WASHINGTON, Nov. 8, 2021 /PRNewswire/ -- The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.A), the nation's secondary market provider that increases the availability and affordability of credit for the benefit of rural America, today announced its results for the fiscal quarter ended September 30, 2021.
Third Quarter 2021 and Recent Highlights
- Added $2.5 billion of gross business volume, resulting in net growth of $921.6 million
- Net income of $24.3 million compared to $18.7 million in third quarter 2020
- Core Earnings1 of $27.6 million compared to $27.7 million in the same period last year
- On August 18, 2021, completed a strategic acquisition that expanded the internal loan servicing function and acquired the loan servicing rights for a sizeable portion of our Farm & Ranch loan and USDA Guaranteed Securities portfolios
- On October 14, 2021, Farmer Mac closed a $302.7 million securitization of agricultural mortgage-backed securities
"We delivered another quarter of strong earnings and net effective spread, reflecting the consistency of our fundamental business model," said President & Chief Executive Officer, Brad Nordholm. "In addition, we executed two important transactions recently that are consistent with our multi-year strategic plan. The expansion of our internal loan servicing represents yet another important step as part of our dual strategy of broadening our business opportunities while also deepening relationships with existing customers. The newly structured, syndicated agricultural mortgage-backed securitization transaction, which we expect to build on in the future, exemplifies Farmer Mac's core mission to increase access to and reduce the cost of credit for the benefit of American agricultural and rural communities."
|
$ in thousands, except per share amounts
|
Quarter Ended
|
Nine Months Ended
|
|
Sept. 30, 2021
|
Sept. 30, 2020
|
Sept. 30, 2021
|
Sept. 30, 2020
|
|
Net Business Volume
|
$921,630
|
$(52,820)
|
$1,194,697
|
$871,346
|
|
Net Interest Income
|
$55,005
|
$44,661
|
$163,385
|
$134,321
|
|
Net Effective Spread1
|
$55,925
|
$51,802
|
$166,335
|
$142,434
|
|
Diluted EPS (GAAP)
|
$2.24
|
$1.73
|
$7.17
|
$5.54
|
|
Core Earnings (per diluted share)1
|
$2.55
|
$2.57
|
$7.71
|
$6.88
|
Third Quarter 2021 Results
Business Volume
Our outstanding business volume was $23.1 billion as of September 30, 2021, a net increase of $0.9 billion from June 30, 2021 after taking into account all new business, maturities, and paydowns on existing assets. This net increase consisted of increases of $499.2 million in Institutional Credit, $389.2 million in Farm & Ranch, and $37.4 million in Rural Utilities, partially offset by a net decrease of $4.2 million in USDA Guarantees.
The $499.2 million net increase in the Institutional Credit line of business reflects $1.4 billion in gross volume, partially offset by $0.9 billion of paydowns and maturities. Within the $1.4 billion of gross volume is $1.2 billion of short-term funding that will mature in fourth quarter 2021.
The $389.2 million net increase in our Farm & Ranch line of business reflected a $277.2 million net increase in outstanding loan purchase volume and a $212.7 million net increase in loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities, which was partially offset by a net decrease of $100.6 million in loans held in consolidated trusts. Our net growth of 15.7% in the Farm & Ranch on-balance sheet portfolio over the twelve months ended September 30, 2021 is significantly higher than the 6.6% net growth of the overall agricultural mortgage loan market over the twelve months ended June 30, 2021 (based on our analysis of call report data from commercial banks, -1.6% growth, and Farm Credit System, 12.7% growth).
The $37.4 million net increase in the Rural Utilities line of business was due to $113.9 million in gross new volume, partially offset by $76.5 million in paydowns in loans and LTSPCs. Within the $113.9 million in gross volume is $50.0 million of unfunded telecommunications loan commitments.
The $4.2 million net decrease in the USDA Guarantees line of business reflected $118.3 million in paydowns, partially offset by $114.1 million in gross new volume. The net volume decrease is reflective of the low interest rate environment that has increased the competition and lowered the spreads in this line of business.
Spreads
Net interest income for third quarter 2021 was $55.0 million, a $10.3 million increase compared to $44.7 million in the prior-year period, primarily due to a $4.5 million decrease in funding costs, a $2.9 million increase related to new business volume, and a $3.1 million increase in the fair value of derivatives designated in fair value hedge accounting relationships. Net interest yield was 0.94% in third quarter 2021 compared to 0.78% in the prior-year period.
Net effective spread, a non-GAAP measure, for third quarter 2021 was $55.9 million, a $4.1 million increase from $51.8 million in the prior-year period. The $4.1 million year-over-year increase in net effective spread in dollars was primarily due to an increase of $2.9 million from new business volume and a $1.0 million decrease in non-GAAP funding costs. In percentage terms, net effective spread increased 0.03% to 0.99% in third quarter 2021 from the prior-year period.
Earnings
Farmer Mac's net income attributable to common stockholders for third quarter 2021 were $24.3 million ($2.24 per diluted common share), compared to $18.7 million ($1.73 per diluted common share) in the prior-year period. The $5.6 million year-over-year increase in net income attributable to common stockholders was due to an $8.2 million after-tax increase in net interest income, the absence of a $1.7 million after-tax loss on the retirement of preferred stock recorded in the comparable prior period, and a $0.7 million after-tax decrease in the provision for credit losses. These factors were partially offset by a $2.0 million after-tax increase in operating expenses, a $1.4 million after-tax decrease in the fair value of undesignated financial derivatives due to fluctuations in long-term interest rates, and a $1.6 million increase in preferred stock dividends
Farmer Mac enters into financial derivatives transactions to hedge interest rate risks inherent in its business and carries its financial derivatives at fair value in its consolidated financial statements. As these fluctuations are not expected to have a cumulative impact on Farmer Mac's earnings, Farmer Mac uses non-GAAP core earnings as a useful alternative measure to understand the business.
