LOANS AND ALLOWANCE FOR LOSSES

Loans

Farmer Mac classifies loans as either held for investment or held for sale. Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled basis. As of December 31, 2014 and 2013, Farmer Mac had no loans held for sale. The following table displays the composition of the loan balances as of December 31, 2014 and 2013:

Table 8.1



	As of December 31, 2014									As of December 31, 2013
	Unsecuritized			In Consolidated Trusts			Total			Unsecuritized			In Consolidated Trusts			Total
	(in thousands)
Farm & Ranch	$	2,118,867		$	421,355		$	2,540,222		$	1,875,958		$	259,509		$	2,135,467
Rural Utilities	718,213			267,396			985,609			698,010			354,241			1,052,251
Total unpaid principal balance (1)	2,837,080			688,751			3,525,831			2,573,968			613,750			3,187,718
Unamortized premiums, discounts and other cost basis adjustments	(3,619		)	3,727			108			(3,843		)	16,239			12,396
Total loans	2,833,461			692,478			3,525,939			2,570,125			629,989			3,200,114
Allowance for loan losses	(5,324		)	(540		)	(5,864		)	(6,587		)	(279		)	(6,866		)
Total loans, net of allowance	$	2,828,137		$	691,938		$	3,520,075		$	2,563,538		$	629,710		$	3,193,248


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

Allowances for Losses

Farmer Mac maintains an allowance for losses presented in two components on its consolidated balance sheets: an allowance for loan losses to account for estimated probable losses on loans held, and a reserve for losses to account for estimated probable losses on loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities. As of December 31, 2014 and 2013, Farmer Mac recorded allowances for losses of $10.1 million and $13.3 million, respectively. See Note 5 and Note 12 for more information about Farmer Mac Guaranteed Securities.

The following is a summary of the changes in the allowance for losses for each year in the three-year period ended December 31, 2014:

Table 8.2



	Allowance for Loan Losses			Reserve for Losses			Total Allowance for Losses
	(in thousands)
Balance as of January 1, 2012	$	10,161		$	7,355		$	17,516
Provision for/(release of) losses	3,691			(1,816		)	1,875
Charge-offs	(2,501		)	—			(2,501		)
Balance as of December 31, 2012	$	11,351		$	5,539		$	16,890
(Release of)/provision for losses	(481		)	929			448
Charge-offs	(4,004		)	—			(4,004		)
Balance as of December 31, 2013	$	6,866		$	6,468		$	13,334
Release of losses	(961		)	(2,205		)	(3,166		)
Charge-offs	(86		)	—			(86		)
Recoveries	45			—			45
Balance as of December 31, 2014	$	5,864		$	4,263		$	10,127

During 2014, Farmer Mac recorded releases from its allowance for loan losses of $1.0 million and releases from its reserve for losses of $2.2 million, primarily related to a decrease in the balance of its ethanol loans as well as a general improvement in the quality of the ethanol loans held and loans underlying LTSPCs. Farmer Mac recorded $0.1 million of charge-offs and recoveries of $45,000 to its allowance for loan losses during 2014.

During 2013, Farmer Mac recorded releases from its allowance for loan losses of $0.5 million and provisions to its reserve for losses of $0.9 million. Farmer Mac also recorded $4.0 million of charge-offs to its allowance for loan losses during 2013. Charge-offs recorded during 2013 included a $3.6 million charge-off related to one ethanol loan that transitioned to real estate owned ("REO") for which Farmer Mac had previously provided a specific allowance.

During 2012, Farmer Mac recorded provisions to its allowance for loan losses of $3.7 million and releases from its reserve for losses of $1.8 million. In fourth quarter 2012, Farmer Mac purchased one defaulted ethanol loan pursuant to the terms of an LTSPC agreement. This resulted in the reclassification of a specific allowance of $3.2 million from the reserve for losses to the allowance for loan losses. The provision for/(release of) losses for 2012 reflects this reclassification as well as an increase in the specific allowance for this loan during 2012 prior to purchase. Farmer Mac also recorded charge-offs of $2.5 million to its allowance for loan losses during 2012.

