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LOANS

12 Months Ended

Dec. 31, 2023

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 basis adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled

basis. As of both December 31, 2023 and 2022, Farmer Mac had no loans held for sale.

Under the Agricultural Finance line of business, Farmer Mac has two segments – Farm & Ranch and Corporate AgFinance. The segments are characterized by similarities in risk attributes and the manner in which Farmer Mac monitors and assesses credit risk.

The following table includes loans held for investment and displays the composition of the loan balances as of December 31, 2023 and 2022:

Table 8.1


	As of December 31, 2023						As of December 31, 2022
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Agricultural Finance loans
Farm & Ranch	$	5,133,450	$	1,432,261	$	6,565,711	$	5,150,750	$	1,211,576	$	6,362,326
Corporate AgFinance	1,259,723		—		1,259,723		1,166,253		—		1,166,253
Total Agricultural Finance loans	6,393,173		1,432,261		7,825,434		6,317,003		1,211,576		7,528,579
Rural Infrastructure Finance loans	3,534,763		—		3,534,763		3,021,266		—		3,021,266
Total unpaid principal balance(1)	9,927,936		1,432,261		11,360,197		9,338,269		1,211,576		10,549,845
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	(304,817)		—		(304,817)		(329,290)		—		(329,290)
Total loans	9,623,119		1,432,261		11,055,380		9,008,979		1,211,576		10,220,555
Allowance for losses	(15,588)		(443)		(16,031)		(14,629)		(460)		(15,089)
Total loans, net of allowance	$	9,607,531	$	1,431,818	$	11,039,349	$	8,994,350	$	1,211,116	$	10,205,466

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

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of December 31, 2023 and 2022:

Table 8.2


	December 31, 2023		December 31, 2022
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Agricultural Finance loans
Farm & Ranch	$	3,936	$	4,044
Corporate AgFinance	2,948		2,731
Total Agricultural Finance Loans	6,884		6,775
Rural Infrastructure Finance loans	9,147		8,314
Total	$	16,031	$	15,089

The following is a summary of the changes in the allowance for losses for each year in the three-year period ended December 31, 2023:

Table 8.3



	Agricultural Finance loans						Rural Infrastructure Finance loans(3)
	Farm & Ranch(1)		Corporate AgFinance(2)		Total
	(in thousands)
Balance as of December 31, 2020	$	3,404	$	341	$	3,745	$	10,087
(Release of)/provision for losses	(1,576)		219		(1,357)		512
Recovery	1,054		—		1,054		—
Balance as of December 31, 2021	$	2,882	$	560	$	3,442	$	10,599
Provision for/(release of) losses	1,246		2,171		3,417		(2,285)
Charge-offs	(84)		—		(84)		—
Balance as of December 31, 2022	$	4,044	$	2,731	$	6,775	$	8,314
(Release of)/provision for losses	(108)		217		109		833
Charge-offs	—		—		—		—
Balance as of December 31, 2023	$	3,936	$	2,948	$	6,884	$	9,147

(1)As of December 31, 2023 and 2022, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $1.0 million and $1.9 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2)As of December 31, 2023 and 2022, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $0.0 million and $2.4 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3)As of December 31, 2023 and 2022, the allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $0.8 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the year ended December 31, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the year. The $0.1 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the year ended December 31, 2023 was primarily attributable to increased loan volume.

The $2.3 million net release from the allowance for the Rural Infrastructure Finance portfolio during the year ended December 31, 2022 was primarily attributable to a risk rating upgrade on a single loan and improvements in forecasts of future economic conditions. The risk rating upgrade on that loan reflected

that borrower's successful securitization of its large payable that arose during the arctic freeze that struck Texas in February 2021. The $3.4 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the year ended December 31, 2022 was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan, due to its ongoing bankruptcy proceedings.

