Items] | ||
Notional Amount | $ 195,845 | $ 124,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Schedule of derivative instruments maturity (Details) - Interest rate swaps - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Derivative [Line Items] | ||
Notional Amount | $ 7,816,114 | $ 8,061,631 |
2024 | 823,574 | |
2025 | 418,928 | |
2026 | 1,066,485 | |
2027 | 343,661 | |
2028 | 604,200 | |
Thereafter | $ 4,559,266 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Narrative (Details) $ in Thousands | 12 Months Ended | ||
May 31, 2023 USD ($) agreement counterparty | May 31, 2022 USD ($) | Feb. 28, 2023 USD ($) | |
Derivative [Line Items] | |||
Treasury rate lock, number of agreements | agreement | 3 | ||
Derivative assets, notional amount | $ 5,405,274 | $ 4,791,699 | |
Number of counterparties subject to ratings trigger and early termination provision | counterparty | 1 | ||
Cash flow hedging | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional Amount | $ 0 | $ 0 | |
Treasury lock | Cash flow hedging | |||
Derivative [Line Items] | |||
Derivative assets, notional amount | 400,000 | ||
AOCI, cash flow hedge, cumulative gain (loss), after tax | $ 7,000 | ||
Interest rate swaps with CFC rating trigger and treasury lock | |||
Derivative [Line Items] | |||
Notional Amount | 227,000 | ||
Payable due from CFC | 26,000 | ||
Interest rate swaps and treasury lock | |||
Derivative [Line Items] | |||
Derivative, net liability position | $ 3,000 | ||
Interest rate swaps and treasury lock | Derivatives | Counterparty exposure risk | |||
Derivative [Line Items] | |||
Concentration percentage | 23% | 24% |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Schedule of derivative instruments on consolidated balance sheets (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Derivative Asset [Abstract] | ||
Derivative assets, fair value | $ 460,762 | $ 222,042 |
Derivative assets, notional amount | 5,405,274 | 4,791,699 |
Derivative Liability [Abstract] | ||
Derivative liabilities, fair value | 115,074 | 128,282 |
Derivative liabilities, notional amount | 2,410,840 | 3,269,932 |
Interest rate swaps | ||
Derivative Asset [Abstract] | ||
Derivative assets, fair value | 460,762 | 222,042 |
Derivative assets, notional amount | 5,405,274 | 4,791,699 |
Derivative Liability [Abstract] | ||
Derivative liabilities, fair value | 115,074 | 128,282 |
Derivative liabilities, notional amount | 2,410,840 | 3,269,932 |
Derivative, notional amount | 7,816,114 | 8,061,631 |
Forward pay-fixed swaps | ||
Derivative Liability [Abstract] | ||
Derivative, notional amount | $ 195,845 | $ 124,000 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Schedule of derivatives offsetting (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Derivative [Line Items] | ||
Derivative asset, fair value, amount not offset against collateral | $ 460,762 | $ 222,042 |
Derivative liability, fair value, amount not offset against collateral | 115,074 | 128,282 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative assets | 460,762 | 222,042 |
Derivative Asset, Fair Value, Gross Liability | 0 | 0 |
Derivative asset, fair value, amount not offset against collateral | 460,762 | 222,042 |
Derivative, Collateral, Obligation to Return Securities | 112,047 | 103,228 |
Derivative, Collateral, Obligation to Return Cash | 0 | 0 |
Derivative asset, fair value, amount offset against collateral | 348,715 | 118,814 |
Derivative Liability, Fair Value, Gross Liability | 115,074 | 128,282 |
Derivative Liability, Fair Value, Gross Asset | 0 | 0 |
Derivative liability, fair value, amount not offset against collateral | 115,074 | 128,282 |
Derivative, Collateral, Right to Reclaim Securities | 112,047 | 103,228 |
Derivative, Collateral, Right to Reclaim Cash | 0 | 0 |
Derivative liability, fair value, amount offset against collateral | $ 3,027 | $ 25,054 |
Derivative Instruments and He_8
Derivative Instruments and Hedging Activities - Summary of gains and losses recorded on the consolidated statements of operations for the entity's derivatives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Derivative [Line Items] | |||
Derivative cash settlements interest income (expense) | $ 0 | $ 0 | $ 0 |
Derivative forward value gains | 252,267 | 557,867 | 621,946 |
Derivative gains | 285,844 | 456,482 | 506,301 |
Interest rate swaps | |||
Derivative [Line Items] | |||
Derivative cash settlements interest income (expense) | 33,577 | (101,385) | (115,645) |
Derivative forward value gains | 252,267 | 557,867 | 621,946 |
Derivative gains | $ 285,844 | $ 456,482 | $ 506,301 |
Derivative Instruments and He_9