The following tables present the changes in the total allowance for losses for the year ended December 31, 2014 and 2013 by commodity type:

Table 8.3



	December 31, 2014
	Crops		Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing (including ethanol facilities)			Other		Total
	(in thousands)
For the Year Ended:
Beginning Balance	$	2,124	$	2,186		$	1,271		$	454		$	7,292		$	7	$	13,334
Provision for/(release of) losses	395		(72		)	209			42			(3,740		)	—		(3,166		)
Charge-offs	—		—			(57		)	(29		)	—			—		(86		)
Recoveries	—		45			—			—			—			—		45
Ending Balance	$	2,519	$	2,159		$	1,423		$	467		$	3,552		$	7	$	10,127



	December 31, 2013
	Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing (including ethanol facilities)			Other		Total
	(in thousands)
For the Year Ended:
Beginning Balance	$	2,589		$	2,316		$	1,534		$	784		$	9,661		$	6	$	16,890
(Release of)/provision for losses	(420		)	(130		)	(263		)	4			1,256			1		448
Charge-offs	(45		)	—			—			(334		)	(3,625		)	—		(4,004		)
Ending Balance	$	2,124		$	2,186		$	1,271		$	454		$	7,292		$	7	$	13,334

The following tables present the unpaid principal balances of loans held and loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities and the related total allowance for losses by impairment method and commodity type as of December 31, 2014 and 2013:

Table 8.4



	As of December 31, 2014
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment:
On-balance sheet	$	1,621,360	$	359,517	$	406,049	$	57,851	$	29,003	$	—	$	2,473,780
Off-balance sheet	1,305,141		521,535		839,286		102,857		85,357		6,781		2,860,957
Total	$	2,926,501	$	881,052	$	1,245,335	$	160,708	$	114,360	$	6,781	$	5,334,737
Individually evaluated for impairment:
On-balance sheet	$	12,307	$	35,904	$	6,571	$	11,660	$	—	$	—	$	66,442
Off-balance sheet	2,458		3,239		8,712		1,586		—		—		15,995
Total	$	14,765	$	39,143	$	15,283	$	13,246	$	—	$	—	$	82,437
Total Farm & Ranch loans:
On-balance sheet	$	1,633,667	$	395,421	$	412,620	$	69,511	$	29,003	$	—	$	2,540,222
Off-balance sheet	1,307,599		524,774		847,998		104,443		85,357		6,781		2,876,952
Total	$	2,941,266	$	920,195	$	1,260,618	$	173,954	$	114,360	$	6,781	$	5,417,174
Allowance for Losses:
Collectively evaluated for impairment:
On-balance sheet	$	1,824	$	495	$	658	$	51	$	503	$	—	$	3,531
Off-balance sheet	298		149		404		52		3,049		7		3,959
Total	$	2,122	$	644	$	1,062	$	103	$	3,552	$	7	$	7,490
Individually evaluated for impairment:
On-balance sheet	$	283	$	1,410	$	328	$	312	$	—	$	—	$	2,333
Off-balance sheet	114		105		33		52		—		—		304
Total	$	397	$	1,515	$	361	$	364	$	—	$	—	$	2,637
Total Farm & Ranch loans:
On-balance sheet	$	2,107	$	1,905	$	986	$	363	$	503	$	—	$	5,864
Off-balance sheet	412		254		437		104		3,049		7		4,263
Total	$	2,519	$	2,159	$	1,423	$	467	$	3,552	$	7	$	10,127