Farmer Mac's non-GAAP core earnings for third quarter 2021 were $27.6 million ($2.55 per diluted common share), compared to $27.7 million ($2.57 per diluted common share) in third quarter 2020. Year-over-year core earnings were approximately equivalent because a $3.3 million after-tax increase in net effective spread and a $0.7 million after-tax decrease in the provision for credit losses, were partially offset by a $2.0 million after-tax increase in operating expenses, a $1.6 million increase in preferred stock dividends, and a $0.3 million after-tax decrease in guarantee fees.
Credit
As of September 30, 2021, the total allowance for losses was $16.8 million, which reflects a $0.3 million provision from June 30, 2021. The provision was primarily attributable to a decline in the economic factor forecast for commodity prices in Farmer Mac's fruit and nuts portfolio. Across all of Farmer Mac's lines of business, allowance for losses represented 0.07% of total outstanding business volume as of September 30, 2021.
As of September 30, 2021, Farmer Mac's 90-day delinquencies were $54.8 million (0.58% of the Farm & Ranch portfolio), compared to $63.1 million (0.70% of the Farm & Ranch portfolio) as of June 30, 2021. Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.24% of total outstanding business volume as of September 30, 2021, compared to 0.28% as of June 30, 2021.
Capital
As of September 30, 2021, Farmer Mac's core capital level was $1.2 billion, which was $479.5 million above the minimum capital level required by our statutory charter. This compares to $1.2 billion as of June 30, 2021, which was $482.6 million above the minimum capital requirement. The decrease in capital in excess of the minimum capital level required was primarily due to an increase in the minimum capital required related to on-balance sheet volume growth. This was partially offset by an increase in core capital due to an increase in retained earnings. Farmer Mac's Tier 1 capital ratio was 15.1% as of September 30, 2021.
Earnings Conference Call Information
The conference call to discuss Farmer Mac's third quarter 2021 financial results will be held beginning at 4:30 p.m. Eastern time on Monday, November 8, and can be accessed by telephone or live webcast as follows:
Telephone (Domestic): (888) 346-2616
Telephone (International): (412) 902-4254
Webcast: https://www.farmermac.com/investors/events-presentations/
When dialing in to the call, please ask for the "Farmer Mac Earnings Conference Call." The call can be heard live and will also be available for replay on Farmer Mac's website for two weeks following the conclusion of the call.
More complete information about Farmer Mac's performance for third quarter 2021 is in Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed today with the SEC.
Use of Non-GAAP Measures
In the accompanying analysis of its financial information, 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 principally differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding 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.
Core earnings and core earnings per share also differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding specified infrequent or unusual transactions that Farmer Mac believes 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, we have excluded from core earnings losses on retirement of preferred stock and the re-measurement of the deferred tax asset.
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. Net effective spread differs from net interest income and net interest yield because it excludes: (1) the amortization of premiums and discounts on assets consolidated at fair value that are amortized as adjustments to yield in interest income over the contractual or estimated remaining lives of the underlying assets; (2) interest income and interest expense related to consolidated trusts with beneficial interests owned by third parties, which are presented on Farmer Mac's consolidated balance sheets as "Loans held for investment in consolidated trusts, at amortized cost"; and (3) the fair value changes of financial derivatives and the corresponding assets or liabilities designated in a fair value hedge accounting relationship.
Net effective spread also principally differs from net interest income and net interest yield because it includes: (1) 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"); and (2) the net effects of terminations or net settlements on financial derivatives. More information about Farmer Mac's use of non-GAAP measures is available in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2020, filed February 25, 2021 with the SEC.
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, and net interest income and net interest yield to net effective spread, see "Reconciliations" below.
Forward-Looking Statements
Management's expectations for Farmer Mac's future necessarily involve assumptions and 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 in this release, including uncertainties about:
- the duration, spread, and severity of the COVID-19 pandemic and its effects on the business operations of agricultural and rural borrowers, the capital markets, and Farmer Mac's business operations;
- the actions taken to address the COVID-19 pandemic, including government actions to mitigate the economic impact of the pandemic, how quickly and to what extent normal economic and operating conditions can resume, the possibility of future disruptions to economic recovery caused by any further outbreaks, regulatory measures or voluntary actions to limit the spread of COVID-19, and the duration and efficacy of any restrictions that may be imposed;
- 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 utilities indebtedness;
- the effect of economic conditions and geopolitics on agricultural mortgage or rural utilities lending, borrower repayment capacity, or collateral values, including fluctuations in interest rates, changes in U.S. trade policies, fluctuations in export demand for U.S. agricultural products, 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 effect of any changes in Farmer Mac's executive leadership; and
- other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather or fluctuations in agricultural real estate values.
Other risk factors are discussed in "Risk Factors" in Part I, Item 1A in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 25, 2021. Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this release. The forward-looking statements contained in this release represent management's expectations as of the date of this release. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements included in this release to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this release is not necessarily indicative of future results.
About Farmer Mac
Farmer Mac is a vital part of the agricultural credit markets and was created to increase access to and reduce the cost of credit for the benefit of American agricultural and rural communities. As the nation's secondary market for agricultural credit, we provide financial solutions to a broad spectrum of the agricultural community, including agricultural lenders, agribusinesses, and other institutions that can benefit from access to flexible, low-cost financing and risk management tools. Farmer Mac's customers benefit from our low cost of funds, low overhead costs, and high operational efficiency. More information about Farmer Mac (including the Annual Report on Form 10-K referenced above) is available on Farmer Mac's website at www.farmermac.com.
