WASHINGTON, Feb. 21, 2019 /PRNewswire/ -- The Federal
Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and
AGM.A), the nation's largest secondary market provider that
increases the availability and affordability of credit for the
benefit of rural America, today announced its results for the
quarter and fiscal year ended December 31,
2018.
2018 Highlights
- Net income attributable to common stockholders grew 33%
year-over-year to $94.9 million, or
$8.83 per diluted common share
- Core earnings, a non-GAAP measure, increased 28% year-over-year
to $84.0 million, or $7.82 per diluted common share
- Added $5.2 billion of gross
business volume, resulting in net growth of $717.2 million
- Net interest income increased 11% from the prior year to
$174.4 million
- Net effective spread, a non-GAAP measure, increased 7% from the
prior year to $151.2 million
- 90-day delinquencies were 0.37% of the $7.2 billion Farm & Ranch portfolio as of
December 31, 2018, compared to 0.71%
as of December 31, 2017
Subsequent to December 31,
2018
- Entered into a master participation agreement with CoBank on
February 13, 2019
-
- Purchased a portfolio of participations in seasoned Rural
Utilities loans in the amount of $546
million on February 19,
2019
- Represents Farmer Mac's first direct loan participation
purchase with CoBank
- On February 19, 2019, Farmer
Mac's board of directors declared a quarterly dividend of
$0.70 per common share for first
quarter 2019
-
- Reflects an increase of $0.12 per
common share, or 21%, over the quarterly dividend payout in
2018
- Board of directors increased our common stock dividend payout
target, as a percentage of annual core earnings, from 30% for 2018
to 35% for 2019 and beyond
"Farmer Mac reported another year of strong earnings growth in
2018 and also announced notable developments for 2019," said
President and Chief Executive Officer Brad
Nordholm. "We are very confident in the strength of
our business outlook and our future earnings prospects, as
demonstrated by our decision to increase our dividend by more than
twenty percent for first quarter 2019. We also announced a
significant purchase of seasoned rural utilities loan
participations, which reflects the first time we've done this type
of business with CoBank. This is an important step forward in
serving our mission to rural America."
Fiscal Year 2018 Results
Business Volume
During 2018, Farmer Mac added $5.2
billion of gross new business volume. Specifically, in 2018,
Farmer Mac:
- purchased $3.0 billion of
AgVantage securities;
- renewed a $300.0 million
revolving floating rate AgVantage facility;
- purchased $960.8 million of newly
originated Farm & Ranch loans;
- added $430.1 million of Farm
& Ranch loans under LTSPCs;
- purchased $332.3 million of USDA
Securities;
- issued $127.9 million of Farmer
Mac Guaranteed USDA Securities; and
- purchased $11.6 million of Rural
Utilities loans.
After $4.5 billion of maturities
and principal paydowns on existing business during 2018, Farmer
Mac's outstanding business volume increased by $717.2 million from December 31, 2017 to $19.7
billion as of December 31,
2018.
This increase was driven by net growth of $477.9 million in the Institutional Credit line
of business, net growth of $366.4
million in the Farm & Ranch line of business, and net
growth of $163.4 million in the
USDA Guarantees line of business. The net growth in these lines of
business were partially offset by a net business volume decline in
the Rural Utilities line of business of $290.5 million.
We achieved net growth of $477.9
million in our Institutional Credit line of business during
2018, as $3.3 billion of new
business volume was offset in part by $2.8 billion of maturities and repayments.
The new business consisted of: (1) $800.0 million of new
AgVantage securities purchased; (2) $2.2
billion in refinances of maturing AgVantage securities; and
(3) the renewal of a $300.0 million
revolving floating rate AgVantage facility. The maturities
and repayments consisted of $2.5
billion of repayments on and maturities of AgVantage
securities and the expiration of the $300.0
million revolving floating rate AgVantage facility that was
renewed during fourth quarter.
Our Farm & Ranch line of business experienced net growth of
$366.4 million during 2018
attributable to $960.8 million of new
loans purchased and $430.1 million of
new LTSPCs, offset in part by loan repayments of $571.1 million and LTSPC repayments of
$435.4 million. Net growth in Farm
& Ranch loan purchases decreased by $294.7 million during 2018 compared to 2017,
primarily due to fewer opportunities to purchase large loans in
amounts greater than $15.0 million
compared to 2017. We believe that this could be due to fewer
eligible borrowers that are able to secure financing of that size,
as well as potentially increased pricing competition for the
highest credit quality borrowers of these larger loans. Also,
increases in interest rates have reduced the demand for refinances
in 2018 compared to 2017. Based on our analysis of bank and FCS
call report data, there was a decline in the growth of the overall
agricultural mortgage market in 2018. Nevertheless, we believe that
our relative share of the overall agricultural mortgage market
during 2018 remained consistent with prior years and that our net
growth of 9.3% in Farm & Ranch loan purchases compared
favorably to the 4.9% net growth of the overall agricultural
mortgage loan market based on a review of bank and FCS call report
data as of September 30, 2018. Net
growth in Farm & Ranch loans added under LTSPCs decreased by
$67.2 million during 2018
compared to 2017 primarily due to the absence in 2018 of some
customers that added large pools of loans under LTSPCs to
restructure their credit risk profile, which occurred in 2017.
Our USDA Guarantees line of business experienced net growth of
$163.4 million during 2018, as
$460.1 million of new business volume
was offset in part by $296.7 million of maturities and
repayments. The new business consisted of $332.3 million of new USDA Securities purchased
and the issuance of $127.9 million of
Farmer Mac Guaranteed USDA Securities. The repayments and
maturities consisted of $282.3
million of repayments on maturing USDA Securities and
$14.3 million of repayments on USDA
Securities underlying Farmer Mac Guaranteed USDA Securities.
Outstanding business volume in our Rural Utilities line of
business decreased by $290.5 million
during 2018, primarily due to repayments on loans held and loans
underlying LTSPCs. Capital expenditures have declined in the
rural utilities industry, which we believe has decreased the
overall demand for credit.
Spreads
Net interest income was $174.4
million for 2018, an 11% increase from $157.6 million in 2017. This increase was
primarily driven by net growth in on-balance sheet AgVantage
securities, Farm & Ranch loans, and USDA Securities, which
contributed to a $10.1 million
increase in net interest income. Fair value changes on financial
derivatives and corresponding financial assets and liabilities in
fair value hedge relationships also contributed $4.9 million in net interest income during
2018. The overall net interest yield was 0.96% for 2018,
compared to 0.94% for 2017.
Net effective spread, a non-GAAP measure, was $151.2 million for 2018, a 7% increase from
$141.3 million in 2017. The
improvement was primarily due to growth in outstanding business
volume, which increased net effective spread by approximately
$10.1 million, and a
$1.5 million increase in the amount
of cash basis interest income received from non-accrual Farm &
Ranch loans. In percentage terms, net effective spread was
0.91% for both 2018 and 2017.
Earnings
Farmer Mac's net income attributable to common stockholders for
2018 was $94.9 million ($8.83 per diluted common share), a 33% increase
from $71.3 million ($6.60 per diluted common share) in 2017.
This increase was primarily due to an $18.4
million decrease in income tax expense due to the reduction
in the federal corporate income tax rate resulting from the
enactment of new federal tax legislation in December 2017,
and a $13.3 million after-tax
increase in net interest income. These increases were
partially offset by: (1) an increase of $3.5
million in net after-tax losses on our financial derivatives
and hedging activities; (2) an increase in general and
administrative ("G&A") expenses of $3.0
million after-tax; and (3) an increase in compensation and
benefits expenses of $2.6 million
after-tax.
G&A expenses and compensation and employee benefits expenses
increased by $7.0 million, or 17.5%,
in 2018 compared to 2017. Farmer Mac previously disclosed its
expectation that these expenses would increase by approximately
15%, or $6.0 million, in 2018
compared to 2017. The incremental $1.0
million increase in these expenses compared to the original
expectation was primarily due to nonrecurring hiring expenses of
$0.6 million, primarily related to
the search process for Farmer Mac's current President and Chief
Executive Officer and two other key hires.