	As of December 31, 2013
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment:
On-balance sheet	$	1,363,861	$	295,037	$	319,665	$	39,940	$	32,636	$	359	$	2,051,498
Off-balance sheet	1,279,887		567,932		912,397		109,884		138,282		8,159		3,016,541
Total	$	2,643,748	$	862,969	$	1,232,062	$	149,824	$	170,918	$	8,518	$	5,068,039
Individually evaluated for impairment:
On-balance sheet	$	21,147	$	41,441	$	10,844	$	10,422	$	—	$	115	$	83,969
Off-balance sheet	1,962		3,414		3,199		2,497		—		—		11,072
Total	$	23,109	$	44,855	$	14,043	$	12,919	$	—	$	115	$	95,041
Total Farm & Ranch loans:
On-balance sheet	$	1,385,008	$	336,478	$	330,509	$	50,362	$	32,636	$	474	$	2,135,467
Off-balance sheet	1,281,849		571,346		915,596		112,381		138,282		8,159		3,027,613
Total	$	2,666,857	$	907,824	$	1,246,105	$	162,743	$	170,918	$	8,633	$	5,163,080
Allowance for Losses:
Collectively evaluated for impairment:
On-balance sheet	$	1,321	$	325	$	436	$	20	$	2,290	$	—	$	4,392
Off-balance sheet	397		159		642		42		5,002		4		6,246
Total	$	1,718	$	484	$	1,078	$	62	$	7,292	$	4	$	10,638
Individually evaluated for impairment:
On-balance sheet	$	362	$	1,641	$	140	$	331	$	—	$	—	$	2,474
Off-balance sheet	44		61		53		61		—		3		222
Total	$	406	$	1,702	$	193	$	392	$	—	$	3	$	2,696
Total Farm & Ranch loans:
On-balance sheet	$	1,683	$	1,966	$	576	$	351	$	2,290	$	—	$	6,866
Off-balance sheet	441		220		695		103		5,002		7		6,468
Total	$	2,124	$	2,186	$	1,271	$	454	$	7,292	$	7	$	13,334

The following tables present by commodity type the unpaid principal balances, recorded investment, and specific allowance for losses related to impaired loans and the recorded investment in loans on nonaccrual status as of December 31, 2014 and 2013:

Table 8.5



	As of December 31, 2014
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	4,877	$	5,837	$	9,576	$	2,001	$	—	$	—	$	22,291
Unpaid principal balance	4,723		5,750		9,386		1,981		—		—		21,840
With a specific allowance:
Recorded investment (1)	10,753		33,690		5,979		11,350		—		—		61,772
Unpaid principal balance	10,042		33,393		5,897		11,265		—		—		60,597
Associated allowance	397		1,515		361		364		—		—		2,637
Total:
Recorded investment	15,630		39,527		15,555		13,351		—		—		84,063
Unpaid principal balance	14,765		39,143		15,283		13,246		—		—		82,437
Associated allowance	397		1,515		361		364		—		—		2,637

Recorded investment of loans on nonaccrual status (2)	$	5,168	$	14,413	$	4,438	$	6,133	$	—	$	—	$	30,152


(1)	Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on $54.4 million (65 percent) of impaired loans as of December 31, 2014, which resulted in a specific reserve of $1.2 million.


(2)	Includes $11.7 million of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.



	As of December 31, 2013
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	6,956	$	9,880	$	6,671	$	1,444	$	—	$	—	$	24,951
Unpaid principal balance	6,825		9,877		6,588		1,443		—		—		24,733
With a specific allowance:
Recorded investment (1)	16,697		36,146		7,600		11,554		—		119		72,116
Unpaid principal balance	16,284		34,978		7,455		11,476		—		115		70,308
Associated allowance	406		1,702		193		392		—		3		2,696
Total:
Recorded investment	23,653		46,026		14,271		12,998		—		119		97,067
Unpaid principal balance	23,109		44,855		14,043		12,919		—		115		95,041
Associated allowance	406		1,702		193		392		—		3		2,696

Recorded investment of loans on nonaccrual status (2)	$	10,812	$	15,237	$	5,344	$	5,835	$	—	$	—	$	37,228


(1)	Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on $65.1 million (67 percent) of impaired loans as of December 31, 2013, which resulted in a specific reserve of $1.3 million.


(2)	Includes $9.6 million of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.