|
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(unaudited)
|
|
|
As of
|
|
September 30, 2021
|
|
December 31, 2020
|
|
(in thousands)
|
|
Assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
899,052
|
|
|
$
|
1,033,941
|
|
|
Investment securities:
|
|
|
|
|
Available-for-sale, at fair value (amortized cost of $3,684,066 and $3,843,666, respectively)
|
3,696,204
|
|
|
3,853,692
|
|
|
Held-to-maturity, at amortized cost
|
45,032
|
|
|
45,032
|
|
|
Other investments
|
403
|
|
|
—
|
|
|
Total Investment Securities
|
3,741,639
|
|
|
3,898,724
|
|
|
Farmer Mac Guaranteed Securities:
|
|
|
|
|
Available-for-sale, at fair value (amortized cost of $5,909,989 and $6,594,992, respectively)
|
6,138,759
|
|
|
6,947,701
|
|
|
Held-to-maturity, at amortized cost
|
2,248,303
|
|
|
1,175,792
|
|
|
Total Farmer Mac Guaranteed Securities
|
8,387,062
|
|
|
8,123,493
|
|
|
USDA Securities:
|
|
|
|
|
Trading, at fair value
|
4,793
|
|
|
6,695
|
|
|
Held-to-maturity, at amortized cost
|
2,457,217
|
|
|
2,473,626
|
|
|
Total USDA Securities
|
2,462,010
|
|
|
2,480,321
|
|
|
Loans:
|
|
|
|
|
Loans held for sale, at lower of cost or fair value
|
301,551
|
|
|
—
|
|
|
Loans held for investment, at amortized cost
|
7,758,286
|
|
|
7,261,933
|
|
|
Loans held for investment in consolidated trusts, at amortized cost
|
977,372
|
|
|
1,287,045
|
|
|
Allowance for losses
|
(14,294)
|
|
|
(13,832)
|
|
|
Total loans, net of allowance
|
9,022,915
|
|
|
8,535,146
|
|
|
Financial derivatives, at fair value
|
15,668
|
|
|
17,468
|
|
|
Interest receivable (includes $7,400 and $16,401, respectively, related to consolidated trusts)
|
144,078
|
|
|
186,429
|
|
|
Guarantee and commitment fees receivable
|
39,038
|
|
|
37,113
|
|
|
Deferred tax asset, net
|
11,084
|
|
|
18,321
|
|
|
Prepaid expenses and other assets
|
21,822
|
|
|
24,545
|
|
|
Total Assets
|
$
|
24,744,368
|
|
|
$
|
24,355,501
|
|
|
|
|
|
|
Liabilities and Equity:
|
|
|
|
|
Liabilities:
|
|
|
|
|
Notes payable
|
$
|
22,365,121
|
|
|
$
|
21,848,917
|
|
|
Debt securities of consolidated trusts held by third parties
|
990,961
|
|
|
1,323,786
|
|
|
Financial derivatives, at fair value
|
25,633
|
|
|
29,892
|
|
|
Accrued interest payable (includes $6,550 and $14,370, respectively, related to consolidated trusts)
|
83,263
|
|
|
92,738
|
|
|
Guarantee and commitment obligation
|
37,526
|
|
|
35,535
|
|
|
Accounts payable and accrued expenses
|
42,566
|
|
|
28,879
|
|
|
Reserve for losses
|
2,000
|
|
|
3,277
|
|
|
Total Liabilities
|
23,547,070
|
|
|
23,363,024
|
|
|
Commitments and Contingencies
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred stock:
|
|
|
|
|
Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding
|
73,382
|
|
|
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
|
|
|
—
|
|
|
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, 9,234,778 shares and 9,205,897 shares outstanding, respectively
|
9,235
|
|
|
9,206
|
|
|
Additional paid-in capital
|
124,942
|
|
|
122,899
|
|
|
Accumulated other comprehensive income/(loss), net of tax
|
18,206
|
|
|
(13,923)
|
|
|
Retained earnings
|
558,853
|
|
|
509,560
|
|
|
Total Equity
|
1,197,298
|
|
|
992,477
|
|
|
Total Liabilities and Equity
|
$
|
24,744,368
|
|
|
$
|
24,355,501
|
|
|
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(unaudited)
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
September 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
|
(in thousands, except per share amounts)
|
|
Interest income:
|
|
|
|
|
|
|
|
|
Investments and cash equivalents
|
$
|
4,121
|
|
|
$
|
7,096
|
|
|
$
|
14,107
|
|
|
$
|
35,236
|
|
|
Farmer Mac Guaranteed Securities and USDA Securities
|
38,428
|
|
|
45,335
|
|
|
123,246
|
|
|
178,644
|
|
|
Loans
|
61,923
|
|
|
56,204
|
|
|
181,631
|
|
|
172,230
|
|
|
Total interest income
|
104,472
|
|
|
108,635
|
|
|
318,984
|
|
|
386,110
|
|
|
Total interest expense
|
49,467
|
|
|
63,974
|
|
|
155,599
|
|
|
251,789
|
|
|
Net interest income
|
55,005
|
|
|
44,661
|
|
|
163,385
|
|
|
134,321
|
|
|
Provision for losses
|
(366)
|
|
|
(653)
|
|
|
(518)
|
|
|
(4,542)
|
|
|
Net interest income after provision for losses
|
54,639
|
|
|
44,008
|
|
|
162,867
|
|
|
129,779
|
|
|
Non-interest income/(expense):
|
|
|
|
|
|
|
|
|
Guarantee and commitment fees
|
3,155
|
|
|
3,159
|
|
|
9,182
|
|
|
9,495
|
|
|
Losses on financial derivatives
|
(2,347)
|
|
|
(564)
|
|
|
(1,120)
|
|
|
(3,339)
|
|
|
Gains/(losses) on trading securities
|
37
|
|
|
(258)
|
|
|
(38)
|
|
|
(173)