Farmer Mac's non-GAAP core earnings for 2018 were $84.0 million ($7.82 per diluted common share), a 28% increase
from $65.6 million ($6.08 per diluted common share) in 2017.
The $18.4 million increase in core
earnings for 2018 compared to 2017 was primarily due to a
$16.8 million decrease in income tax
expense resulting from the lower federal corporate income tax rate
and a $7.8 million after-tax
increase in net effective spread resulting primarily from an
increase in outstanding business volume. The increases to core
earnings were partially offset by a $3.0
million after-tax increase in G&A expenses related to
continued investments in technology and business infrastructure and
a $2.6 million after-tax increase in
compensation and employee benefits expenses.
See "Use of Non-GAAP Measures" below for more information about
core earnings, core earnings per share, and net effective spread
and for reconciliations of the comparable GAAP measures to these
non-GAAP measures.
Fourth Quarter 2018 Results
Business Volume
During fourth quarter 2018, Farmer Mac added $1.0 billion of gross new business volume.
Specifically, in fourth quarter 2018, Farmer Mac:
- purchased $585.8 million of
AgVantage securities;
- purchased $285.0 million of newly
originated Farm & Ranch loans;
- added $80.8 million of Farm &
Ranch loans under LTSPCs;
- purchased $68.1 million of USDA
Securities;
- issued $22.2 million of Farmer
Mac Guaranteed USDA Securities; and
- purchased $3.0 million of Rural
Utilities loans.
After $861.0 million of maturities
and principal paydowns on existing business during fourth quarter
2018, Farmer Mac's outstanding business volume increased by
$183.9 million from September 30, 2018 to $19.7 billion as of December 31, 2018. This increase was driven by
net growth of $167.7 million in Farm
& Ranch loan purchases, $44.4
million in the USDA Securities line of business, and
$17.5 million in net new
Institutional Credit business from financial fund
counterparties.
Our Farm & Ranch line of business experienced net growth of
$162.0 million during fourth quarter
2018 attributable to $285.0 million
of new loans purchased and $80.8
million of new LTSPCs, offset in part by loan repayments of
$117.3 million and LTSPC repayments
of $86.6 million.
Net growth in Farm & Ranch loan purchases of $167.7 million increased 29% from fourth quarter
2017 primarily due to an increase in borrower demand for long-term
financing amidst uncertainty in a rising interest rate environment.
Farmer Mac also purchased a large loan over $50 million and retained a $38 million portion.
Net growth in Farm & Ranch loans added under LTSPCs
decreased by $5.7 million during
fourth quarter 2018.
Our USDA Guarantees line of business experienced net growth of
$44.4 million during fourth quarter
2018, as $90.3 million of new
business volume was offset in part by $45.9 million of maturities and repayments.
The new business was comprised of $68.1
million of new USDA Securities purchased and the issuance of
$22.2 million of Farmer Mac
Guaranteed USDA Securities. The repayments and maturities
consisted of $44.7 million of
repayments on USDA Securities and $1.2
million of repayments on maturing USDA Securities underlying
Farmer Mac Guaranteed USDA Securities.
Our Institutional Credit line of business achieved net growth of
$17.5 million during fourth quarter
2018 attributable to (1) $33.3
million of new AgVantage securities purchased (from
financial fund counterparties); and (2) $500.0 million in refinances of maturing
AgVantage securities. These purchases were offset in part by
$515.7 million of amortization of
existing AgVantage securities and repayments on maturing AgVantage
securities.
Outstanding business volume in our Rural Utilities line of
business decreased by $39.9 million
during fourth quarter 2018, primarily due to repayments on maturing
loans held and loans underlying LTSPCs.
Spreads
Net interest income for fourth quarter 2018 was $42.2 million, compared to $41.3 million in the prior year period. The
increase was primarily driven by net growth in on-balance sheet
AgVantage securities, Farm & Ranch loans, and USDA
Securities. Net interest yield was 0.93% for fourth quarter
2018, a modest decrease from 0.94% in fourth quarter 2017. This was
primarily due to fair value changes on financial derivatives and
corresponding financial assets and liabilities in fair value hedge
relationships.
Net effective spread, a non-GAAP measure, for fourth quarter
2018 was $38.9 million, a
$1.4 million increase from
$37.5 million in the prior year
period. This increase was primarily attributable to growth in
outstanding business volume, which increased net effective spread
by approximately $1.9 million.
In percentage terms, net effective spread was 0.93% for both fourth
quarter 2018 and fourth quarter 2017.
Earnings
Farmer Mac's net income attributable to common stockholders for
fourth quarter 2018 was $19.6 million
($1.82 per diluted common share), a
17% increase from $16.7 million
($1.55 per diluted common share) in
fourth quarter 2017. The $2.9
million increase was driven by a $7.1
million decrease in income tax expense primarily resulting
from the lower federal corporate income tax rate and a $0.7 million after-tax increase in net interest
income resulting primarily from an increase in outstanding business
volume. These were partially offset by a $2.8 million after-tax increase in
non-interest operating expenses related to higher compensation and
employee benefits expenses and higher G&A expenses.
Farmer Mac's non-GAAP core earnings for fourth quarter 2018 was
$20.5 million ($1.90 per diluted common share), a 14% increase
from $17.9 million ($1.65 per diluted common share) in fourth quarter
2017. The $2.6 million
year-over-year increase in core earnings was primarily due to a
$5.4 million decrease in income tax
expense primarily resulting from the lower federal corporate income
tax rate and a $1.0 million
after-tax increase in net effective spread primarily resulting from
an increase in outstanding business volume. These increases
to core earnings were partially offset by a $1.2 million after-tax increase in G&A
expenses related to continued investments in technology and
business infrastructure and a $1.4
million after-tax increase in compensation and employee
benefits expenses. Significantly contributing to the increase in
compensation expense was the absence in 2018 of the recoupment of
approximately $1.1 million after-tax
in compensation costs related to the forfeiture of unvested equity
awards and annual variable incentive compensation resulting from
the termination of employment of Farmer Mac's former President and
Chief Executive Officer in December
2017.
Credit
Our overall credit quality improved during 2018 compared to
2017. Our total provision for losses and our 90-day
delinquencies each decreased year-over-year, while our total
allowance for losses and substandard assets as a percent of our
Farm & Ranch portfolio each remained the same. While we
expect that over time our 90-day delinquency and substandard assets
rates will revert closer to Farmer Mac's historical averages, our
overall credit quality did not deteriorate in 2018 compared to 2017
because borrowers had sufficient capacity to meet their financial
obligations.
Farmer Mac's total provision for losses recorded in 2018 was
$0.3 million, compared to
$1.8 million in 2017, which reflects
a decrease of $1.5 million
year-over-year.
In the Farm & Ranch portfolio, 90-day delinquencies
were $26.9 million (0.37% of the Farm
& Ranch portfolio) as of December 31,
2018, compared to $48.4
million (0.71% of the Farm & Ranch portfolio) as of
December 31, 2017. The
year-over-year decrease is primarily due to two permanent planting
loans to one borrower in the aggregate amount of $15.3 million that became current during
2018.
There are currently no delinquent AgVantage securities or Rural
Utilities loans held or underlying LTSPCs, and USDA Securities are
backed by the full faith and credit of the United States. Across all of Farmer Mac's
lines of business, 90-day delinquencies represented 0.14% of total
business volume as of December 31,
2018, compared to 0.25% as of December 31, 2017.