Derivative Instruments and Hedging Activities - Derivatives - Schedule of notional amounts of derivative instruments having rating triggers (Details) - Interest rate swap rating trigger $ in Thousands | May 31, 2023 USD ($) |
Derivative [Line Items] | |
Notional Amount | $ 5,687,823 |
Payable Due from CFC | (3,057) |
Receivable Due to CFC | 245,478 |
Net Receivable (Payable) | 242,421 |
Falls below A3/A- | |
Derivative [Line Items] | |
Notional Amount | 30,930 |
Payable Due from CFC | (1,450) |
Receivable Due to CFC | 0 |
Net Receivable (Payable) | (1,450) |
Falls below Baa1/BBB+ | |
Derivative [Line Items] | |
Notional Amount | 5,336,304 |
Payable Due from CFC | (1,607) |
Receivable Due to CFC | 227,613 |
Net Receivable (Payable) | 226,006 |
Falls to or below Baa2/BBB | |
Derivative [Line Items] | |
Notional Amount | 320,589 |
Payable Due from CFC | 0 |
Receivable Due to CFC | 17,865 |
Net Receivable (Payable) | $ 17,865 |
Equity - Narrative (Details)
Equity - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2023 USD ($) | Jul. 31, 2022 USD ($) | May 31, 2022 USD ($) | May 31, 2023 USD ($) reserve | May 31, 2022 USD ($) | May 31, 2021 USD ($) | May 31, 2020 USD ($) | |
Equity | |||||||
Stockholders' equity, period increase (decrease) | $ 447,000 | ||||||
Total equity | $ 2,141,969 | 2,589,249 | $ 2,141,969 | $ 1,399,879 | $ 648,822 | ||
Net income | 501,587 | 798,537 | 813,978 | ||||
Patronage capital retirement | $ 61,840 | 59,979 | 61,911 | ||||
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50% | ||||||
Cash flow hedging | |||||||
Equity | |||||||
Accumulated other comprehensive income expected to be reclassified into earnings over the next 12 months | $ 1,000 | ||||||
Patronage Capital Allocated | |||||||
Equity | |||||||
Total equity | 954,988 | 1,006,115 | 954,988 | 923,970 | 894,066 | ||
Net income | 110,273 | 88,583 | 89,761 | ||||
Patronage capital retirement | 59,136 | 57,565 | 59,857 | ||||
Members’ Capital Reserve | |||||||
Equity | |||||||
Total equity | 1,062,286 | 1,202,152 | 1,062,286 | 909,749 | 807,320 | ||
Net income | 139,856 | 152,537 | 102,429 | ||||
Membership Fees and Educational Fund | |||||||
Equity | |||||||
Total equity | 3,387 | 3,534 | 3,387 | 3,125 | $ 3,193 | ||
Net income | $ 1,100 | $ 1,200 | $ 900 | ||||
CFC | |||||||
Equity | |||||||
General reserve required to be maintained as a percentage of membership fees collected | 50% | ||||||
Number of additional board-approved reserves | reserve | 1 | ||||||
CFC | Cooperative educational fund | Minimum | |||||||
Equity | |||||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 0.25% | ||||||
CFC | Patronage Capital Allocated | |||||||
Equity | |||||||
Net income | $ 89,000 | ||||||
Percentage of prior year's allocated patronage capital required to be retired | 50% | ||||||
Percentage of prior year's allocated patronage capital required to be held | 50% | ||||||
Period for which prior year's allocated patronage capital is required to be held | 25 years | ||||||
Retirement of allocated net earnings, percentage | 50% | ||||||
CFC | Patronage Capital Allocated | Subsequent event | |||||||
Equity | |||||||
Net income | $ 110,000 | ||||||
CFC | Retained Earnings, Appropriated Patronage Capital Allocated and Retired | |||||||
Equity | |||||||
Net income | $ 59,000 | ||||||
CFC | Retained Earnings, Appropriated Patronage Capital Allocated and Retired | Subsequent event | |||||||
Equity | |||||||
Net income | 72,000 | ||||||
CFC | Retained earnings allocation of fifty percent of prior year patronage capital allocation | |||||||
Equity | |||||||
Net income | 44,000 | ||||||
CFC | Retained earnings allocation of fifty percent of prior year patronage capital allocation | Subsequent event | |||||||
Equity | |||||||
Net income | $ 55,000 | ||||||
Retirement of allocated net earnings, percentage | 50% | ||||||
CFC | Retained earnings prior year allocation held for 25 years | |||||||
Equity | |||||||
Net income | $ 15,000 | ||||||
Period for which prior year's allocated patronage capital is required to be held | 25 years | ||||||
CFC | Retained earnings prior year allocation held for 25 years | Subsequent event | |||||||
Equity | |||||||
Net income | $ 17,000 | ||||||
Period for which prior year's allocated patronage capital is required to be held | 25 years | ||||||
CFC | Members’ Capital Reserve | |||||||
Equity | |||||||
Net income | $ 153,000 | ||||||
CFC | Members’ Capital Reserve | Subsequent event | |||||||
Equity | |||||||
Net income | $ 140,000 | ||||||
CFC | Membership Fees and Educational Fund | |||||||
Equity | |||||||
Net income | $ 1,000 | $ 1,000 | |||||
RTFC | |||||||
Equity | |||||||
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50% | ||||||
RTFC | Minimum | |||||||
Equity | |||||||
