Federal Agricultural Mortgage 10Q 2024 Q3 Quarterly report

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As filed with the Securities and Exchange Commission on November 4, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission File Number 001-14951


FEDERAL AGRICULTURAL MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)


Federally chartered instrumentality of the United States		52-1578738
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

2100 Pennsylvania Avenue N.W., Suite 450 N,
Washington,	DC	20037
(Address of principal executive offices)		(Zip code)


(202)			872-7700
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Exchange on which registered

Class A voting common stock

AGM.A

New York Stock Exchange

Class C non-voting common stock

AGM

New York Stock Exchange

5.700% Non-Cumulative Preferred Stock, Series D

AGM.PRD

New York Stock Exchange

5.750% Non-Cumulative Preferred Stock, Series E

AGM.PRE

New York Stock Exchange

5.250% Non-Cumulative Preferred Stock, Series F

AGM.PRF

New York Stock Exchange

4.875% Non-Cumulative Preferred Stock, Series G

AGM.PRG

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Class B voting common stock

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of October 28, 2024, the registrant had outstanding 1,030,780 shares of Class A voting common stock, 500,301 shares of Class B voting common stock, and 9,354,722 shares of Class C non-voting common stock.

Table of Contents



PART I
Item 1.	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Equity	6
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	58
	Forward-Looking Statements	58
	Overview	60
	Use of Non-GAAP Measures	64
	Results of Operations	66
	Outlook	85
	Balance Sheet Review	91
	Risk Management	91
	Liquidity and Capital Resources	108
	Other Matters	110
	Supplemental Information	110
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	114
Item 4.	Controls and Procedures	115
PART II		116
Item 1.	Legal Proceedings	116
Item 1A.	Risk Factors	116
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	116
Item 3.	Defaults Upon Senior Securities	116
Item 4.	Mine Safety Disclosures	116
Item 5.	Other Information	117
Item 6.	Exhibits	118
Signatures		118

PART I

Item 1.Financial Statements

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)


	As of
	September 30, 2024		December 31, 2023
	(in thousands)
Assets:
Cash and cash equivalents	$	842,056	$	888,707
Investment securities:
Available-for-sale, at fair value (amortized cost of $5,941,321 and $5,060,135, respectively)	5,877,936		4,918,931
Held-to-maturity, at amortized cost	9,270		53,756
Other investments	8,587		6,817
Total Investment Securities	5,895,793		4,979,504
Farmer Mac Guaranteed Securities:
Available-for-sale, at fair value (amortized cost of $5,939,268 and $5,825,433, respectively)	5,761,691		5,532,479
Held-to-maturity, at amortized cost	2,961,071		4,213,069
Total Farmer Mac Guaranteed Securities	8,722,762		9,745,548
USDA Securities:
Trading, at fair value	842		1,241
Held-to-maturity, at amortized cost	2,343,873		2,354,171
Total USDA Securities	2,344,715		2,355,412
Loans:

Loans held for investment, at amortized cost	10,668,844		9,623,119
Loans held for investment in consolidated trusts, at amortized cost	1,718,440		1,432,261
Allowance for losses	(19,951)		(16,031)
Total loans, net of allowance	12,367,333		11,039,349

Financial derivatives, at fair value	49,197		37,478
Accrued interest receivable (includes $14,781 and $16,764, respectively, related to consolidated trusts)	253,102		287,128
Guarantee and commitment fees receivable	46,077		49,832
Deferred tax asset, net	—		8,470
Prepaid expenses and other assets	94,186		132,954
Total Assets	$	30,615,221	$	29,524,382

Liabilities and Equity:
Liabilities:


Notes payable	$	27,129,456	$	26,336,542
Debt securities of consolidated trusts held by third parties	1,616,513		1,351,069
Financial derivatives, at fair value	64,351		117,131
Accrued interest payable (includes $8,236 and $9,407, respectively, related to consolidated trusts)	214,644		181,841
Guarantee and commitment obligation	43,939		47,563
Accounts payable and accrued expenses	81,697		76,662
Deferred tax liability, net	754		—
Reserve for losses	1,523		1,711
Total Liabilities	29,152,877		28,112,519
Commitments and Contingencies (Note 6)
Equity:
Preferred stock:
Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding as of December 31, 2023 (redemption value $75,000,000)	—		73,382
Series D, par value $25 per share, 4,000,000 shares authorized, issued and outstanding	96,659		96,659
Series E, par value $25 per share, 3,180,000 shares authorized, issued and outstanding	77,003		77,003
Series F, par value $25 per share, 4,800,000 shares authorized, issued and outstanding	116,160		116,160
Series G, par value $25 per share, 5,000,000 shares authorized, issued and outstanding	121,327		121,327
Common stock:
Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding	1,031		1,031
Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding	500		500
Class C Non-Voting, $1 par value, no maximum authorization, 9,354,301 shares and 9,310,872 shares outstanding, respectively	9,354		9,311
Additional paid-in capital	135,225		132,919
Accumulated other comprehensive loss, net of tax	(2,554)		(40,145)
Retained earnings	907,639		823,716
Total Equity	1,462,344		1,411,863
Total Liabilities and Equity	$	30,615,221	$	29,524,382

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in thousands, except per share amounts)
Interest income:
Investments and cash equivalents	$	88,879	$	79,947	$	258,341	$	209,429
Farmer Mac Guaranteed Securities and USDA Securities	156,602		161,351		489,478		442,649
Loans	162,247		140,513		459,932		388,837
Total interest income	407,728		381,811		1,207,751		1,040,915
Total interest expense	320,937		294,168		947,252		795,537
Net interest income	86,791		87,643		260,499		245,378
(Provision for)/release of losses	(3,428)		136		(7,806)		(1,484)
Net interest income after (provision for)/release of losses	83,363		87,779		252,693		243,894
Non-interest income/(expense):
Guarantee and commitment fees	4,015		5,520		11,729		12,942
(Losses)/gains on financial derivatives	(1,934)		2,671		(1,654)		4,763
Losses on sale of mortgage loans	—		—		(1,147)		—
Gains on sale of available-for-sale investment securities	—		—		1,052		—
Release of/(provision for) reserve for losses	170		45		188		(227)
Other income	1,418		1,269		3,341		3,253
Non-interest income	3,669		9,505		13,509		20,731
Operating expenses:
Compensation and employee benefits	15,237		14,103		48,334		43,391
General and administrative	8,625		9,100		25,784		26,047
Regulatory fees	725		831		2,175		2,497
Real estate owned operating costs, net	196		—		196		—
Operating expenses	24,783		24,034		76,489		71,935
Income before income taxes	62,249		73,250		189,713		192,690
Income tax expense	12,421		15,113		39,034		40,306
Net income	49,828		58,137		150,679		152,384
Preferred stock dividends	(5,897)		(6,792)		(19,480)		(20,374)
Loss on retirement of preferred stock	(1,619)		—		(1,619)		—
Net income attributable to common stockholders	$	42,312	$	51,345	$	129,580	$	132,010

Earnings per common share:
Basic earnings per common share	$	3.89	$	4.74	$	11.93	$	12.20
Diluted earnings per common share	$	3.86	$	4.69	$	11.82	$	12.08

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in thousands)
Net income	$	49,828	$	58,137	$	150,679	$	152,384
Other comprehensive income/(loss):
Net unrealized gains on available-for-sale securities	26,350		22,076		61,015		46,068
Net changes in held-to-maturity securities	(443)		(31,525)		(757)		(32,628)
Net unrealized (losses)/gains on cash flow hedges	(17,569)		7,566		(12,675)		5,553
Other comprehensive income/(loss) before tax	8,338		(1,883)		47,583		18,993
Income tax (expense)/benefit related to other comprehensive income/(loss)	(1,751)		395		(9,992)		(3,989)
Other comprehensive income/(loss) net of tax	6,587		(1,488)		37,591		15,004
Comprehensive income	$	56,415	$	56,649	$	188,270	$	167,388

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)


									Accumulated
							Additional		Other
	Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
	Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
	(in thousands)
Balance as of December 31, 2023	19,980	$	484,531	10,842	$	10,842	$	132,919	$	(40,145)	$	823,716	$	1,411,863
Net Income	—	—		—	—		—		—		53,746		53,746
Other comprehensive income, net of tax	—	—		—	—		—		36,027		—		36,027
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $1.40 per share)	—	—		—	—		—		—		(15,186)		(15,186)
Issuance of Class C Common Stock	—	—		27	27		64		—		—		91
Stock-based compensation cost	—	—		—	—		3,483		—		—		3,483
Other stock-based award activity	—	—		—	—		(2,890)		—		—		(2,890)
Balance as of March 31, 2024	19,980	$	484,531	10,869	$	10,869	$	133,576	$	(4,118)	$	855,485	$	1,480,343
Net Income	—	—		—	—		—		—		47,105		47,105
Other comprehensive loss, net of tax	—	—		—	—		—		(5,023)		—		(5,023)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,792)		(6,792)
Common stock (cash dividend of $1.40 per share)	—	—		—	—		—		—		(15,233)		(15,233)
Issuance of Class C Common Stock	—	—		12	12		67		—		—		79
Stock-based compensation cost	—	—		—	—		1,555		—		—		1,555

Other stock-based award activity	—	—		—	—		(1,055)		—		—		(1,055)
Balance as of June 30, 2024	19,980	$	484,531	10,881	$	10,881	$	134,143	$	(9,141)	$	880,565	$	1,500,979
Net Income	—	—		—	—		—		—		49,828		49,828
Other comprehensive income, net of tax	—	—		—	—		—		6,587		—		6,587
Cash dividends:
Preferred stock	—	—		—	—		—		—		(5,897)		(5,897)
Common stock (cash dividend of $1.40 per share)	—	—		—	—		—		—		(15,238)		(15,238)
Redemption of Series C preferred stock	(3,000)	(73,382)		—	—		—		—		—		(73,382)
Loss on retirement of preferred stock	—	—		—	—		—		—		(1,619)		(1,619)
Issuance of Class C Common Stock	—	—		4	4		78		—		—		82
Stock-based compensation cost	—	—		—	—		1,490		—		—		1,490

Other stock-based award activity	—	—		—	—		(486)		—		—		(486)
Balance as of September 30, 2024	16,980	$	411,149	10,885	$	10,885	$	135,225	$	(2,554)	$	907,639	$	1,462,344


									Accumulated
							Additional		Other
	Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
	Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
	(in thousands)
Balance as of December 31, 2022	19,980	$	484,531	10,801	$	10,801	$	128,939	$	(50,843)	$	698,530	$	1,271,958
Net Income	—	—		—	—		—		—		47,035		47,035
Other comprehensive loss, net of tax	—	—		—	—		—		(9,019)		—		(9,019)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,882)		(11,882)
Issuance of Class C Common Stock	—	—		19	19		51		—		—		70
Stock-based compensation cost	—	—		—	—		2,254		—		—		2,254
Other stock-based award activity	—	—		—	—		(1,240)		—		—		(1,240)
Balance as of March 31, 2023	19,980	$	484,531	10,820	$	10,820	$	130,004	$	(59,862)	$	726,892	$	1,292,385
Net Income	—	—		—	—		—		—		47,212		47,212
Other comprehensive income, net of tax	—	—		—	—		—		25,511		—		25,511
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,921)		(11,921)
Issuance of Class C Common Stock	—	—		16	16		54		—		—		70
Stock-based compensation cost	—	—		—	—		1,223		—		—		1,223
Other stock-based award activity	—	—		—	—		(1,134)		—		—		(1,134)
Balance as of June 30, 2023	19,980	$	484,531	10,836	$	10,836	$	130,147	$	(34,351)	$	755,392	$	1,346,555
Net Income	—	—		—	—		—		—		58,137		58,137
Other comprehensive loss, net of tax	—	—		—	—		—		(1,488)		—		(1,488)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,792)		(6,792)
Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,923)		(11,923)
Issuance of Class C Common Stock	—	—		4	4		64		—		—		68
Stock-based compensation cost	—	—		—	—		1,221		—		—		1,221
Other stock-based award activity	—	—		—	—		(511)		—		—		(511)
Balance as of September 30, 2023	19,980	$	484,531	10,840	$	10,840	$	130,921	$	(35,839)	$	794,814	$	1,385,267

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	For the Nine Months Ended
	September 30, 2024		September 30, 2023
	(in thousands)
Cash flows from operating activities:
Net income	$	150,679	$	152,384
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	(19,100)		(11,456)
Amortization of debt premiums, discounts, and issuance costs	29,661		22,851
Net change in fair value of trading securities, hedged items, and financial derivatives	(62,797)		340,035
Losses on sale of mortgage loans	1,147		—
Gains on the sale of available-for-sale investment securities	(1,052)		—
Total provision for/(release of) allowance for losses	7,618		1,711
Excess tax benefits related to stock-based awards	447		470
Deferred income taxes	(768)		9,304
Stock-based compensation expense	6,528		4,699
Proceeds from repayment of loans purchased as held for sale	28,302		19,364
Net change in:
Interest receivable	27,320		(7,116)
Guarantee and commitment fees receivable	131		(1,633)
Other assets	50,121		(7,903)
Accrued interest payable	32,803		54,263
Custodial deposit liability	(18,085)		(31,489)
Other liabilities	12,160		(2,836)
Net cash provided by operating activities	245,115		542,648
Cash flows from investing activities:
Purchases of equipment and leasehold improvements	(5,272)		—
Purchases of available-for-sale and held-to-maturity investment securities	(1,971,974)		(1,381,795)
Purchases of other investment securities	(1,770)		(2,135)
Purchases of Farmer Mac Guaranteed Securities and USDA Securities	(1,522,510)		(3,182,678)
Purchases of loans held for investment	(2,580,492)		(1,520,116)
Purchases of defaulted loans	(317)		—
Proceeds from repayment of available-for-sale and held-to-maturity investment securities	1,049,268		1,146,861
Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities	2,669,746		2,578,193
Proceeds from repayment of loans purchased as held for investment	1,282,579		1,081,265
Proceeds from sale of available-for-sale investment securities	115,247		—
Proceeds from sale of loans previously classified as held for investment	5,775		—
Proceeds from sale of Farmer Mac Guaranteed Securities	60,192		—
Net cash used in investing activities	(899,528)		(1,280,405)
Cash flows from financing activities:
Proceeds from issuance of discount notes	42,829,487		36,018,319
Proceeds from issuance of medium-term notes	5,721,174		5,559,198
Proceeds from issuance of debt securities of consolidated trusts	283,462		222,188
Payments to redeem discount notes	(42,371,640)		(35,059,286)
Payments to redeem medium-term notes	(5,593,883)		(5,931,450)
Payments to third parties on debt securities of consolidated trusts	(115,609)		(91,118)
Proceeds from common stock issuance	209		169
Tax payments related to share-based awards	(4,388)		(2,847)
Retirement of preferred stock	(75,000)		—
Dividends paid on common and preferred stock	(66,050)		(56,100)
Net cash provided by financing activities	607,762		659,073
Net change in cash and cash equivalents	(46,651)		(78,684)
Cash and cash equivalents at beginning of period	888,707		861,002
Cash and cash equivalents at end of period	$	842,056	$	782,318





Non-cash activity:
Loans securitized as Farmer Mac Guaranteed Securities	85,114	10,573
Loans held for investment transferred to consolidated trusts	305,559	281,027

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation ("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Farmer Mac and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted as permitted by SEC rules and regulations. The December 31, 2023 consolidated balance sheet presented in this report has been derived from Farmer Mac's audited 2023 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2023 consolidated financial statements of Farmer Mac and subsidiaries included in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 23, 2024. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain updated information for the three and nine months ended September 30, 2024.

Principles of Consolidation

The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries: (1) Farmer Mac Mortgage Securities Corporation, whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Securities included in the Agricultural Finance line of business. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

Table 1.1


	Consolidation of Variable Interest Entities
	As of September 30, 2024
	Agricultural Finance		Treasury		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,718,440	$	—	$	1,718,440
Debt securities of consolidated trusts held by third parties (1)(2)	1,616,513		—		1,616,513
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value	57,951		—		57,951
Maximum exposure to loss (3)	57,502		—		57,502
Investment securities:
Carrying value (4)	—		4,289,450		4,289,450
Maximum exposure to loss (3)(4)	—		4,423,837		4,423,837
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3)(5)	430,628		—		430,628

(1)Includes borrower remittances of $0.2 million. The borrower remittances had not been passed through to third-party investors as of September 30, 2024.

(2)Includes $102.0 million in unamortized discount related to structured securitization transactions.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments.

(5)The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause.


	Consolidation of Variable Interest Entities
	As of December 31, 2023
	Agricultural Finance		Treasury		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,432,261	$	—	$	1,432,261
Debt securities of consolidated trusts held by third parties (1)(2)	1,351,069		—		1,351,069
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value	46,343		—		46,343
Maximum exposure to loss (3)	45,952		—		45,952
Investment securities:
Carrying value (4)	—		3,676,555		3,676,555
Maximum exposure to loss (3)(4)	—		3,862,006		3,862,006
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3)(5)	452,602		—		452,602

(1)Includes borrower remittances of $6.0 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2023.

(2)Includes $87.1 million in unamortized discount related to a structured securitization transaction.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments.

(a)Earnings Per Common Share

Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding. Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock unit awards. The following schedule reconciles basic and diluted EPS for the three and nine months ended September 30, 2024 and 2023:

Table 1.2


	For the Three Months Ended
	September 30, 2024					September 30, 2023
	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	$	42,312	10,883	$	3.89	$	51,345	10,839	$	4.74
Effect of dilutive securities(1)
SARs and restricted stock units	—		83	(0.03)		—		99	(0.05)
Diluted EPS	$	42,312	10,966	$	3.86	$	51,345	10,938	$	4.69

(1)For the three months ended September 30, 2024 and 2023, SARs and restricted stock units of 15,465 and 16,761 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended September 30, 2024 and 2023, contingent shares of unvested restricted stock units of 29,918 and 32,469 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.


	For the Nine Months Ended
	September 30, 2024					September 30, 2023
	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	$	129,580	10,869	$	11.93	$	132,010	10,825	$	12.20
Effect of dilutive securities(1)
SARs and restricted stock units	—		99	(0.11)		—		99	(0.12)
Diluted EPS	$	129,580	10,968	$	11.82	$	132,010	10,924	$	12.08

(1)For the nine months ended September 30, 2024 and 2023, SARs and restricted stock units of 36,033 and 37,990 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the nine months ended September 30, 2024 and 2023, contingent shares of unvested restricted stock units of 29,918 and 32,407 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.

(b)Comprehensive Income

Comprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and nine months ended September 30, 2024 and 2023.

Table 1.3


	As of September 30, 2024								As of September 30, 2023
	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)













For the Three Months Ended:
Beginning Balance	$	(41,062)	$	(8,972)	$	40,893	$	(9,141)	$	(96,607)	$	15,486	$	46,770	$	(34,351)
Other comprehensive income/(loss) before reclassifications	20,820		—		(9,663)		11,157		17,443		(25,199)		10,376		2,620
Amounts reclassified from AOCI	(3)		(350)		(4,217)		(4,570)		(4)		294		(4,398)		(4,108)
Net comprehensive income/(loss)	20,817		(350)		(13,880)		6,587		17,439		(24,905)		5,978		(1,488)
Ending Balance	$	(20,245)	$	(9,322)	$	27,013	$	(2,554)	$	(79,168)	$	(9,419)	$	52,748	$	(35,839)

For the Nine Months Ended:
Beginning Balance	$	(68,447)	$	(8,724)	$	37,026	$	(40,145)	$	(115,561)	$	16,357	$	48,361	$	(50,843)
Other comprehensive income/(loss) before reclassifications	49,042		—		2,755		51,797		36,406		(25,199)		16,277		27,484
Amounts reclassified from AOCI	(840)		(598)		(12,768)		(14,206)		(13)		(577)		(11,890)		(12,480)
Net comprehensive income/(loss)	48,202		(598)		(10,013)		37,591		36,393		(25,776)		4,387		15,004
Ending Balance	$	(20,245)	$	(9,322)	$	27,013	$	(2,554)	$	(79,168)	$	(9,419)	$	52,748	$	(35,839)

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 three and nine months ended September 30, 2024 and 2023:

Table 1.4


	For the Three Months Ended
	September 30, 2024						September 30, 2023
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains on available-for-sale securities	$	26,354	$	5,534	$	20,820	$	22,081	$	4,638	$	17,443
Less reclassification adjustments included in:
Gains on sale of available-for-sale investment securities(1)	—		—		—		—		—		—
Other income(2)	(4)		(1)		(3)		(5)		(1)		(4)
Total	$	26,350	$	5,533	$	20,817	$	22,076	$	4,637	$	17,439
Held-to-maturity securities:
Change in fair value(3)	$	—	$	—	$	—	$	(31,898)	$	(6,699)	$	(25,199)
Less reclassification adjustments included in:
Net interest income(4)	(443)		(93)		(350)		373		79		294
Total	$	(443)	$	(93)	$	(350)	$	(31,525)	$	(6,620)	$	(24,905)
Cash flow hedges
Unrealized (losses)/gains on cash flow hedges	$	(12,232)	$	(2,569)	$	(9,663)	$	13,135	$	2,759	$	10,376
Less reclassification adjustments included in:
Net interest income(5)	(5,337)		(1,120)		(4,217)		(5,569)		(1,171)		(4,398)
Total	$	(17,569)	$	(3,689)	$	(13,880)	$	7,566	$	1,588	$	5,978
Other comprehensive income/(loss)	$	8,338	$	1,751	$	6,587	$	(1,883)	$	(395)	$	(1,488)

(1)Represents realized gains and losses on sales of available-for-sale securities.

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

(3)Represents the accumulated unrealized loss on the AgVantage Securities transferred from available-for-sale to held-to-maturity.

(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.


	For the Nine Months Ended
	September 30, 2024						September 30, 2023
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains on available-for-sale securities	$	62,079	$	13,037	$	49,042	$	46,084	$	9,678	$	36,406
Less reclassification adjustments included in:
Gains on sale of available-for-sale investment securities(1)	(1,052)		(221)		(831)		—		—		—
Other income(2)	(12)		(3)		(9)		(16)		(3)		(13)
Total	$	61,015	$	12,813	$	48,202	$	46,068	$	9,675	$	36,393
Held-to-maturity securities:
Change in fair value(3)	$	—	$	—	$	—	$	(31,898)	$	(6,699)	$	(25,199)
Less reclassification adjustments included in:
Net interest income(4)	(757)		(159)		(598)		(730)		(153)		(577)
Total	$	(757)	$	(159)	$	(598)	$	(32,628)	$	(6,852)	$	(25,776)
Cash flow hedges
Unrealized gains on cash flow hedges	$	3,488	$	733	$	2,755	$	20,604	$	4,327	$	16,277
Less reclassification adjustments included in:
Net interest income(5)	(16,163)		(3,395)		(12,768)		(15,051)		(3,161)		(11,890)
Total	$	(12,675)	$	(2,662)	$	(10,013)	$	5,553	$	1,166	$	4,387
Other comprehensive income	$	47,583	$	9,992	$	37,591	$	18,993	$	3,989	$	15,004

(1)Represents realized gains and losses on sales of available-for-sale securities.

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

(3)Represents the accumulated unrealized loss on the AgVantage Securities transferred from available-for-sale to held-to-maturity.

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

(c)New Accounting Standards

Recently Adopted Accounting Guidance


Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method	The amendments in this Update permit an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received.	January 1, 2024	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements


Standard	Description	Effect on Consolidated Financial Statements
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	The amendments in this Update require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This Update also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively. Early adoption is permitted.	Farmer Mac does not expect the adoption of this Update to have a material impact on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The Update provides guidance on improvements to annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Additionally, public entities must provide a separate disclosure for any reconciling item that meets a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The amendments should be applied on a prospective basis. Early adoption is permitted.	Farmer Mac is still assessing the impact of the new accounting standard but does not expect that adoption of the new guidance will have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

(d)Reclassifications

Certain reclassifications of prior period information were made to conform to the current period presentation. The reclassifications of prior period information were not material to the consolidated financial statements.