|
|
|
Gains on sale of available-for-sale investment securities
|
253
|
|
|
—
|
|
|
253
|
|
|
—
|
|
|
Gains on sale of real estate owned
|
—
|
|
|
—
|
|
|
—
|
|
|
485
|
|
|
Release of/(provision for) reserve for losses
|
111
|
|
|
(547)
|
|
|
1,277
|
|
|
(540)
|
|
|
Other income
|
582
|
|
|
594
|
|
|
1,600
|
|
|
2,639
|
|
|
Non-interest income
|
1,791
|
|
|
2,384
|
|
|
11,154
|
|
|
8,567
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
10,027
|
|
|
8,791
|
|
|
31,601
|
|
|
27,005
|
|
|
General and administrative
|
6,330
|
|
|
5,044
|
|
|
19,015
|
|
|
15,702
|
|
|
Regulatory fees
|
750
|
|
|
725
|
|
|
2,250
|
|
|
2,175
|
|
|
Operating expenses
|
17,107
|
|
|
14,560
|
|
|
52,866
|
|
|
44,882
|
|
|
Income before income taxes
|
39,323
|
|
|
31,832
|
|
|
121,155
|
|
|
93,464
|
|
|
Income tax expense
|
8,260
|
|
|
6,340
|
|
|
25,579
|
|
|
19,516
|
|
|
Net income
|
31,063
|
|
|
25,492
|
|
|
95,576
|
|
|
73,948
|
|
|
Preferred stock dividends
|
(6,774)
|
|
|
(5,166)
|
|
|
(17,885)
|
|
|
(12,536)
|
|
|
Loss on retirement of preferred stock
|
—
|
|
|
(1,667)
|
|
|
—
|
|
|
(1,667)
|
|
|
Net income attributable to common stockholders
|
$
|
24,289
|
|
|
$
|
18,659
|
|
|
$
|
77,691
|
|
|
$
|
59,745
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
$
|
2.26
|
|
|
$
|
1.74
|
|
|
$
|
7.22
|
|
|
$
|
5.57
|
|
|
Diluted earnings per common share
|
$
|
2.24
|
|
|
$
|
1.73
|
|
|
$
|
7.17
|
|
|
$
|
5.54
|
|
Reconciliations
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 for the periods indicated:
|
Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
|
|
For the Three Months Ended
|
|
September 30, 2021
|
|
June 30, 2021
|
|
September 30, 2020
|
|
(in thousands, except per share amounts)
|
|
Net income attributable to common stockholders
|
$
|
24,289
|
|
|
$
|
25,444
|
|
|
$
|
18,659
|
|
|
Less reconciling items:
|
|
|
|
|
|
|
Losses on undesignated financial derivatives due to fair value changes
|
(1,864)
|
|
|
(3,721)
|
|
|
(4,149)
|
|
|
Losses on hedging activities due to fair value changes
|
(2,093)
|
|
|
(2,097)
|
|
|
(5,245)
|
|
|
Unrealized gains/(losses) on trading assets
|
36
|
|
|
(61)
|
|
|
(258)
|
|
|
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
23
|
|
|
20
|
|
|
97
|
|
|
Net effects of terminations or net settlements on financial derivatives
|
(351)
|
|
|
109
|
|
|
233
|
|
|
Issuance costs on the retirement of preferred stock
|
—
|
|
|
—
|
|
|
(1,667)
|
|
|
Income tax effect related to reconciling items
|
892
|
|
|
1,208
|
|
|
1,957
|
|
|
Sub-total
|
(3,357)
|
|
|
(4,542)
|
|
|
(9,032)
|
|
|
Core earnings
|
$
|
27,646
|
|
|
$
|
29,986
|
|
|
$
|
27,691
|
|
|
|
|
|
|
|
|
Composition of Core Earnings:
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Net effective spread(1)
|
$
|
55,925
|
|
|
$
|
56,551
|
|
|
$
|
51,802
|
|
|
Guarantee and commitment fees(2)
|
4,322
|
|
|
4,334
|
|
|
4,659
|
|
|
Other(3)
|
687
|
|
|
301
|
|
|
453
|
|
|
Total revenues
|
60,934
|
|
|
61,186
|
|
|
56,914
|
|
|
|
|
|
|
|
|
Credit related expense (GAAP):
|
|
|
|
|
|
|
Provision for/(release of) losses
|
255
|
|
|
(983)
|
|
|
1,200
|
|
|
Total credit related expense
|
255
|
|
|
(983)
|
|
|
1,200
|
|
|
|
|
|
|
|
|
Operating expenses (GAAP):
|
|
|
|
|
|
|
Compensation and employee benefits
|
10,027
|
|
|
9,779
|
|
|
8,791
|
|
|
General and administrative
|
6,330
|
|
|
6,349
|
|
|
5,044
|
|
|
Regulatory fees
|
750
|
|
|
750
|
|
|
725
|
|
|
Total operating expenses
|
17,107
|
|
|
16,878
|
|
|
14,560
|
|
|
|
|
|
|
|
|
Net earnings
|
43,572
|
|
|
45,291
|
|
|
41,154
|
|
|
Income tax expense(4)
|
9,152
|
|
|
9,463
|
|
|
8,297
|
|
|
Preferred stock dividends (GAAP)
|
6,774
|
|
|
5,842
|
|
|
5,166
|
|
|
Core earnings
|
$
|
27,646
|
|
|
$
|
29,986
|
|
|
$
|
27,691
|
|
|
|
|
|
|
|
|
Core earnings per share:
|
|
|
|
|
|
|
Basic
|
$
|
2.57
|
|
|
$
|
2.79
|
|
|
$
|
2.58
|
|
|
Diluted
|
2.55
|
|
|
2.77
|
|
|
2.57
|
|
|
|
|
(1)
|
Net effective spread is a non-GAAP measure. See "Use of Non-GAAP Measures" above for an explanation of net effective spread. See below 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, 2021
|
|
September 30, 2020
|
|
(in thousands, except per share amounts)
|
|
Net income attributable to common stockholders
|
$
|
77,691
|
|
|
$
|
59,745
|
|
|
Less reconciling items:
|
|
|
|
|
Losses on undesignated financial derivatives due to fair value changes
|
(3,890)
|
|
|
(1,933)
|
|
|
Losses on hedging activities due to fair value changes
|
(4,461)
|
|
|
(13,846)
|
|
|
Unrealized losses on trading assets