As of December 31, 2018, Farmer
Mac's substandard assets were $232.7
million (3.2% of the Farm & Ranch portfolio), compared
to $221.3 million (3.2% of the Farm
& Ranch portfolio) as of December
31, 2017. The $11.4 million increase in substandard assets
was entirely due to growth in our total Farm & Ranch portfolio,
while the proportion of our substandard assets to the overall Farm
& Ranch portfolio remained the same as in 2017.
Farmer Mac's 90-day delinquencies rate and substandard assets
rate during 2018 each remained below Farmer Mac's historical
averages of 1.0% and 4.0%, respectively.
Capital
Farmer Mac's core capital, which excludes accumulated other
comprehensive income, totaled $727.6
million as of December 31,
2018, exceeding the statutory minimum capital requirement by
34%, or $182.6 million. This
compares to $657.1 million as of
December 31, 2017, exceeding the
statutory minimum capital requirement by 26%, or $136.8 million. Farmer Mac's Tier-1 capital ratio
was 13.4% as of December 31, 2018,
compared to 12.6% as of December 31,
2017. The increase in core capital was due primarily to an
increase in retained earnings.
Dividends
On February 19, 2019, Farmer Mac's
board of directors declared a quarterly dividend of $0.70 per share on all three classes of common
stock. This is an increase of $0.12 per common share, or 21%, over the
quarterly dividend payout in 2018 and reflects the board's
authorization to increase Farmer Mac's common stock dividend payout
target as a percentage of annual core earnings from 30% for 2018 to
35% for 2019 and beyond. This is the eighth consecutive year
that Farmer Mac has increased its quarterly common stock dividend,
which has grown from $0.05 per share
in 2011 to $0.70 per share in first
quarter 2019. In deciding to increase Farmer Mac's common
stock dividend and payout target, the board of directors considered
our strong capital position and the consistency of and outlook for
our earnings, balanced against the need for capital to fund the
significant growth objectives identified in our strategic plan and
to meet regulatory requirements and metrics established by our
board of directors. These actions are also consistent with
Farmer Mac's goal of providing a competitive return on its common
stockholders' investments through the payment of cash dividends.
Our payout ratio of core earnings is also now more in line with
those of our financial institution peers within the S&P
Financial Index and NASDAQ Bank Index, many of which have
significantly increased their common stock dividends during the
past two years.
The $0.70 per share dividend
declared on each of Farmer Mac's three classes of common stock –
Class A voting common stock (NYSE: AGM.A), Class B voting common
stock (not listed on any exchange), and Class C non-voting common
stock (NYSE: AGM) – will be payable on March
29, 2019 to holders of record of common stock as of
March 15, 2019.
Farmer Mac's board of directors also declared a dividend on each
of Farmer Mac's three classes of preferred stock. The
quarterly dividend of $0.3672 per
share of 5.875% Non-Cumulative Preferred Stock, Series A (NYSE:
AGM.PR.A), $0.4297 per share of
6.875% Non-Cumulative Preferred Stock, Series B (NYSE: AGM.PR.B),
and $0.375 per share of 6.000%
Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
(NYSE: AGM.PR.C), is for the period from but not including
January 17, 2019 to and including
April 17, 2019. The preferred
dividends will be payable on April 17,
2019 to holders of record as of April
2, 2019.
Earnings Conference Call Information
The conference call to discuss Farmer Mac's 2018 financial
results will be held beginning at 11:00 a.m.
eastern time on Thursday, February 21, 2019 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/
Presentation materials to be referenced during the call will be
posted on the webpage that can be accessed by clicking on the link
noted above. 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
fourth quarter and full year 2018 is in Farmer Mac's Annual Report
on Form 10-K for the year ended December 31,
2018 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.
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) beginning
January 1, 2018, the fair value
changes of financial derivatives and the corresponding assets or
liabilities designated in a fair value hedge 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
relationships ("undesignated financial derivatives"); and (2)
effective in fourth quarter 2017, the net effects of terminations
or net settlements on financial derivatives and hedging activities.
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, 2018 filed today 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 the "Reconciliations"
section 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 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 the agricultural or rural
utilities industries;
- fluctuations in the fair value of assets held by Farmer Mac and
its subsidiaries;
- the rate and direction of development of the secondary market
for agricultural mortgage and rural utilities loans, including
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, including the effects of
drought and other weather-related conditions and fluctuations in
agricultural real estate values, on agricultural mortgage lending
and borrower repayment capacity;
- the effect of any changes in Farmer Mac's executive
leadership;
- developments in the financial markets, including possible
investor, analyst, and rating agency reactions to events involving
government-sponsored enterprises, including Farmer Mac;
- changes in the level and direction of interest rates, which
could, among other things, affect the value of collateral securing
Farmer Mac's agricultural mortgage loan assets;
- the degree to which Farmer Mac is exposed to basis risk, which
results from fluctuations in Farmer Mac's borrowing costs relative
to market indexes; and
- volatility in commodity prices relative to costs of production,
changes in U.S. trade policies, or fluctuations in export demand
for U.S. agricultural products.
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, 2018. 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 mandated by the SEC. 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 works to increase the availability
and affordability of credit for the benefit of American
agricultural and rural communities. As the nation's largest
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. In fact, we are often able to provide the
lowest cost of borrowing to agricultural and rural borrowers. For
more than thirty years, Farmer Mac has been delivering the capital
and commitment rural America deserves. 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