Percentage of retirement of allocated net earnings in cash | 20% | ||||||
RTFC | Cooperative educational fund | Minimum | |||||||
Equity | |||||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 1% | ||||||
NCSC | |||||||
Equity | |||||||
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50% | ||||||
NCSC | Cooperative educational fund | Minimum | |||||||
Equity | |||||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 0.25% | ||||||
RTFC | |||||||
Equity | |||||||
Percentage of ownership by minority owners | 100% | ||||||
NCSC | |||||||
Equity | |||||||
Percentage of ownership by parent | 100% |
Equity - Schedule of components
Equity - Schedule of components of equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Components of equity | ||||
Prior year-end cumulative derivative forward value gains (losses) | $ 92,363 | $ (461,162) | ||
Current-year derivative forward value gains | 252,267 | 557,867 | $ 621,946 | |
Current year-end cumulative derivative forward value gains | 342,624 | 92,363 | ||
Retained equity | 2,553,716 | 2,112,315 | ||
Accumulated other comprehensive income | 8,343 | 2,258 | ||
Total CFC equity | 2,562,059 | 2,114,573 | ||
Noncontrolling interests | 27,190 | 27,396 | ||
Total equity | 2,589,249 | 2,141,969 | 1,399,879 | $ 648,822 |
Membership Fees and Educational Fund | ||||
Components of equity | ||||
Total members' equity | 3,534 | 3,387 | ||
Total equity | 3,534 | 3,387 | 3,125 | 3,193 |
Membership fees | ||||
Components of equity | ||||
Total members' equity | 969 | 970 | ||
Educational fund | ||||
Components of equity | ||||
Total members' equity | 2,565 | 2,417 | ||
Patronage Capital Allocated | ||||
Components of equity | ||||
Total members' equity | 1,006,115 | 954,988 | ||
Total equity | 1,006,115 | 954,988 | 923,970 | 894,066 |
Members’ capital reserve | ||||
Components of equity | ||||
Total members' equity | 1,202,152 | 1,062,286 | ||
Total equity | 1,202,152 | 1,062,286 | 909,749 | 807,320 |
Other unallocated net loss | ||||
Components of equity | ||||
Total members' equity | (709) | (709) | ||
Unallocated Net Income (Loss) | ||||
Components of equity | ||||
Total equity | 341,915 | 91,654 | $ (461,871) | $ (1,076,548) |
CFC | ||||
Components of equity | ||||
Current-year derivative forward value gains | $ (250,261) | $ (553,525) |
Equity - Summary of activity in
Equity - Summary of activity in accumulated other comprehensive income account by component (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 2,141,969 | $ 1,399,879 |
Changes in unrealized gains (losses) | 6,478 | 2,619 |
Realized (gains) losses reclassified to earnings | (393) | (336) |
Ending balance | 2,589,249 | 2,141,969 |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 2,258 | (25) |
Ending balance | 8,343 | 2,258 |
Unrealized Gains on Derivative Hedges | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 5,123 | 1,718 |
Changes in unrealized gains (losses) | 6,691 | 4,028 |
Realized (gains) losses reclassified to earnings | (712) | (623) |
Ending balance | 11,102 | 5,123 |
Unrealized Losses on Defined Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (2,865) | (1,743) |
Changes in unrealized gains (losses) | (213) | (1,409) |
Realized (gains) losses reclassified to earnings | 319 | 287 |
Ending balance | $ (2,759) | $ (2,865) |
Employee Benefits - Narrative (
Employee Benefits - Narrative (Details) $ in Thousands | 12 Months Ended | |||||
May 31, 2023 USD ($) participant hour salary | May 31, 2022 USD ($) participant | May 31, 2021 USD ($) | Jan. 01, 2023 | Jan. 01, 2022 | Jan. 01, 2021 | |
Defined benefit multiemployer master pension plan | ||||||
Multiemployer plans requisite service period | 1 year | |||||
Percentage of joint and surviving spouse annuity | 50% | |||||
Annuity factor (as a percent) | 1.70% | |||||
Number of highest base salaries | salary | 5 | |||||
Contributions made by CFC | $ 5,000 | $ 5,000 | $ 4,000 | |||
Liability, defined benefit pension plan | 5,000 | 5,000 | ||||
Contributions by employer | 1,000 | 2,000 | 1,000 | |||
Payment for settlement | 1,000 | 2,000 | 1,000 | |||
Accumulated other comprehensive income | 8,343 | 2,258 | ||||
Defined benefit plan, net periodic benefit cost (credit), gain (loss) due to settlement and curtailment (less than $1 million in fiscal year 2023 and 2022) | $ 1,000 | 1,000 | 1,000 | |||
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement and Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Noninterest Expense | |||||
Number of consecutive months considered for eligible period of service | 12 months | |||||
Maximum matching contributions by CFC as a percentage of employee's salary | 2% | |||||
Minimum employee contribution (as a percent) | 2% | |||||