The provision to the allowance for Rural Infrastructure Finance loan losses of $0.5 million recorded

during the year ended 2021 was primarily attributable to the impact of the Texas Arctic Freeze, partially

offset by the impact of improving economic factor forecasts. The $1.4 million release from the allowance

for the Agricultural Finance mortgage loan portfolio during the year ended 2021 was primarily attributable

to a recovery on the payoff of the agricultural storage and processing loan secured by a specialized poultry

facility that had been partially charged off in 2020 and improving economic factor forecasts.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of December 31, 2023 and 2022:

Table 8.4


	As of December 31, 2023
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Agricultural Finance loans
Farm & Ranch	$	6,470,205	$	15,326	$	3,953	$	10,991	$	30,270	$	65,236	$	6,565,711
Corporate AgFinance	1,259,723		—		—		—		—		—		1,259,723
Total Agricultural Finance loans	7,729,928		15,326		3,953		10,991		30,270		65,236		7,825,434
Rural Infrastructure Finance loans	3,534,763		—		—		—		—		—		3,534,763
Total	$	11,264,691	$	15,326	$	3,953	$	10,991	$	30,270	$	65,236	$	11,360,197

(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)Includes loans in consolidated trusts with beneficial interests owned by third parties (single-class) that are 90 days or more past due.

(3)Includes loans that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(4)Includes $25.7 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2023, Farmer Mac received $2.6 million in interest on nonaccrual loans.


	As of December 31, 2022
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Agricultural Finance loans
Farm & Ranch	$	6,287,326	$	10,066	$	392	$	1,140	$	11,598	$	63,402	$	6,362,326
Corporate AgFinance	1,150,690		—		—		—		—		15,563		1,166,253
Total Agricultural Finance loans	7,438,016		10,066		392		1,140		11,598		78,965		7,528,579
Rural Infrastructure Finance loans	3,021,266		—		—		—		—		—		3,021,266
Total	$	10,459,282	$	10,066	$	392	$	1,140	$	11,598	$	78,965	$	10,549,845

(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)Includes loans in consolidated trusts with beneficial interests owned (single-class) by third parties that are 90 days or more past due.

(4)Includes $22.0 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2022, Farmer Mac received $5.6 million in interest on nonaccrual loans.

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of December 31, 2023 and 2022, by year of origination:

Table 8.5


	As of December 31, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable	$	530,956	$	1,137,226	$	1,653,780	$	1,120,917	$	323,922	$	1,068,862	$	385,766	$	6,221,429
Special mention(2)	70,524		46,529		27,957		11,591		4,782		21,257		8,777		191,417
Substandard(3)	3,357		23,987		10,164		17,395		28,942		58,606		10,414		152,865
Total	$	604,837	$	1,207,742	$	1,691,901	$	1,149,903	$	357,646	$	1,148,725	$	404,957	$	6,565,711







For the Year Ended December 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(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, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Corporate AgFinance(1):
Internally Assigned Risk Rating:
Acceptable	$	207,279	$	97,922	$	261,992	$	123,158	$	99,352	$	112,947	$	254,325	$	1,156,975
Special mention(2)	—		14,522		15,408		50,822		20,333		—		1,663		102,748
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	207,279	$	112,444	$	277,400	$	173,980	$	119,685	$	112,947	$	255,988	$	1,259,723





For the Year Ended December 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(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, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	618,946	$	681,272	$	187,746	$	593,841	$	701,937	$	611,548	$	100,223	$	3,495,513
Special mention(2)	—		9,850		—		—		—		—		—		9,850
Substandard(3)	—		29,400		—		—		—		—		—		29,400
Total	$	618,946	$	720,522	$	187,746	$	593,841	$	701,937	$	611,548	$	100,223	$	3,534,763






For the Year Ended December 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(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, 2022
	Year of Origination:
	2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable	$	1,157,829	$	1,704,547	$	1,187,474	$	360,704	$	242,491	$	947,535	$	385,503	$	5,986,083
Special mention(2)	91,099		68,260		25,629		11,254		5,325		17,797		2,452		221,816
Substandard(3)	3,094		8,814		22,976		23,937		17,845		67,654		10,107		154,427
Total	$	1,252,022	$	1,781,621	$	1,236,079	$	395,895	$	265,661	$	1,032,986	$	398,062	$	6,362,326






For the Year Ended December 31, 2022:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	(84)	$	—	$	(84)

(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, 2022
	Year of Origination:
	2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Corporate AgFinance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	145,263	$	299,729	$	221,560	$	108,230	$	76,454	$	44,827	$	232,107	$	1,128,170
Special mention(2)	—		—		—		20,698		—		—		2,145		22,843
Substandard(3)	—		—		4,598		—		—		—		10,642		15,240
Total	$	145,263	$	299,729	$	226,158	$	128,928	$	76,454	$	44,827	$	244,894	$	1,166,253






For the Year Ended December 31, 2022:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(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, 2022
	Year of Origination:
	2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266






For the Year Ended December 31, 2022:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(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.