|
|
|
|
|
|
|
|
As of
|
|
|
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
(in
thousands)
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
425,256
|
|
|
$
|
302,022
|
|
|
Investment
securities
|
|
|
|
|
|
|
|
|
Available-for-sale, at
fair value
|
|
2,217,852
|
|
|
|
2,215,405
|
|
|
Held-to-maturity, at
amortized cost
|
|
45,032
|
|
|
|
45,032
|
|
|
Total
Investment Securities
|
|
2,262,884
|
|
|
|
2,260,437
|
|
|
Farmer Mac Guaranteed
Securities
|
|
|
|
|
|
|
|
|
Available-for-sale, at
fair value
|
|
5,974,497
|
|
|
|
5,471,914
|
|
|
Held-to-maturity, at
amortized cost
|
|
2,096,618
|
|
|
|
2,126,274
|
|
|
Total
Farmer Mac Guaranteed Securities
|
|
8,071,115
|
|
|
|
7,598,188
|
|
|
USDA
Securities
|
|
|
|
|
|
|
|
|
Trading, at fair
value
|
|
9,999
|
|
|
|
13,515
|
|
|
Held-to-maturity, at
amortized cost
|
|
2,166,174
|
|
|
|
2,117,850
|
|
|
Total
USDA Securities
|
|
2,176,173
|
|
|
|
2,131,365
|
|
|
Loans:
|
|
|
|
|
|
|
|
|
|
|
Loans held for
investment, at amortized cost
|
|
4,004,968
|
|
|
|
3,873,755
|
|
|
Loans held for
investment in consolidated trusts, at amortized cost
|
|
1,517,101
|
|
|
|
1,399,827
|
|
|
Allowance for loan
losses
|
|
(7,017)
|
|
|
|
(6,796)
|
|
|
Total
loans, net of allowance
|
|
5,515,052
|
|
|
|
5,266,786
|
|
|
Real estate owned, at
lower of cost or fair value
|
|
128
|
|
|
|
139
|
|
|
Financial
derivatives, at fair value
|
|
7,487
|
|
|
|
7,093
|
|
|
Interest receivable
(includes $19,783 and $17,373, respectively, related to
consolidated trusts)
|
|
180,080
|
|
|
|
155,278
|
|
|
Guarantee and
commitment fees receivable
|
|
40,366
|
|
|
|
39,895
|
|
|
Deferred tax asset,
net
|
|
6,369
|
|
|
|
2,048
|
|
|
Prepaid expenses and
other assets
|
|
9,418
|
|
|
|
29,023
|
|
Total Assets
|
$
|
18,694,328
|
|
|
$
|
17,792,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity:
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable:
|
|
|
|
|
|
|
|
|
Due within one
year
|
$
|
7,757,050
|
|
|
$
|
8,089,826
|
|
|
Due after one
year
|
|
8,486,647
|
|
|
|
7,432,790
|
|
|
Total
notes payable
|
|
16,243,697
|
|
|
|
15,522,616
|
|
|
Debt securities of
consolidated trusts held by third parties
|
|
1,528,957
|
|
|
|
1,404,945
|
|
|
Financial
derivatives, at fair value
|
|
19,633
|
|
|
|
26,599
|
|
|
Accrued interest
payable (includes $17,125 and $14,631, respectively, related to
consolidated trusts)
|
|
96,743
|
|
|
|
75,402
|
|
|
Guarantee and
commitment obligation
|
|
38,683
|
|
|
|
38,400
|
|
|
Accounts payable and
accrued expenses
|
|
11,891
|
|
|
|
14,096
|
|
|
Deferred tax
liability, net
|
|
—
|
|
|
|
—
|
|
|
Reserve for
losses
|
|
2,167
|
|
|
|
2,070
|
|
Total
Liabilities
|
|
17,941,771
|
|
|
|
17,084,128
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
stock:
|
|
|
|
|
|
|
|
|
Series A, par value $25
per share, 2,400,000 shares authorized, issued and
outstanding
|
|
58,333
|
|
|
|
58,333
|
|
|
Series B, par value $25
per share, 3,000,000 shares authorized, issued and
outstanding
|
|
73,044
|
|
|
|
73,044
|
|
|
Series C, par value $25
per share, 3,000,000 shares authorized, issued and
outstanding
|
|
73,382
|
|
|
|
73,382
|
|
|
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, 9,137,550 shares and 9,087,670
shares
outstanding, respectively
|
|
9,138
|
|
|
|
9,088
|
|
|
Additional paid-in
capital
|
|
118,822
|
|
|
|
118,979
|
|
|
Accumulated other
comprehensive income, net of tax
|
|
24,956
|
|
|
|
51,085
|
|
|
Retained
earnings
|
|
393,351
|
|
|
|
322,704
|
|
|
Total Equity
|
|
752,557
|
|
|
|
708,146
|
|
|
Total
Liabilities and Equity
|
$
|
18,694,328
|
|
|
$
|
17,792,274
|
|
FEDERAL
AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
For the Three Months
Ended
|
|
For the Year
Ended
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
(in thousands, except per share amounts)
|
Interest
income:
|
|
|
|
|
|
|
|
Investments and cash
equivalents
|
$
|
16,498
|
|
|
$
|
9,752
|
|
|
$
|
55,179
|
|
|
$
|
34,586
|
|
Farmer Mac Guaranteed
Securities and USDA Securities
|
|
77,474
|
|
|
|
56,818
|
|
|
|
290,953
|
|
|
|
203,796
|
|
Loans
|
|
52,481
|
|
|
|
44,801
|
|
|
|
198,152
|
|
|
|
162,150
|
|
Total
interest income
|
|
146,453
|
|
|
|
111,371
|
|
|
|
544,284
|
|
|
|
400,532
|
|
Total interest
expense
|
|
104,237
|
|
|
|
70,088
|
|
|
|
369,848
|
|
|
|
242,885
|
|
Net
interest income
|
|
42,216
|
|
|
|
41,283
|
|
|
|
174,436
|
|
|
|
157,647
|
|
Provision for loan
losses
|
|
(146)
|
|
|
|
(474)
|
|
|
|
(238)
|
|
|
|
(1,708)
|
|
Net
interest income after provision for loan losses
|
|
42,070
|
|
|
|
40,809
|
|
|
|
174,198
|
|
|
|
155,939
|
|
Non-interest
income:
|
|
|
|
|
|
|
|
|
Guarantee and
commitment fees
|
|
3,506
|
|
|
|
3,484
|
|
|
|
13,976
|
|
|
|
14,114
|
|
|
(Losses)/gains on
financial derivatives and hedging activities
|
|
(2,999)
|
|
|
|
(1,777)
|
|
|
|
(3,687)
|
|
|
|
753
|
|
|
Gains/(losses) on
trading securities
|
|
57
|
|
|
|
60
|
|
|
|
81
|
|
|
|
(24)
|
|
|
Gains on sale of
available-for-sale investment securities
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
89
|
|
|
Gains/(losses) on
sale of real estate owned
|
|
—
|
|
|
|
964
|
|
|
|
(7)
|
|
|
|
1,748
|
|
|
Other
income/(loss)
|
|
118
|
|
|
|
(58)
|
|
|
|
1,377
|
|
|
|
832
|
|
|
|
Non-interest
income
|
|
682
|
|
|
|
2,673
|
|
|
|
11,740
|
|
|
|
17,512
|
|
Non-interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
7,167
|
|
|
|
5,247
|
|
|
|
27,534
|
|
|
|
24,233
|
|
|
General and
administrative
|
|
5,829
|
|
|
|
4,348
|
|
|
|
19,707
|
|
|
|
15,959
|
|
|
Regulatory
fees
|
|
687
|
|
|
|
625
|
|
|
|
2,562
|
|
|
|
2,500
|
|
|
Real estate owned
operating costs, net
|
|
—
|
|
|
|
—
|
|
|
|
16
|
|
|
|
23
|
|
|
Provision
for/(release of) reserve for losses
|
|
20
|
|
|
|
(10)
|
|
|
|
97
|
|
|
|
50
|
|
|
|
Non-interest
expense
|
|
13,703
|
|
|
|
10,210
|
|
|
|
49,916
|
|
|
|
42,765
|
|
|
|
Income before income
taxes
|
|
29,049
|
|
|
|
33,272
|
|
|
|
136,022
|
|
|
|
130,686
|
|
Income tax
expense
|
|
6,193
|
|
|
|
13,266
|
|
|
|
27,942
|
|
|
|
46,369
|
|
|
|
Net income
|
|
22,856
|
|
|
|
20,006
|
|
|
|
108,080
|
|
|
|
84,317
|
|
Less: Net loss
attributable to non-controlling interest
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
165
|
|
|
Net income
attributable to Farmer Mac
|
|
29,769
|
|
|
|
20,006
|
|
|
|
108,080
|
|
|
|
84,482
|
|
Preferred stock
dividends
|
|
(3,296)
|
|
|
|
(3,296)
|
|
|
|
(13,182)
|
|
|
|
(13,182)
|
|
|
|
Net income
attributable to common stockholders
|
$
|
19,560
|
|
|
$
|
16,710
|
|
|
$
|
94,898
|
|
|
$
|
71,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share and dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
1.84
|
|
|
$
|
1.57
|
|
|
$
|
8.91
|
|
|
$
|
6.73
|
|
|
|
Diluted earnings per
common share
|
$
|
1.82
|
|
|
$
|
1.55
|
|
|
$
|
8.83
|
|
|
$
|
6.60
|
|
|
|
Common stock