Contributions made by CFC | $ 1,000 | $ 1,000 | $ 1,000 | |||
Minimum | ||||||
Defined benefit multiemployer master pension plan | ||||||
Funded status, more than 80% (as a percent) | 80% | 80% | 80% | |||
Requisite service period | hour | 1,000 | |||||
Maximum | ||||||
Defined benefit multiemployer master pension plan | ||||||
Contributions made by CFC as a percentage of total contributions by all participating employers | 5% | 5% | 5% | |||
Executive benefit restoration plan | ||||||
Defined benefit multiemployer master pension plan | ||||||
Number of participants | participant | 7 | 3 | ||||
Pension expense | $ 1,000 | $ 1,000 | $ 2,000 | |||
Accumulated other comprehensive income expected to be reclassified into earnings over the next 12 months | 1,000 | |||||
Accumulated other comprehensive income | $ 3,000 | $ 3,000 |
Guarantees - Summary of total g
Guarantees - Summary of total guarantees by type of guarantee and member class (Details) - USD ($) | May 31, 2023 | May 31, 2022 |
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | $ 796,821,000 | $ 730,783,000 |
Long-term tax-exempt bonds | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 98,405,000 | 122,150,000 |
Letters of credit | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 538,393,000 | 450,354,000 |
Other guarantees | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 160,023,000 | 158,279,000 |
Performance guarantee | Hybrid Letter Of Credit | ||
Guarantor Obligations [Line Items] | ||
Letter of credit facility maximum additional amount potentially required to be issued | 35,000,000 | |
CFC | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 781,558,000 | 706,813,000 |
CFC | Distribution | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 383,644,000 | 314,925,000 |
CFC | Power supply | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 380,382,000 | 378,516,000 |
CFC | Statewide and associate | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 17,532,000 | 13,372,000 |
NCSC | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 15,263,000 | 23,970,000 |
Variable interest entity, primary beneficiary | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | 15,263,000 | 23,970,000 |
Variable interest entity, primary beneficiary | Statewide and associate | ||
Guarantor Obligations [Line Items] | ||
CFC third-party guarantees | $ 16,000,000 | $ 11,000,000 |
Guarantees - Narrative (Details
Guarantees - Narrative (Details) - USD ($) | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | $ 796,821,000 | $ 730,783,000 | |
Guarantee obligations unsecured | $ 535,000,000 | $ 466,000,000 | |
Guarantee obligations unsecured commitment as percentage of total commitment | 67% | 64% | |
Guarantee liability recorded | $ 13,000,000 | $ 13,000,000 | |
Guaranty liabilities | 12,000,000 | ||
Other guarantees | |||
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | 160,023,000 | 158,279,000 | |
Guarantor obligations, maximum exposure, undiscounted | 160,000,000 | 158,000,000 | |
Financial standby letter of credit | Adjustable and floating rate tax exempt bonds | |||
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | 0 | 0 | $ 0 |
Performance guarantee | Master letter of credit | |||
Guarantor Obligations [Line Items] | |||
Letter of credit facility maximum additional amount potentially required to be issued | 126,000,000 | ||
Letters of credit | |||
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | 538,393,000 | 450,354,000 | |
Guarantee obligations secured | 138,000,000 | 118,000,000 | |
Long-term tax-exempt bonds | |||
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | 98,405,000 | 122,150,000 | |
Guarantee obligations liquidity provided to member carrying value | 98,000,000 | ||
Guarantee type, other secured | |||
Guarantor Obligations [Line Items] | |||
Guarantor obligations, maximum exposure, undiscounted | 25,000,000 | 25,000,000 | |
CFC | |||
Guarantor Obligations [Line Items] | |||
CFC third-party guarantees | $ 781,558,000 | $ 706,813,000 |
Guarantees - Schedule of maturi
Guarantees - Schedule of maturities of outstanding guarantees (Details) - Guarantee obligations $ in Thousands | May 31, 2023 USD ($) |
Guarantor Obligations [Line Items] | |
2024 | $ 252,082 |
2025 | 82,317 |
2026 | 191,422 |
2027 | 39,286 |
2028 | 109,820 |
Thereafter | 121,894 |
Total | $ 796,821 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of carrying and fair values for entity's financial instruments (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 198,936 | $ 153,551 |
Cash and cash equivalents | 198,936 | 153,551 |
Restricted cash | 8,301 | 7,563 |
Equity securities, at fair value | 35,494 | 33,758 |
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 6,660 | 6,710 |