2.INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of September 30, 2024 and December 31, 2023:

Table 2.1


	As of September 30, 2024
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(25)	$	—	$	(197)	$	19,478
Floating rate Government/GSE guaranteed mortgage-backed securities	2,450,408		(525)		2,449,883		—		3,756		(17,204)		2,436,435
Fixed rate GSE guaranteed mortgage-backed securities	2,262,332		(59,093)		2,203,239		—		25,573		(85,054)		2,143,758
Floating rate U.S. Treasuries	—		—		—		—		—		—		—
Fixed rate U.S. Treasuries	1,281,077		(12,578)		1,268,499		—		10,331		(565)		1,278,265
Total available-for-sale	6,013,517		(72,196)		5,941,321		(25)		39,660		(103,020)		5,877,936
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	9,270		—		9,270		—		273		—		9,543
Total held-to-maturity	$	9,270	$	—	$	9,270	$	—	$	273	$	—	$	9,543

(1)Amounts presented exclude $24.5 million of accrued interest receivable on investment securities as of September 30, 2024.

(2)Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

(3)The held-to-maturity investment securities had a weighted average yield of 6.4% as of September 30, 2024.


	As of December 31, 2023
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(27)	$	—	$	(591)	$	19,082
Floating rate Government/GSE guaranteed mortgage-backed securities	2,454,009		(1,138)		2,452,871		—		1,212		(29,649)		2,424,434
Fixed rate GSE guaranteed mortgage-backed securities	1,727,669		(46,788)		1,680,881		—		6,558		(117,824)		1,569,615
Floating rate U.S. Treasuries	50,000		(17)		49,983		—		—		(15)		49,968
Fixed rate U.S. Treasuries	869,585		(12,885)		856,700		—		2,074		(2,942)		855,832
Total available-for-sale	5,120,963		(60,828)		5,060,135		(27)		9,844		(151,021)		4,918,931
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	53,756		—		53,756		—		1,745		—		55,501
Total held-to-maturity	$	53,756	$	—	$	53,756	$	—	$	1,745	$	—	$	55,501

(1)Amounts presented exclude $15.9 million of accrued interest receivable on investment securities as of December 31, 2023.

(3)The held-to-maturity investment securities had a weighted average yield of 6.7% as of December 31, 2023.

Farmer Mac did not sell any securities from its available-for-sale investment securities during the three months ended September 30, 2024. During the nine months ended September 30, 2024, Farmer Mac sold floating rate government/GSE guaranteed mortgage-backed securities for $115.2 million from its

available-for-sale investment portfolio, resulting in a gain of $1.1 million. These sales were done to rebalance the liquidity investment portfolio given the lower level of business volume activity while demonstrating that the portfolio provides strong contingent liquidity.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the three and nine months ended September 30, 2023.

As of September 30, 2024 and December 31, 2023, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2


	As of September 30, 2024
	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
	(dollars in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,478	$	(197)
Floating rate Government/GSE guaranteed mortgage-backed securities	367,575		(514)		1,074,472		(16,690)
Fixed rate Government/GSE guaranteed mortgage-backed securities	24,873		(42)		986,007		(85,012)
Floating rate U.S. Treasuries	—		—		—		—
Fixed rate U.S. Treasuries	193,727		(352)		84,016		(213)
Total	$	586,175	$	(908)	$	2,163,973	$	(102,112)

Number of securities in loss position			39				148


	As of December 31, 2023
	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
	(dollars in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,082	$	(591)
Floating rate Government/GSE guaranteed mortgage-backed securities	568,759		(4,395)		1,449,122		(25,254)
Fixed rate Government/GSE guaranteed mortgage-backed securities	384,305		(4,262)		905,759		(113,562)
Floating rate U.S. Treasuries	49,969		(15)		—		—
Fixed rate U.S. Treasuries	140,435		(606)		237,192		(2,336)
Total	$	1,143,468	$	(9,278)	$	2,611,155	$	(141,743)

Number of securities in loss position			91				162

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to September 30, 2024 and December 31, 2023, 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 both September 30, 2024 and December 31, 2023, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government, a U.S. government sponsored enterprise, or had credit ratings of at least "AA+."

Securities in unrealized loss positions for 12 months or longer have a fair value as of September 30, 2024 that is, on average, approximately 95.5% 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, changes in credit spread, or changes in levels of interest rates.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of September 30, 2024 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 2.3


	As of September 30, 2024
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	346,788	$	347,433	3.09%
Due after one year through five years	2,372,245		2,377,160		4.33%
Due after five years through ten years	2,474,834		2,414,718		4.27%
Due after ten years	747,454		738,625		5.56%
Total	$	5,941,321	$	5,877,936	4.39%

3.FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of September 30, 2024 and December 31, 2023:

Table 3.1


	As of September 30, 2024
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	2,940,125	$	(27,545)	$	2,912,580	$	(153)	$	8,019	$	(23,287)	$	2,897,159
Farmer Mac Guaranteed USDA Securities	48,616		28		48,644		—		261		(1,682)		47,223
Total Farmer Mac Guaranteed Securities	2,988,741		(27,517)		2,961,224		(153)		8,280		(24,969)		2,944,382
USDA Securities	2,324,019		19,854		2,343,873		—		130		(232,761)		2,111,242
Total held-to-maturity	$	5,312,760	$	(7,663)	$	5,305,097	$	(153)	$	8,410	$	(257,730)	$	5,055,624
Available-for-sale:
AgVantage	$	5,930,382	$	—	$	5,930,382	$	(217)	$	39,387	$	(217,167)	$	5,752,385
Farmer Mac Guaranteed Securities(3)	—		8,886		8,886		—		420		—		9,306
Total available-for-sale	$	5,930,382	$	8,886	$	5,939,268	$	(217)	$	39,807	$	(217,167)	$	5,761,691
Trading:
USDA Securities(4)	$	838	$	47	$	885	$	—	$	—	$	(43)	$	842

(1)Amounts presented exclude $59.8 million, $51.6 million, and $20,090 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of September 30, 2024.

(2)Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

(3)Fair value includes $9.3 million of an interest-only security with a notional amount of $228.6 million.

(4)The trading USDA securities had a weighted average yield of 5.48% as of September 30, 2024.


	As of December 31, 2023
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	4,206,324	$	(29,622)	$	4,176,702	$	(209)	$	4,676	$	(39,451)	$	4,141,718
Farmer Mac Guaranteed USDA Securities	36,543		33		36,576		—		107		(806)		35,877
Total Farmer Mac Guaranteed Securities	4,242,867		(29,589)		4,213,278		(209)		4,783		(40,257)		4,177,595
USDA Securities	2,331,093		23,078		2,354,171		—		417		(319,783)		2,034,805
Total held-to-maturity	$	6,573,960	$	(6,511)	$	6,567,449	$	(209)	$	5,200	$	(360,040)	$	6,212,400
Available-for-sale:
AgVantage	$	5,816,024	$	—	$	5,816,024	$	(317)	$	16,416	$	(309,411)	$	5,522,712
Farmer Mac Guaranteed Securities(3)	—		9,409		9,409		—		358		—		9,767
Total available-for-sale	$	5,816,024	$	9,409	$	5,825,433	$	(317)	$	16,774	$	(309,411)	$	5,532,479
Trading:
USDA Securities(4)	$	1,236	$	64	$	1,300	$	—	$	—	$	(59)	$	1,241

(1)Amounts presented exclude $47.2 million, $67.4 million, and $42,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of December 31, 2023.

(3)Fair value includes $9.8 million of an interest-only security with a notional amount of $238.4 million.

(4)The trading USDA securities had a weighted average yield of 5.46% as of December 31, 2023.

On July 1, 2023, Farmer Mac transferred $2.7 billion of AgVantage Securities from available-for-sale to held-to-maturity to reflect Farmer Mac's positive intent and ability to hold these securities until maturity or payoff. Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment due to unrealized losses of $31.9 million. The accumulated unrealized losses were recorded in accumulated other comprehensive income in the amount of $31.9 million. Both the cost basis adjustment and accumulated unrealized depreciation will be amortized as an adjustment to the yield on the held-to-maturity AgVantage Securities over the remaining term of the transferred securities.

As of September 30, 2024 and December 31, 2023, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2


	As of September 30, 2024
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	1,536,693	$	(5,100)	$	705,981	$	(18,187)
Farmer Mac Guaranteed USDA Securities	28,467		(1,193)		8,378		(489)
USDA Securities	7,569		(16)		2,099,685		(232,745)
Total held-to-maturity	$	1,572,729	$	(6,309)	$	2,814,044	$	(251,421)

Available-for-sale:
AgVantage	$	199,910	$	(90)	$	3,853,189	$	(217,077)

Total available-for-sale	$	199,910	$	(90)	$	3,853,189	$	(217,077)


	As of December 31, 2023
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	2,070,770	$	(6,705)	$	725,347	$	(32,746)
Farmer Mac Guaranteed USDA Securities	—		—		8,393		(806)
USDA Securities	—		—		2,023,801		(319,783)
Total held-to-maturity	$	2,070,770	$	(6,705)	$	2,757,541	$	(353,335)

Available-for-sale:
AgVantage	$	508,182	$	(5,716)	$	4,043,431	$	(303,695)

Total available-for-sale	$	508,182	$	(5,716)	$	4,043,431	$	(303,695)

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to September 30, 2024 and December 31, 2023, as applicable.

The credit exposure related to Farmer Mac's USDA Securities in the Agricultural Finance line of business is covered by the full faith and credit guarantee of the United States of America.

The unrealized losses from AgVantage securities were on 58 and 68 available-for-sale securities as of September 30, 2024 and December 31, 2023, respectively. There were 48 and 53 held-to-maturity AgVantage securities with an unrealized loss as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, 57 and 62 available-for-sale AgVantage securities had been in a loss position for more than 12 months, respectively. As of September 30, 2024 and December 31, 2023, there were 16 and 22 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three and nine months ended September 30, 2024 and 2023 Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of September 30, 2024 are set forth below. The balances presented are based on their contractual maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3


	As of September 30, 2024
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	596,516	$	593,048	3.58	%
Due after one year through five years	3,255,116		3,213,655		3.82	%
Due after five years through ten years	950,000		902,642		3.60	%
Due after ten years	1,137,636		1,052,346		3.82	%
Total	$	5,939,268	$	5,761,691	3.75	%

(1)Amounts presented exclude $59.8 million of accrued interest receivable.


	As of September 30, 2024
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,184,967	$	1,178,075	5.16	%
Due after one year through five years	1,172,821		1,158,934		4.64	%
Due after five years through ten years	290,568		262,229		3.70	%
Due after ten years	2,656,741		2,456,386		4.36	%
Total	$	5,305,097	$	5,055,624	4.61	%

(1)Amounts presented exclude $51.6 million of accrued interest receivable.

4.FINANCIAL DERIVATIVES

Farmer Mac enters into financial derivative transactions to protect against risk from the effects of market price, or interest rate movements, on the value of certain assets, future cash flows, or debt issuance, and not for trading or speculative purposes. Certain financial derivatives are designated as fair value hedges of fixed rate assets, classified as available-for-sale, to protect against fair value changes in the assets related to changes in a benchmark interest rate (e.g., SOFR). Certain other financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt. Certain financial derivatives are not designated in hedge accounting relationships.

Farmer Mac manages the interest rate risk related to loans it has committed to acquire, but has not yet permanently funded, primarily through the use of futures contracts involving U.S. Treasury securities. Farmer Mac aims to achieve a duration-matched hedge ratio between the hedged item and the hedge instrument. Gains or losses generated by these hedge transactions are expected to offset changes in

funding costs. All financial derivatives are recorded on the balance sheet at fair value as a freestanding asset or liability.

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements. The table below includes accrued interest on cleared swaps, but excludes $19.5 million and $16.4 million of accrued interest receivable and $6.0 million and $6.5 million of accrued interest payable on uncleared swaps as of September 30, 2024 and December 31, 2023, respectively. The aforementioned accrued interest on uncleared swaps is included within Accrued Interest Receivable and Accrued Interest Payable on the consolidated balance sheets.

Table 4.1


	As of September 30, 2024
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Receive fixed non-callable	$	8,363,185	$	770	$	(19,533)	5.17%	3.36%		1.57
Pay fixed non-callable	9,679,159		21,625		(24)		2.66%	5.03%		9.25
Receive fixed callable	4,090,827		19,612		(52,594)		5.00%	3.50%		2.57
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	540,000		14,900		—		1.92%	5.35%		3.68
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	157,776		720		(4)		2.92%	5.22%		3.65
Receive fixed non-callable	1,926,269		5		(243)		4.99%	4.80%		0.32

Basis swaps	655,384		21		(548)		5.16%	5.01%		4.08
Treasury futures	44,000		139		—				114.60
Netting adjustments(1)	—		(8,595)		8,595
Total financial derivatives	$	25,456,600	$	49,197	$	(64,351)

(1)Amounts represent the application of the netting requirements that allow Farmer Mac to settle positive and negative positions, including accrued interest, held or placed with the same clearing agent.


	As of December 31, 2023
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Receive fixed non-callable	$	9,776,685	$	2,350	$	(20,390)	5.57%	2.94%		1.78
Pay fixed non-callable	9,174,253		7,767		(1,081)		2.50%	5.47%		9.57
Receive fixed callable	3,879,827		7,374		(95,984)		5.40%	3.40%		2.48
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	558,000		20,234		(43)		1.94%	5.82%		4.30
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	160,623		676		(29)		2.92%	5.64%		4.34
Receive fixed non-callable	1,358,396		263		(3)		5.44%	4.87%		0.64

Basis swaps	850,384		39		(746)		5.52%	5.48%		3.83
Treasury futures	21,300		11		(91)				112.51

Netting adjustments(1)	—		(1,236)		1,236
Total financial derivatives	$	25,779,468	$	37,478	$	(117,131)

As of September 30, 2024, Farmer Mac expects to reclassify $9.5 million after-tax from accumulated other comprehensive income to earnings over the next twelve months related to cash flow hedges. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after September 30, 2024. During the three and nine months ended September 30, 2024 and 2023, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

The following tables summarize the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and nine months ended September 30, 2024 and 2023:

Table 4.2


	For the Three Months Ended September 30, 2024
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income								Non-Interest Income		Total
	Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Losses on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	88,879	$	156,602	$	162,247	$	(320,937)	$	(1,934)	$	84,857
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	10,774		39,127		17,878		(69,433)		—		(1,654)
Recognized on hedged items	11,476		54,513		17,544		(106,154)		—		(22,621)
Premium/discount amortization recognized on hedged items	623		—		—		(688)		—		(65)
Income/(expense) related to interest settlements on fair value hedging relationships	$	22,873	$	93,640	$	35,422	$	(176,275)	$	—	$	(24,340)

Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	(60,799)	$	(189,698)	$	(98,464)	$	212,027	$	—	$	(136,934)
Recognized on hedged items	60,915		189,141		98,015		(210,932)		—		137,139
Gains/(losses) on fair value hedging relationships	$	116	$	(557)	$	(449)	$	1,095	$	—	$	205

Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	5,338	$	—	$	5,338
Recognized on hedged items	—		—		—		(7,918)		—		(7,918)
Discount amortization recognized on hedged items	—		—		—		(14)		—		(14)
Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(2,594)	$	—	$	(2,594)

Losses on financial derivatives not designated in hedging relationships:
Losses on interest rate swaps	$	—	$	—	$	—	$	—	$	(1,310)	$	(1,310)
Interest expense on interest rate swaps	—		—		—		—		(858)		(858)
Treasury futures	—		—		—		—		234		234
Losses on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	(1,934)	$	(1,934)


	For the Three Months Ended September 30, 2023
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income								Non-Interest Income		Total
	Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	79,947	$	161,351	$	140,513	$	(294,168)	$	2,671	$	90,314
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	9,950		40,114		17,692		(92,663)		—		(24,907)
Recognized on hedged items	9,006		46,303		16,089		(91,525)		—		(20,127)
Premium/discount amortization recognized on hedged items	623		—		—		(732)		—		(109)
Income/(expense) related to interest settlements on fair value hedging relationships	$	19,579	$	86,417	$	33,781	$	(184,920)	$	—	$	(45,143)

Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	42,051	$	110,196	$	107,265	$	9,475	$	—	$	268,987
Recognized on hedged items	(41,944)		(107,965)		(105,403)		(10,465)		—		(265,777)
Gains/(losses) on fair value hedging relationships	$	107	$	2,231	$	1,862	$	(990)	$	—	$	3,210

Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	5,569	$	—	$	5,569
Recognized on hedged items	—		—		—		(8,287)		—		(8,287)
Discount amortization recognized on hedged items	—		—		—		(14)		—		(14)
Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(2,732)	$	—	$	(2,732)

Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	2,772	$	2,772
Interest expense on interest rate swaps	—		—		—		—		(805)		(805)
Treasury futures	—		—		—		—		704		704
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	2,671	$	2,671


	For the Nine Months Ended September 30, 2024
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income								Non-Interest Income		Total
	Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Losses on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	258,341	$	489,478	$	459,932	$	(947,252)	$	(1,654)	$	258,845
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	31,479		118,593		53,554		(229,642)		—		(26,016)
Recognized on hedged items	31,734		158,869		50,847		(319,876)		—		(78,426)
Premium/discount amortization recognized on hedged items	1,555		—		—		(2,156)		—		(601)
Income/(expense) related to interest settlements on fair value hedging relationships	$	64,768	$	277,462	$	104,401	$	(551,674)	$	—	$	(105,043)

Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	(29,549)	$	(101,186)	$	(37,096)	$	188,182	$	—	$	20,351
Recognized on hedged items	30,032		101,890		38,842		(185,304)		—		(14,540)
Gains/(losses) on fair value hedging relationships	$	483	$	704	$	1,746	$	2,878	$	—	$	5,811

Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	16,162	$	—	$	16,162
Recognized on hedged items	—		—		—		(24,023)		—		(24,023)
Discount amortization recognized on hedged items	—		—		—		(42)		—		(42)
Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(7,903)	$	—	$	(7,903)

Losses on financial derivatives not designated in hedging relationships:
Losses on interest rate swaps	$	—	$	—	$	—	$	—	$	(581)	$	(581)
Interest expense on interest rate swaps	—		—		—		—		(1,379)		(1,379)
Treasury futures	—		—		—		—		306		306
Losses on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	(1,654)	$	(1,654)


	For the Nine Months Ended September 30, 2023
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income								Non-Interest Income		Total
	Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	209,429	$	442,649	$	388,837	$	(795,537)	$	4,763	$	250,141
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	24,952		104,023		46,625		(258,358)		—		(82,758)
Recognized on hedged items	23,865		133,995		47,144		(243,053)		—		(38,049)
Premium/discount amortization recognized on hedged items	1,399		—		—		(2,137)		—		(738)
Income/(expense) related to interest settlements on fair value hedging relationships	$	50,216	$	238,018	$	93,769	$	(503,548)	$	—	$	(121,545)

(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	45,722	$	117,267	$	97,346	$	50,916	$	—	$	311,251
Recognized on hedged items	(46,485)		(116,591)		(97,827)		(52,144)		—		(313,047)
(Losses)/gains on fair value hedging relationships	$	(763)	$	676	$	(481)	$	(1,228)	$	—	$	(1,796)

Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	15,051	$	—	$	15,051
Recognized on hedged items	—		—		—		(23,325)		—		(23,325)
Discount amortization recognized on hedged items	—		—		—		(41)		—		(41)
Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(8,315)	$	—	$	(8,315)

Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	5,263	$	5,263
Interest expense on interest rate swaps	—		—		—		—		(3,999)		(3,999)
Treasury futures	—		—		—		—		3,499		3,499
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	4,763	$	4,763

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of September 30, 2024 and December 31, 2023:

Table 4.3


	Hedged Items in Fair Value Relationship
	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)
	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
	(in thousands)
Investment securities, Available-for-Sale, at fair value	$	1,525,596	$	1,251,386	$	(58,602)	$	(88,635)
Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	5,726,645		5,497,948		(155,546)		(257,436)
Loans held for investment, at amortized cost	1,890,571		1,699,361		(266,750)		(305,592)
Notes Payable(1)	(12,128,955)		(13,350,111)		65,114		250,418

(1)Carrying amount represents amortized cost.

The following tables present the fair value of financial assets and liabilities, based on the terms of Farmer Mac's master netting arrangements as of September 30, 2024 and December 31, 2023:

Table 4.4


	September 30, 2024
	Gross Amount Recognized		Gross Amounts offset in the Consolidated Balance Sheet		Net Amount Presented in the Consolidated Balance Sheet(1)		Gross Amounts Not Offset in the Consolidated Balance Sheet
							Netting Adjustments		Financial instruments pledged		Cash Collateral(2)		Net Amount(3)
	(in thousands)
Assets:
Uncleared derivatives	$	27,397	$	—	$	27,397	$	(23,737)	$	—	$	(3,521)	$	139
Cleared derivatives	22,759		(8,595)		14,164		—		—		—		14,164
Total	$	50,156	$	(8,595)	$	41,561	$	(23,737)	$	—	$	(3,521)	$	14,303

Liabilities:
Uncleared derivatives	$	(55,046)	$	—	$	(55,046)	$	23,737	$	—	$	22,154	$	(9,155)
Cleared derivatives	(8,595)		8,595		—		—		—		—		—
Total	$	(63,641)	$	8,595	$	(55,046)	$	23,737	$	—	$	22,154	$	(9,155)

(1)Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2)Cash collateral excludes $5.6 million of collateral posted and $10.2 million of collateral received related to counterparties not subject to master netting agreements.

(3)Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount. As of September 30, 2024, Farmer Mac had additional net exposure of $217.4 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position and $1.9 million due to instances where a Farmer Mac's collateral from a counterparty exceeded the net derivative position.


	December 31, 2023
	Gross Amount Recognized		Gross Amounts offset in the Consolidated Balance Sheet		Net Amount Presented in the Consolidated Balance Sheet(1)		Gross Amounts Not Offset in the Consolidated Balance Sheet
							Netting Adjustments		Financial instruments pledged		Cash Collateral(2)		Net Amount(3)
	(in thousands)
Assets:
Uncleared derivatives	$	25,751	$	—	$	25,751	$	(25,727)	$	—	$	—	$	24
Cleared derivatives	10,388		(1,236)		9,152		—		—		—		9,152
Total	$	36,139	$	(1,236)	$	34,903	$	(25,727)	$	—	$	—	$	9,176

Liabilities:
Uncleared derivatives	$	(100,114)	$	—	$	(100,114)	$	25,727	$	—	$	69,360	$	(5,027)
Cleared derivatives	(1,236)		1,236		—		—		—		—		—
Total	$	(101,350)	$	1,236	$	(100,114)	$	25,727	$	—	$	69,360	$	(5,027)

(1)Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2)Cash collateral excludes $15.2 million of collateral posted and $2.0 million of collateral received related to counterparties not subject to master netting agreements.

(3)Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount. As of December 31, 2023, Farmer Mac had additional net exposure of $207.2 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position.

Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets. Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets. If Farmer Mac had breached certain provisions of the derivative contracts as of September 30, 2024 or December 31, 2023, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral. As of September 30, 2024 and December 31, 2023, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's $25.4 billion notional amount of interest rate swaps outstanding as of September 30, 2024, $20.1 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME"). Of Farmer Mac's $25.8 billion notional amount of interest rate swaps outstanding as of December 31, 2023, $20.5 billion were cleared through the CME.

5.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 basis adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled basis. As of both September 30, 2024 and December 31, 2023, Farmer Mac had no loans held for sale.

During the nine months ended September 30, 2024, Farmer Mac sold a portion of a Corporate AgFinance agricultural storage and processing loan at a loss of $1.1 million to reduce the overall exposure to the borrower.