The following table presents by commodity type the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2014 and 2013:

Table 8.6



	December 31, 2014
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
For the Year Ended:
Average recorded investment in impaired loans	$	20,625	$	43,221	$	13,543	$	12,596	$	—	$	24	$	90,009
Income recognized on impaired loans	373		474		327		359		—		—		1,533



	December 31, 2013
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
For the Year Ended:
Average recorded investment in impaired loans	$	28,387	$	42,838	$	16,117	$	13,042	$	867	$	481	$	101,732
Income recognized on impaired loans	793		2,254		277		444		—		—		3,768

A modification to the contractual terms of a loan that results in granting a concession to a borrower experiencing financial difficulties is considered a troubled debt restructuring ("TDR"). Farmer Mac has granted a concession when, as a result of the restructuring, it does not expect to collect all amounts due in a timely manner, including interest accrued at the original contract rate. In making its determination of whether a borrower is experiencing financial difficulties, Farmer Mac considers several factors, including whether (1) the borrower has declared or is in the process of declaring bankruptcy, (2) there is substantial doubt as to whether the borrower will continue to be a going concern, and (3) the borrower can obtain funds from other sources at an effective interest rate at or near a current market interest rate for debt with similar risk characteristics. Farmer Mac evaluates TDRs similarly to other impaired loans for purposes of the allowance for losses. For the year ended December 31, 2014, the recorded investment of loans determined to be TDRs was $5.3 million before restructuring and $6.0 million after restructuring. For the year ended December 31, 2013, the recorded investment of loans determined to be TDRs was $1.1 million both before and after restructuring. For the year ended December 31, 2012, the recorded investment of loans determined to be TDRs was $2.6 million before and $2.8 million after restructuring. As of December 31, 2014 and 2013, there were no TDRs identified during the previous 12 months that were in default under the modified terms. The impact of TDRs on Farmer Mac's allowance for loan losses was immaterial for the year ended December 31, 2014. The impact of TDRs on Farmer Mac's allowance for loan losses for the year ended December 31 2013, and 2012 was a provision of $0.1 million and a release of $0.3 million, respectively.

When particular criteria are met, such as the default of the borrower, Farmer Mac becomes entitled to purchase the defaulted loans underlying Farmer Mac Guaranteed Securities (commonly referred to as "removal-of-account" provisions). Farmer Mac records all such defaulted loans at their unpaid principal balance during the period in which Farmer Mac becomes entitled to purchase the loans and therefore regains effective control over the transferred loans. In accordance with the terms of all LTSPCs, Farmer Mac acquires loans that are either 90 days or 120 days delinquent (depending on the provisions of the applicable agreement) upon the request of the counterparty. Subsequent to the purchase, these defaulted loans are treated as nonaccrual loans and, therefore, interest is accounted for on the cash basis. Any decreases in expected cash flows are recognized as impairment.

During 2014, Farmer Mac purchased 2 defaulted loans having an unpaid principal balance of $0.7 million, from pools underlying LTSPCs. During 2013, Farmer Mac purchased 11 defaulted loans having an unpaid principal balance of $6.7 million from pools underlying Farm & Ranch Guaranteed Securities and LTSPCs. During 2012, Farmer Mac purchased 15 defaulted loans having an unpaid principal balance of $17.0 million from pools underlying Farm & Ranch Guaranteed Securities and LTSPCs.

The following tables present information related to Farmer Mac's acquisition of defaulted loans for the years ended December 31, 2014, 2013, and 2012 and the outstanding balances and carrying amounts of all such loans as of December 31, 2014, 2013, and 2012:

Table 8.7



	For the Year Ended December 31,
	2014		2013		2012
	(in thousands)
Unpaid principal balance at acquisition date:
Loans underlying LTSPCs	$	705	$	37	$	8,091
Loans underlying off-balance sheet Farmer Mac Guaranteed Securities	—		6,667		8,933
Total unpaid principal balance at acquisition date	705		6,704		17,024
Contractually required payments receivable	705		6,907		17,432
Impairment recognized subsequent to acquisition	69		477		4,774
Recovery/release of allowance for defaulted loans	233		949		997



	As of December 31,
	2014		2013		2012
	(in thousands)
Outstanding balance	$	24,921	$	32,838	$	41,737
Carrying amount	22,149		29,613		33,798

Net credit losses and 90-day delinquencies as of and for the periods indicated for loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs are presented in the table below. As of December 31, 2014, there were no delinquencies and no probable losses inherent in Farmer Mac's Rural Utilities loan portfolio and Farmer Mac had not experienced credit losses on any Rural Utilities loans.