|
(39)
|
|
|
(173)
|
|
|
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
59
|
|
|
135
|
|
|
Net effects of terminations or net settlements on financial derivatives
|
923
|
|
|
(346)
|
|
|
Issuance costs on the retirement of preferred stock
|
—
|
|
|
(1,667)
|
|
|
Income tax effect related to reconciling items
|
1,556
|
|
|
3,394
|
|
|
Sub-total
|
(5,852)
|
|
|
(14,436)
|
|
|
Core earnings
|
$
|
83,543
|
|
|
$
|
74,181
|
|
|
|
|
|
|
Composition of Core Earnings:
|
|
|
|
|
Revenues:
|
|
|
|
|
Net effective spread(1)
|
$
|
166,335
|
|
|
$
|
142,434
|
|
|
Guarantee and commitment fees(2)
|
12,896
|
|
|
14,498
|
|
|
Other(3)
|
1,439
|
|
|
2,175
|
|
|
Total revenues
|
180,670
|
|
|
159,107
|
|
|
|
|
|
|
Credit related expense (GAAP):
|
|
|
|
|
(Release of)/provision for losses
|
(759)
|
|
|
5,082
|
|
|
Gain on sale of REO
|
—
|
|
|
(485)
|
|
|
Total credit related expense
|
(759)
|
|
|
4,597
|
|
|
|
|
|
|
Operating expenses (GAAP):
|
|
|
|
|
Compensation and employee benefits
|
31,601
|
|
|
27,005
|
|
|
General and administrative
|
19,015
|
|
|
15,702
|
|
|
Regulatory fees
|
2,250
|
|
|
2,175
|
|
|
Total operating expenses
|
52,866
|
|
|
44,882
|
|
|
|
|
|
|
Net earnings
|
128,563
|
|
|
109,628
|
|
|
Income tax expense(4)
|
27,135
|
|
|
22,911
|
|
|
Preferred stock dividends (GAAP)
|
17,885
|
|
|
12,536
|
|
|
Core earnings
|
$
|
83,543
|
|
|
$
|
74,181
|
|
|
|
|
|
|
Core earnings per share:
|
|
|
|
|
Basic
|
$
|
7.77
|
|
|
$
|
6.92
|
|
|
Diluted
|
7.71
|
|
|
6.88
|
|
|
|
|
(1)
|
Net effective spread is a non-GAAP measure. See "Use of Non-GAAP Measures" above for an explanation of net effective spread. See below 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 GAAP Basic Earnings Per Share to Core Earnings Basic Earnings Per Share
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
|
(in thousands, except per share amounts)
|
|
GAAP - Basic EPS
|
$
|
2.26
|
|
|
$
|
2.36
|
|
|
$
|
1.74
|
|
|
$
|
7.22
|
|
|
$
|
5.57
|
|
|
Less reconciling items:
|
|
|
|
|
|
|
|
|
|
|
Losses on undesignated financial derivatives due to fair value changes
|
(0.17)
|
|
|
(0.35)
|
|
|
(0.39)
|
|
|
(0.36)
|
|
|
(0.18)
|
|
|
Losses on hedging activities due to fair value changes
|
(0.19)
|
|
|
(0.19)
|
|
|
(0.49)
|
|
|
(0.42)
|
|
|
(1.29)
|
|
|
Unrealized losses on trading securities
|
—
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
Net effects of terminations or net settlements on financial derivatives
|
(0.03)
|
|
|
0.01
|
|
|
0.02
|
|
|
0.08
|
|
|
(0.03)
|
|
|
Issuance costs on the retirement of preferred stock
|
—
|
|
|
—
|
|
|
(0.15)
|
|
|
—
|
|
|
(0.16)
|
|
|
Income tax effect related to reconciling items
|
0.08
|
|
|
0.11
|
|
|
0.18
|
|
|
0.14
|
|
|
0.32
|
|
|
Sub-total
|
(0.31)
|
|
|
(0.43)
|
|
|
(0.84)
|
|
|
(0.55)
|
|
|
(1.35)
|
|
|
Core Earnings - Basic EPS
|
$
|
2.57
|
|
|
$
|
2.79
|
|
|
$
|
2.58
|
|
|
$
|
7.77
|
|
|
$
|
6.92
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation (GAAP and Core Earnings)
|
10,766
|
|
|
10,763
|
|
|
10,734
|
|
|
10,756
|
|
|
10,725
|
|
|
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,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
|
(in thousands, except per share amounts)
|
|
GAAP - Diluted EPS
|
$
|
2.24
|
|
|
$
|
2.35
|
|
|
$
|
1.73
|
|
|
$
|
7.17
|
|
|
$
|
5.54
|
|
|
Less reconciling items:
|
|
|
|
|
|
|
|
|
|
|
Losses on undesignated financial derivatives due to fair value changes
|
(0.17)
|
|
|
(0.34)
|
|
|
(0.39)
|
|
|
(0.36)
|
|
|
(0.18)
|
|
|
Losses on hedging activities due to fair value changes
|
(0.19)
|
|
|
(0.19)
|
|
|
(0.49)
|
|
|
(0.42)
|
|
|
(1.28)
|
|
|
Unrealized losses on trading securities
|
—
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
—
|
|
|
(0.02)
|
|
|
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
Net effects of terminations or net settlements on financial derivatives
|
(0.03)
|
|
|
0.01
|
|
|
0.02
|
|
|
0.09
|
|
|
(0.03)
|
|
|
Issuance costs on the retirement of preferred stock
|
—
|
|
|
—
|
|
|
(0.15)
|
|
|
—
|
|
|
(0.15)
|
|
|
Income tax effect related to reconciling items
|
0.08
|
|
|
0.11
|
|
|
0.18
|
|
|
0.14
|
|
|
0.31
|
|
|
Sub-total
|
(0.31)
|
|
|
(0.42)
|
|
|
(0.84)
|
|
|
(0.54)
|
|
|
(1.34)
|
|
|
Core Earnings - Diluted EPS
|
$
|
2.55
|
|
|
$
|
2.77
|
|
|
$
|
2.57
|
|
|
$
|
7.71
|
|
|
$
|
6.88
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation (GAAP and Core Earnings)
|
10,842
|
|
|
10,838
|
|
|
10,785
|
|
|
10,834
|
|
|
10,781
|
|