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 September 30, 2024 and December 31, 2023:

Table 5.1


	As of September 30, 2024						As of December 31, 2023
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Agricultural Finance loans
Farm & Ranch	$	5,253,260	$	1,718,440	$	6,971,700	$	5,133,450	$	1,432,261	$	6,565,711
Corporate AgFinance	1,297,563		—		1,297,563		1,259,723		—		1,259,723
Total Agricultural Finance loans	6,550,823		1,718,440		8,269,263		6,393,173		1,432,261		7,825,434
Rural Infrastructure Finance loans	4,383,355		—		4,383,355		3,534,763		—		3,534,763
Total unpaid principal balance(1)	10,934,178		1,718,440		12,652,618		9,927,936		1,432,261		11,360,197
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	(265,334)		—		(265,334)		(304,817)		—		(304,817)
Total loans	10,668,844		1,718,440		12,387,284		9,623,119		1,432,261		11,055,380
Allowance for losses	(19,314)		(637)		(19,951)		(15,588)		(443)		(16,031)
Total loans, net of allowance	$	10,649,530	$	1,717,803	$	12,367,333	$	9,607,531	$	1,431,818	$	11,039,349

(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 September 30, 2024 and December 31, 2023:

Table 5.2


	September 30, 2024		December 31, 2023
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Agricultural Finance loans
Farm & Ranch	$	4,832	$	3,936
Corporate AgFinance	5,769		2,948
Total Agricultural Finance loans	10,601		6,884
Rural Infrastructure Finance loans	9,350		9,147
Total	$	19,951	$	16,031

The following is a summary of the changes in the allowance for losses for the three and nine months ended September 30, 2024 and 2023:

Table 5.3



	September 30, 2024								September 30, 2023
	Agricultural Finance loans						Rural Infrastructure Finance loans(3)		Agricultural Finance loans						Rural Infrastructure Finance loans(3)
	Farm & Ranch(1)		Corporate AgFinance(2)		Total				Farm & Ranch(1)		Corporate AgFinance(2)		Total
	(in thousands)












For the Three Months Ended
Beginning Balance	$	4,676	$	4,014	$	8,690	$	7,810	$	3,935	$	7,367	$	11,302	$	5,446
Provision for/(release of) losses	156		1,755		1,911		1,540		(25)		(3,689)		(3,714)		3,580
Charge-offs	—		—		—		—		—		—		—		—
Ending Balance	$	4,832	$	5,769	$	10,601	$	9,350	$	3,910	$	3,678	$	7,588	$	9,026

For the Nine Months Ended
Beginning Balance	$	3,936	$	2,948	$	6,884	$	9,147	$	4,044	$	2,731	$	6,775	$	8,314
Provision for/(release of) losses	997		6,763		7,760		203		(134)		947		813		712
Charge-offs	(101)		(3,942)		(4,043)		—		—		—		—		—
Ending Balance	$	4,832	$	5,769	$	10,601	$	9,350	$	3,910	$	3,678	$	7,588	$	9,026

(1)As of September 30, 2024 and 2023, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $1.2 million and $1.1 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2)As of September 30, 2024 and 2023, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $1.1 million and $0.0 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3)As of both September 30, 2024 and 2023, the allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $1.5 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the quarter ended September 30, 2024 was primarily attributable to new loan volume. The $1.9 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended September 30, 2024 was primarily attributable to risk rating downgrades.

The $0.2 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the nine months ended September 30, 2024 was primarily attributable to new loan volume. The $7.8 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the nine months ended September 30, 2024 was primarily attributable to two permanent planting borrower relationships and other risk rating downgrades.

The $3.6 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the quarter ended September 30, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the quarter. The $3.7 million net release from the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended September 30, 2023 was primarily attributable to the full payoff of a single collateral dependent storage and processing loan.

The $0.7 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the nine months ended September 30, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the most recent quarter. The $0.8 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the nine months ended

September 30, 2023 was primarily attributable to increased loan volume and certain risk rating downgrades.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of September 30, 2024 and December 31, 2023:

Table 5.4


	As of September 30, 2024
	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	$	6,817,093	$	14,363	$	12,072	$	34,390	$	60,825	$	93,782	$	6,971,700
Corporate AgFinance	1,249,879		—		—		—		—		47,684		1,297,563
Total Agricultural Finance loans	8,066,972		14,363		12,072		34,390		60,825		141,466		8,269,263
Rural Infrastructure Finance loans	4,383,355		—		—		—		—		—		4,383,355
Total	$	12,450,327	$	14,363	$	12,072	$	34,390	$	60,825	$	141,466	$	12,652,618

(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 $22.5 million of nonaccrual loans for which there was no associated allowance. During the three and nine months ended September 30, 2024, Farmer Mac received $2.4 million and $4.1 million, in interest on nonaccrual loans, respectively.


	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 (single-class) by third parties that are 90 days or more past due.

(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.

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of September 30, 2024 and December 31, 2023, by year of origination:

Table 5.5


	As of September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable	$	660,038	$	490,681	$	1,094,748	$	1,563,276	$	1,023,692	$	1,260,030	$	362,119	$	6,454,584
Special mention(2)	78,097		77,428		25,222		31,257		6,897		28,306		9,874		257,081
Substandard(3)	3,101		26,052		41,315		24,963		53,445		86,803		24,356		260,035
Total	$	741,236	$	594,161	$	1,161,285	$	1,619,496	$	1,084,034	$	1,375,139	$	396,349	$	6,971,700

For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	101	$	—	$	—	$	—	$	101

(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 September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Corporate AgFinance(1):
Internally Assigned Risk Rating:
Acceptable	$	106,145	$	155,782	$	75,840	$	235,951	$	80,593	$	162,180	$	264,366	$	1,080,857
Special mention(2)	—		37,168		—		14,776		75,464		—		7,275		134,683
Substandard(3)	—		7,311		7,655		—		14,339		33,490		19,228		82,023
Total	$	106,145	$	200,261	$	83,495	$	250,727	$	170,396	$	195,670	$	290,869	$	1,297,563

For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	3,942	$	3,942

(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 September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	932,310	$	536,679	$	582,812	$	176,273	$	565,944	$	1,242,792	$	274,551	$	4,311,361
Special mention(2)	2,941		10,450		34,475		—		—		—		—		47,866
Substandard(3)	—		—		24,128		—		—		—		—		24,128
Total	$	935,251	$	547,129	$	641,415	$	176,273	$	565,944	$	1,242,792	$	274,551	$	4,383,355

For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2024:
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 - 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 Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 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 loans(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 Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 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 Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 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.

6.GUARANTEES AND COMMITMENTS

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1


Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
	As of September 30, 2024		As of December 31, 2023
	(in thousands)
Agricultural Finance
Farmer Mac Guaranteed Securities	$	430,628	$	452,602


Total off-balance sheet Farmer Mac Guaranteed Securities	$	430,628	$	452,602

Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors.

The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2


	For the Nine Months Ended
	September 30, 2024		September 30, 2023
	(in thousands)
Proceeds from new securitizations	$	343,654	$	222,188
Guarantee fees received	1,173		1,280

Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets. The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3


	As of September 30, 2024		As of December 31, 2023
	(dollars in thousands)
Guarantee and commitment obligation	$	5,644	$	5,969
Weighted average remaining maturity:
Farmer Mac Guaranteed Securities	21.4 years		21.9 years

Long-Term Standby Purchase Commitments

Farmer Mac has recorded a liability for its obligation to stand ready under the commitment in the guarantee and commitment obligation on the consolidated balance sheets. The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4


	As of September 30, 2024		As of December 31, 2023
	(dollars in thousands)
Guarantee and commitment obligation(1)	$	38,295	$	41,594
Maximum principal amount	3,568,824		3,680,333
Weighted-average remaining maturity	14.4 years		14.5 years

(1) Relates to LTSPCs issued or modified on or after January 1, 2003.

Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities

The following table is a summary, by asset type, of the reserve for losses as of September 30, 2024 and December 31, 2023:

Table 6.5


	September 30, 2024		December 31, 2023
	Reserve for Losses		Reserve for Losses
	(in thousands)
Agricultural Finance	$	1,317	$	1,471
Rural Infrastructure Finance	207		240
Total	$	1,524	$	1,711

The following is a summary of the changes in the reserve for losses for the three and nine month periods ended September 30, 2024 and 2023:

Table 6.6


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023

	Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
	(in thousands)







Agricultural Finance
Beginning Balance	$	1,443	$	1,471	$	1,471	$	819
(Release of)/provision for losses	(126)		(59)		(154)		593
Ending Balance	$	1,317	$	1,412	$	1,317	$	1,412

Rural Infrastructure Finance
Beginning Balance	$	251	$	234	$	240	$	614
(Release of)/provision for losses	(44)		14		(33)		(366)
Ending Balance	$	207	$	248	$	207	$	248

The release from the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during the nine months ended September 30, 2024 was primarily due to a decrease in LTSPC volume. The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the nine months ended September 30, 2024 was primarily due to a decrease in LTSPC volume.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023:

Table 6.7


	As of September 30, 2024
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Agricultural Finance:	$	3,182,727	$	2,090	$	6,232	$	6,358	$	14,680	$	3,197,407
Rural Infrastructure Finance:	611,163		—		—		—		—		611,163
Total	$	3,793,890	$	2,090	$	6,232	$	6,358	$	14,680	$	3,808,570

(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs 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.


	As of December 31, 2023
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Agricultural Finance:	$	3,390,918	$	2,776	$	2,366	$	1,784	$	6,926	$	3,397,844
Rural Infrastructure Finance:	535,013		—		—		—		—		535,013
Total	$	3,925,931	$	2,776	$	2,366	$	1,784	$	6,926	$	3,932,857

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023, by year of origination:

Table 6.8


	As of September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance:
Internally Assigned Risk Rating:
Acceptable	$	12,104	$	127,022	$	219,900	$	478,659	$	516,045	$	1,297,238	$	411,223	$	3,062,191
Special mention(1)	—		5,963		12,941		14,561		6,926		46,864		12,134		99,389
Substandard(2)	—		—		1,246		1,182		6,346		25,839		1,214		35,827
Total	$	12,104	$	132,985	$	234,087	$	494,402	$	529,317	$	1,369,941	$	424,571	$	3,197,407

For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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 September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	363,689	$	247,474	$	611,163
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	363,689	$	247,474	$	611,163

For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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:
Internally Assigned Risk Rating:
Acceptable	$	169,429	$	246,441	$	515,396	$	534,395	$	264,815	$	1,185,811	$	391,335	$	3,307,622
Special mention(1)	—		71		2,466		872		531		44,631		8,565		57,136
Substandard(2)	—		—		—		131		1,536		26,328		5,091		33,086
Total	$	169,429	$	246,512	$	517,862	$	535,398	$	266,882	$	1,256,770	$	404,991	$	3,397,844

For the Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	419,190	$	115,823	$	535,013
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	419,190	$	115,823	$	535,013

For the Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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.

7.NOTES PAYABLE

Farmer Mac's borrowings consist of discount notes and medium-term notes, both of which are unsecured general obligations of Farmer Mac. Discount notes generally have original maturities of 1 year or less, whereas medium-term notes generally have maturities of 0.5 years to 25.0 years.

The following tables set forth information related to Farmer Mac's borrowings as of September 30, 2024 and December 31, 2023:

Table 7.1


	September 30, 2024
	Outstanding as of September 30				Average Outstanding During the Quarter
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,209,572	4.82	%	$	1,884,228	5.22	%
Medium-term notes	1,533,369		5.05	%	625,746		5.28	%
Current portion of medium-term notes	6,202,504		3.29	%
Total due within one year	$	9,945,445	3.90	%
Due after one year:
Medium-term notes due in:
Two years	$	4,552,685	2.90	%
Three years	4,322,588		3.09	%
Four years	2,731,158		3.97	%
Five years	2,286,867		4.62	%
Thereafter	3,355,828		2.73	%
Total due after one year	$	17,249,126	3.31	%
Total principal net of discounts	$	27,194,571	3.53	%
Hedging adjustments	(65,115)
Total	$	27,129,456


	December 31, 2023
	Outstanding as of December 31				Average Outstanding During the Year
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	1,734,387	5.32	%	$	1,097,300	5.08	%
Medium-term notes	384,970		5.07	%	1,731,308		4.09	%
Current portion of medium-term notes	5,967,811		2.90	%
Total due within one year	$	8,087,168	3.52	%
Due after one year:
Medium-term notes due in:
Two years	$	5,523,671	3.27	%
Three years	3,825,702		2.27	%
Four years	3,038,229		3.44	%
Five years	2,623,202		4.37	%
Thereafter	3,488,987		2.80	%
Total due after one year	$	18,499,791	3.16	%
Total principal net of discounts	$	26,586,959	3.27	%
Hedging adjustments	(250,417)
Total	$	26,336,542

The maximum amount of Farmer Mac's discount notes outstanding at any month end during each of the nine months ended September 30, 2024 and 2023 was $2.3 billion and $1.5 billion, respectively.

Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date. The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2024 as of September 30, 2024:

Table 7.2


Debt Callable in 2024 as of September 30, 2024, by Maturity
	Amount		Weighted-Average Rate
	(dollars in thousands)
Maturity:
2025	$	703,213	2.48	%
2026	1,102,104		1.85	%
2027	747,096		2.79	%
2028	281,393		3.92	%
Thereafter	1,215,130		2.62	%
Total	$	4,048,936	2.51	%

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of September 30, 2024, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

Table 7.3


	Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding
	Amount		Weighted-Average Rate
	(dollars in thousands)
Debt with interest rate resets, or debt maturities in:
2024	$	6,127,512	4.53	%
2025	6,369,714		3.39	%
2026	4,490,285		2.54	%
2027	3,366,626		3.44	%
2028	2,414,941		4.10	%
Thereafter	4,425,493		3.10	%
Total principal net of discounts	$	27,194,571	3.53	%

During the nine months ended September 30, 2024 and 2023, Farmer Mac called $1.2 billion and $111.0 million of callable medium-term notes, respectively.

Authority to Borrow from the U.S. Treasury

Farmer Mac's statutory charter authorizes it, upon satisfying certain conditions, to borrow up to $1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely to fulfill Farmer Mac's guarantee obligations. Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S. Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the

obligations from Farmer Mac. The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S. Treasury within a reasonable time. As of September 30, 2024, Farmer Mac had not used this borrowing authority.

Gains on Repurchases of Outstanding Debt

No outstanding debt repurchases were made in the three and nine months ended September 30, 2024 and 2023.

8.EQUITY

Common Stock

During each of the first, second, and third quarters 2024, Farmer Mac paid a quarterly dividend of $1.40 per share on all classes of its common stock. For each quarter in 2023, Farmer Mac paid a quarterly dividend of $1.10 per share on all classes of its common stock.

Except for the period from March 16, 2020 to March 10, 2021, Farmer Mac has had a common stock repurchase program in place since third quarter 2015. On March 10, 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms and extended the expiration date of the program to March 2023. In February 2023, Farmer Mac's board of directors renewed the share repurchase program on its previous terms (with a remaining authorization of up to $9.8 million in stock repurchases) and extended the expiration date of the program to February 2025. Farmer Mac has not repurchased any shares of its Class C non-voting common stock since the repurchase program was reinstated in March 2021. As of September 30, 2024, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $19.8 million under the share repurchase program since 2015.

Preferred Stock

On July 18, 2024, Farmer Mac redeemed all outstanding shares of its 6.000% Fixed-to-Floating Rate Non-Cumulative Series C Preferred Stock, plus any declared and unpaid dividends through and including the redemption date. As a result of this redemption, Farmer Mac recognized $1.6 million of loss on retirement of preferred stock in third quarter 2024, which was related to deferred issuance costs.

Capital Requirements

Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of both September 30, 2024 and December 31, 2023, the minimum capital requirement was greater than the risk-based capital requirement. Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements.

As of September 30, 2024, Farmer Mac's minimum capital requirement was $885.0 million and its core capital level was $1.5 billion, which was $579.9 million above the minimum capital requirement as of that date. As of December 31, 2023, Farmer Mac's minimum capital requirement was $862.6 million and its core capital level was $1.5 billion, which was $589.4 million above the minimum capital requirement as of that date.

In accordance with a rule of the Farm Credit Administration ("FCA") on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac has adopted a policy for maintaining a sufficient level of Tier 1 capital (consisting of retained earnings, paid-in-capital, common stock, and qualifying preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

9.FAIR VALUE DISCLOSURES

Fair Value Classification and Transfers

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Table 9.1


Assets and Liabilities Measured at Fair Value as of September 30, 2024
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,478	$	19,478
Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,436,435		—		2,436,435
Fixed rate GSE guaranteed mortgage-backed securities	—		2,143,758		—		2,143,758
Floating rate U.S. Treasuries	—		—		—		—
Fixed rate U.S. Treasuries	1,278,265		—		—		1,278,265
Total Available-for-sale Investment Securities	1,278,265		4,580,193		19,478		5,877,936
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		5,752,385		5,752,385
Farmer Mac Guaranteed Securities	—		—		9,306		9,306
Total Farmer Mac Guaranteed Securities	—		—		5,761,691		5,761,691
USDA Securities:
Trading	—		—		842		842
Total USDA Securities	—		—		842		842
Financial derivatives	138		49,059		—		49,197
Guarantee Asset	—		—		5,556		5,556
Total Assets at fair value	$	1,278,403	$	4,629,252	$	5,787,567	$	11,695,222
Liabilities:
Financial derivatives	$	—	$	64,351	$	—	$	64,351
Total Liabilities at fair value	$	—	$	64,351	$	—	$	64,351

(1) Level 3 assets represent 19% of total assets and 49% of financial instruments measured at fair value.


Assets and Liabilities Measured at Fair Value as of December 31, 2023
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,082	$	19,082
Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,424,434		—		2,424,434
Fixed rate GSE guaranteed mortgage-backed securities	—		1,569,615		—		1,569,615
Floating rate U.S. Treasuries	49,968		—		—		49,968
Fixed rate U.S. Treasuries	855,832		—		—		855,832
Total Available-for-sale Investment Securities	905,800		3,994,049		19,082		4,918,931
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		5,522,712		5,522,712
Farmer Mac Guaranteed Securities	—		—		9,767		9,767
Total Farmer Mac Guaranteed Securities	—		—		5,532,479		5,532,479
USDA Securities:
Trading	—		—		1,241		1,241
Total USDA Securities	—		—		1,241		1,241
Financial derivatives	11		37,467		—		37,478
Guarantee Asset	—		—		5,831		5,831
Total Assets at fair value	$	905,811	$	4,031,516	$	5,558,633	$	10,495,960
Liabilities:
Financial derivatives	$	91	$	117,040	$	—	$	117,131
Total Liabilities at fair value	$	91	$	117,040	$	—	$	117,131

(1) Level 3 assets represent 19% of total assets and 52% of financial instruments measured at fair value.

There were no material assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2024 or December 31, 2023.

Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period. During the three and nine months ended September 30, 2024 and 2023, there were no transfers within the fair value hierarchy.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three and nine months ended September 30, 2024 and 2023.

Table 9.2


Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2024
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,478	$	—	$	—	$	—	$	—	$	—	$	19,478
Total available-for-sale	19,478		—		—		—		—		—		19,478
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	5,389,841		400,000		(215,855)		44		189,191		(10,836)		5,752,385
Farmer Mac Guaranteed Securities	9,310		—		(176)		—		—		172		9,306
Total available-for-sale	5,399,151		400,000		(216,031)		44		189,191		(10,664)		5,761,691
USDA Securities:

Trading	1,026		—		(198)		—		14		—		842
Total USDA Securities	1,026		—		(198)		—		14		—		842
Guarantee and commitment obligations:
Guarantee Asset	5,559		—		(86)		—		83		—		5,556
Total Guarantee and commitment obligations	5,559		—		(86)		—		83		—		5,556
Total Assets at fair value	$	5,425,214	$	400,000	$	(216,315)	$	44	$	189,288	$	(10,664)	$	5,787,567


Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2023
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains included in Other Comprehensive Income		Transfers Out(1)		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,032	$	—	$	—	$	1	$	—	$	—	$	—	$	19,033
Total available-for-sale	19,032		—		—		1		—		—		—		19,033
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,737,810		100,000		(6,875)		133		(107,917)		9,653		(2,684,096)		5,048,708
Farmer Mac Guaranteed Securities	7,605		—		(169)		—		—		2,553		—		9,989
Total available-for-sale	7,745,415		100,000		(7,044)		133		(107,917)		12,206		(2,684,096)		5,058,697
USDA Securities:
Trading	1,348		—		(44)		—		(2)		—		—		1,302
Total USDA Securities	1,348		—		(44)		—		(2)		—		—		1,302
Guarantee and commitment obligations:
Guarantee Asset	4,331		—		(84)		—		1,716		—		—		5,963
Total Guarantee and commitment obligations	4,331		—		(84)		—		1,716		—		—		5,963
Total Assets at fair value	$	7,770,126	$	100,000	$	(7,172)	$	134	$	(106,203)	$	12,206	$	(2,684,096)	$	5,084,995

(1)Includes $2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.


Level 3 Assets and Liabilities Measured at Fair Value for the Nine Months Ended September 30, 2024
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,082	$	—	$	—	$	2	$	—	$	394	$	19,478
Total available-for-sale	19,082		—		—		2		—		394		19,478
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	5,522,712		675,000		(560,643)		100		102,036		13,180		5,752,385
Farmer Mac Guaranteed Securities	9,767		—		(523)		—		—		62		9,306
Total available-for-sale	5,532,479		675,000		(561,166)		100		102,036		13,242		5,761,691
USDA Securities:
Trading	1,241		—		(414)		—		15		—		842
Total USDA Securities	1,241		—		(414)		—		15		—		842
Guarantee and commitment obligations:
Guarantee Asset	5,831		—		(256)		—		(19)		—		5,556
Total Guarantee and commitment obligations	5,831		—		(256)		—		(19)		—		5,556
Total Assets at fair value	$	5,558,633	$	675,000	$	(561,836)	$	102	$	102,032	$	13,636	$	5,787,567


Level 3 Assets and Liabilities Measured at Fair Value for the Nine Months Ended September 30, 2023
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains included in Other Comprehensive Income		Transfers Out(1)		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,027	$	—	$	—	$	6	$	—	$	—	$	—	$	19,033
Total available-for-sale	19,027		—		—		6		—		—		—		19,033
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,599,379		1,639,650		(1,405,674)		173		(116,447)		15,723		(2,684,096)		5,048,708
Farmer Mac Guaranteed Securities	7,847		—		(1,043)		—		—		3,185		—		9,989
Total available-for-sale	7,607,226		1,639,650		(1,406,717)		173		(116,447)		18,908		(2,684,096)		5,058,697
USDA Securities:
Trading	1,767		—		(479)		—		14		—		—		1,302
Total USDA Securities	1,767		—		(479)		—		14		—		—		1,302
Guarantee and commitment obligations:
Guarantee Asset	4,467		—		(506)		—		2,002		—		—		5,963
Total Guarantee and commitment obligations	4,467		—		(506)		—		2,002		—		—		5,963
Total Assets at fair value	$	7,632,487	$	1,639,650	$	(1,407,702)	$	179	$	(114,431)	$	18,908	$	(2,684,096)	$	5,084,995

(1)Includes $2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of September 30, 2024 and December 31, 2023:

Table 9.3

As of September 30, 2024

Financial Instruments

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted-Average)

(in thousands)

Assets:

Investment securities:

Floating rate auction-rate certificates backed by Government guaranteed student loans

19,478

Indicative bids

Range of broker quotes

99.0% - 99.0% (99.0%)

Farmer Mac Guaranteed Securities:

AgVantage

5,752,385

Discounted cash flow

Discount rate

4.3% - 5.3% (4.5%)

Farmer Mac Guaranteed Securities

9,306

Discounted cash flow

Discount rate

8.3%

CPR

USDA Securities

842

Discounted cash flow

Discount rate

5.2% - 5.3% (5.3%)

CPR

13% - 13% (13%)

Guarantee Asset

5,556

Discounted cash flow

Discount rate

8.3%

CPR

As of December 31, 2023

Financial Instruments

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted-Average)

(in thousands)

Assets:

Investment securities:

Floating rate auction-rate certificates backed by Government guaranteed student loans

19,082

Indicative bids

Range of broker quotes

97.0% - 97.0% (97.0%)

Farmer Mac Guaranteed Securities:

AgVantage

5,522,712

Discounted cash flow

Discount rate

4.7% - 5.4% (5.0%)

Farmer Mac Guaranteed Securities

9,767

Discounted cash flow

Discount rate

8.3%

CPR

USDA Securities

1,241

Discounted cash flow

Discount rate

5.4% - 5.4% (5.4%)

CPR

12% - 12% (12%)

Guarantee Asset

5,831

Discounted cash flow

Discount rate

8.3%

CPR

The significant unobservable input used in the fair value measurements of AgVantage Farmer Mac Guaranteed Securities is the discount rate commensurate with the risks involved. Typically, significant increases (decreases) in this input in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease. CPR are not presented in the table above for AgVantage securities

because they generally have fixed maturity dates when the secured general obligations are due and do not prepay.