dividends per common share
|
$
|
0.58
|
|
|
$
|
0.36
|
|
|
$
|
2.32
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
|
|
(in thousands,
except per share amounts)
|
Net income
attributable to common stockholders
|
|
$
|
19,560
|
|
|
$
|
26,474
|
|
|
$
|
16,710
|
|
Less reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on
undesignated financial derivatives due to fair value
changes
|
|
|
(96)
|
|
|
|
3,625
|
|
|
|
(264)
|
|
|
(Losses)/gains on
hedging activities due to fair value changes
|
|
|
(853)
|
|
|
|
1,051
|
|
|
|
60
|
|
|
Unrealized
gains/(losses) on trading securities
|
|
|
57
|
|
|
|
(3)
|
|
|
|
(129)
|
|
|
Amortization of
premiums/discounts and deferred gains on assets consolidated at
fair
value
|
|
67
|
|
|
|
(38)
|
|
|
|
632
|
|
|
Net effects of
terminations or net settlements on financial derivatives and
hedging
activities(1)
|
|
(312)
|
|
|
|
546
|
|
|
|
(1,365)
|
|
|
Income tax effect
related to reconciling items
|
|
|
238
|
|
|
|
(1,088)
|
|
|
|
(105)
|
|
|
|
Sub-total
|
|
|
(899)
|
|
|
|
4,093
|
|
|
|
(1,171)
|
|
Core
earnings
|
|
$
|
20,459
|
|
|
$
|
22,381
|
|
|
$
|
17,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of Core
Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net effective
spread(2)
|
|
$
|
38,855
|
|
|
$
|
39,077
|
|
|
$
|
37,467
|
|
|
Guarantee and
commitment fees(3)
|
|
|
5,309
|
|
|
|
5,170
|
|
|
|
5,157
|
|
|
Other(4)
|
|
|
(129)
|
|
|
|
110
|
|
|
|
69
|
|
|
|
Total
revenues
|
|
|
44,035
|
|
|
|
44,357
|
|
|
|
42,693
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit related
expense/(income) (GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for/(release of) losses
|
|
|
166
|
|
|
|
(3)
|
|
|
|
464
|
|
|
(Gains)/losses on
sale of REO
|
|
|
-
|
|
|
|
41
|
|
|
|
(964)
|
|
|
|
Total credit related
expense/(income)
|
|
|
166
|
|
|
|
38
|
|
|
|
(500)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
|
7,167
|
|
|
|
6,777
|
|
|
|
5,247
|
|
|
General and
administrative
|
|
|
5,829
|
|
|
|
4,350
|
|
|
|
4,348
|
|
|
Regulatory
fees
|
|
|
687
|
|
|
|
625
|
|
|
|
625
|
|
|
|
Total operating
expenses
|
|
|
13,683
|
|
|
|
11,752
|
|
|
|
10,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
30,186
|
|
|
|
32,567
|
|
|
|
32,973
|
|
|
Income tax
expense(5)
|
|
|
6,431
|
|
|
|
6,891
|
|
|
|
11,796
|
|
|
Preferred stock
dividends (GAAP)
|
|
|
3,296
|
|
|
|
3,295
|
|
|
|
3,296
|
|
|
|
Core
earnings
|
|
$
|
20,459
|
|
|
$
|
22,381
|
|
|
$
|
17,881
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.92
|
|
|
$
|
2.10
|
|
|
$
|
1.68
|
|
|
Diluted
|
|
|
1.90
|
|
|
|
2.08
|
|
|
|
1.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Effective in fourth quarter 2017, Farmer Mac revised its
methodology for calculating net effective spread, which is a
component of core earnings, to also include the net effects of
terminations or net settlements on financial derivatives and
hedging activities. All prior period information has been recast to
reflect the revised methodology. For more information, see
"Use of Non-GAAP Measures—Net Effective Spread" above.
|
(2) Net
effective spread is a non-GAAP measure. See "Use of Non-GAAP
Measures—Net Effective Spread" above for an explanation of net
effective spread. See below for a reconciliation of net
interest income to net effective spread.
|
(3)
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.
|
(4)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 hedging activities, 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.
|
(5)
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 Year
Ended
|
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
(in thousands,
except per share amounts)
|
Net income
attributable to common stockholders
|
|
$
|
94,898
|
|
|
$
|
71,300
|
|
Less reconciling
items:
|
|
|
|
|
|
|
|
|
|
Gains on undesignated
financial derivatives due to fair value changes
|
|
|
7,959
|
|
|
|
9,499
|
|
|
Gains/(losses) on
hedging activities due to fair value changes
|
|
|
4,449
|
|
|
|
(24)
|
|
|
Unrealized
gains/(losses) on trading securities
|
|
|
81
|
|
|
|
(1,327)
|
|
|
Amortization of
premiums/discounts and deferred gains on assets consolidated at
fair value
|
|
|
(461)
|
|
|
|
2,674
|
|
|
Net effects of
terminations or net settlements on financial derivatives and
hedging activities(1)
|
|
1,708
|
|
|
|
(1,365)
|
|
|
Income tax effect
related to reconciling items
|
|
|
(2,885)
|
|
|
|
(3,788)
|
|
|
|
Sub-total
|
|
|
10,851
|
|
|
|
5,669
|
|
Core
earnings
|
|
$
|
84,047
|
|
|
$
|
65,631
|
|
|
|
|
|
|
|
|
Composition of Core
Earnings:
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Net effective
spread(2)
|
|
$
|
151,195
|
|
|
$
|
141,303
|
|
|
Guarantee and
commitment fees(3)
|
|
|
20,733
|
|
|
|
20,350
|
|
|
Other(4)
|
|
|
520
|
|
|
|
935
|
|
|
|
Total
revenues
|
|
|
172,448
|
|
|
|
162,588
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit related
expense (GAAP):
|
|
|
|
|
|
|
|
|
|
Provision for
losses
|
|
|
335
|
|
|
|
1,758
|
|
|
REO operating
expenses
|
|
|
16
|
|
|
|
23
|
|
|
Losses/(gains) on
sale of REO
|
|
|
7
|
|
|
|
(1,748)
|
|
|
|
Total credit related
expense
|
|
|
358
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(GAAP):
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
|
27,534
|
|
|
|
24,233
|
|
|
General and
administrative
|
|
|
19,707
|
|
|
|
15,959
|
|
|
Regulatory
fees
|
|
|
2,562
|
|
|
|
2,500
|
|
|
|
Total operating
expenses
|
|
|
49,803
|
|
|
|
42,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
122,287
|
|
|
|
119,863
|
|
|
Income tax
expense(4)
|
|
|
25,058
|
|
|
|
41,215
|
|
|
Net loss attributable
to non-controlling interest (GAAP)
|
|
|
-
|
|
|
|
(165)
|
|
|
Preferred stock
dividends (GAAP)
|
|
|
13,182
|
|
|
|
13,182
|
|
|
|
Core
earnings
|
|
$
|
84,047
|
|
|
$
|
65,631
|
|
|
|
|
|
|
|
|
|
|
|
|
Core earnings per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
7.89
|
|
|
$
|
6.20
|
|
|
Diluted
|
|
|
7.82
|
|
|
|
6.08
|
|
|
|
|
|
|
|
|
|
|
|
(1)Effective in fourth quarter 2017,
Farmer Mac revised its methodology for calculating net effective
spread, which is a component of core earnings, to also include the
net effects of terminations or net settlements on financial
derivatives and hedging activities. All prior period information
has been recast to reflect the revised methodology. For more
information, see "Use of Non-GAAP Measures—Net Effective Spread"
above.
|
(2) Net
effective spread is a non-GAAP measure. See "Use of Non-GAAP
Measures—Net Effective Spread" above for an explanation of net
effective spread. See below for a reconciliation of net
interest income to net effective spread.
|
(3)
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.
|
(4)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 hedging activities, 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.