The following table presents a reconciliation of net interest income and net yield to net effective spread for the periods indicated:
|
Reconciliation of GAAP Net Interest Income/Yield to Net Effective Spread
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
September 30,
2021
|
|
June 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
(dollars in thousands)
|
|
Net interest income/yield
|
$
|
55,005
|
|
|
0.94
|
%
|
|
$
|
55,129
|
|
|
0.94
|
%
|
|
$
|
44,661
|
|
|
0.78
|
%
|
|
$
|
163,385
|
|
|
0.93
|
%
|
|
$
|
134,321
|
|
|
0.80
|
%
|
|
Net effects of consolidated trusts
|
(1,167)
|
|
|
0.02
|
%
|
|
(1,337)
|
|
|
0.02
|
%
|
|
(1,500)
|
|
|
0.02
|
%
|
|
(3,713)
|
|
|
0.02
|
%
|
|
(5,003)
|
|
|
0.03
|
%
|
|
Expense related to undesignated financial derivatives
|
117
|
|
|
—
|
%
|
|
970
|
|
|
0.02
|
%
|
|
3,613
|
|
|
0.07
|
%
|
|
3,154
|
|
|
0.02
|
%
|
|
9
|
|
|
—
|
%
|
|
Amortization of premiums/discounts on assets consolidated at fair value
|
(15)
|
|
|
—
|
%
|
|
(13)
|
|
|
—
|
%
|
|
(81)
|
|
|
—
|
%
|
|
(36)
|
|
|
—
|
%
|
|
(92)
|
|
|
—
|
%
|
|
Amortization of losses due to terminations or net settlements on financial derivatives
|
65
|
|
|
—
|
%
|
|
77
|
|
|
—
|
%
|
|
62
|
|
|
—
|
%
|
|
246
|
|
|
—
|
%
|
|
90
|
|
|
—
|
%
|
|
Fair value changes on fair value hedge relationships
|
1,920
|
|
|
0.03
|
%
|
|
1,725
|
|
|
0.03
|
%
|
|
5,047
|
|
|
0.09
|
%
|
|
3,299
|
|
|
0.02
|
%
|
|
13,109
|
|
|
0.09
|
%
|
|
Net effective spread
|
$
|
55,925
|
|
|
0.99
|
%
|
|
$
|
56,551
|
|
|
1.01
|
%
|
|
$
|
51,802
|
|
|
0.96
|
%
|
|
$
|
166,335
|
|
|
0.99
|
%
|
|
$
|
142,434
|
|
|
0.92
|
%
|
The following table presents core earnings for Farmer Mac's reportable operating segments and a reconciliation to consolidated net income for the three months ended September 30, 2021:
|
Core Earnings by Business Segment
|
|
For the Three Months Ended September 30, 2021
|
|
Farm &
Ranch
|
|
USDA
Guarantees
|
|
Rural
Utilities
|
|
Institutional
Credit
|
|
Corporate
|
|
Reconciling
Adjustments
|
|
Consolidated
Net Income
|
|
(in thousands)
|
|
Net interest income
|
$
|
24,893
|
|
|
$
|
6,449
|
|
|
$
|
7,018
|
|
|
$
|
13,707
|
|
|
$
|
2,938
|
|
|
$
|
—
|
|
|
$
|
55,005
|
|
|
Less: reconciling adjustments(1)(2)(3)
|
(526)
|
|
|
398
|
|
|
(554)
|
|
|
1,652
|
|
|
(50)
|
|
|
(920)
|
|
|
—
|
|
|
Net effective spread
|
24,367
|
|
|
6,847
|
|
|
6,464
|
|
|
15,359
|
|
|
2,888
|
|
|
(920)
|
|
|
|
|
Guarantee and commitment fees(2)
|
3,831
|
|
|
166
|
|
|
320
|
|
|
5
|
|
|
—
|
|
|
(1,167)
|
|
|
3,155
|
|
|
Other income/(expense)(3)
|
405
|
|
|
152
|
|
|
2
|
|
|
—
|
|
|
128
|
|
|
(2,162)
|
|
|
(1,475)
|
|
|
Non-interest income/(loss)
|
4,236
|
|
|
318
|
|
|
322
|
|
|
5
|
|
|
128
|
|
|
(3,329)
|
|
|
1,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision for)/release of losses
|
(414)
|
|
|
—
|
|
|
120
|
|
|
(78)
|
|
|
6
|
|
|
—
|
|
|
(366)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Release of reserve for losses
|
91
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111
|
|
|
Other non-interest expense
|
(6,275)
|
|
|
(2,284)
|
|
|
(1,889)
|
|
|
(2,514)
|
|
|
(4,145)
|
|
|
—
|
|
|
(17,107)
|
|
|
Non-interest expense(4)
|
(6,184)
|
|
|
(2,284)
|
|
|
(1,869)
|
|
|
(2,514)
|
|
|
(4,145)
|
|
|
—
|
|
|
(16,996)
|
|
|
Core earnings before income taxes
|
22,005
|
|
|
4,881
|
|
|
5,037
|
|
|
12,772
|
|
|
(1,123)
|
|
|
(4,249)
|
|
(5)
|
39,323
|
|
|
Income tax (expense)/benefit
|
(4,621)
|
|
|
(1,025)
|
|
|
(1,058)
|
|
|
(2,682)
|
|
|
234
|
|
|
892
|
|
|
(8,260)
|
|
|
Core earnings before preferred stock dividends
|
17,384
|
|
|
3,856
|
|
|
3,979
|
|
|
10,090
|
|
|
(889)
|
|
|
(3,357)
|
|
(5)
|
31,063
|
|
|
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,774)
|
|
|
—
|
|
|
(6,774)
|
|
|
Segment core earnings/(losses)
|
$
|
17,384
|
|
|
$
|
3,856
|
|
|
$
|
3,979
|
|
|
$
|
10,090
|
|
|
$
|
(7,663)
|
|
|
$
|
(3,357)
|
|
(5)
|
$
|
24,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at carrying value
|
$
|
6,883,879
|
|
|
$
|
2,522,382
|
|
|
$
|
2,249,071
|
|
|
$
|
8,395,286
|
|
|
$
|
4,693,750
|
|
|
$
|
—
|
|
|
$
|
24,744,368
|
|
|
Total on- and off-balance sheet program assets at principal balance
|
$
|
9,445,359
|
|
|
$
|
2,722,702
|
|
|
$
|
2,817,427
|
|
|
$
|
8,133,303
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,118,791
|
|
|
|
|
(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 on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
|
|
(4)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
|
|
(5)
|
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.