Disclosures on Fair Value of Financial Instruments

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of September 30, 2024 and December 31, 2023:

Table 9.4


	As of September 30, 2024				As of December 31, 2023
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
	(in thousands)
Financial assets:
Cash and cash equivalents	$	842,056	$	842,056	$	888,707	$	888,707
Investment securities	5,896,066		5,895,793		4,981,249		4,979,504
Farmer Mac Guaranteed Securities	8,706,073		8,722,762		9,710,074		9,745,548
USDA Securities	2,112,084		2,344,715		2,036,046		2,355,412
Loans	11,974,136		12,367,333		10,426,021		11,039,349
Financial derivatives	49,197		49,197		37,478		37,478
Guarantee and commitment fees receivable	53,624		46,077		58,465		49,832
Financial liabilities:
Notes payable	26,673,965		27,129,456		25,670,971		26,336,542
Debt securities of consolidated trusts held by third parties	1,607,791		1,616,513		1,268,563		1,351,069
Financial derivatives	64,351		64,351		117,131		117,131
Guarantee and commitment obligations	51,486		43,939		56,195		47,563

The carrying value of cash and cash equivalents is a reasonable estimate of their approximate fair value and is classified as Level 1. The fair value of investments in U.S. Treasuries are valued based on unadjusted quoted prices in active markets and are classified as Level 1. A significant portion of Farmer Mac's investment portfolio is valued using a reputable nationally recognized third-party pricing service. The prices obtained are non-binding and generally representative of recent market trades and are classified as Level 2. Farmer Mac internally models the fair value of its loan portfolio, including loans held for investment and loans held for investment in consolidated trusts, Farmer Mac Guaranteed Securities, and USDA Securities by discounting the projected cash flows of these instruments at projected interest rates. The fair values are based on the present value of expected cash flows using management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves and discount rates commensurate with the risks involved. These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3. Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2. The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3. Notes payable are valued by discounting the expected cash flows of these instruments using a yield curve derived from market prices observed for similar agency securities and are also classified as Level 3. Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent,

estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model. Different market assumptions and estimation methodologies could significantly affect estimated fair value amounts.

10.BUSINESS SEGMENT REPORTING

The following table presents Farmer Mac's seven segments:

Agricultural Finance

Rural Infrastructure Finance

Treasury

Farm & Ranch

Corporate AgFinance

Rural Utilities

Renewable Energy

Funding

Investments

Corporate

The financial information presented below reflects the accounts of Farmer Mac and its subsidiaries on a consolidated basis. Accordingly, the core earnings for Farmer Mac's segments would differ from any stand-alone financial statements of Farmer Mac's subsidiaries. These differences would be due to various factors, including the exclusion of unrealized gains and losses related to fair value changes of trading assets and financial derivatives, as well as the allocation of certain expenses such as operating expenses, dividends and interest expense related to the issuance of capital and the issuance of indebtedness managed at the corporate level.

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the three and nine months ended September 30, 2024 and 2023.

Table 10.1


Core Earnings by Business Segment
For the Three Months Ended September 30, 2024
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	36,816	$	6,397	$	7,608	$	3,810	$	31,217	$	943	$	—	$	—		$	86,791
Less: reconciling adjustments(1)(2)(3)	(1,061)		—		(29)		—		(305)		—		—		1,395			—
Net effective spread	35,755		6,397		7,579		3,810		30,912		943		—		1,395			—
Guarantee and commitment fees	4,304		168		338		187		—		—		—		(982)			4,015
Gain on sale of investment securities	—		—		—		—		—		—		—		—			—
Loss on sale of mortgage loan	—		—		—		—		—		—		—		—			—
Other income/(expense)(3)	1,091		40		—		—		—		10		(8)		(1,649)			(516)
Total revenues	41,150		6,605		7,917		3,997		30,912		953		(8)		(1,236)			90,290

Provision for of losses	(116)		(1,779)		(1,195)		(337)		—		(1)		—		—			(3,428)

Release of reserve for losses	126		—		44		—		—		—		—		—			170
Operating expenses	(196)		—		—		—		—		—		(24,587)		—			(24,783)
Total non-interest expense	(70)		—		44		—		—		—		(24,587)		—			(24,613)
Core earnings before income taxes	40,964		4,826		6,766		3,660		30,912		952		(24,595)		(1,236)		(4)	62,249
Income tax (expense)/benefit	(8,602)		(1,013)		(1,421)		(768)		(6,492)		(201)		5,816		260			(12,421)
Core earnings before preferred stock dividends	32,362		3,813		5,345		2,892		24,420		751		(18,779)		(976)		(4)	49,828
Preferred stock dividends	—		—		—		—		—		—		(5,897)		—			(5,897)
Loss on retirement of preferred stock	—		—		—		—		—		—		—		(1,619)			(1,619)
Segment core earnings/(losses)	$	32,362	$	3,813	$	5,345	$	2,892	$	24,420	$	751	$	(24,676)	$	(2,595)	(4)	$	42,312

Total Assets	$	14,562,142	$	1,662,687	$	6,952,605	$	985,435	$	—	$	6,389,160	$	63,192	$	—		$	30,615,221
Total on- and off-balance sheet program assets at principal balance	$	18,090,374	$	1,842,780	$	7,440,141	$	1,095,008	$	—	$	—	$	—	$	—		$	28,468,303

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

(2)Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.

(3)Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

(4)Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.


Core Earnings by Business Segment
For the Three Months Ended September 30, 2023
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	33,735	$	8,250	$	6,393	$	1,150	$	37,642	$	473	$	—	$	—		$	87,643
Less: reconciling adjustments(1)(2)(3)	(1,017)		—		(31)		—		(3,230)		59		—		4,219			—
Net effective spread	32,718		8,250		6,362		1,150		34,412		532		—		4,219			—
Guarantee and commitment fees	4,447		78		279		24		—		—		—		692			5,520
Other income/(expense)(3)	807		—		—		—		3		6		240		2,884			3,940
Total revenues	37,972		8,328		6,641		1,174		34,415		538		240		7,795			97,103

Release of/(provision for) losses	13		3,694		(3,504)		(66)		—		(1)		—		—			136

Release of/(provision for) reserve for losses	58		—		(13)		—		—		—		—		—			45
Operating expenses	—		—		—		—				—		(24,034)		—			(24,034)
Total non-interest expense	58		—		(13)		—		—		—		(24,034)		—			(23,989)
Core earnings before income taxes	38,043		12,022		3,124		1,108		34,415		537		(23,794)		7,795		(4)	73,250
Income tax (expense)/benefit	(7,989)		(2,525)		(656)		(233)		(7,226)		(113)		5,267		(1,638)			(15,113)
Core earnings before preferred stock dividends	30,054		9,497		2,468		875		27,189		424		(18,527)		6,157		(4)	58,137
Preferred stock dividends	—		—		—		—		—		—		(6,792)		—			(6,792)
Segment core earnings/(losses)	$	30,054	$	9,497	$	2,468	$	875	$	27,189	$	424	$	(25,319)	$	6,157	(4)	$	51,345

Total Assets	$	14,660,371	$	1,619,664	$	6,648,693	$	320,572	$	—	$	4,866,969	$	195,112	$	—		$	28,311,381
Total on- and off-balance sheet program assets at principal balance	$	18,461,835	$	1,741,306	$	7,118,295	$	330,575	$	—	$	—	$	—	$	—		$	27,652,011

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


Core Earnings by Business Segment
For the Nine Months Ended September 30, 2024
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	106,227	$	22,234	$	22,545	$	8,858	$	98,556	$	2,079	$	—	$	—		$	260,499
Less: reconciling adjustments(1)(2)(3)	(3,473)		—		(88)		—		(4,902)		—		—		8,463			—
Net effective spread	102,754		22,234		22,457		8,858		93,654		2,079		—		8,463			—
Guarantee and commitment fees	13,400		382		988		465		—		—		—		(3,506)			11,729
Gain on sale of investment securities	—		—		—		—		—		1,052		—		—			1,052
Loss on sale of mortgage loan	—		(1,147)		—		—		—		—		—		—			(1,147)
Other income/(expense)(3)	2,603		47		—		—		—		21		20		(1,004)			1,687
Total revenues	118,757		21,516		23,445		9,323		93,654		3,152		20		3,953			273,820

(Provision for)/release of losses	(888)		(6,755)		2,324		(2,488)		—		1		—		—			(7,806)

Release of reserve for losses	154		—		34		—		—		—		—		—			188
Operating expenses	(196)		—		—		—		—		—		(76,293)		—			(76,489)
Total non-interest expense	(42)		—		34		—		—		—		(76,293)		—			(76,301)
Core earnings before income taxes	117,827		14,761		25,803		6,835		93,654		3,153		(76,273)		3,953		(4)	189,713
Income tax (expense)/benefit	(24,743)		(3,099)		(5,419)		(1,435)		(19,666)		(664)		16,822		(830)			(39,034)
Core earnings before preferred stock dividends	93,084		11,662		20,384		5,400		73,988		2,489		(59,451)		3,123		(4)	150,679
Preferred stock dividends	—		—		—		—		—		—		(19,480)		—			(19,480)
Loss on retirement of preferred stock	—		—		—		—		—		—		—		(1,619)			(1,619)
Segment core earnings/(losses)	$	93,084	$	11,662	$	20,384	$	5,400	$	73,988	$	2,489	$	(78,931)	$	1,504	(4)	$	129,580

Total Assets	$	14,562,142	$	1,662,687	$	6,952,605	$	985,435	$	—	$	6,389,160	$	63,192	$	—		$	30,615,221
Total on- and off-balance sheet program assets at principal balance	$	18,090,374	$	1,842,780	$	7,440,141	$	1,095,008	$	—	$	—	$	—	$	—		$	28,468,303

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.


Core Earnings by Business Segment
For the Nine Months Ended September 30, 2023
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	102,671	$	22,842	$	17,772	$	3,108	$	98,588	$	397	$	—	$	—		$	245,378
Less: reconciling adjustments(1)(2)(3)	(3,100)		—		(95)		—		60		186		—		2,949			—
Net effective spread	99,571		22,842		17,677		3,108		98,648		583		—		2,949			—
Guarantee and commitment fees	12,960		193		841		69		—		—		—		(1,121)			12,942
Other income/(expense)(3)	2,216		12		—		—		3		17		284		5,484			8,016
Total revenues	114,747		23,047		18,518		3,177		98,651		600		284		7,312			266,336

Release of/(provision for) losses	136		(934)		(652)		(38)		—		4		—		—			(1,484)

(Provision for)/release of reserve for losses	(594)		—		367		—		—		—		—		—			(227)
Operating expenses	—		—		—		—		—		—		(71,935)		—			(71,935)
Total non-interest expense	(594)		—		367		—		—		—		(71,935)		—			(72,162)
Core earnings before income taxes	114,289		22,113		18,233		3,139		98,651		604		(71,651)		7,312		(4)	192,690
Income tax (expense)/benefit	(24,001)		(4,644)		(3,829)		(659)		(20,716)		(127)		15,206		(1,536)			(40,306)
Core earnings before preferred stock dividends	90,288		17,469		14,404		2,480		77,935		477		(56,445)		5,776		(4)	152,384
Preferred stock dividends	—		—		—		—		—		—		(20,374)		—			(20,374)
Segment core earnings/(losses)	$	90,288	$	17,469	$	14,404	$	2,480	$	77,935	$	477	$	(76,819)	$	5,776	(4)	$	132,010

Total Assets	$	14,660,371	$	1,619,664	$	6,648,693	$	320,572	$	—	$	4,866,969	$	195,112	$	—		$	28,311,381
Total on- and off-balance sheet program assets at principal balance	$	18,461,835	$	1,741,306	$	7,118,295	$	330,575	$	—	$	—	$	—	$	—		$	27,652,011

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

The objective of this section of the report is to provide a discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's financial condition and results of operations for the quarter ended September 30, 2024. Financial information included in this report is consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage

Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with: (1) the interim unaudited consolidated financial statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed with the SEC on February 23, 2024 (the "2023 Annual Report").

FORWARD-LOOKING STATEMENTS

In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation unless otherwise stated or unless the context otherwise requires.

Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "intends," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing Farmer Mac's:

•prospects for earnings;

•prospects for growth in business volume;

•trends in net interest income and net effective spread;

•trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for losses;

•assessment of economic and market trends;

•trends in expenses;

•trends in investment securities;

•prospects for asset impairments and allowance for losses;

•changes in capital position;

•future dividend payments; and

•other business and financial matters.

Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the forward-looking statements, including the factors discussed under "Risk Factors" in Part I, Item 1A of Farmer Mac's 2023 Annual Report, as well as uncertainties about:

•the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms;

•legislative or regulatory developments that could affect Farmer Mac, its sources of business, or agricultural or rural infrastructure industries;

•fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries;

•the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac;

•the general rate of growth in agricultural mortgage and rural infrastructure indebtedness;

•the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or rural infrastructure lending, borrower repayment capacity, or collateral values, including inflation, fluctuations in interest rates, changes in U.S. trade policies, fluctuations in export demand for U.S. agricultural products and foreign currency exchange rates, supply chain disruptions, increases in input costs, labor availability, and volatility in commodity prices;

•the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes;

•developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac;

•the effects of the Federal Reserve’s efforts to achieve monetary policy normalization to respond to inflation and employment levels; and

•other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, climate change, or fluctuations in agricultural real estate values.

Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this report. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this report is not necessarily indicative of future results.

Overview

Farmer Mac is driven by its mission to increase the accessibility of financing for American agriculture and rural infrastructure. As a secondary market provider for our nation's agricultural and rural infrastructure credit, we provide financial solutions to a broad spectrum of customers supporting rural America, including agricultural lenders, agribusinesses, and rural electric cooperatives. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Farmer Mac also serves as a critical investment tool for a number of entities – such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions – by offering investment opportunities that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During third quarter 2024:

•we provided $2.0 billion in liquidity and lending capacity to lenders serving rural America;

•we maintained strong liquidity in our investment portfolio well above regulatory requirements;

•we maintained our strong capital position, well above regulatory requirements, and uninterrupted access to the debt capital markets; and

•we redeemed all $75.0 million of our Series C Preferred Stock.

The discussion below of Farmer Mac's financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Net Income and Core Earnings

The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings and core earnings per share are non-GAAP measures that differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions.

Table 1


	For the Three Months Ended
	September 30, 2024		June 30, 2024		September 30, 2023
	(in thousands)
Net income attributable to common stockholders	$	42,312	$	40,313	$	51,345
Core earnings	44,907		39,777		45,188

The $2.0 million sequential increase in net income attributable to common stockholders was due to a $2.3 million after-tax decrease in our provision for credit losses, a $0.9 million decrease in preferred stock dividends related to the redemption of the Series C Preferred Stock, and a $0.6 million after-tax increase in late fee income. These factors were partially offset by the $1.6 million loss on retirement of the Series C Preferred Stock, related to deferred issuance costs.

The $9.0 million year-over-year decrease in net income attributable to common stockholders was due to a $3.6 million after-tax decrease in the fair value of undesignated financial derivatives, a $2.7 million after-tax increase in our provision for credit losses, the $1.6 million loss on retirement of the Series C Preferred Stock related to deferred issuance costs, and a $1.2 million after-tax decrease in guarantee and commitment fee income. These factors were partially offset by a $0.9 million decrease in preferred stock dividends related to the redemption of the Series C Preferred Stock.

The $5.1 million sequential increase in core earnings was due to a $2.3 million after-tax decrease in our provision for credit losses, a $1.4 million after-tax increase in net effective spread, a $0.9 million decrease in preferred stock dividends related to the redemption of the Series C Preferred Stock, and a $0.6 million after-tax increase in late fee income.

The $0.3 million year-over-year decrease in core earnings was due to a $2.7 million after-tax increase in our provision for credit losses partially offset by a $1.5 million after-tax increase in net effective spread and a $0.9 million decrease in preferred stock dividends related to the redemption of the Series C Preferred Stock.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Net Interest Income and Net Effective Spread

The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income.

Table 2


	For the Three Months Ended
	September 30, 2024			June 30, 2024			September 30, 2023
	(in thousands)
Net interest income	$	86,791		$	87,340		$	87,643
Net interest yield %	1.15		%	1.15		%	1.22		%
Net effective spread	$	85,396		$	83,596		$	83,424
Net effective spread %	1.16		%	1.14		%	1.20		%

The $0.5 million sequential decrease in net interest income was primarily due to a $2.4 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives), a $0.9 million increase from a shift in the composition of new business volume towards higher-yielding loans, and a decrease of $0.9 million in our funding costs, which was primarily attributable to our proactive asset liability management practices such as calling fixed-rate debt in response to lower nominal interest rates. In percentage terms, net interest income remained consistent compared to second quarter 2024.

The $0.9 million year-over-year decrease in net interest income was primarily due to an increase of $3.0 million of funding costs, which was primarily attributable to (1) the widening of debt spreads that occurred in fourth quarter 2023, which increased our floating-rate funding costs, and (2) a $2.9 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). These factors were partially offset by a $5.0 million increase from a shift in the composition of new business volume towards higher-yielding loans. In percentage terms, the year-over-year decrease of 0.07% was primarily attributable to an increase of 0.07% in funding costs and a decrease in the fair value of our designated financial derivatives of 0.03%, partially offset by an increase of 0.03% related to the shift in the composition of new business volume towards higher-yielding loans.

The $1.8 million sequential increase in net effective spread was primarily due to a $0.9 million increase from a shift in the composition of new business volume towards higher-yielding loans, and a decrease of $0.9 million in our non-GAAP funding costs, which was primarily attributable to our proactive asset liability management practices such as calling fixed-rate debt in response to lower nominal interest rates. In percentage terms, the sequential increase of 0.02% was primarily attributable to an increase of 0.01% due to the shift in the composition of new business volume towards higher-yielding loans and a decrease of 0.01% in non-GAAP funding costs.

The $2.0 million year-over-year increase in net effective spread was primarily due to a $5.0 million increase from a shift in the composition of new business volume towards higher-yielding loans. This factor was partially offset by an increase of $3.0 million in non-GAAP funding costs, which was primarily attributable to the widening of debt spreads that occurred in fourth quarter 2023 and increased our floating-rate funding costs. In percentage terms, the year-over-year decrease of 0.04% was primarily attributable to an increase of 0.07% related to the increases in non-GAAP funding costs, and was partially offset by an increase of 0.03% on the shift in the composition of new business volume towards higher-yielding loans.

For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Business Volume

Our outstanding business volume was $28.5 billion as of September 30, 2024, a net decrease of $290.0 million from June 30, 2024 after taking into account all new business, maturities, sales, and paydowns on existing assets. The net decrease was primarily attributable to a net decrease of $388.2 million in the Agricultural Finance line of business, partially offset by a net increase of $98.2 million in the Rural Infrastructure Finance line of business.

For more information about Farmer Mac's business volume, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Business Volume."

Capital

Table 3


	As of
	September 30, 2024		December 31, 2023
	(in thousands)
Core capital	$	1,464,898	$	1,452,008
Capital in excess of minimum capital level required	579,877		589,399

The decrease in capital in excess of the minimum capital level required was primarily due to the redemption of the Series C Preferred Stock, partially offset by an increase in retained earnings.

Credit Quality

The following table presents Agricultural Finance on- and off-balance sheet substandard assets, in dollars and as a percentage of the respective portfolio as of September 30, 2024, June 30, 2024, and December 31, 2023:

Table 4


	On-Balance Sheet				Off-Balance Sheet
	Substandard Assets		% of Portfolio		Substandard Assets		% of Portfolio
	(dollars in thousands)
September 30, 2024	$	342,058	4.1	%	$	35,827	1.1	%
June 30, 2024	219,679		2.7	%	28,323		0.9	%
December 31, 2023	152,865		2.0	%	33,086		1.0	%

Increase/(decrease) from prior quarter-ending	$	122,379	1.4	%	$	7,504	0.2	%
Increase/(decrease) from prior year-ending	189,193		2.1	%	2,741		0.1	%

The increase of $122.4 million in on-balance sheet substandard assets during third quarter was primarily driven by credit downgrades in permanent plantings, crops, livestock, part-time farms, and agricultural storage and processing. The $7.5 million increase in substandard assets in our off-balance sheet portfolios during third quarter was primarily due to credit downgrades in crops, permanent plantings, and livestock, and was partially offset by credit upgrades in part-time farms.

There was one substandard asset with an outstanding balance of $24.1 million in the Rural Infrastructure Finance portfolio as of September 30, 2024. There was one substandard asset with an outstanding balance of $29.4 million in the Rural Infrastructure Finance portfolio as of December 31, 2023.

For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 24 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

The following table presents 90-day delinquencies for the on- and off-balance sheet Agricultural Finance portfolios in dollars and as a percentage of the respective balance sheet category as of September 30, 2024, June 30, 2024, and December 31, 2023:

Table 5


	On-Balance Sheet				Off-Balance Sheet
	90-Day Delinquencies		% of Portfolio		90-Day Delinquencies		% of Portfolio
	(dollars in thousands)
September 30, 2024	$	138,049	1.67	%	$	6,358	0.20	%
June 30, 2024	57,791		0.71	%	4,272		0.13	%
December 31, 2023	32,893		0.42	%	1,784		0.05	%

Increase/(decrease) from prior quarter-ending	$	80,258	0.96	%	$	2,086	0.07	%
Increase/(decrease) from prior year-ending	105,156		1.25	%	4,574		0.15	%

On-balance sheet Agricultural Finance assets 90 or more days delinquent increased in permanent plantings, crops, livestock, part-time farms, and agricultural storage and processing. Off-balance sheet Agricultural Finance assets 90 days or more delinquent increased in permanent plantings, crops, and part-time farms. The top ten borrower exposures over 90 days delinquent in either the on- or off-balance sheet Agricultural Finance portfolio represented over half of the aggregate 90-day delinquencies as of September 30, 2024.

As of both September 30, 2024 and December 31, 2023, there were no 90-day delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loan purchases and loans underlying LTSPCs.

For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

Use of Non-GAAP Measures

In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends.

The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.

Core Earnings and Core Earnings Per Share

The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and core earnings per share. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

Net Effective Spread

Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of these assets. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain.

Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.

Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "(Losses)/gains on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.

Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of

cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

For a reconciliation of net interest income and net interest yield to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Results of Operations

Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings:

Table 6


Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
	For the Three Months Ended
	September 30, 2024		September 30, 2023
	(in thousands, except per share amounts)
Net income attributable to common stockholders	$	42,312	$	51,345
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13)	(1,064)		2,921
Gains on hedging activities due to fair value changes	205		3,210
Unrealized gains on trading securities	99		1,714
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	27		29
Net effects of terminations or net settlements on financial derivatives	(503)		(79)
Issuance costs on the retirement of preferred stock	(1,619)		—
Income tax effect related to reconciling items	260		(1,638)
Sub-total	(2,595)		6,157
Core earnings	$	44,907	$	45,188

Composition of Core Earnings:
Revenues:
Net effective spread(1)	$	85,396	$	83,424
Guarantee and commitment fees(2)	4,997		4,828
Gain on sale of investment securities (GAAP)	—		—
Loss on sale of mortgage loan (GAAP)	—		—
Other(3)	1,133		1,056
Total revenues	91,526		89,308

Credit related expense (GAAP):
Provision for/(release of) losses	3,258		(181)
REO operating expenses	196		—
Total credit related expense	3,454		(181)

Operating expenses (GAAP):
Compensation and employee benefits	15,237		14,103
General and administrative	8,625		9,100
Regulatory fees	725		831
Total operating expenses	24,587		24,034

Net earnings	63,485		65,455
Income tax expense(4)	12,681		13,475
Preferred stock dividends (GAAP)	5,897		6,792
Core earnings	$	44,907	$	45,188

Core earnings per share:
Basic	$	4.13	$	4.17
Diluted	$	4.10	$	4.13
Weighted-average shares:
Basic	10,883		10,839
Diluted	10,966		10,938

(1)Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 10 for a reconciliation of net interest income to net effective spread.

(2)Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.

(3)Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.