Loans to members, net | 32,478,992 | 29,995,826 |
Loans to members, net | 29,308,647 | 28,595,111 |
Accrued interest receivable | 172,723 | 111,418 |
Accrued interest receivable | 172,723 | 111,418 |
Derivative assets | 460,762 | 222,042 |
Financial assets | 33,836,743 | 31,097,014 |
Financial assets | 30,666,398 | 29,696,299 |
Liabilities [Abstract] | ||
Short-term borrowings | 4,546,275 | 4,981,167 |
Short-term borrowings | 4,547,333 | 4,978,580 |
Long-term debt | 23,946,548 | 21,545,440 |
Long-term debt | 22,665,551 | 21,106,750 |
Accrued interest payable | 212,340 | 131,950 |
Guarantee liability | 12,973 | 12,764 |
Guarantee liability | 12,475 | 13,083 |
Derivative liabilities | 115,074 | 128,282 |
Subordinated deferrable debt | 1,283,436 | 986,518 |
Subordinated deferrable debt | 1,261,141 | 960,869 |
Members’ subordinated certificates | 1,223,126 | 1,234,161 |
Members’ subordinated certificates | 1,223,126 | 1,234,161 |
Financial liabilities | 31,339,772 | 29,020,282 |
Financial liabilities | 30,037,040 | 28,553,675 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 198,936 | 153,551 |
Restricted cash | 8,301 | 7,563 |
Equity securities, at fair value | 35,494 | 33,758 |
Debt securities trading, at fair value | 0 | 0 |
Deferred compensation investments | 6,660 | 6,710 |
Loans to members, net | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Derivative assets | 0 | 0 |
Financial assets | 249,391 | 201,582 |
Liabilities [Abstract] | ||
Short-term borrowings | 0 | 0 |
Long-term debt | 0 | 0 |
Accrued interest payable | 0 | 0 |
Guarantee liability | 0 | 0 |
Derivative liabilities | 0 | 0 |
Subordinated deferrable debt | 240,831 | 250,800 |
Members’ subordinated certificates | 0 | 0 |
Financial liabilities | 240,831 | 250,800 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Equity securities, at fair value | 0 | 0 |
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 0 | 0 |
Loans to members, net | 0 | 0 |
Accrued interest receivable | 172,723 | 111,418 |
Derivative assets | 460,762 | 222,042 |
Financial assets | 1,108,360 | 899,606 |
Liabilities [Abstract] | ||
Short-term borrowings | 4,547,333 | 4,978,580 |
Long-term debt | 13,527,393 | 12,248,695 |
Accrued interest payable | 212,340 | 131,950 |
Guarantee liability | 0 | 0 |
Derivative liabilities | 115,074 | 128,282 |
Subordinated deferrable debt | 1,020,310 | 710,069 |
Members’ subordinated certificates | 0 | 0 |
Financial liabilities | 19,422,450 | 18,197,576 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Equity securities, at fair value | 0 | 0 |
Debt securities trading, at fair value | 0 | 0 |
Deferred compensation investments | 0 | 0 |
Loans to members, net | 29,308,647 | 28,595,111 |
Accrued interest receivable | 0 | 0 |
Derivative assets | 0 | 0 |
Financial assets | 29,308,647 | 28,595,111 |
Liabilities [Abstract] | ||
Short-term borrowings | 0 | 0 |
Long-term debt | 9,138,158 | 8,858,055 |
Accrued interest payable | 0 | 0 |
Guarantee liability | 12,475 | 13,083 |
Derivative liabilities | 0 | 0 |
Subordinated deferrable debt | 0 | 0 |
Members’ subordinated certificates | 1,223,126 | 1,234,161 |
Financial liabilities | $ 10,373,759 | $ 10,105,299 |
Fair Value Measurement - Sche_2
Fair Value Measurement - Schedule of fair value, assets and liabilities measured on recurring basis (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, at fair value | $ 35,494 | $ 33,758 |
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 6,660 | 6,710 |
Derivative assets | 460,762 | 222,042 |
Derivative liabilities | 115,074 | 128,282 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities trading, at fair value | 0 | 0 |
Deferred compensation investments | 6,660 | 6,710 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 0 | 0 |
Derivative assets | 460,762 | 222,042 |
Derivative liabilities | 115,074 | 128,282 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, at fair value | 35,494 | 33,758 |
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 6,660 | 6,710 |
Derivative assets | 460,762 | 222,042 |
Derivative liabilities | 115,074 | 128,282 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, at fair value | 35,494 | 33,758 |
Debt securities trading, at fair value | 0 | 0 |
Deferred compensation investments | 6,660 | 6,710 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities, at fair value | 0 | 0 |
Debt securities trading, at fair value | 474,875 | 566,146 |
Deferred compensation investments | 0 | 0 |
Derivative assets | 460,762 | 222,042 |
Derivative liabilities | $ 115,074 | $ 128,282 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) | May 31, 2023 | May 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets | $ 30,666,398,000 | $ 29,696,299,000 |