|
Supplemental Information
The following table sets forth information about outstanding volume in each of Farmer Mac's four lines of business as of the dates indicated:
|
Lines of Business - Outstanding Business Volume
|
|
As of September 30, 2021
|
|
As of December 31, 2020
|
|
(in thousands)
|
|
Farm & Ranch:
|
|
|
|
|
Loans
|
$
|
5,800,376
|
|
|
$
|
4,889,393
|
|
|
Loans held in trusts:
|
|
|
|
|
Beneficial interests owned by third party investors
|
977,373
|
|
|
1,287,045
|
|
|
LTSPCs
|
2,607,261
|
|
|
2,325,431
|
|
|
Guaranteed Securities
|
60,349
|
|
|
79,312
|
|
|
USDA Guarantees:
|
|
|
|
|
USDA Securities
|
2,434,582
|
|
|
2,452,964
|
|
|
Farmer Mac Guaranteed USDA Securities
|
288,120
|
|
|
333,754
|
|
|
Rural Utilities:
|
|
|
|
|
Loans
|
2,243,172
|
|
|
2,260,412
|
|
|
LTSPCs
|
574,255
|
|
|
556,425
|
|
|
Institutional Credit
|
|
|
|
|
AgVantage Securities
|
8,133,303
|
|
|
7,739,359
|
|
|
Total
|
$
|
23,118,791
|
|
|
$
|
21,924,095
|
|
The following table presents the quarterly net effective spread by segment:
|
Net Effective Spread by Line of Business
|
|
|
|
Farm &
Ranch
|
|
USDA
Guarantees
|
|
Rural
Utilities
|
|
Institutional
Credit
|
|
Corporate
|
|
Net Effective
Spread
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
(dollars in thousands)
|
|
For the quarter ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2021(1)
|
$
|
24,367
|
|
|
1.74
|
%
|
|
$
|
6,847
|
|
|
1.11
|
%
|
|
$
|
6,464
|
|
|
1.15
|
%
|
|
$
|
15,359
|
|
|
0.81
|
%
|
|
$
|
2,888
|
|
|
0.25
|
%
|
|
$
|
55,925
|
|
|
0.99
|
%
|
|
June 30, 2021
|
23,978
|
|
|
1.82
|
%
|
|
6,982
|
|
|
1.12
|
%
|
|
6,615
|
|
|
1.18
|
%
|
|
16,131
|
|
|
0.85
|
%
|
|
2,845
|
|
|
0.24
|
%
|
|
56,551
|
|
|
1.01
|
%
|
|
March 31, 2021
|
21,454
|
|
|
1.74
|
%
|
|
6,367
|
|
|
1.02
|
%
|
|
6,674
|
|
|
1.19
|
%
|
|
16,673
|
|
|
0.87
|
%
|
|
2,691
|
|
|
0.22
|
%
|
|
53,859
|
|
|
0.97
|
%
|
|
December 31, 2020
|
20,313
|
|
|
1.75
|
%
|
|
6,786
|
|
|
1.10
|
%
|
|
7,322
|
|
|
1.35
|
%
|
|
17,401
|
|
|
0.85
|
%
|
|
2,700
|
|
|
0.22
|
%
|
|
54,522
|
|
|
0.98
|
%
|
|
September 30, 2020
|
18,025
|
|
|
1.67
|
%
|
|
5,865
|
|
|
0.97
|
%
|
|
6,939
|
|
|
1.32
|
%
|
|
18,601
|
|
|
0.87
|
%
|
|
2,372
|
|
|
0.23
|
%
|
|
51,802
|
|
|
0.96
|
%
|
|
June 30, 2020
|
16,733
|
|
|
1.71
|
%
|
|
4,689
|
|
|
0.81
|
%
|
|
5,516
|
|
|
1.15
|
%
|
|
18,782
|
|
|
0.86
|
%
|
|
749
|
|
|
0.08
|
%
|
|
46,469
|
|
|
0.89
|
%
|
|
March 31, 2020
|
14,938
|
|
|
1.64
|
%
|
|
4,625
|
|
|
0.81
|
%
|
|
4,920
|
|
|
1.14
|
%
|
|
17,702
|
|
|
0.84
|
%
|
|
1,978
|
|
|
0.21
|
%
|
|
44,163
|
|
|
0.89
|
%
|
|
December 31, 2019
|
16,374
|
|
|
1.90
|
%
|
|
4,363
|
|
|
0.78
|
%
|
|
4,871
|
|
|
1.17
|
%
|
|
18,008
|
|
|
0.85
|
%
|
|
2,375
|
|
|
0.27
|
%
|
|
45,991
|
|
|
0.95
|
%
|
|
September 30, 2019
|
13,181
|
|
|
1.66
|
%
|
|
4,314
|
|
|
0.79
|
%
|
|
4,502
|
|
|
1.16
|
%
|
|
17,807
|
|
|
0.84
|
%
|
|
2,657
|
|
|
0.30
|
%
|
|
42,461
|
|
|
0.90
|
%
|
|
|
|
(1)
|
See above for a reconciliation of GAAP net interest income by line of business to net effective spread by line of business for the three months ended September 30, 2021.