(4)Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.


Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
	For the Nine Months Ended
	September 30, 2024		September 30, 2023
	(in thousands, except per share amounts)
Net income attributable to common stockholders	$	129,580	$	132,010
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13)	260		5,978
Gains/(losses) on hedging activities due to fair value changes	5,811		(1,796)
Unrealized (losses)/gains on trading securities	(2)		2,016
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	84		87
Net effects of terminations or net settlements on financial derivatives	(2,200)		1,027
Issuance costs on the retirement of preferred stock	(1,619)		—
Income tax effect related to reconciling items	(830)		(1,536)
Sub-total	1,504		5,776
Core earnings	$	128,076	$	126,234

Composition of Core Earnings:
Revenues:
Net effective spread(1)	$	252,036	$	242,429
Guarantee and commitment fees(2)	15,235		14,063
Gain on sale of investment securities (GAAP)	1,052		—
Loss on sale of mortgage loan (GAAP)	(1,147)		—
Other(3)	2,691		2,532
Total revenues	269,867		259,024

Credit related expense (GAAP):
Provision for losses	7,618		1,711
REO operating expenses	196		—
Total credit related expense	7,814		1,711

Operating expenses (GAAP):
Compensation and employee benefits	48,334		43,391
General and administrative	25,784		26,047
Regulatory fees	2,175		2,497
Total operating expenses	76,293		71,935

Net earnings	185,760		185,378
Income tax expense(4)	38,204		38,770
Preferred stock dividends (GAAP)	19,480		20,374
Core earnings	$	128,076	$	126,234

Core earnings per share:
Basic	$	11.79	$	11.66
Diluted	$	11.69	$	11.56
Weighted-average shares:
Basic	10,869		10,825
Diluted	10,968		10,924

(4)Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.

Table 7


Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in thousands, except per share amounts)
GAAP - Basic EPS	$	3.89	$	4.74	$	11.93	$	12.20
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13)	(0.09)		0.27		0.02		0.55
Gains/(losses) on hedging activities due to fair value changes	0.02		0.30		0.54		(0.17)
Unrealized gains on trading securities	0.01		0.16		—		0.19
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		—		0.01		0.01
Net effects of terminations or net settlements on financial derivatives	(0.05)		(0.01)		(0.20)		0.10
Issuance costs on the retirement of preferred stock	(0.15)		—		(0.15)		—
Income tax effect related to reconciling items	0.02		(0.15)		(0.08)		(0.14)
Sub-total	(0.24)		0.57		0.14		0.54
Core Earnings - Basic EPS	$	4.13	$	4.17	$	11.79	$	11.66

Shares used in per share calculation (GAAP and Core Earnings)	10,883		10,839		10,869		10,825


Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in thousands, except per share amounts)
GAAP - Diluted EPS	$	3.86	$	4.69	$	11.82	$	12.08
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13)	(0.09)		0.27		0.02		0.54
Gains/(losses) on hedging activities due to fair value changes	0.02		0.29		0.53		(0.16)
Unrealized gains on trading securities	0.01		0.16		—		0.18
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		—		0.01		0.01
Net effects of terminations or net settlements on financial derivatives	(0.05)		(0.01)		(0.20)		0.09
Issuance costs on the retirement of preferred stock	(0.15)		—		(0.15)		—
Income tax effect related to reconciling items	0.02		(0.15)		(0.08)		(0.14)
Sub-total	(0.24)		0.56		0.13		0.52
Core Earnings - Diluted EPS	$	4.10	$	4.13	$	11.69	$	11.56

Shares used in per share calculation (GAAP and Core Earnings)	10,966		10,938		10,968		10,924

The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are:

1. (Losses)/gains on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) (Losses)/gains on undesignated financial derivatives due to fair value changes; and (b) Gains/(losses) on hedging activities due to fair value changes.

2. Unrealized (losses)/gains on trading securities. The unrealized (losses)/gains on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period.

3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value. The amount of this non-GAAP reconciling item is the recorded amount of premium, discount, or deferred gain amortization during the reporting period on those assets for which the premium, discount, or deferred gain was based on the application of an accounting principle (e.g., consolidation of variable interest entities) rather than on a cash transaction (e.g., a purchase price premium or discount).

4. The net effects of terminations or net settlements on financial derivatives. These terminations or net settlements relate to:

•Forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities. These contracts are used as a short-term economic hedge of the issuance of debt. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.

5. The recognition of deferred issuance costs on the retirement of the Series C Preferred Stock in July 2024 has been excluded from core earnings because they are not frequently occurring transactions, nor are they indicative of future operating results. This is consistent with Farmer Mac's previous treatment of deferred issuance costs associated with the retirement of preferred stock.

The following sections provide more detail about specific components of Farmer Mac's results of operations.

Net Interest Income. The following table provides information about interest-earning assets and funding for the three and nine months ended September 30, 2024 and 2023. The average balance of non-accruing loans is included in the average balance of loans, Farmer Mac Guaranteed Securities, and USDA Securities presented, though the related income is accounted for on a cash basis. Therefore, as the average balance of non-accruing loans and the income received increases or decreases, the net interest income and yield will fluctuate accordingly. The average balance of loans in consolidated trusts with beneficial interests owned by third parties (single-class) and for which Farmer Mac guarantees all classes of securities issued is disclosed in the net effect of consolidated trusts and is not included in the average balances of interest-earning assets and interest-bearing liabilities. The interest income and expense associated with these trusts are shown in the net effect of consolidated trusts.

Table 8


	For the Three Months Ended
	September 30, 2024						September 30, 2023
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
	(dollars in thousands)
Interest-earning assets:
Cash and investments	$	6,492,807	$	88,879	5.48	%	$	5,974,669	$	79,947	5.35	%
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)	22,932,539		309,208		5.39	%	21,859,457		293,378		5.37	%
Total interest-earning assets	29,425,346		398,087		5.41	%	27,834,126		373,325		5.36	%
Funding:
Notes payable due within one year	3,867,653		50,613		5.23	%	3,212,217		38,704		4.82	%
Notes payable due after one year(2)	23,673,268		261,748		4.42	%	22,784,190		248,002		4.35	%
Total interest-bearing liabilities(3)	27,540,921		312,361		4.54	%	25,996,407		286,706		4.41	%
Net non-interest-bearing funding	1,884,425		—				1,837,719		—
Total funding	29,425,346		312,361		4.25	%	27,834,126		286,706		4.12	%
Net interest income/yield prior to consolidation of certain trusts	29,425,346		85,726		1.17	%	27,834,126		86,619		1.24	%
Net effect of consolidated trusts(4)	884,929		1,065		0.48	%	861,980		1,024		0.48	%
Net interest income/yield	$	30,310,275	$	86,791	1.15	%	$	28,696,106	$	87,643	1.22	%

(1)Excludes interest income of $9.6 million and $8.5 million in third quarter 2024 and 2023, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(2)Includes current portion of long-term notes.

(3)Excludes interest expense of $8.6 million and $7.5 million in third quarter 2024 and 2023, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(4)Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class).


	For the Nine Months Ended
	September 30, 2024						September 30, 2023
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
	(dollars in thousands)
Interest-earning assets:
Cash and investments	$	6,322,303	$	258,341	5.45	%	$	5,833,829	$	209,429	4.79	%
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)	23,001,393		920,887		5.34	%	21,518,428		805,922		4.99	%
Total interest-earning assets	29,323,696		1,179,228		5.36	%	27,352,257		1,015,351		4.95	%
Funding:
Notes payable due within one year	3,162,862		123,893		5.22	%	3,463,479		115,557		4.45	%
Notes payable due after one year(2)	24,216,950		798,324		4.40	%	22,242,225		657,538		3.94	%
Total interest-bearing liabilities(3)	27,379,812		922,217		4.49	%	25,705,704		773,095		4.01	%
Net non-interest-bearing funding	1,943,884		—				1,646,553		—
Total funding	29,323,696		922,217		4.19	%	27,352,257		773,095		3.77	%
Net interest income/yield prior to consolidation of certain trusts	29,323,696		257,011		1.17	%	27,352,257		242,256		1.18	%
Net effect of consolidated trusts(4)	881,774		3,488		0.53	%	880,150		3,122		0.47	%
Net interest income/yield	$	30,205,470	$	260,499	1.15	%	$	28,232,407	$	245,378	1.16	%

(1)Excludes interest income of $28.5 million and $25.6 million in the first nine months of 2024 and 2023, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(2)Includes current portion of long-term notes.

(3)Excludes interest expense of $25.0 million and $22.4 million in the first nine months of 2024 and 2023, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(4)Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class).

The following table sets forth information about changes in the components of Farmer Mac's net interest income prior to consolidation of certain trusts for the periods indicated. For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by prior rate), and changes in rate (change in rate multiplied by old volume), and then allocated based on the relative size of rate and volume changes from the prior period.

Table 9


	For the Nine Months Ended September 30, 2024 Compared to Same Period in 2023
	Increase/(Decrease) Due to
	Rate		Volume		Total
	(in thousands)
Income from interest-earning assets:
Cash and investments	$	30,462	$	18,450	$	48,912
Loans, Farmer Mac Guaranteed Securities and USDA Securities	57,509		57,456		114,965
Total	87,971		75,906		163,877
Expense from other interest-bearing liabilities	(1,213,392)		1,362,514		149,122
Change in net interest income prior to consolidation of certain trusts(1)	$	1,301,363	$	(1,286,608)	$	14,755

(1)Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties (single-class).

The following table presents a reconciliation of net interest income and net interest yield to net effective spread. Net effective spread is measured by: including (1) expenses related to undesignated financial derivatives, which consists of income or expense related to contractual amounts due on financial derivatives not designated in hedge relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (1) the amortization of premiums and discounts on assets consolidated at fair value, (2) the net effects of consolidated trusts with beneficial interests owned by third parties (single-class), and (3) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information about net effective spread.

Table 10


	For the Three Months Ended								For the Nine Months Ended
	September 30, 2024				September 30, 2023				September 30, 2024				September 30, 2023
	Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield
	(dollars in thousands)
Net interest income/yield	$	86,791	1.15	%	$	87,643	1.22	%	$	260,499	1.15	%	$	245,378	1.16	%
Net effects of consolidated trusts	(1,065)		0.02	%	(1,024)		0.02	%	(3,488)		0.02	%	(3,123)		0.02	%
Expense related to undesignated financial derivatives	(858)		(0.01)	%	(805)		(0.01)	%	(1,379)		(0.01)	%	(3,999)		(0.02)	%
Amortization of premiums/discounts on assets consolidated at fair value	(24)		—	%	(24)		—	%	(72)		—	%	(71)		—	%
Amortization of losses due to terminations or net settlements on financial derivatives	757		0.01	%	844		0.01	%	2,287		0.01	%	2,448		0.01	%
Fair value changes on fair value hedge relationships	(205)		(0.01)	%	(3,210)		(0.04)	%	(5,811)		(0.02)	%	1,796		0.01	%
Net effective spread	$	85,396	1.16	%	$	83,424	1.20	%	$	252,036	1.15	%	$	242,429	1.18	%

The $9.6 million year-over-year increase in net effective spread was primarily due to a $13.1 million increase from a shift in the composition of new business volume towards higher-yielding loans. This was partially offset by a $3.5 million increase in non-GAAP funding costs, which was primarily attributable to the widening of debt spreads that occurred in fourth quarter 2023 and increased our floating-rate funding costs. In percentage terms, the year-over-year decrease of 0.03% was primarily attributable to an increase in non-GAAP funding costs.

See Note 10 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business.

Provision for and Release of Allowance for Losses and Reserve for Losses. The following table summarizes the components of Farmer Mac's total allowance for losses for the three and nine month periods ended September 30, 2024 and 2023:

Table 11



	As of September 30, 2024						As of September 30, 2023
	Allowance for Losses		Reserve for Losses		Total Allowance for Losses		Allowance for Losses		Reserve for Losses		Total Allowance for Losses
	(in thousands)













For the Three Months Ended
Beginning Balance	$	16,924	$	1,693	$	18,617	$	17,351	$	1,705	$	19,056
Provision for/(release of) losses	3,428		(170)		3,258		(136)		(45)		(181)
Charge-offs	—		—		—		—		—		—

Ending Balance	$	20,352	$	1,523	$	21,875	$	17,215	$	1,660	$	18,875

For the Nine Months Ended
Beginning Balance	$	16,589	$	1,711	$	18,300	$	15,731	$	1,433	$	17,164
Provision for/(release of) losses	7,806		(188)		7,618		1,484		227		1,711
Charge-offs	(4,043)		—		(4,043)		—		—		—

Ending Balance	$	20,352	$	1,523	$	21,875	$	17,215	$	1,660	$	18,875

See Notes 5 and 6 to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

During third quarter 2024, we recorded a $3.3 million net provision to the total allowance for losses primarily as a result of one permanent planting borrower relationship, risk rating downgrades in Agricultural Finance, and new loan volume in Rural Infrastructure.

Guarantee and Commitment Fees. The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the three and nine months ended September 30, 2024 and 2023:

Table 12


	For the Three Months Ended								For the Nine Months Ended
					Change								Change
	September 30, 2024		September 30, 2023		$		%		September 30, 2024		September 30, 2023		$		%
	(dollars in thousands)
Contractual guarantee and commitment fees	$	3,932	$	3,794	$	138	4	%	$	11,781	$	11,195	$	586	5	%
Guarantee obligation amortization	1,383		847		536		63	%	4,435		3,767		668		18	%
Guarantee asset fair value changes	(1,300)		879		(2,179)		248	%	(4,487)		(2,020)		(2,467)		122	%
Guarantee and commitment fee income	$	4,015	$	5,520	$	(1,505)	(27)	%	$	11,729	$	12,942	$	(1,213)	(9)	%

Guarantee and commitment fees decreased for the three and nine months ended September 30, 2024 compared to 2023, which was due to a decrease in the fair value of our retained beneficial interest in our off-balance sheet securitization. As adjusted for the core earnings presentation, guarantee and commitment fees were $5.0 million and $15.2 million for the three and nine months ended September 30, 2024, respectively, compared to $4.8 million and $14.1 million for the three and nine months ended September 30, 2023, respectively.

In Farmer Mac's presentation of core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities. Farmer Mac has also excluded guarantee asset fair value changes from the presentation of core earnings because these fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations if Farmer Mac fulfills its guarantee obligation throughout the term of the guaranteed securities, as is expected.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

(Losses)/gains on financial derivatives. The components of gains and losses on financial derivatives for the three and nine months ended September 30, 2024 and 2023 are summarized in the following table:

Table 13


	For the Three Months Ended								For the Nine Months Ended
					Change								Change
	September 30, 2024		September 30, 2023		$		%		September 30, 2024		September 30, 2023		$		%
	(dollars in thousands)
(Losses)/gains due to fair value changes	$	(1,064)	$	2,921	$	(3,985)	(136)	%	$	260	$	5,978	$	(5,718)	(96)	%
Accrual of contractual payments	(858)		(805)		(53)		7	%	(1,379)		(3,999)		2,620		(66)	%
(Losses)/gains due to terminations or net settlements	(12)		555		(567)		(102)	%	(535)		2,784		(3,319)		(119)	%
(Losses)/gains on financial derivatives	$	(1,934)	$	2,671	$	(4,605)	(172)	%	$	(1,654)	$	4,763	$	(6,417)	(135)	%

These changes in fair value are primarily the result of fluctuations in long-term interest rates. The accrual of periodic cash settlements for interest paid or received from Farmer Mac's interest rate swaps that are undesignated financial derivatives is shown as income or expense related to financial derivatives. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "(Losses)/gains due to terminations or net settlements" in the table above. See Note 4 to the consolidated financial statements for more information about Farmer Mac's financial derivatives.

Operating Expenses. The components of operating expenses for the three and nine months ended

September 30, 2024 and 2023 are summarized in the following table:

Table 14


	For the Three Months Ended								For the Nine Months Ended
					Change								Change
	September 30, 2024		September 30, 2023		$		%		September 30, 2024		September 30, 2023		$		%
	(dollars in thousands)
Compensation and employee benefits	$	15,237	$	14,103	$	1,134	8	%	$	48,334	$	43,391	$	4,943	11	%
General and administrative	8,625		9,100		(475)		(5)	%	25,784		26,047		(263)		(1)	%
Regulatory fees	725		831		(106)		(13)	%	2,175		2,497		(322)		(13)	%
Total Operating Expenses	$	24,587	$	24,034	$	553	2	%	$	76,293	$	71,935	$	4,358	6	%

Compensation and Employee Benefits. The increase in compensation and employee benefits expenses for the three and nine months ended September 30, 2024 compared to 2023 was largely due to increased headcount and increased stock compensation expense.

General and Administrative Expenses (G&A). The decrease in G&A expenses for the three months and nine months ended September 30, 2024 compared to 2023 was primarily due to a decrease in consulting costs related to technology strategic initiatives because more of the costs were capitalized during the current year than in the prior-year period. One of those initiatives is a multi-

year effort to replace Farmer Mac's platform for securities trades and to implement a treasury management system. That initiative was substantially completed during fourth quarter 2024.

Income Tax Expense. The following table presents income tax expense and the effective income tax rate for the three and nine months ended September 30, 2024 and 2023:

Table 15


	For the Three Months Ended										For the Nine Months Ended
							Change										Change
	September 30, 2024			September 30, 2023			$		%		September 30, 2024			September 30, 2023			$		%
	(dollars in thousands)
Income tax expense	$	12,421		$	15,113		$	(2,692)	(18)	%	$	39,034		$	40,306		$	(1,272)	(3)	%
Effective tax rate	20.0		%	20.6		%			(0.6)	%	20.6		%	20.9		%			(0.3)	%

Business Volume.

The following table sets forth the net growth or decrease in Farmer Mac's lines of business for the three and nine months ended September 30, 2024 and 2023:

Table 16


Net New Business Volume
		For the Three Months Ended				For the Nine Months Ended
		September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	On or Off Balance Sheet	Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)
		(in thousands)
Agricultural Finance:
Farm & Ranch:
Loans	On-balance sheet	$	114,441	$	35,546	$	119,810	$	(162,932)
Loans held in consolidated trusts:
Beneficial interests owned by third-party investors (single-class)(1)	On-balance sheet	(28,873)		(17,146)		8,815		(55,001)
Beneficial interests owned by third-party investors (structured)(1)	On-balance sheet	(14,042)		(8,180)		277,364		266,279
IO-FMGS(2)	On-balance sheet	(176)		(168)		(523)		(1,042)
USDA Securities	On-balance sheet	14,023		(13,456)		4,601		(77,472)
AgVantage Securities(1)	On-balance sheet	(460,000)		225,000		(860,000)		80,000
LTSPCs and unfunded loan commitments	Off-balance sheet	(40,004)		157,041		(232,623)		169,752
Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	(6,194)		(25,716)		(21,974)		(45,272)
Loans serviced for others	Off-balance sheet	6,698		(7,589)		(13,897)		558,731
Total Farm & Ranch		$	(414,127)	$	345,332	$	(718,427)	$	733,043
Corporate AgFinance:
Loans	On-balance sheet	$	11,396	$	35,874	$	37,840	$	57,524
AgVantage Securities(1)	On-balance sheet	(4,751)		15,050		65,997		23,573
Unfunded loan commitments	Off-balance sheet	19,242		9,626		44,964		56,702
Total Corporate AgFinance		$	25,887	$	60,550	$	148,801	$	137,799
Total Agricultural Finance		$	(388,240)	$	405,882	$	(569,626)	$	870,842
Rural Infrastructure Finance:
Rural Utilities:
Loans	On-balance sheet	$	154,463	$	29,170	$	300,646	$	222,944
AgVantage Securities(1)	On-balance sheet	(319,383)		476,028		(357,837)		573,386
LTSPCs and unfunded loan commitments	Off-balance sheet	43,588		1,205		16,609		(37,577)
Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	—		—		—		(71)
Total Rural Utilities		$	(121,332)	$	506,403	$	(40,582)	$	758,682
Renewable Energy:
Loans	On-balance sheet	$	249,654	$	6,776	$	547,946	$	98,503
Unfunded loan commitments	Off-balance sheet	(30,118)		(4,102)		59,541		1,902
Total Renewable Energy		$	219,536	$	2,674	$	607,487	$	100,405
Total Rural Infrastructure Finance		$	98,204	$	509,077	$	566,905	$	859,087
Total		$	(290,036)	$	914,959	$	(2,721)	$	1,729,929

(1)Categories of Farmer Mac Guaranteed Securities.

(2)An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.

(3)Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

Farmer Mac's outstanding business volume was $28.5 billion as of September 30, 2024, a net decrease of $0.3 billion from June 30, 2024 after taking into account all new business, maturities, sales, and paydowns on existing assets.

The $0.4 billion net decrease in Farm & Ranch during third quarter 2024 resulted from $1.2 billion of scheduled maturities and repayments, partially offset by $0.8 billion of new purchases, commitments, and guarantees. Included in the $0.8 billion is the purchase of $271.9 million of Farm & Ranch loans. Scheduled loan maturities and repayments in the aggregate amount of $157.4 million partially offset those purchases. Not included in these Farm & Ranch loan purchase results for third quarter 2024 is Farmer Mac's October 2024 purchase of a $122.1 million pool of loans from a single agricultural lender, which will be reflected in Farmer Mac's results for fourth quarter 2024.

During third quarter 2024, a total of $0.5 billion in Farm & Ranch AgVantage Securities matured without refinancing, which primarily reflected slower loan growth resulting in less liquidity needs from Farmer Mac's AgVantage counterparties.

The $25.9 million net increase in Corporate AgFinance during third quarter 2024 resulted from $307.3 million of new purchases and unfunded loan commitments, which was partially offset by $281.4 million of scheduled maturities, repayments, sales, and paydowns on revolving commitments.

The $0.1 billion net decrease in Rural Utilities during third quarter 2024 resulted from $701.2 million of scheduled maturities and repayments, partially offset by $579.9 million of new purchases, unfunded loan commitments, and guarantees.

The $0.2 billion net increase in Renewable Energy during third quarter 2024 primarily reflects $325.7 million in loan purchases and unfunded commitments, partially offset by $106.2 million in repayments. The net increase in Renewable Energy loan purchases and unfunded commitments primarily reflects the continued strong demand for renewable power generation and storage.

Farmer Mac's outstanding business volume was $27.7 billion as of September 30, 2023, a net increase of $0.9 billion from June 30, 2023 after taking into account all new business, maturities, and paydowns on existing assets.

The $0.3 billion net increase in Farm & Ranch during third quarter 2023 resulted from $1.4 billion of new purchases, commitments, and guarantees, partially offset by $1.0 billion of scheduled maturities and repayments.

Farmer Mac purchased a total of $0.2 billion in Farm & Ranch loans during third quarter 2023, partially offset by $0.1 billion in repayments. The $0.1 billion net increase was primarily driven by strong borrower economics despite the continued higher interest rate environment.

Farmer Mac also purchased a total of $1.0 billion in Farm & Ranch AgVantage Securities during third quarter 2023, which primarily reflected the refinancing of maturing securities. The $1.0 billion in gross purchases was partially offset by $0.8 billion in scheduled maturities.

The $0.1 billion net increase in Corporate AgFinance during third quarter 2023 resulted from $0.3 billion of new purchases and commitments, which was partially offset by $0.2 billion of scheduled maturities and repayments. Farmer Mac purchased a total of $195.6 million in loans, which was partially offset by $159.7

million in scheduled maturities and repayments. The increase in loan purchases was primarily due to Farmer Mac's continued focus to support loans to larger and more complex agribusinesses focused on food and fiber processing and other food supply chain production.

The $0.5 billion net increase in Rural Utilities during third quarter 2023 resulted from $0.6 billion of new purchases, commitments, and guarantees, which was partially offset by $0.1 billion of scheduled maturities and repayments. Farmer Mac purchased a total of $500.0 million in AgVantage Securities, $43.5 million in telecommunications loans, and $47.0 million in electric distribution and generation and transmission loans. The $90.5 million in loan purchases was partially offset by $61.4 million in scheduled maturities and repayments. The net increase in loan purchases primarily reflected borrowers' normal course capital expenditures related to maintaining and upgrading utility infrastructure as well as investments in broadband infrastructure, and Farmer Mac's continued focus to support telecommunications investment in rural America.