Financial liabilities | 30,037,040,000 | 28,553,675,000 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets | 29,308,647,000 | 28,595,111,000 |
Financial liabilities | 10,373,759,000 | 10,105,299,000 |
Level 3 | Recurring basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial assets | $ 0 | |
Financial liabilities | $ 0 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of variable interest entities (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Variable Interest Entity [Line Items] | ||
Other assets | $ 64,723 | $ 23,885 |
Total assets | 34,012,060 | 31,251,382 |
Total liabilities | 31,422,811 | 29,109,413 |
Variable interest entity, primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Loans to members | 1,444,662 | 1,178,479 |
Other assets | 12,612 | 9,672 |
Total assets | 1,457,274 | 1,188,151 |
Total liabilities | $ 19,704 | $ 22,958 |
Variable Interest Entities - _2
Variable Interest Entities - Schedule of variable interest entities, credit commitments (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Variable Interest Entity [Line Items] | ||
CFC third-party guarantees | $ 796,821 | $ 730,783 |
Consolidated variable interest entities | ||
Variable Interest Entity [Line Items] | ||
Total CFC credit commitments | 5,500,000 | 5,500,000 |
Borrowings payable to CFC | 1,428,886 | 1,158,583 |
CFC third-party guarantees | 15,263 | 23,970 |
Other credit enhancements | 2,038 | 4,044 |
Total credit enhancements | 17,301 | 28,014 |
Total outstanding commitments | 1,446,187 | 1,186,597 |
CFC credit commitments available | $ 4,053,813 | $ 4,313,403 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) $ in Millions | May 31, 2023 USD ($) vote director | Jun. 07, 2021 USD ($) |
Revolving credit agreements | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, maximum borrowing capacity | $ 2,600 | $ 2,600 |
Variable interest entity, primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Guarantor obligations, maximum exposure, undiscounted | $ 17 | |
RTFC | Variable interest entity, primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Number of votes per member for election of directors | vote | 1 | |
RTFC | Variable interest entity, primary beneficiary | Revolving credit agreements | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, maximum borrowing capacity | $ 1,000 | |
RTFC | Variable interest entity, primary beneficiary | Revolving Term Loan | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, maximum borrowing capacity | $ 1,500 | |
NCSC | Variable interest entity, primary beneficiary | ||
Variable Interest Entity [Line Items] | ||
Number of directors for whom nomination process is controlled | director | 1 | |
Number of votes per member for election of directors | vote | 1 | |
NCSC | Variable interest entity, primary beneficiary | Revolving credit agreements | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, maximum borrowing capacity | $ 1,500 | |
NCSC | Variable interest entity, primary beneficiary | Revolving Term Loan | ||
Variable Interest Entity [Line Items] | ||
Variable interest entity, maximum borrowing capacity | $ 1,500 |
Business Segments - Narrative (
Business Segments - Narrative (Details) | 12 Months Ended |
May 31, 2023 operating_segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Business Segments - Schedule of
Business Segments - Schedule of segment presentation for the consolidated statements of operations and consolidated balance sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Statement of operations: | ||||
Interest income | $ 1,351,729 | $ 1,141,243 | $ 1,116,601 | |
Interest expense | (1,036,508) | (705,534) | (702,063) | |
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Interest expense | (1,036,508) | (705,534) | (702,063) | |
Net interest income | 315,221 | 435,709 | 414,538 | |
Benefit (provision) for credit losses | (603) | 17,972 | (28,507) | |
Net interest income after benefit (provision) for credit losses | 314,618 | 453,681 | 386,031 | |
Non-interest income: | ||||
Fee and other income | 18,134 | 17,193 | 18,929 | |
Derivative gains: | ||||
Derivative forward value gains | 252,267 | 557,867 | 621,946 | |
Derivative gains | 285,844 | 456,482 | 506,301 | |
Investment securities gains (losses) | (4,974) | (30,179) | 1,495 | |
Total non-interest income | 299,004 | 443,496 | 526,725 | |
Non-interest expense: | ||||
General and administrative expenses | (109,631) | (95,186) | (94,705) | |
Losses on early extinguishment of debt | (117) | (754) | (1,456) | |
Other non-interest expense | (1,487) | (1,552) | (1,619) | |
Total non-interest expense | (111,235) | (97,492) | (97,780) | |
