Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

The following schedule reconciles basic and diluted EPS for the years ended December 31, 2022, 2021 and 2020:

Table 2.1


	For the Years Ended December 31,
	2022					2021					2020
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	150,979	10,791	$	14.00	$	111,412	10,758	$	10.36	$	94,904	10,728	$	8.85
Effect of dilutive securities(1)
SARs and restricted stock	—		92	(0.13)		—		88	(0.09)		—		58	(0.05)
Diluted EPS	$	150,979	10,883	$	13.87	$	111,412	10,846	$	10.27	$	94,904	10,786	$	8.80

(1)For the years ended December 31, 2022, 2021 and 2020, SARs and restricted stock of 32,448, 39,326, and 74,336, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the years ended December 31, 2022, 2021 and 2020, contingent shares of unvested restricted stock of 18,535, 18,183, and 12,680 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

Schedule of Accumulated Other Comprehensive Income, Net of Tax

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the years ended December 31, 2022, 2021, and 2020.

Table 2.2



	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)
Balance as of January 1, 2020	$	(43,397)	$	32,845	$	(5,609)	$	(16,161)
Other comprehensive income/(loss) before reclassifications	32,739		—		(21,606)		11,133
Amounts reclassified from AOCI	(3,279)		(10,016)		4,400		(8,895)
Net comprehensive income/(loss)	29,460		(10,016)		(17,206)		2,238
Balance as of December 31, 2020	$	(13,937)	$	22,829	$	(22,815)	$	(13,923)
Other comprehensive income before reclassifications	9,114		—		11,602		20,716
Amounts reclassified from AOCI	(2,109)		(6,676)		5,845		(2,940)
Net comprehensive income/(loss)	7,005		(6,676)		17,447		17,776
Balance as of December 31, 2021	$	(6,932)	$	16,153	$	(5,368)	$	3,853
Other comprehensive (loss)/income before reclassifications	(108,624)		—		54,688		(53,936)
Amounts reclassified from AOCI	(5)		204		(959)		(760)
Net comprehensive (loss)/income	(108,629)		204		53,729		(54,696)
Balance as of December 31, 2022	$	(115,561)	$	16,357	$	48,361	$	(50,843)

Schedule of Reclassification out of Accumulated Other Comprehensive Income

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the years ended December 31, 2022, 2021, and 2020:

Table 2.3


	For the Years Ended December 31,
	2022						2021						2020
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding (losses)/gains on available-for-sale securities	$	(137,500)	$	(28,876)	$	(108,624)	$	11,537	$	2,423	$	9,114	$	41,442	$	8,703	$	32,739
Less reclassification adjustments included in:
Net interest income(1)	—		—		—		(2,333)		(490)		(1,843)		(3,895)		(818)		(3,077)
Gains on sale of available-for-sale investment securities(2)	—		—		—		(253)		(53)		(200)		—		—		—
Other income(3)	(6)		(1)		(5)		(84)		(18)		(66)		(256)		(54)		(202)
Total	$	(137,506)	$	(28,877)	$	(108,629)	$	8,867	$	1,862	$	7,005	$	37,291	$	7,831	$	29,460
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(4)	259		55		204		(8,451)		(1,775)		(6,676)		(12,677)		(2,661)		(10,016)
Total	$	259	$	55	$	204	$	(8,451)	$	(1,775)	$	(6,676)	$	(12,677)	$	(2,661)	$	(10,016)
Cash flow hedges
Unrealized gains/(losses) on cash flow hedges	$	69,225	$	14,537	$	54,688	$	14,685	$	3,083	$	11,602	$	(27,350)	$	(5,744)	$	(21,606)
Less reclassification adjustments included in:
Net interest income(5)	(1,213)		(254)		(959)		7,399		1,554		5,845		5,570		1,170		4,400
Total	$	68,012	$	14,283	$	53,729	$	22,084	$	4,637	$	17,447	$	(21,780)	$	(4,574)	$	(17,206)
Other comprehensive (loss)/income	$	(69,235)	$	(14,539)	$	(54,696)	$	22,500	$	4,724	$	17,776	$	2,834	$	596	$	2,238

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

(2)Represents unrealized gains and losses on sales of available-for-sale securities.

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

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

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

Schedule of Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance


Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2020-04 and 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	January 1, 2020	Farmer Mac adopted optional expedients specific to discounting transition on a retrospective basis, and as a result of this election, the discounting transition did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. Farmer Mac is exploring the adoption of additional optional expedients, including contract modification relief, and does not expect this to have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848	The amendments in this Update deferred the sunset date in Topic 848 from December 31, 2022 to December 31, 2024.	December 21, 2022	Farmer Mac continues to evaluate the impact of ASC 848.

Recently Issued Accounting Guidance


Standard	Description	Effect on Consolidated Financial Statements
ASU 2022-01, Fair Value Hedging - Portfolio Layer Method	The Update introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method). Additionally, it expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio, and provides that an entity may reclassify HTM debt securities identified within 30 days of the date of adoption to AFS if the entity applies portfolio layer method hedging to those debt securities.	Farmer Mac is continuing to evaluate the use of the portfolio layer method in its hedging programs, although future use of the standard is dependent on its asset-liability management strategies in the context of the then current interest rate outlook. Farmer Mac does not believe adoption of the standard will have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The Update addresses and amends areas identified by the Financial Accounting Standards Board ("FASB") as part of its post-implementation review of the accounting standard that introduced the current expected credit losses (“CECL”) model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross writeoffs 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 that have adopted the CECL accounting standard. Early adoption, however, is permitted if an entity has adopted the CECL accounting standard.	We adopted this guidance effective January 1, 2023 on a prospective basis and will provide additional disclosures as required.