The $2.7 million net increase in Renewable Energy during third quarter 2023 primarily reflects $17.4 million in loan purchases and unfunded commitments, partially offset by $14.7 million in repayments.

The level and composition of Farmer Mac’s outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from quarter to quarter. This relationship in turn depends on a variety of factors both internal and external to Farmer Mac. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report.

The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated:

Table 17


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(dollars in thousands)
AgVantage securities	$	663,145	$	1,519,715	$	1,349,345	$	3,093,370

Loans securitized and held in consolidated trusts with beneficial interests owned by third parties (structured and single-class)	—		6,399		330,481		291,600
Total Farmer Mac Guaranteed Securities Issuances	$	663,145	$	1,526,114	$	1,679,826	$	3,384,970

Farmer Mac either retains the loans it purchases or securitizes them and retains or sells Farmer Mac Guaranteed Securities backed by those securitized loans. During second quarter 2024, Farmer Mac executed its fourth structured securitization transaction, whereby it sold and securitized agricultural mortgage loans resulting in $305.6 million of Farmer Mac Guaranteed Securities. In this transaction, Farmer Mac transferred selected loans to a depositor which then deposited the loans into a trust, at which time the loans became assets of the trust. Farmer Mac concluded that it was the primary beneficiary of the trust because Farmer Mac retained significant interest and has power over the activities most significant to the economic performance of the Variable Interest Entity in its role as Master Servicer. Therefore, Farmer Mac consolidates the assets and liabilities of the trust for this structured securitization. Farmer Mac does

not consider the assets held by the related securitization trust to be available to satisfy the claims of the creditors of Farmer Mac and/or the depositor.

During the three and nine months ended September 30, 2024 and 2023, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the consolidated balance sheets.

During the three and nine months ended September 30, 2024 and 2023, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed USDA Securities or AgVantage Securities.

The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated:

Table 18


Outstanding Business Volume

	On or Off Balance Sheet	As of September 30, 2024		As of December 31, 2023
		(in thousands)
Agricultural Finance:
Farm & Ranch:
Loans	On-balance sheet	$	5,253,260	$	5,133,450
Loans held in consolidated trusts:
Beneficial interests owned by third-party investors (single-class)(1)	On-balance sheet	879,727		870,912
Beneficial interests owned by third-party investors (structured)(1)	On-balance sheet	838,713		561,349
IO-FMGS(2)	On-balance sheet	8,886		9,409
USDA Securities	On-balance sheet	2,373,473		2,368,872
AgVantage Securities(1)	On-balance sheet	4,975,000		5,835,000
LTSPCs and unfunded loan commitments	Off-balance sheet	2,767,320		2,999,943
Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	430,628		452,602
Loans serviced for others	Off-balance sheet	563,367		577,264
Total Farm & Ranch		$	18,090,374	$	18,808,801
Corporate AgFinance:
Loans	On-balance sheet	$	1,297,563	$	1,259,723
AgVantage Securities(1)	On-balance sheet	354,876		288,879
Unfunded loan commitments	Off-balance sheet	190,341		145,377
Total Corporate AgFinance		$	1,842,780	$	1,693,979
Total Agricultural Finance		$	19,933,154	$	20,502,780
Rural Infrastructure Finance:
Rural Utilities:
Loans	On-balance sheet	$	3,395,123	$	3,094,477
AgVantage Securities(1)	On-balance sheet	3,540,631		3,898,468
LTSPCs and unfunded loan commitments	Off-balance sheet	504,387		487,778

Total Rural Utilities		$	7,440,141	$	7,480,723
Renewable Energy:
Loans	On-balance sheet	$	988,232	$	440,286
Unfunded loan commitments	Off-balance sheet	106,776		47,235
Total Renewable Energy		$	1,095,008	$	487,521
Total Rural Infrastructure Finance		$	8,535,149	$	7,968,244
Total		$	28,468,303	$	28,471,024

(1)A type of Farmer Mac Guaranteed Security.

(2)An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.

(3)Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of September 30, 2024:

Table 19


Schedule of Principal Amortization as of September 30, 2024
	Loans		Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs		USDA Securities and Farmer Mac Guaranteed USDA Securities		Total
	(in thousands)
2024	$	120,414	$	95,580	$	28,194	$	244,188
2025	886,255		410,779		114,203		1,411,237
2026	675,783		359,107		115,917		1,150,807
2027	774,473		256,957		119,113		1,150,543
2028	948,502		236,026		118,048		1,302,576
Thereafter	9,247,191		2,450,121		2,068,880		13,766,192
Total	$	12,652,618	$	3,808,570	$	2,564,355	$	19,025,543

Of Farmer Mac's $28.5 billion outstanding principal balance of business volume as of September 30, 2024, $8.9 billion were AgVantage securities included in the Agricultural Finance and Rural Infrastructure Finance lines of business. Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. Changes in quarterly AgVantage securities volume are primarily driven by the generally larger transaction sizes for that product, scheduled maturity amounts for a particular quarter, the liquidity needs of Farmer Mac’s AgVantage counterparties, and changes in the pricing and availability of wholesale funding. Based on these factors, Farmer Mac expects its business volumes in AgVantage securities to continue to be volatile. The following table summarizes by maturity date the outstanding principal amount of both on- and off-balance sheet AgVantage securities as of September 30, 2024:

Table 20


AgVantage Balances by Year of Maturity
	As of
	September 30, 2024
	(in thousands)
2024	$	319,813
2025	2,058,125
2026	1,351,905
2027	1,086,033
2028	677,200
Thereafter(1)	3,377,431
Total	$	8,870,507

(1)Includes various maturities ranging from 2029 to 2044.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.7 years as of September 30, 2024.

Outlook

Business Outlook

Products and Portfolio

Farmer Mac serves a vital role in serving rural America by offering liquidity, capital, and risk management tools as a secondary market that help increase the accessibility of financing for American agriculture and rural infrastructure. The growth trajectory of Farmer Mac is closely tied to the capital and liquidity needs of the lending institutions serving agriculture and rural infrastructure businesses and the overall financial health of borrowers in these sectors. Given significant increases in market interest rates over the past two years and global and economic volatility, Farmer Mac's outstanding business volume was flat in third quarter 2024 versus third quarter 2023, but net effective spread increased by 4.0% year-to-date 2024 versus the same year-to-date period 2023. This year-over-year increase in net effective spread primarily reflects the diversification of Farmer Mac’s business model and the resiliency of the agriculture and rural infrastructure sectors.

Several factors continue to influence business volume growth dynamics. The rise in market interest rates that have persisted over the past few years has had a direct impact on Farmer Mac’s Farm & Ranch product interest rates, and there generally exists an inverse correlation between Farm & Ranch new loan purchase volumes and changes in Farm & Ranch product interest rates, with higher product interest rates slowing portfolio loan prepayments. In addition, a tightening agricultural economy is creating the need for additional liquidity and working capital needs for borrowers managing through this agricultural cycle. The net effect of these forces contributed to positive Farm & Ranch loan purchase portfolio growth in third quarter 2024. Future changes in monetary policy, sustained elevated product interest rates, and the financial health of borrowers are anticipated to influence the demand for Agricultural Finance mortgage loans and the pace of repayments. Farmer Mac experienced a decrease in wholesale finance volume during third quarter 2024, driven by slower market loan growth and a tightening of market credit spreads resulting in less liquidity and diversification needs from our counterparties. Future growth will be influenced by market interest rates and credit spreads, overall economic conditions and loan growth opportunities, and the relative value of Farmer Mac’s products versus the broader market. Corporate AgFinance loan purchases and unfunded commitments increased 9.6% in third quarter 2024 versus third quarter 2023. The Rural Infrastructure Finance segments showed significant business volume growth in third quarter 2024, increasing 14.6% to $8.5 billion in third quarter 2024 versus third quarter 2023. Business volume in Rural Infrastructure Finance was strong across most products and segments year-over-year, primarily driven by increased investment activity and additional financing for renewable energy projects in response to continued strong demand for renewable power generation and storage.

Opportunities for profitable future growth include Farmer Mac's potential role in alleviating liquidity, capital, and return-on-equity capital challenges faced by agricultural and rural infrastructure lenders. The suite of Farmer Mac's offerings encompasses loan and loan portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, and securitizations. In October 2024, Farmer Mac purchased from a single agricultural lender a pool of Farm & Ranch loans with an aggregate outstanding principal balance of $122.1 million. Ongoing business and product development efforts continue to attract institutional investors and nontraditional lenders, resulting in the diversification of Farmer Mac's customer base and product set, potentially generating increased product demand from new sources. Farmer Mac’s improved loan servicing capabilities enhance our loan portfolio purchase value proposition, adding new product offerings to an increasingly diverse customer base.

Growing relationships with larger agriculture lenders, financial industry consolidation, interest rates and market volatility, as well as financial institutions' focus on capital efficiency and liquidity continue to provide increased opportunities for Farmer Mac, influencing the demand for loan purchases, risk management solutions, and wholesale funding. This growth may lead to an increase in the average transaction size within Farmer Mac’s lines of business. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and rural infrastructure industries present further opportunities for Farmer Mac’s loan purchase products and other financing solutions. And investments supporting consumer and food supply demand may increase financing needs in the food and agriculture supply chain, potentially requiring incremental capital support through the secondary market. Deepening relationships with eligible rural infrastructure counterparties are expected to continue to create opportunities to support fiber and broadband-related transactions, including significant market activity and investments in wholesale data centers as well as renewable energy projects.

Funding

Unlike depository institutions, Farmer Mac's funding strategies do not rely on deposits, allowing us to navigate beyond short-term liquidity disruptions and to take advantage of increased opportunities in a competitive lending environment. Our funding advantage over regional and national banks is also aided by the fact that our debt has a contractual term to maturity and that we have the ability to call our callable debt before its original maturity date when market conditions are beneficial to Farmer Mac. In contrast, depository institutions largely rely on demand deposit accounts in which the depositors hold the right to withdraw at any time. Because of these differences in funding strategies, certain economic disruptions may have a positive impact on Farmer Mac’s funding costs relative to the overall market. During third quarter 2024, we began to see some benefit from calling fixed-rate debt and may continue to see this benefit throughout the rest of 2024.

Farmer Mac's business may benefit from natural business hedges that help mitigate vulnerability to effects from interest rate volatility. When interest rates rise, prepayments tend to decline, but interest earned on excess cash and capital increases, maintaining Farmer Mac's strong market access without relying on deposits. Conversely, when interest rates decline, loan purchase volume often increases, but prepayments tend to rise as well. Although these natural business dynamics may not be perfect offsets, they tend to provide some counterbalance to mitigate volatility from changes in short-term interest rates.

Operations

Farmer Mac expects continued increases in its operating expenses over the next several years as we continue to expand our investments in human capital, technology, and business infrastructure to increase capacity and efficiency as we seek to accommodate growth opportunities and achieve our long-term strategic objectives. Investments in infrastructure and funding platforms to support strategic objectives are expected to allow Farmer Mac to scale more efficiently with future portfolio and earnings growth. These investments will likely help improve product delivery and funding efficiency, potentially creating additional benefits for future growth. In September 2024, the Farm Credit Administration notified us that the amount of Farmer Mac's annual assessment for regulatory fees for the period October 1, 2024 through September 30, 2025 was $4.0 million.

Another focus of our infrastructure investments will be a continued effort to expand our servicing capabilities and to enhance the efficiency and effectiveness of processes associated with loan onboarding and servicing. Farmer Mac will continue to leverage technology enhancements and servicing standardization efforts to drive scalability and consistency. Technology enhancements are planned for the remainder of 2024 and into 2025 to continue to incorporate all Farmer Mac loan portfolios onto our

servicing platform and to provide flexibility in accessing loan portfolio information, as well as streamlining operational workflows. During fourth quarter 2024, Farmer Mac substantially completed its multi-year effort to replace its platform for securities trades and to implement a treasury management system.

Agricultural Finance Industry Outlook

Farm Incomes

Overall farm incomes fell in 2023 and are forecast to have fallen again in 2024. According to the USDA, net cash farm income peaked at $210.1 billion in 2022, a new all-time high. The primary driver of profitability in 2022 was higher cash revenues, in contrast to 2019 and 2020, when elevated government support payments supported farm incomes. The USDA currently estimates that net cash farm income dropped 21% in 2023 and will decrease another 7% in 2024. Declines in crop producer revenues are being partially offset by lower expenses for protein producers in 2024 as sectors rotate through agricultural cycles. Still, the overall average farm income in 2024 would be 1% higher than the 10-year inflation-adjusted average if the USDA's projections are realized.

Commodity prices may see increased volatility in 2024 and 2025 due to a rebound in global supply levels. Annual grain crop prices remained under pressure in third quarter 2024. U.S. annual crops have benefited from favorable growing conditions across much of the U.S. Midwest this summer, raising the likelihood of above trend-line yields this year. Tree nut prices have faced similar pressure in recent years from rising production, including almonds and walnuts. Tree nut producers have reduced new plantings as a result, which, combined with robust exports this marketing year, has provided moderate support for prices. Within the livestock and animal protein sector, producers could see offsetting benefits from lower feed costs, particularly the cattle sector. Broadly speaking, farm expenses could also abate somewhat in 2024 and into 2025, with lower expected feed, fertilizer, and fuel costs partially offset by higher expected interest, labor, and rental rates. Demand for corn and soybean by-products could see a boost in late 2024 and into 2025 as renewable diesel and sustainable aviation fuel markets continue to mature.

Declining farm incomes can have multiple competing effects on loan performance and agricultural credit demand. Constraints on cash flow can cause loan delinquency rates to rise back to and surpass historical averages. This reversion is most likely in commodities experiencing negative market conditions like some grain and nut crops. Simultaneously, cash flow constraints can increase demand for debt capital to reorganize balance sheets and replace lost incomes. Farmer Mac believes its portfolio and market strategy to be sufficiently diversified by borrower, industry, and region to maintain robust portfolio performance through the current cycle and be positioned to support any expansion of the farm mortgage market that may arise in the coming quarters.

Land Values

Record-setting farm incomes in 2021 and 2022, combined with historically low interest rates in 2020 and 2021, drove a rapid rise in land values and a decrease in farm delinquencies and bankruptcies. Momentum for farmland values persisted throughout 2023 due to high levels of farm liquidity and a constrained supply of farmland for sale. Land values have slowed in some markets in 2024 due to higher interest rates and lower profitability in many agricultural sectors. Land value survey data from the USDA show a 5% increase in average farm real estate values from June 2023 to June 2024. Annual farm real estate value gains were highest in the Southeast (9.4%) and the Southern Plains (7.5%) and still strong but slowing in the Lake states (4.3%), the Corn Belt (3.7%), and the Southeast (2.4%).

Farmland value growth rates moderated in the first half of 2024 in the face of continued higher market interest rates. The Federal Reserve Bank of Chicago AgLetter reported a 2% gain in farmland values in the Seventh District (primarily Iowa, Indiana, Illinois, and Wisconsin) between July 2023 and July 2024. This was down from a 9% increase over the previous 12-month period and was the smallest increase in over three years. Data from the Federal Reserve Bank of Kansas City showed similar growth in land values in the Tenth District (primarily Kansas, Missouri, Nebraska, and Oklahoma) during that same period. Growth rates in land values could continue to moderate into 2025 due to compressing farm profitability and an elevated interest rate environment, particularly in states like California where there are multiple headwinds. Nationally, however, a general low supply of available farmland and persistent demand for the asset class across a wide variety of investors could help maintain balance in the farmland transaction markets.

While regional averages for farmland values generally provide a good barometer for the overall changes in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate. Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors.

Markets and Weather

Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector. Some of the external market conditions that could adversely affect the farm and food sectors into 2025 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions. The U.S. agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms and food. The USDA projects that U.S. agriculture exports will drop to $169.5 billion in 2025, 2% lower than 2024 and down 14% relative to peak levels in 2022. Through August 2024, agricultural export values were roughly even in 2024 compared to 2023. One challenge for U.S. exports has been the value of the U.S. dollar relative to competing exporters of agricultural goods. Slower global growth could also be a headwind for consumer-oriented products like animal proteins, dairy, fruits, and nuts. Ukrainian corn and wheat export shipments continue to rebound and have approached pre-2022 levels in recent months. Looking ahead, economic and geopolitical uncertainties such as conflicts in Eastern Europe and the Middle East could lead to higher volatility for the U.S. dollar during the year.

Severe weather conditions and long-term environmental change continue to shape agricultural sectors. Through September 10, 2024, the U.S. had experienced 20 separate billion-dollar weather disasters in 2024, as tracked by the National Oceanic and Atmospheric Administration. Many of those events affected agriculture, including midwestern storms, flooding, western wildfires, excessive heat, and drought. Hurricanes Helene and Milton disrupted agricultural production in the Southeast, but Farmer Mac's portfolio had not experienced any material performance degradation as a result of those storms as of September 30, 2024. Federal crop insurance provides a strong mitigator against this risk, but farmers and ranchers face increasingly severe weather incidents.

Drought conditions, which were relatively sparse to start the year, increased modestly in intensity and prevalence in third quarter 2024. Persistent heat and drought conditions previously affected agricultural production regions in the western and midwestern parts of the United States in 2021 and 2022. However, there was a sizable improvement in conditions in 2023 for large portions of the West Coast. Notably, drought conditions in California remain largely absent in 2024 and reservoirs have returned to historical averages. As of October 15, 2024, 18% of the continental U.S. was classified as being in moderate to

exceptional drought according to data from the National Center for Environmental Information, which is virtually unchanged from 17% at the end of 2023.

For loans in other areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting standards include an assessment of anticipated long-term water availability for the related property and how water availability impacts the collateral value and the borrower's liquidity position to mitigate that risk.

Agricultural Processing and Food Supply Chain

The production of food, feed, fiber, and biofuels has been economically viable in the past few years, but some factors have been changing in 2024 and could continue to change into 2025. Rising consumer inflation boosted the profitability of the food processing and supply chains in 2021 and 2022. Moderating consumer prices in 2023 and 2024 increased the volume of consumer spending but also limited the profit expansion of food and fiber businesses. Biofuels have gained demand due to low-carbon regulations in several states and incremental tax benefits for the production of renewable diesel and sustainable aviation fuel. A large number of planned biofuel projects and new facilities for 2024 and 2025 could provide support for raw materials such as corn and soybeans, but markets for these fuels are nascent and are expected to evolve rapidly in the coming quarters. A strong U.S. dollar, trade issues, and a high risk of global economic turmoil could pose challenges for these sectors in the last quarter of 2024 and into 2025. Nonetheless, consumer spending held steady in third quarter 2024, providing stable conditions for value-added food, feed, fiber, and biofuel consumption. Credit demand in these sectors could grow in the next few quarters if interest rate policy continues to moderate, inflation rises again, or economic uncertainty clears up.

Rural Infrastructure Finance Industry Outlook

Power and Energy

Economic conditions affecting rural power and electricity markets typically follow those in the general economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers have picked up again in 2024, with an annual increase in sales of 1.9% and an increase in revenue of 3.4%, respectively, in the last 12 months through July 2024 compared to July 2023. This increase was the result of higher residential and commercial electricity sales combined with slightly higher average prices paid for electricity relative to 2023. Higher energy input prices, such as natural gas and coal, became a headwind in 2022. After two years of increased prices and heightened volatility, oil and natural gas prices moderated throughout much of 2023 and 2024. Geopolitical uncertainty in the Middle East and Eastern Europe could increase energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices as evidenced by higher retail electricity prices in 2022 and parts of 2023. Through September 30, 2024, Farmer Mac had not observed material degradation in the financial performance of its rural electric utilities portfolio, and that portfolio has never had a serious delinquency or default since its inception. Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure. These growth opportunities may be affected by the demand for electric power in rural areas, increased power demand from regional data centers, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry. Generally, these investments are expected to continue at, or above, historical levels based on the replacement and modernization of existing and new infrastructure.

Renewable Energy

Growth in renewable energy generation and deployment of energy storage technologies has the potential to continue to deepen Farmer Mac's relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable electricity capacity is expected to grow by 167% in the next ten years, compared to total electric capacity growth of 43%. The rising cost of fossil fuel-based inputs combined with the falling costs of renewable power generation may hasten this increase in capacity along with recently enacted legislation, such as the Inflation Reduction Act of 2022 that incentivizes domestic production in clean energy technologies such as solar and wind. Because of these policy tailwinds, analysis from Bloomberg New Energy Finance (BNEF) estimates that investors will put $2.5 trillion into renewable projects between 2021 and 2050. If realized, growth in renewable energy capacity has the potential to broaden Farmer Mac's customer base focused on financing renewable energy projects and companies. In response to this expected growth, Farmer Mac has hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represents a new and growing market opportunity for Farmer Mac.

Telecommunications

Rural telecommunication and data connectivity has proven to be of vital economic importance in the last decade, as more households and agricultural enterprises require more data and connectivity to thrive. The rapid growth in digital technologies, including the ongoing interest and investment in artificial intelligence, advancements in cloud computing, and wireless network densification, will require significantly more computing and storage capabilities as well as investment in additional fiber network capacity. These industry tailwinds are creating additional investments in rural telecommunications infrastructure by cooperative and non-cooperative providers, which is aided by access to many federally funded programs, such as USDA's Broadband Equity Access and Deployment Program (BEAD), the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF), the USDA’s ReConnect program, and the USDA’s Telecommunications Infrastructure Loan and Loan Guarantee program. In addition to capital projects spurred by these programs, Farmer Mac could see an increase in financing opportunities for other telecommunications providers in rural areas, with fiber line expansion, wireless broadband, and data processing centers increasingly important to rural economic opportunity and precision agriculture.

Legislative and Regulatory Outlook

Farmer Mac continues to monitor potential legislative and regulatory changes that could affect Farmer Mac or its stakeholders, including:

•On November 16, 2023, President Biden signed a one-year extension of the 2018 farm bill, which lapsed on September 30, 2024. Avoiding a reversion to 1930s-era policy, which provides no price support for many key commodities that have enjoyed support for many years, would require Congress to enact another extension or a new farm bill by the end of the year. The farm bill is crucial for Farmer Mac's customers, supporting farmers' profitability, rural community vitality, and infrastructure modernization. Farmer Mac is seeking changes to its charter in the farm bill reauthorization to better support lenders serving rural areas. Any changes would require Congressional approval and the President's signature.

•The FCA's proposed 2024 regulatory agenda includes a proposed rulemaking to review Farmer Mac's regulatory capital framework, with rulemaking expected in May 2025. Farmer Mac's management team will continue to monitor and engage with this regulatory process as it develops.

•Two of the three members of the FCA board remain in holdover status, meaning their terms have expired. These board members will continue to serve in their roles until the President nominates and the Senate confirms their replacements. On May 2, 2024, President Biden nominated Marcus D. Graham to the FCA board to replace Glen Smith. Mr. Graham's nomination will require Senate confirmation by year-end, or the nomination will be returned to the President.

•Farmer Mac will monitor the effects of the fall elections on policies affecting Farmer Mac's business, including the expiration of key provisions of the Tax Cuts and Jobs Act at the end of 2025 and the suspension of the debt ceiling, which expires on January 1, 2025.

Balance Sheet Review

The following table summarizes Farmer Mac's balance sheet as of the periods indicated:

Table 21


	As of				Change
	September 30, 2024		December 31, 2023		$		%
	(in thousands)
Assets
Cash and cash equivalents	$	842,056	$	888,707	$	(46,651)	(5)	%
Investment securities	5,895,793		4,979,504		916,289		18	%
Farmer Mac Guaranteed Securities	8,722,762		9,745,548		(1,022,786)		(10)	%
USDA Securities	2,344,715		2,355,412		(10,697)		—	%
Loans, net of allowance	10,649,530		9,607,531		1,041,999		11	%
Loans held in trusts	1,717,803		1,431,818		285,985		20	%
Other	442,562		515,862		(73,300)		(14)	%
Total assets	$	30,615,221	$	29,524,382	$	1,090,839	4	%
Liabilities
Notes Payable	$	27,129,456	$	26,336,542	$	792,914	3	%
Debt securities of consolidated trusts held by third parties	1,616,513		1,351,069		265,444		20	%
Other	406,908		424,908		(18,000)		(4)	%
Total liabilities	$	29,152,877	$	28,112,519	$	1,040,358	4	%
Total equity	1,462,344		1,411,863		50,481		4	%
Total liabilities and equity	$	30,615,221	$	29,524,382	$	1,090,839	4	%

Assets. The increase in total assets was primarily attributable to new loan volume, including those held in consolidated trusts, and a larger investment portfolio.