Income (loss) before income taxes | 502,387 | 799,685 | 814,976 | |
Income tax provision | (800) | (1,148) | (998) | |
Net income | 501,587 | 798,537 | 813,978 | |
Assets: | ||||
Total loans outstanding | 32,519,349 | 30,051,354 | ||
Deferred loan origination costs | 12,737 | 12,032 | ||
Loans to members | 32,532,086 | 30,063,386 | ||
Less: Allowance for credit losses | (53,094) | (67,560) | (85,532) | $ (53,125) |
Loans to members, net | 32,478,992 | 29,995,826 | ||
Other assets | 1,533,068 | 1,255,556 | ||
Total assets | 34,012,060 | 31,251,382 | ||
Interest rate swaps | ||||
Statement of operations: | ||||
Derivative cash settlements interest income (expense) | 33,577 | (101,385) | (115,645) | |
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 33,577 | (101,385) | (115,645) | |
Derivative forward value gains | 252,267 | 557,867 | 621,946 | |
Derivative gains | 285,844 | 456,482 | 506,301 | |
Operating segments | ||||
Statement of operations: | ||||
Interest income | 1,404,931 | 1,176,468 | 1,152,175 | |
Interest expense | (1,089,710) | (740,759) | (737,637) | |
Derivative cash settlements interest income (expense) | 33,577 | (101,385) | (115,645) | |
Interest expense | (1,056,133) | (842,144) | (853,282) | |
Net interest income | 348,798 | 334,324 | 298,893 | |
Benefit (provision) for credit losses | (1,538) | 21,306 | (31,670) | |
Net interest income after benefit (provision) for credit losses | 347,260 | 355,630 | 267,223 | |
Non-interest income: | ||||
Fee and other income | 28,802 | 22,496 | 29,695 | |
Derivative gains: | ||||
Derivative gains | 0 | 0 | 0 | |
Investment securities gains (losses) | (4,974) | (30,179) | 1,495 | |
Total non-interest income | 23,828 | (7,683) | 31,190 | |
Non-interest expense: | ||||
General and administrative expenses | (117,731) | (101,567) | (100,934) | |
Losses on early extinguishment of debt | (117) | (754) | (1,456) | |
Other non-interest expense | (3,120) | (3,808) | (2,993) | |
Total non-interest expense | (120,968) | (106,129) | (105,383) | |
Income (loss) before income taxes | 250,120 | 241,818 | 193,030 | |
Income tax provision | (800) | (1,148) | (998) | |
Net income | 249,320 | 240,670 | 192,032 | |
Assets: | ||||
Total loans outstanding | 33,948,236 | 31,209,938 | ||
Deferred loan origination costs | 12,737 | 12,032 | ||
Loans to members | 33,960,973 | 31,221,970 | ||
Less: Allowance for credit losses | (56,764) | (70,295) | ||
Loans to members, net | 33,904,209 | 31,151,675 | ||
Other assets | 1,598,084 | 1,343,278 | ||
Total assets | 35,502,293 | 32,494,953 | ||
Operating segments | Interest rate swaps | ||||
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Derivative forward value gains | 0 | 0 | 0 | |
Reclasses and adjustments | ||||
Statement of operations: | ||||
Interest income | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | |
Derivative cash settlements interest income (expense) | (33,577) | 101,385 | 115,645 | |
Interest expense | (33,577) | 101,385 | 115,645 | |
Net interest income | (33,577) | 101,385 | 115,645 | |
Benefit (provision) for credit losses | 0 | 0 | 0 | |
Net interest income after benefit (provision) for credit losses | (33,577) | 101,385 | 115,645 | |
Non-interest income: | ||||
Fee and other income | 0 | 0 | 0 | |
Derivative gains: | ||||
Derivative gains | 285,844 | 456,482 | 506,301 | |
Investment securities gains (losses) | 0 | 0 | 0 | |
Total non-interest income | 285,844 | 456,482 | 506,301 | |
Non-interest expense: | ||||
General and administrative expenses | 0 | 0 | 0 | |
Losses on early extinguishment of debt | 0 | 0 | 0 | |
Other non-interest expense | 0 | 0 | 0 | |
Total non-interest expense | 0 | 0 | 0 | |
Income (loss) before income taxes | 252,267 | 557,867 | 621,946 | |
Income tax provision | 0 | 0 | 0 | |
Net income | 252,267 | 557,867 | 621,946 | |
Assets: | ||||
Total loans outstanding | 0 | 0 | ||
Deferred loan origination costs | 0 | 0 | ||
Loans to members | 0 | 0 | ||
Less: Allowance for credit losses | 0 | 0 | ||
Loans to members, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | 0 | 0 | ||
Reclasses and adjustments | Interest rate swaps | ||||
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 33,577 | (101,385) | (115,645) | |
Derivative forward value gains | 252,267 | 557,867 | 621,946 | |
Intersegment eliminations | ||||
Statement of operations: | ||||
Interest income | (53,202) | (35,225) | (35,574) | |
Interest expense | 53,202 | 35,225 | 35,574 | |
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Interest expense | 53,202 | 35,225 | 35,574 | |
Net interest income | 0 | 0 | 0 | |
Benefit (provision) for credit losses | 935 | (3,334) | 3,163 | |
Net interest income after benefit (provision) for credit losses | 935 | (3,334) | 3,163 | |