|
The following table presents quarterly core earnings reconciled to net income attributable to common stockholders:
|
Core Earnings by Quarter Ended
|
|
September
2021
|
|
June
2021
|
|
March
2021
|
|
December
2020
|
|
September
2020
|
|
June
2020
|
|
March
2020
|
|
December
2019
|
|
September
2019
|
|
(in thousands)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net effective spread
|
$
|
55,925
|
|
|
$
|
56,551
|
|
|
$
|
53,859
|
|
|
$
|
54,522
|
|
|
$
|
51,802
|
|
|
$
|
46,469
|
|
|
$
|
44,163
|
|
|
$
|
45,991
|
|
|
$
|
42,461
|
|
|
Guarantee and commitment fees
|
4,322
|
|
|
4,334
|
|
|
4,240
|
|
|
4,652
|
|
|
4,659
|
|
|
4,943
|
|
|
4,896
|
|
|
5,432
|
|
|
5,208
|
|
|
Other
|
687
|
|
|
301
|
|
|
451
|
|
|
512
|
|
|
453
|
|
|
1,048
|
|
|
674
|
|
|
100
|
|
|
389
|
|
|
Total revenues
|
60,934
|
|
|
61,186
|
|
|
58,550
|
|
|
59,686
|
|
|
56,914
|
|
|
52,460
|
|
|
49,733
|
|
|
51,523
|
|
|
48,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit related expense/(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for/(release of) losses
|
255
|
|
|
(983)
|
|
|
(31)
|
|
|
2,973
|
|
|
1,200
|
|
|
51
|
|
|
3,831
|
|
|
2,851
|
|
|
623
|
|
|
REO operating expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Losses/(gains) on sale of REO
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
(485)
|
|
|
—
|
|
|
—
|
|
|
Total credit related expense/(income)
|
255
|
|
|
(983)
|
|
|
(31)
|
|
|
2,995
|
|
|
1,200
|
|
|
51
|
|
|
3,346
|
|
|
2,851
|
|
|
623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
10,027
|
|
|
9,779
|
|
|
11,795
|
|
|
9,497
|
|
|
8,791
|
|
|
8,087
|
|
|
10,127
|
|
|
6,732
|
|
|
7,654
|
|
|
General and administrative
|
6,330
|
|
|
6,349
|
|
|
6,336
|
|
|
6,274
|
|
|
5,044
|
|
|
5,295
|
|
|
5,363
|
|
|
5,773
|
|
|
5,253
|
|
|
Regulatory fees
|
750
|
|
|
750
|
|
|
750
|
|
|
750
|
|
|
725
|
|
|
725
|
|
|
725
|
|
|
725
|
|
|
688
|
|
|
Total operating expenses
|
17,107
|
|
|
16,878
|
|
|
18,881
|
|
|
16,521
|
|
|
14,560
|
|
|
14,107
|
|
|
16,215
|
|
|
13,230
|
|
|
13,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
43,572
|
|
|
45,291
|
|
|
39,700
|
|
|
40,170
|
|
|
41,154
|
|
|
38,302
|
|
|
30,172
|
|
|
35,442
|
|
|
33,840
|
|
|
Income tax expense
|
9,152
|
|
|
9,463
|
|
|
8,520
|
|
|
8,470
|
|
|
8,297
|
|
|
8,016
|
|
|
6,598
|
|
|
7,526
|
|
|
7,018
|
|
|
Preferred stock dividends
|
6,774
|
|
|
5,842
|
|
|
5,269
|
|
|
5,269
|
|
|
5,166
|
|
|
3,939
|
|
|
3,431
|
|
|
3,432
|
|
|
3,427
|
|
|
Core earnings
|
$
|
27,646
|
|
|
$
|
29,986
|
|
|
$
|
25,911
|
|
|
$
|
26,431
|
|
|
$
|
27,691
|
|
|
$
|
26,347
|
|
|
$
|
20,143
|
|
|
$
|
24,484
|
|
|
$
|
23,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on undesignated financial derivatives due to fair value changes
|
$
|
(1,864)
|
|
|
$
|
(3,721)
|
|
|
$
|
1,695
|
|
|
$
|
(1,758)
|
|
|
$
|
(4,149)
|
|
|
$
|
8,700
|
|
|
$
|
(6,484)
|
|
|
$
|
4,469
|
|
|
$
|
(7,117)
|
|
|
(Losses)/gains on hedging activities due to fair value changes
|
(2,093)
|
|
|
(2,097)
|
|
|
(271)
|
|
|
3,827
|
|
|
(5,245)
|
|
|
(2,676)
|
|
|
(5,925)
|
|
|
(220)
|
|
|
(4,535)
|
|
|
Unrealized gains/(losses) on trading assets
|
36
|
|
|
(61)
|
|
|
(14)
|
|
|
223
|
|
|
(258)
|
|
|
(20)
|
|
|
106
|
|
|
172
|
|
|
49
|
|
|
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
23
|
|
|
20
|
|
|
16
|
|
|
(77)
|
|
|
97
|
|
|
35
|
|
|
3
|
|
|
40
|
|
|
(7)
|
|
|
Net effects of terminations or net settlements on financial derivatives
|
(351)
|
|
|
109
|
|
|
1,165
|
|
|
1,583
|
|
|
233
|
|
|
720
|
|
|
(1,300)
|
|
|
1,339
|
|
|
232
|
|
|
Issuance costs on the retirement of preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,667)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Income tax effect related to reconciling items
|
892
|
|
|
1,208
|
|
|
(544)
|
|
|
(798)
|
|
|
1,957
|
|
|
(1,419)
|
|
|
2,856
|
|
|
(1,218)
|
|
|
2,389
|
|
|
Net income attributable to common stockholders
|
$
|
24,289
|
|
|
$
|
25,444
|
|
|
$
|
27,958
|
|
|
$
|
29,431
|
|
|
$
|
18,659
|
|
|
$
|
31,687
|
|
|
$
|
9,399
|
|
|
$
|
29,066
|
|
|
$
|
14,406
|
|
View original content to download multimedia:https://www.prnewswire.com/news-releases/farmer-mac-reports-third-quarter-2021-results-301418993.html
SOURCE Farmer Mac