Liabilities. The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of loan volume, including those held in consolidated trusts.

Equity. The increase in total equity was primarily due to an increase in retained earnings and an increase in accumulated other comprehensive income, and was partially offset by the redemption of the Series C Preferred Stock.

Risk Management

Credit Risk – Loans and Guarantees.

Agricultural Finance - Direct Credit Exposure

Farmer Mac's direct credit exposure to Agricultural Finance mortgage loans as of September 30, 2024 was $11.5 billion across 48 states. Farmer Mac applies credit underwriting standards and methodologies to help assess exposures to loan purchases, which may include collateral valuation, financial metrics, and other appropriate borrower financial and credit information. For Corporate AgFinance loans, which are often larger loan exposures to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity. For more information about Farmer Mac's underwriting and collateral valuation standards for Agricultural Finance mortgage loans, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch" and "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance" in Farmer Mac's 2023 Annual Report.

Farmer Mac's 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of September 30, 2024, were $144.4 million (1.26% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to $62.1 million (0.54% of the Agricultural Finance mortgage loan portfolio) as of June 30, 2024 and $34.7 million (0.31% of the Agricultural Finance mortgage loan portfolio) as of December 31, 2023. Those 90-day delinquencies consisted of 84 delinquent loans as of September 30, 2024, compared to 34 delinquent loans as of June 30, 2024 and 23 delinquent loans as of December 31, 2023. The increase in the number of 90-day delinquencies was primarily driven by increased delinquencies in permanent plantings, crops, livestock, part-time farms, and agricultural storage and processing. The increase in loans 90 days or more delinquent as of September 30, 2024 compared to June 30, 2024 is consistent with the seasonal pattern of delinquencies with higher levels generally observed at the end of the first and third quarters and lower levels generally observed at the end of the second and fourth quarter of each year. This seasonal pattern results from the annual (January 1st) and semi-annual (January 1st and July 1st) payment dates on most Farm & Ranch loans. $37.6 million of the increase in 90-day delinquent loans was related to a single permanent planting borrower relationship. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of September 30, 2024. Farmer Mac believes that it remains adequately collateralized on its delinquent loans.

Farmer Mac's 90-day delinquency rate as of September 30, 2024 was higher than Farmer Mac's historical average. In the near-term, our delinquency rate may continue to exceed our historical average due to the current agricultural cycle or changes in the general economy or unforeseen and idiosyncratic events like adverse weather events. Farmer Mac's average 90-day delinquency rate as a percentage of its Agricultural Finance mortgage loan portfolio over the last 15 years is approximately 1%. The highest 90-day delinquency rate observed during that period occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's ethanol loan portfolio.

The following table presents historical information about Farmer Mac's 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure:

Table 22


	Agricultural Finance Mortgage Loans		90-Day Delinquencies		Percentage
	(dollars in thousands)
As of:
September 30, 2024	$	11,466,670	$	144,407	1.26	%
June 30, 2024	11,409,396		62,063		0.54	%
March 31, 2024	11,184,817		76,825		0.69	%
December 31, 2023	11,223,276		34,677		0.31	%
September 30, 2023	11,014,678		42,443		0.39	%
June 30, 2023	10,826,201		45,368		0.42	%
March 31, 2023	10,680,419		70,646		0.66	%
December 31, 2022	10,719,571		43,498		0.41	%
September 30, 2022	10,508,549		44,232		0.42	%

Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.51% of total outstanding business volume as of September 30, 2024, compared to 0.12% as of December 31, 2023 and 0.15% as of September 30, 2023.

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of September 30, 2024 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure:

Table 23


Agricultural Finance Mortgage Loans 90-Day Delinquencies as of September 30, 2024
	Distribution of Agricultural Loans		Agricultural Loans		90-Day Delinquencies(1)		Percentage
	(dollars in thousands)
By year of origination:
2014 and prior	7	%	$	809,032	$	4,853	0.60	%
2015	2	%	271,083		789		0.29	%
2016	4	%	448,420		15,870		3.54	%
2017	4	%	490,005		9,319		1.90	%
2018	5	%	546,156		11,114		2.03	%
2019	7	%	756,933		27,038		3.57	%
2020	16	%	1,870,002		32,883		1.76	%
2021	21	%	2,453,110		5,437		0.22	%
2022	14	%	1,614,382		20,645		1.28	%
2023	10	%	1,116,477		16,459		1.28	%
2024	10	%	1,091,070		—		—	%
Total	100	%	$	11,466,670	$	144,407	1.26	%
By geographic region(2):
Northwest	12	%	$	1,401,166	$	8,820	0.63	%
Southwest	30	%	3,450,670		100,608		2.92	%
Mid-North	27	%	3,087,529		20,738		0.67	%
Mid-South	17	%	1,880,190		4,959		0.26	%
Northeast	4	%	501,024		5,840		1.17	%
Southeast	10	%	1,146,091		3,442		0.30	%
Total	100	%	$	11,466,670	$	144,407	1.26	%
By commodity/collateral type:
Crops	49	%	$	5,655,747	$	47,582	0.84	%
Permanent plantings	22	%	2,455,319		77,615		3.16	%
Livestock	19	%	2,160,936		12,393		0.57	%
Part-time farm	4	%	491,242		6,447		1.31	%
Ag. Storage and Processing	6	%	678,617		370		0.05	%
Other	—	%	24,809		—		—	%
Total	100	%	$	11,466,670	$	144,407	1.26	%
By original loan-to-value ratio:
0.00% to 40.00%	17	%	$	1,955,737	$	10,652	0.54	%
40.01% to 50.00%	22	%	2,506,566		34,758		1.39	%
50.01% to 60.00%	34	%	3,839,441		81,086		2.11	%
60.01% to 70.00%	20	%	2,321,014		16,981		0.73	%
70.01% to 80.00%(3)	2	%	248,887		930		0.37	%
80.01% to 90.00%(3)	—	%	27,181		—		—	%
Enterprise Value(4)	5	%	567,844		—		—	%
Total	100	%	$	11,466,670	$	144,407	1.26	%
By size of borrower exposure(5):
Less than $1,000,000	26	%	$	2,953,846	$	12,912	0.44	%
$1,000,000 to $4,999,999	38	%	4,413,490		59,934		1.36	%
$5,000,000 to $9,999,999	15	%	1,678,922		33,957		2.02	%
$10,000,000 to $24,999,999	13	%	1,497,383		—		—	%
$25,000,000 and greater	8	%	923,029		37,604		4.07	%
Total	100	%	$	11,466,670	$	144,407	1.26	%

(1)Includes loans held and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs 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.

(2)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).

(3)Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance.

(4)"Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques.

(5)Includes aggregated loans to single borrowers or borrower-related entities.

Another indicator that Farmer Mac considers in analyzing the credit quality of its Agricultural Finance mortgage loans is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" 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 September 30, 2024, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $377.9 million (3.3% of the portfolio), compared to $248.0 million (2.2% of the portfolio) as of June 30, 2024, and $186.0 million (1.7% of the portfolio) as of December 31, 2023. Those substandard assets comprised 302 loans as of September 30, 2024, 238 loans as of June 30, 2024, and 206 loans as of December 31, 2023.

The increase of $129.9 million in Agricultural Finance substandard assets during third quarter 2024 was primarily driven by credit downgrades in permanent plantings, crops, livestock, part-time farms and agricultural storage and processing. Agricultural Finance substandard assets increased as a percentage of our on- and off-balance sheet Agricultural Finance portfolios during third quarter 2024.

The percentage of Agricultural Finance substandard assets within the portfolio as of September 30, 2024 was below the historical average. Farmer Mac's average Agricultural Finance substandard assets as a percentage of its Agricultural Finance mortgage loans over the last 15 years is approximately 4%. The highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's ethanol portfolio. If Farmer Mac's substandard asset rate increases from current levels on a sustained basis, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses would also increase.

Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its Agricultural Finance portfolio, which Farmer Mac believes is adequately collateralized.

Within Agricultural Finance, Farmer Mac considers a Farm & Ranch loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards. As of September 30, 2024 and December 31, 2023, the average unpaid principal balances for Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $801,000 and $804,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans purchased during third quarter 2024 was 52%, compared to 47% for loans purchased during third quarter 2023. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 52% as of both September 30, 2024 and December 31, 2023. The weighted-average original loan-to-value ratio for all 90-day delinquencies was 54% and 56% as of September 30, 2024 and December 31, 2023, respectively.

The weighted-average current loan-to-value ratio (the loan to-value ratio based on original appraised value and current outstanding loan amount adjusted to reflect amortization) for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 45% and 47% as of September 30, 2024 and December 31, 2023, respectively.

The following table presents the current loan-to-value ratios for the Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, as disaggregated by internally assigned risk ratings:

Table 24


Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of September 30, 2024
	Acceptable		Special Mention		Substandard		Total
	(in thousands)
Current loan-to-value ratio(1):
0.00% to 40.00%	$	3,372,852	$	83,810	$	88,881	$	3,545,543
40.01% to 50.00%	2,591,377		140,604		60,540		2,792,521
50.01% to 60.00%	2,652,469		112,990		120,684		2,886,143
60.01% to 70.00%	1,274,503		116,804		83,805		1,475,112
70.01% to 80.00%	134,260		32,928		5,566		172,754
80.01% and greater	14,196		1,802		10,754		26,752
Enterprise Value(2)	557,975		2,215		7,655		567,845
Total	$	10,597,632	$	491,153	$	377,885	$	11,466,670

(1)The current loan-to-value ratio is based on original appraised value (or most recently obtained valuation, if available) and current outstanding loan amount adjusted to reflect loan amortization.

(2)"Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques.

The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of September 30, 2024 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized losses relative to original Farm & Ranch purchases, guarantees, and commitments.

Table 25


Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative
Original Loans, Guarantees, and LTSPCs as of September 30, 2024
	Cumulative Original Loans, Guarantees and LTSPCs		Cumulative Net Credit Losses/(Recoveries)		Cumulative Loss Rate
	(dollars in thousands)
By year of origination:
2014 and prior	$	19,836,069	$	33,785	0.17	%
2015	1,255,851		(516)		(0.04)	%
2016	1,605,758		903		0.06	%
2017	1,715,321		4,311		0.25	%
2018	1,424,730		—		—	%
2019	1,645,830		—		—	%
2020	2,975,666		—		—	%
2021	3,332,191		297		0.01	%
2022	2,007,621		—		—	%
2023	1,419,585		3,942		0.28	%
2024	1,140,267		—		—	%
Total	$	38,358,889	$	42,722	0.11	%
By geographic region(1):
Northwest	$	4,802,244	$	12,094	0.25	%
Southwest	12,720,516		12,484		0.10	%
Mid-North	9,569,340		17,165		0.18	%
Mid-South	5,517,040		(613)		(0.01)	%
Northeast	2,017,934		620		0.03	%
Southeast	3,731,815		972		0.03	%
Total	$	38,358,889	$	42,722	0.11	%
By commodity/collateral type:
Crops	$	17,658,196	$	3,790	0.02	%
Permanent plantings	8,268,080		14,022		0.17	%
Livestock	8,397,165		3,836		0.05	%
Part-time farm	1,963,591		1,090		0.06	%
Ag. Storage and Processing	1,838,933		19,984		1.09	%
Other	232,924		—		—	%
Total	$	38,358,889	$	42,722	0.11	%

(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).

Analysis of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. The following tables present concentrations of Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit losses by origination year and commodity type:

Table 26


	As of September 30, 2024
	Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region
	Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing			Other			Total
	(dollars in thousands)
By geographic region(1):
Northwest	$	694,516		$	237,847		$	319,044		$	119,390		$	29,239		$	1,130		$	1,401,166
	6.1		%	2.0		%	2.8		%	1.0		%	0.3		%	—		%	12.2		%
Southwest	782,111			1,829,572			596,956			119,810			105,884			16,337			3,450,670
	6.8		%	16.0		%	5.2		%	1.1		%	0.9		%	0.1		%	30.1		%
Mid-North	2,521,691			10,942			291,045			78,014			184,747			1,090			3,087,529
	22.0		%	0.1		%	2.5		%	0.7		%	1.6		%	—		%	26.9		%
Mid-South	1,086,058			81,653			607,640			65,779			36,999			2,061			1,880,190
	9.5		%	0.8		%	5.3		%	0.6		%	0.3		%	—		%	16.5		%
Northeast	196,526			45,606			70,323			47,521			141,048			—			501,024
	1.7		%	0.4		%	0.6		%	0.4		%	1.2		%	—		%	4.3		%
Southeast	374,845			249,699			275,928			60,728			180,700			4,191			1,146,091
	3.3		%	2.2		%	2.4		%	0.5		%	1.6		%	—		%	10.0		%
Total	$	5,655,747		$	2,455,319		$	2,160,936		$	491,242		$	678,617		$	24,809		$	11,466,670
	49.4		%	21.5		%	18.8		%	4.3		%	5.9		%	0.1		%	100.0		%

Table 27


	As of September 30, 2024
	Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Total
	(in thousands)
By year of origination:
2014 and prior	$	3,427	$	9,783	$	3,836	$	1,066	$	15,673	$	33,785
2015	(540)		—		—		24		—		(516)
2016	903		—		—		—		—		903
2017	—		—		—		—		4,311		4,311
2018	—		—		—		—		—		—
2019	—		—		—		—		—		—
2020	—		—		—		—		—		—
2021	—		297		—		—		—		297
2022	—		—		—		—		—		—
2023	—		3,942		—		—		—		3,942
2024	—		—		—		—		—		—
Total	$	3,790	$	14,022	$	3,836	$	1,090	$	19,984	$	42,722

For more information about the credit quality of Farmer Mac's Agricultural Finance mortgage loans and the associated allowance for losses please refer to Note 5 and Note 6 to the consolidated financial statements. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses."

Rural Infrastructure Finance - Direct Credit Exposure

Farmer Mac's direct credit exposure to Rural Infrastructure Finance loans held and loans underlying LTSPCs as of September 30, 2024 was $5.0 billion across 45 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Rural Infrastructure Finance loans, see "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac's 2023 Annual Report. As of September 30, 2024, there was one telecommunications loan classified as substandard, with an unpaid principal balance of $24.1 million. As of December 31, 2023, there was one telecommunications loan classified as substandard, with an unpaid principal balance of $29.4 million.

Farmer Mac evaluates credit risk of Rural Infrastructure assets by reviewing a variety of borrower credit risk characteristics. These characteristics can include (but are not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment.

The following table disaggregates Farmer Mac’s portfolio of Rural Infrastructure loans by portfolio segment and by internally assigned risk ratings.

Table 28


	As of September 30, 2024
	Rural Infrastructure Finance portfolio by internally assigned risk rating
	Acceptable		Special Mention		Substandard		Total
	(in thousands)
Distribution Cooperative	$	2,565,658	$	—	$	—	$	2,565,658
Generation and Transmission Cooperative	688,146		—		—		688,146
Renewable Energy	1,081,617		13,391		—		1,095,008
Telecommunications	587,103		34,475		24,128		645,706
Rural Infrastructure Total	$	4,922,524	$	47,866	$	24,128	$	4,994,518

For more information about the credit quality of Farmer Mac's Rural Infrastructure Finance portfolio and the associated allowance for losses please refer to Notes 5 and 6 of the consolidated financial statements.

Other Considerations Regarding Credit Risk Related to Loans and Guarantees

The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States. Therefore, Farmer Mac believes that we have little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business because of the USDA guarantee. As of September 30, 2024, Farmer Mac had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Securities.

Farmer Mac requires many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to Farmer Mac's standards, the accuracy of loan data provided to Farmer Mac, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has the ability to require a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's decision to purchase the loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred by the seller to Farmer Mac. During the previous three years ended September 30, 2024, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan. In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Rural Infrastructure Finance loans on which it has direct credit exposure. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria. For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac’s 2023 Annual Report.

Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements. Servicers are responsible to Farmer Mac for material errors in the servicing of those loans. If a servicer materially breaches the terms of its servicing

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agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. In September 2024, Farmer Mac notified a field servicer of a breach of its servicing duties and the termination of the servicing relationship for two large borrower relationships effective October 1, 2024. That was Farmer Mac's only exercise of remedies or taking of formal action against any servicers during the previous three years ended September 30, 2024. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Servicing" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac’s 2023 Annual Report.

Credit Risk – Counterparty Risk. Farmer Mac is exposed to credit risk arising from its business relationships with other institutions, which include:

•issuers of AgVantage securities;

•approved lenders and servicers; and

•interest rate swap counterparties.

Farmer Mac approves AgVantage counterparties and manages institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's standards for creditworthiness for the particular counterparty type and transaction. The required collateralization level is established when the AgVantage facility is entered into with the counterparty and does not change during the life of the AgVantage securities issued under the facility without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute eligible loans that are current in payment or pay down the AgVantage securities to maintain the minimum required collateralization level.

In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Rural Infrastructure loans that secure AgVantage securities. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, Farmer Mac also typically requires that the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower loan-to-value ratio thresholds and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. As of September 30, 2024, Farmer Mac had not experienced any credit losses on any AgVantage securities over the life of the program. For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Other Products – Rural Infrastructure Finance—AgVantage Securities" in Farmer Mac’s 2023 Annual Report.

The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $5.3 billion as of September 30, 2024 and $6.1 billion as of December 31, 2023. The unpaid principal balance of on-balance sheet AgVantage

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securities secured by loans eligible for the Rural Infrastructure Finance line of business totaled $3.5 billion as of September 30, 2024 and $3.9 billion as of December 31, 2023.

The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of September 30, 2024 and December 31, 2023:

Table 29


	As of September 30, 2024		As of December 31, 2023
Counterparty	Balance		Required Collateralization	Balance		Required Collateralization
	(dollars in thousands)
AgVantage:
CFC	$	3,540,631	100%	$	3,898,468	100%
MetLife	2,050,000		103%	2,050,000		103%
Rabo AgriFinance	2,275,000		105%	3,085,000		105%
Other(1)	1,004,876		100% to 125%	988,879		100% to 125%
Total outstanding	$	8,870,507		$	10,022,347

(1)Consists of AgVantage securities issued by 9 and 8 different issuers as of September 30, 2024 and December 31, 2023, respectively.

Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness. Farmer Mac monitors the financial condition of those institutions by evaluating financial statements and credit rating agency reports. For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac’s 2023 Annual Report.

Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that vary based on the market value of its swap portfolio with each counterparty. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 4 to the consolidated financial statements.

Credit Risk – Other Investments. As of September 30, 2024, Farmer Mac had $0.8 billion of cash and cash equivalents and $5.9 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's internal policies as well as FCA regulations, which can be found at 12 C.F.R. §§ 652.1-652.45 ("Liquidity and Investment Regulations"). In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's investment policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets.

The Liquidity and Investment Regulations and Farmer Mac's internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a

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minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held.

The Liquidity and Investment Regulations and Farmer Mac's internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. The Liquidity and Investment Regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor of securities to 10% of Farmer Mac's regulatory capital ($148.7 million as of September 30, 2024). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($74.3 million as of September 30, 2024). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE.

Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework.

Interest Rate Risk. Farmer Mac is subject to interest rate risk on all interest-earning assets on its balance sheet because of timing differences in the cash flows due to maturity, paydown, or repricing of the assets and debt together with financial derivatives. Cash flow mismatches due to changing interest rates can reduce the earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac could realize a decline in income if assets repay more slowly than originally forecasted and the associated maturing debt must be replaced by debt issuances at higher interest rates.

Interest Rate Risk Management

The goal of interest rate risk management at Farmer Mac is to manage the balance sheet in a manner that generates stable earnings and value across a variety of interest rate environments. Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac regularly assesses this exposure and, if necessary, adjusts its portfolio of interest-earning assets, debt, and financial derivatives.

Farmer Mac's objective is to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's board of directors. Farmer Mac's management-level Asset and Liability Committee ("ALCO") provides oversight, establishes guidelines, and approves strategies to maintain interest rate risk within the board-established limits.

Farmer Mac's primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and convexity characteristics and help mitigate impacts from interest rate changes across the yield curve. As part of this strategy, Farmer Mac seeks to

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issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows.

Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its debt issuance strategy. Portions of Farmer Mac's callable debt is issued to mitigate prepayment risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, prepayments typically increase, and Farmer Mac is able to economically extinguish certain callable debt issuances. In addition, Farmer Mac enters into financial derivatives, primarily interest rate swaps, to better match the durations of Farmer Mac's assets and liabilities, thereby reducing overall sensitivity to changing interest rates.

Taking into consideration the prepayment provisions and the default probabilities associated with its portfolio of interest-earning assets, Farmer Mac incorporates behavioral models when projecting and valuing cash flows associated with these assets. In recognition that borrowers' behaviors in various interest rate environments may change over time, Farmer Mac periodically evaluates the effectiveness of these models compared to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts.

Changes in interest rates may affect the timing of asset prepayments which may, in turn, impact durations and values of the assets. Declining interest rates generally result in increased prepayments, which shortens the duration of these assets, while rising interest rates generally result in lower prepayments, thereby extending the duration of the assets.

Farmer Mac is subject to interest rate risk on loans and securities it has committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When Farmer Mac commits to purchase these assets, it is exposed to interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of these loans. Farmer Mac manages the interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives.

Farmer Mac's $0.8 billion of cash and cash equivalents held as of September 30, 2024 mature within three months. As of September 30, 2024, $2.8 billion of the $5.9 billion of investment securities (47%) were floating rate securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Farmer Mac's floating rate investment securities are funded with floating rate debt. The fixed rate investment securities are generally funded in a manner consistent with Farmer Mac's overall funding strategy that approximates a duration and convexity match.

Interest Rate Risk Metrics

Farmer Mac regularly evaluates and conducts interest rate shock simulations on its portfolio of financial assets, debt, and financial derivatives and examines a variety of metrics to quantify and manage its exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted net effective spread ("NES") as well as a duration gap analysis.

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MVE represents management's estimate of the present value of all future cash flows from its current portfolio of on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. The MVE sensitivity analysis measures the degree to which the market values of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates.

Farmer Mac's NES simulation represents the difference between projected income over the next twelve months from the current portfolio of interest-earning assets and interest expense produced by the related funding, including associated financial derivatives. Farmer Mac's NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of funded assets and debt together with the associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest rates across the yield curve as well as the composition of Farmer Mac's portfolio. The NES simulation represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of Farmer Mac's NES income sensitivity to interest rate shocks.

Duration is a measure of a financial instrument's fair value sensitivity to small changes in interest rates. Duration gap is calculated using the net estimated durations of Farmer Mac's interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and financial derivatives. Duration gap provides a relatively concise measure of the interest rate risk inherent in Farmer Mac's outstanding portfolio.

A positive duration gap denotes that the duration of Farmer Mac's interest-earning assets is greater than the duration of its debt and financial derivatives. A positive duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is more sensitive than the fair value change of its debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets are less sensitive than the fair value change of its debt and financial derivatives. A duration gap of zero indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is effectively offset by the fair value change of its debt and financial derivatives.

Each of the interest rate risk metrics is quantified using asset/liability models and derived based on management's best estimates of factors such as implied forward interest rates across the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes.

105

The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of September 30, 2024 and December 31, 2023 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:

Table 30


	Percentage Change in MVE from Base Case
Interest Rate Scenario	As of September 30, 2024		As of December 31, 2023
+100 basis points	(3.8)	%	(3.6)	%
-100 basis points	3.6	%	2.9	%


	Percentage Change in NES from Base Case
Interest Rate Scenario	As of September 30, 2024		As of December 31, 2023
+100 basis points	(1.3)	%	—	%
-100 basis points	1.2	%	0.8	%

As of September 30, 2024, Farmer Mac maintained a positive effective duration gap of 3.4 months, remaining consistent with the 3.4 months reported as of December 31, 2023. Since the end of 2023, the yield curve has steepened, with the yield-to-maturities of 2-year and 10-year U.S. Treasury Notes decreasing by approximately 61 and 10 basis points, respectively. This shift in rates shortened the duration of Farmer Mac's funded assets and liabilities, resulting in Farmer Mac's duration gap being stable.

