INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's investment securities as of December 31, 2016 and 2015:

Table 4.1



	As of December 31, 2016
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—		$	19,700	$	—	$	(1,970	)	$	17,730
Floating rate asset-backed securities	44,442		(202		)	44,240		1		(390		)	43,851
Floating rate corporate debt securities	10,000		—			10,000		41		—			10,041
Floating rate Government/GSE guaranteed mortgage-backed securities	1,359,700		2,827			1,362,527		1,768		(3,266		)	1,361,029
Fixed rate GSE guaranteed mortgage-backed securities⁽¹⁾	538		2,582			3,120		4,505		—			7,625
Floating rate GSE subordinated debt	70,000		—			70,000		—		(3,047		)	66,953
Fixed rate senior agency debt	187,295		106			187,401		—		(268		)	187,133
Fixed rate U.S. Treasuries	821,619		359			821,978		47		(536		)	821,489
Total available-for-sale	2,513,294		5,672			2,518,966		6,362		(9,477		)	2,515,851
Total investment securities	$	2,513,294	$	5,672		$	2,518,966	$	6,362	$	(9,477	)	$	2,515,851


⁽¹⁾	Fair value includes $7.0 million of an interest-only security with a notional amount of $146.1 million.



	As of December 31, 2015
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	46,500	$	—		$	46,500	$	—	$	(1,576	)	$	44,924
Floating rate asset-backed securities	74,744		(253		)	74,491		14		(776		)	73,729
Floating rate corporate debt securities	10,000		—			10,000		—		(9		)	9,991
Fixed rate corporate debt securities	10,000		(1		)	9,999		—		(5		)	9,994
Floating rate Government/GSE guaranteed mortgage-backed securities	1,353,495		3,515			1,357,010		2,768		(4,319		)	1,355,459
Fixed rate GSE guaranteed mortgage-backed securities⁽¹⁾	692		3,117			3,809		4,095		—			7,904
Floating rate GSE subordinated debt	70,000		—			70,000		—		(3,751		)	66,249
Fixed rate senior agency debt	214,000		(25		)	213,975		12		—			213,987
Fixed rate U.S. Treasuries	993,680		(417		)	993,263		2		(477		)	992,788
Total available-for-sale	2,773,111		5,936			2,779,047		6,891		(10,913		)	2,775,025
Trading:
Floating rate asset-backed securities	2,211		—			2,211		—		(1,720		)	491
Total investment securities	$	2,775,322	$	5,936		$	2,781,258	$	6,891	$	(12,633	)	$	2,775,516


⁽¹⁾	Fair value includes $7.2 million of an interest-only security with a notional amount of $148.5 million.

During 2016, Farmer Mac received proceeds of $186.8 million from the sale of securities from its available-for-sale investment portfolio, resulting in gross realized gains of $0.1 million and gross realized losses of $0.1 million. During 2015, Farmer Mac received proceeds of $83.7 million from the sale of securities from its available-for-sale investment portfolio, resulting in gross realized gains of $0.1 million. During 2014, Farmer Mac received proceeds of $770.1 million from the sale of securities from its available-for-sale investment portfolio, resulting in gross realized losses of $0.8 million and gross realized gains of $0.6 million. Farmer Mac also recognized $0.1 million in losses during 2015 related to other-than-temporary impairment on two auction-rate certificate securities.

As of December 31, 2016 and 2015, unrealized losses on available-for-sale investment securities were as follows:

Table 4.2



	As of December 31, 2016
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	17,730	$	(1,970	)
Floating rate asset-backed securities	4,654		(10		)	38,077		(380		)
Floating rate Government/GSE guaranteed mortgage-backed securities	384,586		(1,030		)	442,041		(2,236		)
Floating rate GSE subordinated debt	—		—			66,953		(3,047		)
Fixed rate U.S. Treasuries	732,371		(536		)	—		—
Fixed rate senior agency debt	187,133		(268		)	—		—
Total	$	1,308,744	$	(1,844	)	$	564,801	$	(7,633	)



	As of December 31, 2015
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	18,124	$	(1,576	)
Floating rate asset-backed securities	44,552		(464		)	9,975		(312		)
Floating rate corporate debt securities	4,991		(9		)	—		—
Fixed rate corporate debt securities	9,994		(5		)	—		—
Floating rate Government/GSE guaranteed mortgage-backed securities	794,959		(3,408		)	100,192		(911		)
Floating rate GSE subordinated debt	—		—			66,249		(3,751		)
Fixed rate U.S. Treasuries	944,842		(477		)	—		—
Total	$	1,799,338	$	(4,363	)	$	194,540	$	(6,550	)

The unrealized losses presented above are principally due to a general widening of credit spreads and an increase in the levels of interest rates from the dates of acquisition to December 31, 2016 and 2015, as applicable. The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities. As of December 31, 2016, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government or had credit ratings of at least "AA+," except one that was rated "A-." As of December 31, 2015, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government or had credit ratings of at least "AA+," except three that were rated "A-." The unrealized losses were on 97 and 69 individual investment securities as of December 31, 2016 and 2015, respectively.

As of December 31, 2016, 36 of the securities in loss positions had been in loss positions for more than 12 months and had a total unrealized loss of $7.6 million. As of December 31, 2015, 17 of the securities in loss positions had been in loss positions for more than 12 months and had a total unrealized loss of $6.6 million. Securities in unrealized loss positions for 12 months or longer have a fair value as of December 31, 2016 that is, on average, approximately 99 percent of their amortized cost basis. Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity or changes in credit spreads. Accordingly, Farmer Mac has concluded that none of the unrealized losses on these available-for-sale investment securities are other-than-temporary impairment as of December 31, 2016 and 2015.

Farmer Mac did not own any held-to-maturity investment securities as of December 31, 2016 and 2015. As of December 31, 2016, Farmer Mac did not own any trading investment securities. As of December 31, 2015, Farmer Mac owned trading investment securities with an amortized cost of $2.2 million, a fair value of $0.5 million, and a weighted average yield of 4.41 percent.

The amortized cost, fair value, and weighted average yield of available-for-sale investment securities by remaining contractual maturity as of December 31, 2016 are set forth below. Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 4.3



	As of December 31, 2016
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	879,669	$	879,137	0.76%
Due after one year through five years	370,435		370,089		1.11%
Due after five years through ten years	424,882		426,270		1.39%
Due after ten years	843,980		840,355		1.19%
Total	$	2,518,966	$	2,515,851	1.06%