|
(5)
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 Year
Ended
|
|
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
(in thousands, except per share amounts)
|
GAAP - Basic
EPS
|
$
|
1.84
|
|
|
$
|
2.48
|
|
|
$
|
1.57
|
|
|
$
|
8.91
|
|
|
$
|
6.73
|
|
Less reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on
undesignated financial derivatives due to fair value
changes
|
|
(0.01)
|
|
|
|
0.34
|
|
|
|
(0.03)
|
|
|
|
0.75
|
|
|
|
0.97
|
|
|
(Losses)/gains on
hedging activities due to fair value changes
|
|
(0.08)
|
|
|
|
0.10
|
|
|
|
—
|
|
|
|
0.41
|
|
|
|
(0.07)
|
|
|
Unrealized gains on
trading securities
|
|
0.01
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
—
|
|
|
Amortization of
premiums/discounts and deferred gains on assets consolidated at
fair
value
|
|
0.01
|
|
|
|
—
|
|
|
|
(0.01)
|
|
|
|
(0.04)
|
|
|
|
(0.13)
|
|
|
Net effects of
terminations or net settlements on financial derivatives and
hedging
activities
|
|
(0.03)
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.16
|
|
|
|
0.25
|
|
|
Re-measurement of net
deferred tax asset due to enactment of new tax
legislation
|
|
—
|
|
|
|
—
|
|
|
|
(0.13)
|
|
|
|
—
|
|
|
|
(0.13)
|
|
|
Income tax effect
related to reconciling items
|
|
0.02
|
|
|
|
(0.11)
|
|
|
|
(0.01)
|
|
|
|
(0.27)
|
|
|
|
(0.36)
|
|
|
|
Sub-total
|
|
(0.08)
|
|
|
|
0.38
|
|
|
|
(0.11)
|
|
|
|
1.02
|
|
|
|
0.53
|
|
Core Earnings - Basic
EPS
|
$
|
1.92
|
|
|
$
|
2.10
|
|
|
$
|
1.68
|
|
|
$
|
7.89
|
|
|
$
|
6.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation (GAAP and Core Earnings)
|
|
10,669
|
|
|
|
10,668
|
|
|
|
10,618
|
|
|
|
10,654
|
|
|
|
10,594
|
|
Reconciliation of
GAAP Diluted Earnings Per Share to Core Earnings Diluted Earnings
Per Share
|
|
|
|
For the Three Months
Ended
|
|
For the Year
Ended
|
|
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
(in thousands, except per share amounts)
|
GAAP - Diluted
EPS
|
$
|
1.82
|
|
|
$
|
2.46
|
|
|
$
|
1.55
|
|
|
$
|
8.83
|
|
|
$
|
6.60
|
|
Less reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on
undesignated financial derivatives due to fair value
changes
|
|
(0.01)
|
|
|
|
0.33
|
|
|
|
(0.02)
|
|
|
|
0.74
|
|
|
|
0.94
|
|
|
(Losses)/gains on
hedging activities due to fair value changes
|
|
(0.08)
|
|
|
|
0.10
|
|
|
|
0.01
|
|
|
|
0.41
|
|
|
|
(0.07)
|
|
|
Unrealized gains on
trading securities
|
|
0.01
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
—
|
|
|
Amortization of
premiums/discounts and deferred gains on assets consolidated at
fair
value
|
|
0.01
|
|
|
|
—
|
|
|
|
(0.01)
|
|
|
|
(0.04)
|
|
|
|
(0.12)
|
|
|
Net effects of
terminations or net settlements on financial derivatives and
hedging
activities
|
|
(0.03)
|
|
|
|
0.05
|
|
|
|
0.06
|
|
|
|
0.16
|
|
|
|
0.25
|
|
|
Re-measurement of net
deferred tax asset due to enactment of new tax
legislation
|
|
—
|
|
|
|
—
|
|
|
|
(0.13)
|
|
|
|
—
|
|
|
|
(0.13)
|
|
|
Income tax effect
related to reconciling items
|
|
0.02
|
|
|
|
(0.10)
|
|
|
|
(0.01)
|
|
|
|
(0.27)
|
|
|
|
(0.35)
|
|
|
|
Sub-total
|
|
0.38
|
|
|
|
0.38
|
|
|
|
(0.09)
|
|
|
|
1.01
|
|
|
|
0.52
|
|
Core Earnings -
Diluted EPS
|
$
|
2.08
|
|
|
$
|
2.08
|
|
|
$
|
1.64
|
|
|
$
|
7.82
|
|
|
$
|
6.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per
share calculation (GAAP and Core Earnings)
|
|
10,745
|
|
|
|
10,744
|
|
|
|
10,815
|
|
|
|
10,746
|
|
|
|
10,803
|
|
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 Year
Ended
|
|
|
|
December 31,
2018
|
|
September 30,
2018
|
|
December 31,
2017
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
|
|
(dollars
in thousands)
|
Net interest
income/yield
|
$
|
42,216
|
|
|
0.93
|
|
%
|
|
$
|
45,058
|
|
|
0.99
|
|
%
|
|
$
|
41,283
|
|
|
0.94
|
|
%
|
|
$
|
174,436
|
|
|
0.96
|
|
%
|
|
$
|
157,647
|
|
|
0.94
|
|
%
|
Net effects of
consolidated trusts
|
|
(1,804)
|
|
|
0.04
|
|
%
|
|
|
(1,681)
|
|
|
0.05
|
|
%
|
|
|
(1,673)
|
|
|
0.04
|
|
%
|
|
|
(6,757)
|
|
|
0.04
|
|
%
|
|
|
(6,236)
|
|
|
0.04
|
|
%
|
Expense related to
undesignated financial derivatives
|
|
(2,162)
|
|
|
(0.05)
|
|
%
|
|
|
(3,223)
|
|
|
(0.08)
|
|
%
|
|
|
(1,943)
|
|
|
(0.05)
|
|
%
|
|
|
(11,685)
|
|
|
(0.07)
|
|
%
|
|
|
(10,261)
|
|
|
(0.07)
|
|
%
|
Amortization of
premiums/discounts and deferred gains
on assets consolidated at fair value
|
|
(138)
|
|
|
-
|
|
%
|
|
|
49
|
|
|
-
|
|
%
|
|
|
(28)
|
|
|
-
|
|
%
|
|
|
417
|
|
|
0.01
|
|
%
|
|
|
1,191
|
|
|
0.01
|
|
%
|
Amortization of
losses due to terminations or net
settlements on financial derivatives and hedging
activities
|
|
(68)
|
|
|
-
|
|
%
|
|
|
(75)
|
|
|
-
|
|
%
|
|
|
(172)
|
|
|
0
|
|
%
|
|
|
(275)
|
|
|
-
|
|
%
|
|
|
(1,038)
|
|
|
(0.01)
|
|
%
|
Fair value changes on
fair value hedge relationships
|
|
811
|
|
|
0.02
|
|
%
|
|
|
(1,051)
|
|
|
(0.03)
|
|
%
|
|
|
-
|
|
|
-
|
|
%
|
|
|
(4,941)
|
|
|
(0.03)
|
|
%
|
|
|
-
|
|
|
-
|
|
%
|
Net effective
spread
|
$
|
38,855
|
|
|
0.93
|
|
%
|
|
$
|
39,077
|
|
|
0.93
|
|
%
|
|
$
|
35,976
|
|
|
0.91
|
|
%
|
|
$
|
151,195
|
|
|
0.91
|
|
%
|
|
$
|
141,303
|
|
|
0.91
|
|
%
|
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 December 31, 2018:
Core Earnings by
Business Segment
|
For the Three Months
Ended December 31, 2018
|
|
|
|
Farm &
Ranch
|
|
USDA
Guarantees
|
|
Rural
Utilities
|
|
Institutional
Credit
|
|
Corporate
|
|
Reconciling
Adjustments
|
|
Consolidated Net
Income
|
|
|
|
(in thousands)
|
Net interest
income
|
$
|
15,596
|
|
|
$
|
5,108
|
|
|
$
|
3,574
|
|
|
$
|
15,084
|
|
|
$
|
2,754
|
|
|
$
|
—
|
|
|
$
|
42,216
|
|
|
Less: reconciling
adjustments(1)(2)(3)
|
|
(2,408)
|
|
|
|
(478)
|
|
|
|
(741)
|
|
|
|
667
|
|
|
|
(401)
|
|
|
|
3,361
|
|
|
|
—
|
|
Net effective
spread
|
|
13,288
|
|
|
|
4,630
|
|
|
|
2,833
|
|
|
|
15,751
|
|
|
|
2,353
|
|
|
|
3,361
|
|
|
|
—
|
|
Guarantee and
commitment fees(2)
|
|
4,621
|
|
|
|
227
|
|
|
|
372
|
|
|
|
89
|
|
|
|
—
|
|
|
|
(1,803)
|
|
|
|
3,506
|
|
Other
income/(expense)(3)
|
|