Financial Derivatives Transactions

The economic effects of financial derivatives are included in Farmer Mac's MVE, NES, and duration gap analyses. Farmer Mac typically enters into the following types of financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of interest-earning assets, future cash flows, and debt issuance, and not for trading or speculative purposes:

•"pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties;

•"receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties;

•"basis swaps," in which Farmer Mac pays floating rates of interest based on one index to, and receives floating rates of interest based on a different index from, counterparties; and

•exchange-traded futures contracts involving U.S. Treasury securities.

As of September 30, 2024, Farmer Mac had $25.4 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to just over thirty years, of which $10.4 billion were pay-fixed interest rate swaps, $14.4 billion were receive-fixed interest rate swaps, and $0.7 billion were basis swaps.

Farmer Mac enters into interest rate swaps to more closely match the cash flow and duration characteristics of its interest-earning assets with those of its debt. For example, Farmer Mac transacts pay-fixed interest rate swaps and issues floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. Farmer Mac evaluates the overall cost of using interest rate swaps in conjunction with debt issuance as a funding alternative to duration-matched debt and enters into interest rate swaps to manage interest rate risks across the balance sheet.

106

Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available-for-sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt.

As discussed in Note 4 to the consolidated financial statements, all financial derivatives are recorded on the balance sheet at fair value as derivative assets or as derivative liabilities. Changes in the fair values of undesignated financial derivatives are reported in "(Losses)/gains on financial derivatives" in the consolidated statements of operations. For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations. Interest accruals on derivatives designated in fair value hedge accounting relationships are also recorded in "Net interest income" in the consolidated statements of operations. For financial derivatives designated in cash flow hedge accounting relationships, the unrealized gain or loss on the derivative is recorded in other comprehensive income. Because the hedging instrument is an interest rate swap and the hedged forecasted transactions are future interest payments on floating rate debt, amounts recorded in accumulated other comprehensive income are reclassified to "Total interest expense" in conjunction with the recognition of interest expense on the debt. All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both September 30, 2024 and December 31, 2023, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.

Re-funding and repricing risk

Farmer Mac is subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. Re-funding and repricing risk arises from potential changes in funding costs resulting from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that on average may have longer maturities. Changes in Farmer Mac's funding costs relative to the benchmark market index rate to which the assets are indexed can cause changes to net interest income when debt matures and is reissued at then current interest rates to continue funding those assets.

Farmer Mac is subject to re-funding and repricing risk on a portion of its fixed rate assets as a result of its use of pay-fixed receive-floating interest rate swaps that effectively convert the required funding needed from fixed rate to floating rate. These fixed rate assets are then effectively floating rate assets that require floating rate funding.

Farmer Mac can meet floating rate funding needs in several ways, including:

•issuing short-term fixed rate discount notes with maturities that match the reset period of the assets;

•issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded;

•issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or

•issuing non-maturity matched, fixed rate discount notes or medium-term notes swapped to floating rate to match the interest rate reset dates of the assets.

107

To meet certain floating rate funding needs, Farmer Mac frequently issues shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with a received-fixed interest rate swap because these funding alternatives generally provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's overall debt issuance and liquidity management strategies. However, if the funding cost of Farmer Mac’s discount notes or medium-term notes increased relative to the benchmark market index of the associated assets during the time between when these floating rate assets were first funded and when Farmer Mac refinanced the associated debt, Farmer Mac would be exposed to a commensurate reduction of net effective spread. Conversely, if the funding cost on Farmer Mac’s discount notes or medium-term notes decreased relative to the benchmark market index during that time, Farmer Mac would benefit from a commensurate increase to net effective spread.

Farmer Mac's debt issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's risk tolerance. Farmer Mac regularly adjusts its funding strategies to mitigate the effects of interest rate variability and seeks to maintain an effective mixture of funding structures in the context of its overall liability and liquidity management strategies.

As of September 30, 2024, Farmer Mac held $7.3 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indices, such as the Secured Overnight Financing Rate ("SOFR"). As of the same date, Farmer Mac also had $10.4 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily SOFR.

Liquidity and Capital Resources

Farmer Mac's primary sources of funds to meet its liquidity and funding needs are the proceeds of its debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and repayments of AgVantage and investment securities. Farmer Mac regularly accesses the debt capital markets for funding, and Farmer Mac has maintained steady access to the debt capital markets throughout 2024. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the debt capital markets. As of September 30, 2024, Farmer Mac had outstanding discount notes of $2.2 billion, medium-term notes that mature within one year of $7.7 billion, and medium-term notes that mature after one year of $17.2 billion.

Assuming continued access to the debt capital markets, Farmer Mac believes it has sufficient liquidity and capital resources to support its operations for the next 12 months and for the foreseeable future. Farmer Mac has a contingency funding plan to manage unanticipated disruptions in its access to the debt capital markets. Farmer Mac must maintain a minimum of 90 days of liquidity under the Liquidity and Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac maintained a monthly average of 308 days of liquidity throughout third quarter 2024 and had 309 days of liquidity as of September 30, 2024.

108

Farmer Mac maintains cash, cash equivalents (including U.S. Treasury securities, operational deposits, and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs. Farmer Mac's current policies authorize liquidity investments in:

•obligations of or fully guaranteed by the United States or a U.S. government agency;

•obligations of or fully guaranteed by GSEs;

•municipal securities;

•international and multilateral development bank obligations;

•money market instruments;

•diversified investment funds;

•asset-backed securities;

•corporate debt securities; and

•mortgage-backed securities.

The following table presents these assets as of September 30, 2024 and December 31, 2023:

Table 31


	As of September 30, 2024		As of December 31, 2023
	(in thousands)
Cash and cash equivalents	$	842,056	$	888,707
Investment securities:
Guaranteed by U.S. Government and its agencies	1,597,112		1,249,568
Guaranteed by GSEs	4,270,616		3,704,037
Asset-backed securities	19,478		19,082
Total	$	6,729,262	$	5,861,394

The objectives of the investment portfolio as of September 30, 2024 and December 31, 2023 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity, to prepare for the possibility of future volatility in the debt capital markets, and to support program asset growth.

Capital Requirements. Farmer Mac is subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of September 30, 2024, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level).

In accordance with the FCA's rule on capital planning, Farmer Mac's board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of September 30, 2024 and December 31, 2023, Farmer Mac's Tier 1 capital ratio was 14.2% and 15.4%, respectively. As of September 30, 2024, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with the FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition.

For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and the FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—

109

Capital Standards." See Note 8 to the consolidated financial statements for more information about Farmer Mac's capital position.

Other Matters

None.

Supplemental Information

The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume:

Table 32


New Business Volume
	Agricultural Finance				Rural Infrastructure Finance
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
	(in thousands)
For the quarter ended:
September 30, 2024	$	776,023	$	307,325	$	579,887	$	325,743	$	1,988,978
June 30, 2024	698,787		288,740		235,033		271,890		1,494,450
March 31, 2024	665,916		290,525		115,795		347,898		1,420,134
December 31, 2023	1,282,045		188,272		434,511		225,986		2,130,814
September 30, 2023	1,384,273		275,932		607,979		17,390		2,285,574
June 30, 2023	1,574,169		218,136		294,292		71,611		2,158,208
March 31, 2023	469,013		203,211		683,232		89,747		1,445,203
December 31, 2022	1,114,255		165,395		140,222		43,737		1,463,609
September 30, 2022	1,629,496		169,932		547,117		61,653		2,408,198

For the year ended:
December 31, 2023	$	4,709,500	$	885,551	$	2,020,014	$	404,734	$	8,019,799
December 31, 2022	6,614,687		546,596		1,392,203		182,333		8,735,819

110

Table 33


Repayments of Assets
	Agricultural Finance				Rural Infrastructure Finance
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
	(in thousands)
For the quarter ended:
Scheduled	$	1,079,136	$	239,596	$	674,590	$	106,207	$	2,099,529
Unscheduled	117,538		41,842		26,629		—		186,009
September 30, 2024	$	1,196,674	$	281,438	$	701,219	$	106,207	$	2,285,538

Scheduled	$	752,473	$	141,565	$	78,299	$	138,725	$	1,111,062
Unscheduled	342,594		89,576		32,984		—		465,154
June 30, 2024	$	1,095,067	$	231,141	$	111,283	$	138,725	$	1,576,216

Scheduled	$	402,088	$	118,885	$	126,314	$	93,112	$	740,399
Unscheduled	150,903		99,325		32,481		—		282,709
March 31, 2024	$	552,991	$	218,210	$	158,795	$	93,112	$	1,023,108

Scheduled	$	827,122	$	133,468	$	53,614	$	69,040	$	1,083,244
Unscheduled	106,041		102,131		18,469		—		226,641
December 31, 2023	$	933,163	$	235,599	$	72,083	$	69,040	$	1,309,885

Scheduled	$	922,223	$	110,383	$	80,998	$	14,716	$	1,128,320
Unscheduled	108,960		104,999		20,578		—		234,537
September 30, 2023	$	1,031,183	$	215,382	$	101,576	$	14,716	$	1,362,857

Scheduled	$	1,050,480	$	81,386	$	558,944	$	52,203	$	1,743,013
Unscheduled	96,507		55,976		13,138		—		165,621
June 30, 2023	$	1,146,987	$	137,362	$	572,082	$	52,203	$	1,908,634

Scheduled	$	279,676	$	78,482	$	95,809	$	11,424	$	465,391
Unscheduled	231,288		128,254		57,354		—		416,896
March 31, 2023	$	510,964	$	206,736	$	153,163	$	11,424	$	882,287

Scheduled	$	447,976	$	64,308	$	75,671	$	9,809	$	597,764
Unscheduled	136,245		132,366		1,201		—		269,812
December 31, 2022	$	584,221	$	196,674	$	76,872	$	9,809	$	867,576

Scheduled	$	724,580	$	38,018	$	422,917	$	13,429	$	1,198,944
Unscheduled	296,763		64,439		—		—		361,202
September 30, 2022	$	1,021,343	$	102,457	$	422,917	$	13,429	$	1,560,146

For the year ended:
Scheduled	$	3,079,501	$	403,719	$	789,365	$	147,383	$	4,419,968
Unscheduled	542,796		391,360		109,539		—		1,043,695
December 31, 2023	$	3,622,297	$	795,079	$	898,904	$	147,383	$	5,463,663

Scheduled	$	3,822,704	$	183,968	$	924,428	$	38,926	$	4,970,026
Unscheduled	1,154,105		287,955		3,389		—		1,445,449
December 31, 2022	$	4,976,809	$	471,923	$	927,817	$	38,926	$	6,415,475

111

Table 34


Outstanding Business Volume
	Agricultural Finance				Rural Infrastructure Finance
	Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
	(in thousands)
As of:
September 30, 2024	$	18,090,374	$	1,842,780	$	7,440,141	$	1,095,008	$	28,468,303
June 30, 2024	18,504,501		1,816,893		7,561,473		875,472		28,758,339
March 31, 2024	18,900,906		1,766,294		7,437,723		742,307		28,847,230
December 31, 2023	18,808,801		1,693,979		7,480,723		487,521		28,471,024
September 30, 2023	18,461,835		1,741,306		7,118,295		330,575		27,652,011
June 30, 2023	18,116,503		1,680,756		6,611,892		327,901		26,737,052
March 31, 2023	17,685,961		1,599,982		6,889,682		308,493		26,484,118
December 31, 2022	17,728,792		1,603,507		6,359,613		230,170		25,922,082
September 30, 2022	17,199,347		1,634,786		6,296,263		196,242		25,326,638

Table 35


On-Balance Sheet Outstanding Business Volume
	Fixed Rate		5- to 10-Year ARMs & Resets		1-Month to 3-Year ARMs		Total Held in Portfolio
	(in thousands)
As of:
September 30, 2024	$	14,328,691	$	3,311,001	$	6,265,792	$	23,905,484
June 30, 2024	14,064,831		3,273,764		6,850,137		24,188,732
March 31, 2024	14,166,500		3,194,246		6,849,237		24,209,983
December 31, 2023	14,133,794		3,171,672		6,455,359		23,760,825
September 30, 2023	13,727,280		3,019,317		6,255,690		23,002,287
June 30, 2023	13,721,129		3,003,560		5,493,104		22,217,793
March 31, 2023	13,607,740		3,020,229		5,924,032		22,552,001
December 31, 2022	13,693,810		3,031,288		5,251,427		21,976,525
September 30, 2022	13,810,162		2,960,596		4,644,958		21,415,716

112

The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:

Table 36


	Net Effective Spread(1)
	Agricultural Finance								Rural Infrastructure Finance								Treasury
	Farm & Ranch				Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments				Net Effective Spread
	Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield
	(dollars in thousands)
For the quarter ended:
September 30, 2024(2)	$	35,755	1.05	%	$	6,397	1.56	%	$	7,579	0.44	%	$	3,810	1.78	%	$	30,912	0.42	%	$	943	0.05	%	$	85,396	1.16	%
June 30, 2024	34,156		0.98	%	7,866		1.91	%	7,646		0.44	%	2,999		1.86	%	30,268		0.41	%	661		0.04	%	83,596		1.14	%
March 31, 2024	32,843		0.95	%	7,971		2.05	%	7,232		0.42	%	2,049		1.75	%	32,474		0.45	%	475		0.03	%	83,044		1.14	%
December 31, 2023	33,329		0.98	%	8,382		2.06	%	7,342		0.43	%	1,540		1.69	%	33,361		0.47	%	597		0.04	%	84,551		1.19	%
September 30, 2023(2)	32,718		0.97	%	8,250		2.05	%	6,362		0.39	%	1,150		1.46	%	34,412		0.49	%	532		0.04	%	83,424		1.20	%
June 30, 2023	34,388		1.03	%	7,444		1.92	%	5,808		0.38	%	1,100		1.47	%	32,498		0.48	%	594		0.04	%	81,832		1.20	%
March 31, 2023	32,465		0.97	%	7,148		1.94	%	5,507		0.36	%	858		1.53	%	31,738		0.47	%	(543)		(0.04)	%	77,173		1.15	%
December 31, 2022	32,770		0.98	%	7,471		1.94	%	4,960		0.34	%	935		1.76	%	27,656		0.42	%	(2,689)		(0.19)	%	71,103		1.07	%
September 30, 2022	33,343		1.04	%	7,600		1.99	%	4,220		0.30	%	705		1.97	%	22,564		0.36	%	(2,791)		(0.21)	%	65,641		1.03	%

(1)Farmer Mac excludes the Corporate segment in the presentation above because the segment does not have any interest-earning assets.

(2)See Note 10 to the consolidated financial statements for a reconciliation of GAAP net interest income by segment to net effective spread by segment for the three months ended September 30, 2024 and 2023.

113

The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders:

Table 37


	Core Earnings by Quarter End
	September 2024		June 2024		March 2024		December 2023		September 2023		June 2023		March 2023		December 2022		September 2022
	(in thousands)
Revenues:
Net effective spread	$	85,396	$	83,596	$	83,044	$	84,551	$	83,424	$	81,832	$	77,173	$	71,103	$	65,641
Guarantee and commitment fees	4,997		5,256		4,982		4,865		4,828		4,581		4,654		4,677		4,201
Gain on sale of investment securities	—		1,052		—		—		—		—		—		—		—
Loss on sale of mortgage loan	—		(1,147)		—		—		—		—		—		—		—
Other	1,133		481		1,077		767		1,056		409		1,067		390		473
Total revenues	91,526		89,238		89,103		90,183		89,308		86,822		82,894		76,170		70,315

Credit related expense/(income):
Provision for/(release of) losses	3,258		6,230		(1,870)		(575)		(181)		1,142		750		1,945		450
REO operating expenses	196		—		—		—		—		—		—		819		—

Total credit related expense/(income)	3,454		6,230		(1,870)		(575)		(181)		1,142		750		2,764		450

Operating expenses:
Compensation and employee benefits	15,237		14,840		18,257		15,523		14,103		13,937		15,351		12,105		11,648
General and administrative	8,625		8,904		8,255		8,916		9,100		9,420		7,527		8,055		6,919
Regulatory fees	725		725		725		725		831		831		835		832		812
Total operating expenses	24,587		24,469		27,237		25,164		24,034		24,188		23,713		20,992		19,379

Net earnings	63,485		58,539		63,736		65,594		65,455		61,492		58,431		52,414		50,486
Income tax expense	12,681		11,970		13,553		13,881		13,475		12,539		12,756		11,210		10,303
Preferred stock dividends	5,897		6,792		6,791		6,791		6,792		6,791		6,791		6,791		6,791
Core earnings	$	44,907	$	39,777	$	43,392	$	44,922	$	45,188	$	42,162	$	38,884	$	34,413	$	33,392

Reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes	$	(1,064)	$	(359)	$	1,683	$	(836)	$	2,921	$	2,141	$	916	$	1,596	$	6,441
Gains/(losses) on hedging activities due to fair value changes	205		2,604		3,002		(3,598)		3,210		(4,901)		(105)		(148)		(624)
Unrealized gains/(losses) on trading assets	99		(87)		(14)		(37)		1,714		(57)		359		31		(757)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	27		26		31		88		29		29		29		57		24
Net effects of terminations or net settlements on financial derivatives	(503)		(1,505)		(192)		(800)		(79)		583		523		1,268		(3,522)
Issuance costs on the retirement of preferred stock	(1,619)		—		—		—		—		—		—		—		—

Income tax effect related to reconciling items	260		(143)		(947)		1,089		(1,638)		464		(362)		(590)		(327)
Net income attributable to common stockholders	$	42,312	$	40,313	$	46,955	$	40,828	$	51,345	$	40,421	$	40,244	$	36,627	$	34,627

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Farmer Mac is exposed to market risk from changes in interest rates. Farmer Mac manages this market risk by entering into various financial transactions, including financial derivatives, and by monitoring and measuring its exposure to changes in interest rates. See "Management's Discussion and Analysis of

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Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" for more information about Farmer Mac's exposure to interest rate risk and its strategies to manage that risk. For information about Farmer Mac's use of financial derivatives and related accounting policies, see Note 4 to the consolidated financial statements.

Item 4.Controls and Procedures

Management's Evaluation of Disclosure Controls and Procedures. Farmer Mac maintains disclosure controls and procedures designed to ensure that information required to be disclosed in its periodic filings under the Securities Exchange Act of 1934 (“Exchange Act”), including this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to Farmer Mac's management on a timely basis to allow decisions about required disclosure. Management, including Farmer Mac's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of Farmer Mac's disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of September 30, 2024.

Farmer Mac carried out the evaluation of the effectiveness of its disclosure controls and procedures, required by paragraph (b) of Exchange Act Rules 13a-15 and 15d-15, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Farmer Mac's disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control Over Financial Reporting. There were no changes in Farmer Mac's internal control over financial reporting during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, Farmer Mac's internal control over financial reporting.

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PART II

Item 1.Legal Proceedings

None.

Item 1A.Risk Factors

Information about risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Statements” in Part I, Item 2 of this Form 10-Q and in Part I, Item 1A of Farmer Mac’s 2023 Annual Report.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(a) Farmer Mac is a federally chartered instrumentality of the United States whose debt and equity securities are exempt from registration under Section 3(a)(2) of the Securities Act of 1933. During third quarter 2024, the following transactions occurred related to Farmer Mac's equity securities that were not registered under the Securities Act of 1933 and were not otherwise reported on a Current Report on Form 8-K:

Class C Non-Voting Common Stock. Under Farmer Mac's policy that permits directors of Farmer Mac to elect to receive shares of Class C non-voting common stock in lieu of their cash retainers, Farmer Mac issued an aggregate of 433 shares of its Class C non-voting common stock in July 2024 to the eight directors who elected to receive stock in lieu of their cash retainers. Farmer Mac calculated the number of shares issued to the directors based on a price of $180.82 per share, which was the closing price of the Class C non-voting common stock on June 30, 2024 (the last trading day of the previous quarter) as reported by the New York Stock Exchange.

(b) Not applicable.

Item 3.Defaults Upon Senior Securities

(a) None.

(b) None.

Item 4.Mine Safety Disclosures

Not applicable.

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Item 5.Other Information

Director and Officer Trading Arrangements

None of Farmer Mac's directors or executive officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the three months ended September 30, 2024.

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Item 6.Exhibits


*	3.1	—	Title VIII of the Farm Credit Act of 1971, as most recently amended on June 18, 2020 (Previously filed as Exhibit 3.1 to Form 10-Q filed August 10, 2020).
*	3.2	—	Amended and Restated By-Laws of the Registrant (Previously filed as Exhibit 3.2 to Form 10-Q filed May 6, 2024).
*	4.1	—	Specimen Certificate for Farmer Mac Class A Voting Common Stock (Previously filed as Exhibit 4.1 to Form 10-Q filed May 15, 2003).
*	4.2	—	Specimen Certificate for Farmer Mac Class B Voting Common Stock (Previously filed as Exhibit 4.2 to Form 10-Q filed May 15, 2003).
*	4.3	—	Specimen Certificate for Farmer Mac Class C Non-Voting Common Stock (Previously filed as Exhibit 4.3 to Form 10-Q filed May 15, 2003).
*	4.4	—	Specimen Certificate for 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.6 to Form 10-Q filed August 11, 2014).
*	4.4.1	—	Certificate of Designation of Terms and Conditions of 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.1 to Form 8-A filed June 20, 2014).
*	4.5	—	Specimen Certificate for 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.7 to Form 10-Q filed August 1, 2019).
*	4.5.1	—	Certificate of Designation of Terms and Conditions of 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.1 to Form 8-A filed May 13, 2019).
*	4.6	—	Specimen Certificate for 5.750% Non-Cumulative Preferred Stock, Series E (Previously filed as Exhibit 4.7 to Form 10-Q filed August 10, 2020).
*	4.6.1	—	Certificate of Designation of Terms and Conditions of 5.750% Non-Cumulative Preferred Stock, Series E (Previously filed as Exhibit 4.1 to Form 8-A filed May 20, 2020).
*	4.7	—	Specimen Certificate for 5.250% Non-Cumulative Preferred Stock, Series F (Previously filed as Exhibit 4.8 to Form 10-Q filed November 9, 2020).
*	4.7.1	—	Certificate of Designation of Terms and Conditions of 5.250% Non-Cumulative Preferred Stock, Series F (Previously filed as Exhibit 4.1 to Form 8-A filed August 20, 2020).
*	4.8		Specimen Certificate for 4.875% Non-Cumulative Preferred Stock, Series G (Previously filed as Exhibit 4.8 to Form 10-Q filed August 5, 2021).
*	4.8.1		Certificate of Designation of Terms and Conditions of 4.875% Non-Cumulative Preferred Stock, Series G (Previously filed as Exhibit 4.1 to Form 8-A filed May 27, 2021).
**	4.9	—	Description of the Registrant's securities that are registered under Section 12 of the Securities Exchange Act of 1934 .

































**	31.1	—	Certification of Registrant's principal executive officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	31.2	—	Certification of Registrant's principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	32	—	Certification of Registrant's principal executive officer and principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

**	101.INS	—	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
**	101.SCH	—	Inline XBRL Taxonomy Extension Schema
**	101.CAL	—	Inline XBRL Taxonomy Extension Calculation
**	101.DEF	—	Inline XBRL Taxonomy Extension Definition
**	101.LAB	—	Inline XBRL Taxonomy Extension Label
**	101.PRE	—	Inline XBRL Taxonomy Extension Presentation
**	104	—	Cover Page Inline Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document included as Exhibit 101


*			Incorporated by reference to the indicated prior filing.
**			Filed with this report.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION


/s/ Bradford T. Nordholm		November 4, 2024
By:	Bradford T. Nordholm
	President and Chief Executive Officer
	(Principal Executive Officer)

/s/ Aparna Ramesh		November 4, 2024
By:	Aparna Ramesh
	Executive Vice President – Chief Financial Officer and Treasurer
	(Principal Financial Officer)

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Federal Agricultural Mortgage (AGM) 10-Q2024 Q3 Quarterly report

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