Non-interest income: | ||||
Fee and other income | (10,668) | (5,303) | (10,766) | |
Derivative gains: | ||||
Derivative gains | 0 | 0 | 0 | |
Investment securities gains (losses) | 0 | 0 | 0 | |
Total non-interest income | (10,668) | (5,303) | (10,766) | |
Non-interest expense: | ||||
General and administrative expenses | 8,100 | 6,381 | 6,229 | |
Losses on early extinguishment of debt | 0 | 0 | 0 | |
Other non-interest expense | 1,633 | 2,256 | 1,374 | |
Total non-interest expense | 9,733 | 8,637 | 7,603 | |
Income (loss) before income taxes | 0 | 0 | 0 | |
Income tax provision | 0 | 0 | 0 | |
Net income | 0 | 0 | 0 | |
Assets: | ||||
Total loans outstanding | (1,428,887) | (1,158,584) | ||
Deferred loan origination costs | 0 | 0 | ||
Loans to members | (1,428,887) | (1,158,584) | ||
Less: Allowance for credit losses | 3,670 | 2,735 | ||
Loans to members, net | (1,425,217) | (1,155,849) | ||
Other assets | (65,016) | (87,722) | ||
Total assets | (1,490,233) | (1,243,571) | ||
Intersegment eliminations | Interest rate swaps | ||||
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Derivative forward value gains | 0 | 0 | 0 | |
CFC | Operating segments | ||||
Statement of operations: | ||||
Interest income | 1,343,215 | 1,133,173 | 1,108,543 | |
Interest expense | (1,036,499) | (705,534) | (702,063) | |
Derivative cash settlements interest income (expense) | 34,021 | (99,768) | (113,951) | |
Interest expense | (1,002,478) | (805,302) | (816,014) | |
Net interest income | 340,737 | 327,871 | 292,529 | |
Benefit (provision) for credit losses | (603) | 17,972 | (28,507) | |
Net interest income after benefit (provision) for credit losses | 340,134 | 345,843 | 264,022 | |
Non-interest income: | ||||
Fee and other income | 24,880 | 22,426 | 23,732 | |
Derivative gains: | ||||
Derivative gains | 0 | 0 | 0 | |
Investment securities gains (losses) | (4,974) | (30,179) | 1,495 | |
Total non-interest income | 19,906 | (7,753) | 25,227 | |
Non-interest expense: | ||||
General and administrative expenses | (107,209) | (93,465) | (93,085) | |
Losses on early extinguishment of debt | (117) | (754) | (1,456) | |
Other non-interest expense | (1,484) | (1,552) | (1,619) | |
Total non-interest expense | (108,810) | (95,771) | (96,160) | |
Income (loss) before income taxes | 251,230 | 242,319 | 193,089 | |
Income tax provision | 0 | 0 | 0 | |
Net income | 251,230 | 242,319 | 193,089 | |
Assets: | ||||
Total loans outstanding | 32,503,574 | 30,031,459 | ||
Deferred loan origination costs | 12,737 | 12,032 | ||
Loans to members | 32,516,311 | 30,043,491 | ||
Less: Allowance for credit losses | (53,094) | (67,560) | ||
Loans to members, net | 32,463,217 | 29,975,931 | ||
Other assets | 1,520,456 | 1,245,884 | ||
Total assets | 33,983,673 | 31,221,815 | ||
CFC | Operating segments | Interest rate swaps | ||||
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Derivative forward value gains | 0 | 0 | 0 | |
NCSC and RTFC | Operating segments | ||||
Statement of operations: | ||||
Interest income | 61,716 | 43,295 | 43,632 | |
Interest expense | (53,211) | (35,225) | (35,574) | |
Derivative cash settlements interest income (expense) | (444) | (1,617) | (1,694) | |
Interest expense | (53,655) | (36,842) | (37,268) | |
Net interest income | 8,061 | 6,453 | 6,364 | |
Benefit (provision) for credit losses | (935) | 3,334 | (3,163) | |
Net interest income after benefit (provision) for credit losses | 7,126 | 9,787 | 3,201 | |
Non-interest income: | ||||
Fee and other income | 3,922 | 70 | 5,963 | |
Derivative gains: | ||||
Derivative gains | 0 | 0 | 0 | |
Investment securities gains (losses) | 0 | 0 | 0 | |
Total non-interest income | 3,922 | 70 | 5,963 | |
Non-interest expense: | ||||
General and administrative expenses | (10,522) | (8,102) | (7,849) | |
Losses on early extinguishment of debt | 0 | 0 | 0 | |
Other non-interest expense | (1,636) | (2,256) | (1,374) | |
Total non-interest expense | (12,158) | (10,358) | (9,223) | |
Income (loss) before income taxes | (1,110) | (501) | (59) | |
Income tax provision | (800) | (1,148) | (998) | |
Net income | (1,910) | (1,649) | (1,057) | |
Assets: | ||||
Total loans outstanding | 1,444,662 | 1,178,479 | ||
Deferred loan origination costs | 0 | 0 | ||
Loans to members | 1,444,662 | 1,178,479 | ||
Less: Allowance for credit losses | (3,670) | (2,735) | ||
Loans to members, net | 1,440,992 | 1,175,744 | ||
Other assets | 77,628 | 97,394 | ||
Total assets | 1,518,620 | 1,273,138 | ||
NCSC and RTFC | Operating segments | Interest rate swaps | ||||
Derivative gains: | ||||
Derivative cash settlements interest income (expense) | 0 | 0 | 0 | |
Derivative forward value gains | $ 0 | $ 0 | $ 0 |