Table 8.8



	90-Day Delinquencies (1)				Net Credit (Recoveries)/Losses
	As of December 31,				For the Year Ended December 31,
	2014		2013		2014			2013		2012
	(in thousands)
On-balance sheet assets:
Farm & Ranch:
Loans	$	18,427	$	27,580	$	(6	)	$	2,975	$	1,673
Total on-balance sheet	$	18,427	$	27,580	$	(6	)	$	2,975	$	1,673
Off-balance sheet assets:
Farm & Ranch:
LTSPCs	$	490	$	716	$	—		$	—	$	—
Total off-balance sheet	$	490	$	716	$	—		$	—	$	—
Total	$	18,917	$	28,296	$	(6	)	$	2,975	$	1,673


(1)	Includes loans and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, restructured after delinquency, or in bankruptcy, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

Of the $18.4 million and $27.6 million of on-balance sheet loans reported as 90-day delinquencies as of December 31, 2014 and 2013, respectively, $1.8 million and $1.2 million, respectively, were loans subject to "removal-of-account" provisions.

Credit Quality Indicators

Farmer Mac analyzes credit risk related to loans held and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities based on internally assigned loan scores (i.e., risk ratings) that are derived by taking into consideration such factors as historical repayment performance, indicators of current financial condition, loan seasoning, loan size, and loan-to-value ratio. Loans are then classified into one of the following asset categories based on their underlying risk rating: acceptable; other assets especially mentioned; and substandard. Farmer Mac believes this analysis provides meaningful information regarding the credit risk profile of its Farm & Ranch portfolio as of each quarterly reporting period end date.

Farmer Mac also uses 90-day delinquency information to evaluate its credit risk exposure on these assets because historically it has been the best measure of borrower credit quality deterioration. Most of the loans held and underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities have annual (January 1) or semi-annual (January 1 and July 1) payment dates and are supported by less frequent and less predictable revenue sources, such as the cash flows generated from the maturation of crops, sales of livestock, and government farm support programs. Taking into account the reduced frequency of payment due dates and revenue sources, Farmer Mac considers 90-day delinquency to be the most significant observation point when evaluating delinquency information.

The following tables present credit quality indicators related to Farm & Ranch loans held and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities as of December 31, 2014 and 2013:

Table 8.9



	As of December 31, 2014
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade (1)
On-balance sheet:
Acceptable	$	1,604,546	$	353,487	$	375,010	$	57,239	$	29,003	$	—	$	2,419,285
Special mention (2)	16,814		6,030		31,039		612		—		—		54,495
Substandard (3)	12,307		35,904		6,571		11,660		—		—		66,442
Total on-balance sheet	$	1,633,667	$	395,421	$	412,620	$	69,511	$	29,003	$	—	$	2,540,222
Off-Balance Sheet:
Acceptable	$	1,282,773	$	503,414	$	799,047	$	97,692	$	64,363	$	6,117	$	2,753,406
Special mention (2)	13,603		12,150		30,281		1,351		—		8		57,393
Substandard (3)	11,223		9,210		18,670		5,400		20,994		656		66,153
Total off-balance sheet	$	1,307,599	$	524,774	$	847,998	$	104,443	$	85,357	$	6,781	$	2,876,952
Total Ending Balance:
Acceptable	$	2,887,319	$	856,901	$	1,174,057	$	154,931	$	93,366	$	6,117	$	5,172,691
Special mention (2)	30,417		18,180		61,320		1,963		—		8		111,888
Substandard (3)	23,530		45,114		25,241		17,060		20,994		656		132,595
Total	$	2,941,266	$	920,195	$	1,260,618	$	173,954	$	114,360	$	6,781	$	5,417,174