179
|
|
|
|
2
|
|
|
|
8
|
|
|
|
—
|
|
|
|
(319)
|
|
|
|
(2,694)
|
|
|
|
(2,824)
|
|
|
Non-interest
income/(loss)
|
|
4,800
|
|
|
|
229
|
|
|
|
380
|
|
|
|
89
|
|
|
|
(319)
|
|
|
|
(4,497)
|
|
|
|
682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for loan
losses
|
|
(146)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(146)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Release of reserve
for losses
|
|
(20)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(20)
|
|
Other non-interest
expense
|
|
(5,096)
|
|
|
|
(1,516)
|
|
|
|
(918)
|
|
|
|
(2,291)
|
|
|
|
(3,862)
|
|
|
|
—
|
|
|
|
(13,683)
|
|
|
Non-interest
expense(4)
|
|
(5,116)
|
|
|
|
(1,516)
|
|
|
|
(918)
|
|
|
|
(2,291)
|
|
|
|
(3,862)
|
|
|
|
—
|
|
|
|
(13,849)
|
|
Core earnings before
income taxes
|
|
12,826
|
|
|
|
3,343
|
|
|
|
2,295
|
|
|
|
13,549
|
|
|
|
(1,828)
|
|
|
|
(1,136)
|
|
(6)
|
|
29,049
|
|
Income tax
(expense)/benefit
|
|
(2,693)
|
|
|
|
(702)
|
|
|
|
(482)
|
|
|
|
(2,845)
|
|
|
|
292
|
|
|
|
237
|
|
|
|
(6,193)
|
|
|
Core earnings before
preferred stock
dividends and attribution of income to
non-controlling interest - preferred stock
dividends
|
|
10,133
|
|
|
|
2,641
|
|
|
|
1,813
|
|
|
|
10,704
|
|
|
|
(1,536)
|
|
|
|
(899)
|
|
(6)
|
|
22,856
|
|
Preferred stock
dividends
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,296)
|
|
|
|
—
|
|
|
|
(3,296)
|
|
|
Segment core
earnings/(losses)
|
$
|
10,133
|
|
|
$
|
2,641
|
|
|
$
|
1,813
|
|
|
$
|
10,704
|
|
|
$
|
(4,832)
|
|
|
$
|
(899)
|
|
(5)
|
$
|
19,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at
carrying value
|
$
|
4,701,736
|
|
|
$
|
2,240,906
|
|
|
$
|
945,282
|
|
|
$
|
8,089,410
|
|
|
$
|
2,716,994
|
|
|
$
|
-
|
|
|
$
|
18,694,328
|
|
Total on-and
off-balance sheet program
assets at principal balance
|
$
|
7,233,972
|
|
|
$
|
2,515,620
|
|
|
$
|
1,592,115
|
|
|
$
|
8,382,817
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
19,724,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Excludes 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 and hedging activities" on the consolidated financial
statements, to determine the effective funding cost for each
operating segment.
|
(4)Effective in fourth quarter 2017,
Farmer Mac revised its methodology for calculating net effective
spread, a component of core earnings, to also include the net
effects of gains/(losses) due to terminations or net settlements on
financial derivatives and hedging activities. All prior
period information has been recast to reflect the revised
methodology. For more information, see "Use of Non-GAAP
Measures-Net Effective Spread" above.
|
(5)
Includes directly attributable costs and an allocation of
indirectly attributable costs based on employee
headcount.
|
(6)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 and attribution of income to
non-controlling interest reconciled to net income; and segment core
earnings reconciled to net income attributable to common
stockholders.
|
Supplemental Information
The following table sets forth information regarding 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 December 31,
2018
|
|
As of December 31,
2017
|
|
|
|
|
|
(in thousands)
|
On-balance
sheet:
|
|
|
|
|
Farm &
Ranch:
|
|
|
|
|
|
Loans
|
$
|
3,071,222
|
|
|
$
|
2,798,906
|
|
|
|
Loans held in
trusts:
|
|
|
|
|
|
|
|
|
|
|
Beneficial interests
owned by third party investors
|
|
1,517,101
|
|
|
|
1,399,827
|
|
|
USDA
Guarantees:
|
|
|
|
|
|
|
|
|
|
USDA
Securities
|
|
2,120,553
|
|
|
|
2,068,017
|
|
|
|
Farmer Mac Guaranteed
USDA Securities
|
|
27,383
|
|
|
|
29,980
|
|
|
Rural
Utilities:
|
|
|
|
|
|
|
|
|
|
Loans
|
|
938,843
|
|
|
|
1,076,291
|
|
|
Institutional
Credit:
|
|
|
|
|
|
|
|
|
|
AgVantage
securities
|
|
8,072,919
|
|
|
|
7,593,322
|
|
|
|
|
Total on-balance
sheet
|
$
|
15,748,021
|
|
|
$
|
14,966,343
|
|
Off-balance
sheet:
|
|
|
|
|
Farm &
Ranch:
|
|
|
|
|
|
LTSPCs
|
$
|
2,509,787
|
|
|
$
|
2,335,342
|
|
|
|
Guaranteed
Securities
|
|
135,862
|
|
|
|
333,511
|
|
|
USDA
Guarantees:
|
|
|
|
|
|
|
|
|
|
Farmer Mac Guaranteed
USDA Securities
|
|
367,684
|
|
|
|
254,217
|
|
|
Rural
Utilities:
|
|
|
|
|
|
|
|
|
LTSPCs(1)
|
|
653,272
|
|
|
|
806,342
|
|
|
Institutional
Credit:
|
|
|
|
|
|
|
|
|
|
AgVantage
securities
|
|
9,898
|
|
|
|
11,556
|
|
|
|
Revolving floating
rate AgVantage facility(2)
|
|
300,000
|
|
|
|
300,000
|
|
|
|
|
Total off-balance
sheet
|
$
|
3,976,503
|
|
|
$
|
4,040,968
|
|
|
|
|
|
Total
|
$
|
19,724,524
|
|
|
$
|
19,007,311
|
|
|
(1)
During fourth quarter 2018, Farmer Mac repurchased the 100%
participation interests in loans underlying a pool of $134.1
million in Farm & Ranch Guaranteed Securities at par, thereby
redeeming the corresponding Farm & Ranch Guaranteed Securities
from their sole security holder. These participation
interests were repurchased by Farmer Mac at the request of the sole
security holder in exchange for the termination of the
participation interests and the reconveyance of all beneficial
interest in the loans to the sole security holder that owned the
loans in which the participation interests had been issued.
The resulting pool of Farm & Ranch loans was concurrently added
under LTSPCs. The commitment fee Farmer Mac receives on these
loans added under LTSPCs is the same as the guarantee fee Farmer
Mac had been earning on the Farm & Ranch Guaranteed
Securities.
|
(2)Includes $17.0 million and $20.0
million related to one-year loan purchase commitments on which
Farmer Mac receives a nominal unused commitment fee as of December
31, 2018 and December 31, 2017.
|
(3)
During both 2018 and 2017, $100.0 million of this facility was
drawn and subsequently repaid. Farmer Mac receives a fixed fee
based on the full dollar amount of the facility. If the
counterparty draws on the facility, the amounts drawn will be in
the form of AgVantage securities, and Farmer Mac will earn interest
income on those securities.