Commodity analysis of past due loans (1)
On-balance sheet	$	4,175	$	6,869	$	4,555	$	2,828	$	—	$	—	$	18,427
Off-balance sheet	—		—		490		—		—		—		490
90-days or more past due	$	4,175	$	6,869	$	5,045	$	2,828	$	—	$	—	$	18,917


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


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


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



	As of December 31, 2013
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade (1)
On-balance sheet:
Acceptable	$	1,348,205	$	290,064	$	300,308	$	39,022	$	10,987	$	359	$	1,988,945
Special Mention (2)	15,656		4,973		19,357		918		6,267		—		47,171
Substandard (3)	21,147		41,441		10,844		10,422		15,382		115		99,351
Total on-balance sheet	$	1,385,008	$	336,478	$	330,509	$	50,362	$	32,636	$	474	$	2,135,467
Off-Balance Sheet
Acceptable	$	1,251,834	$	548,254	$	844,130	$	105,589	$	99,072	$	7,478	$	2,856,357
Special Mention (2)	10,977		15,621		36,555		917		11,011		578		75,659
Substandard (3)	19,038		7,471		34,911		5,875		28,199		103		95,597
Total off-balance sheet	$	1,281,849	$	571,346	$	915,596	$	112,381	$	138,282	$	8,159	$	3,027,613
Total Ending Balance:
Acceptable	$	2,600,039	$	838,318	$	1,144,438	$	144,611	$	110,059	$	7,837	$	4,845,302
Special Mention (2)	26,633		20,594		55,912		1,835		17,278		578		122,830
Substandard (3)	40,185		48,912		45,755		16,297		43,581		218		194,948
Total	$	2,666,857	$	907,824	$	1,246,105	$	162,743	$	170,918	$	8,633	$	5,163,080

Commodity analysis of past due loans (1)
On-balance sheet	$	8,036	$	11,841	$	4,462	$	3,122	$	—	$	119	$	27,580
Off-balance sheet	220		—		—		496		—		—		716
90-days or more past due	$	8,256	$	11,841	$	4,462	$	3,618	$	—	$	119	$	28,296


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


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


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

Concentrations of Credit Risk

The following table sets forth the geographic and commodity/collateral diversification, as well as the range of original loan-to-value ratios, for all Farm & Ranch loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs as of December 31, 2014 and December 31, 2013:

Table 8.10



	As of December 31,
	2014		2013
	(in thousands)
By commodity/collateral type:
Crops	$	2,941,266	$	2,666,857
Permanent plantings	920,195		907,824
Livestock	1,260,618		1,246,105
Part-time farm	173,954		162,743
Ag. Storage and Processing (including ethanol facilities)	114,360		170,918
Other	6,781		8,633
Total	$	5,417,174	$	5,163,080
By geographic region (1):
Northwest	$	573,135	$	524,034
Southwest	1,753,606		1,752,109
Mid-North	1,873,041		1,702,668
Mid-South	627,615		601,359
Northeast	214,402		231,731
Southeast	375,375		351,179
Total	$	5,417,174	$	5,163,080
By original loan-to-value ratio:
0.00% to 40.00%	$	1,503,076	$	1,375,758
40.01% to 50.00%	1,191,804		1,099,033
50.01% to 60.00%	1,491,502		1,431,562
60.01% to 70.00%	1,091,759		1,113,427
70.01% to 80.00%	115,645		110,828
80.01% to 90.00%	23,388		32,472
Total	$	5,417,174	$	5,163,080


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

The original loan-to-value ratio is calculated by dividing the loan principal balance at the time of guarantee, purchase, or commitment by the appraised value at the date of loan origination or, when available, the updated appraised value at the time of guarantee, purchase, or commitment. Current loan-to-value ratios may be higher or lower than the original loan-to-value ratios.