|
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(1)
|
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
|
(dollars in
thousands)
|
For the quarter
ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2018(2)
|
$
|
13,288
|
|
|
1.79
|
%
|
|
$
|
4,630
|
|
|
0.85
|
%
|
|
$
|
2,833
|
|
|
1.19
|
%
|
|
$
|
15,751
|
|
|
0.80
|
%
|
|
$
|
2,353
|
|
|
0.36
|
%
|
|
$
|
38,855
|
|
|
0.93
|
%
|
|
September 30,
2018
|
|
13,887
|
|
|
1.91
|
%
|
|
|
4,627
|
|
|
0.86
|
%
|
|
|
2,877
|
|
|
1.18
|
%
|
|
|
15,642
|
|
|
0.78
|
%
|
|
|
2,044
|
|
|
0.30
|
%
|
|
|
39,077
|
|
|
0.93
|
%
|
|
June 30,
2018
|
|
13,347
|
|
|
1.86
|
%
|
|
|
4,398
|
|
|
0.83
|
%
|
|
|
2,923
|
|
|
1.15
|
%
|
|
|
15,220
|
|
|
0.76
|
%
|
|
|
274
|
|
|
0.04
|
%
|
|
|
36,162
|
|
|
0.86
|
%
|
|
March 31,
2018
|
|
12,540
|
|
|
1.80
|
%
|
|
|
4,400
|
|
|
0.82
|
%
|
|
|
2,950
|
|
|
1.12
|
%
|
|
|
14,824
|
|
|
0.78
|
%
|
|
|
2,387
|
|
|
0.36
|
%
|
|
|
37,101
|
|
|
0.91
|
%
|
|
December
31, 2017(2)
|
|
12,396
|
|
|
1.80
|
%
|
|
|
4,979
|
|
|
0.93
|
%
|
|
|
3,057
|
|
|
1.14
|
%
|
|
|
14,800
|
|
|
0.78
|
%
|
|
|
2,235
|
|
|
0.35
|
%
|
|
|
37,467
|
|
|
0.93
|
%
|
|
September 30,
2017
|
|
11,303
|
|
|
1.73
|
%
|
|
|
4,728
|
|
|
0.90
|
%
|
|
|
2,765
|
|
|
1.07
|
%
|
|
|
14,455
|
|
|
0.78
|
%
|
|
|
2,725
|
|
|
0.41
|
%
|
|
|
35,976
|
|
|
0.91
|
%
|
|
June 30,
2017
|
|
11,158
|
|
|
1.77
|
%
|
|
|
4,551
|
|
|
0.87
|
%
|
|
|
2,669
|
|
|
1.06
|
%
|
|
|
14,467
|
|
|
0.81
|
%
|
|
|
2,489
|
|
|
0.36
|
%
|
|
|
35,334
|
|
|
0.91
|
%
|
|
March 31,
2017
|
|
10,511
|
|
|
1.77
|
%
|
|
|
4,561
|
|
|
0.89
|
%
|
|
|
2,568
|
|
|
1.04
|
%
|
|
|
12,615
|
|
|
0.82
|
%
|
|
|
2,271
|
|
|
0.32
|
%
|
|
|
32,526
|
|
|
0.90
|
%
|
|
December 31,
2016
|
|
10,131
|
|
|
1.75
|
%
|
|
|
5,152
|
|
|
1.04
|
%
|
|
|
2,530
|
|
|
1.02
|
%
|
|
|
11,636
|
|
|
0.78
|
%
|
|
|
1,999
|
|
|
0.26
|
%
|
|
|
31,448
|
|
|
0.88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net
effective spread is a non-GAAP measure. Effective in fourth quarter
2017, Farmer Mac revised its methodology for calculating net
effective spread to also include the net effects of terminations or
net settlements on financial derivatives and hedging
activities. All prior period information has been recast to
reflect the revised net effective spread methodology.
See "Use of Non-GAAP Measures—Net Effective Spread" above for more
information about net effective spread.
|
(2) See
above for a reconciliation of GAAP net interest income by line of
business to net effective spread by line of business for years
ended December 31, 2018 and 2017.
|
The following table presents quarterly core earnings reconciled
to net income attributable to common stockholders:
Core Earnings by
Quarter Ended
|
|
|
|
|
|
December
2018
|
|
September
2018
|
|
June
2018
|
|
March
2018
|
|
December
2017
|
|
September
2017
|
|
June
2017
|
|
March
2017
|
|
December
2016
|
|
|
|
|
|
|
|
(in
thousands)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net effective
spread
|
|
$
|
38,855
|
|
|
$
|
39,077
|
|
|
$
|
36,162
|
|
|
$
|
37,101
|
|
|
$
|
37,467
|
|
|
$
|
35,976
|
|
|
$
|
35,334
|
|
|
$
|
32,526
|
|
|
$
|
31,448
|
|
|
|
Guarantee and
commitment fees
|
|
|
5,309
|
|
|
|
5,170
|
|
|
|
5,171
|
|
|
|
5,083
|
|
|
|
5,157
|
|
|
|
4,935
|
|
|
|
4,942
|
|
|
|
5,316
|
|
|
|
5,158
|
|
|
|
Other
|
|
|
(129)
|
|
|
|
110
|
|
|
|
111
|
|
|
|
428
|
|
|
|
69
|
|
|
|
274
|
|
|
|
107
|
|
|
|
485
|
|
|
|
545
|
|
|
|
|
Total
revenues
|
|
|
44,035
|
|
|
|
44,357
|
|
|
|
41,444
|
|
|
|
42,612
|
|
|
|
42,693
|
|
|
|
41,185
|
|
|
|
40,383
|
|
|
|
38,327
|
|
|
|
37,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit related
expense/(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
for/(release of) losses
|
|
|
166
|
|
|
|
(3)
|
|
|
|
582
|
|
|
|
(410)
|
|
|
|
464
|
|
|
|
384
|
|
|
|
466
|
|
|
|
444
|
|
|
|
512
|
|
|
|
REO operating
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
|
-
|
|
|
|
-
|
|
|
|
23
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Losses/(gains) on
sale of REO
|
|
|
-
|
|
|
|
41
|
|
|
|
(34)
|
|
|
|
—
|
|
|
|
(964)
|
|
|
|
(32)
|
|
|
|
(757)
|
|
|
|
5
|
|
|
|
-
|
|
|
|
|
Total credit related
expense/(income)
|
|
|
166
|
|
|
|
38
|
|
|
|
548
|
|
|
|
(394)
|
|
|
|
(500)
|
|
|
|
352
|
|
|
|
(268)
|
|
|
|
449
|
|
|
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
employee benefits
|
|
|
7,167
|
|
|
|
6,777
|
|
|
|
6,936
|
|
|
|
6,654
|
|
|
|
5,247
|
|
|
|
5,987
|
|
|
|
6,682
|
|
|
|
6,317
|
|
|
|
5,949
|
|
|
|
General and
administrative
|
|
|
5,829
|
|
|
|
4,350
|
|
|
|
5,202
|
|
|
|
4,326
|
|
|
|
4,348
|
|
|
|
3,890
|
|
|
|
3,921
|
|
|
|
3,800
|
|
|
|
4,352
|
|
|
|
Regulatory
fees
|
|
|
687
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
625
|
|
|
|
|
Total operating
expenses
|
|
|
13,683
|
|
|
|
11,752
|
|
|
|
12,763
|
|
|
|
11,605
|
|
|
|
10,220
|
|
|
|
10,502
|
|
|
|
11,228
|
|
|
|
10,742
|
|
|
|
10,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
30,186
|
|
|
|
32,567
|
|
|
|
28,133
|
|
|
|
31,401
|
|
|
|
32,973
|
|
|
|
30,331
|
|
|
|
29,423
|
|
|
|
27,136
|
|
|
|
25,713
|
|
|
Income tax
expense
|
|
|
6,431
|
|
|
|
6,891
|
|
|
|
5,477
|
|
|
|
6,259
|
|
|
|
11,796
|
|
|
|
10,268
|
|
|
|
10,307
|
|
|
|
8,844
|
|
|
|
9,189
|
|
|
Net (loss)/income
attributable to non-controlling interest(1)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
—
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(150)
|
|
|
|
(15)
|
|
|
|
28
|
|
|
Preferred stock
dividends
|
|
|
3,296
|
|
|
|
3,295
|
|
|
|
3,296
|
|
|
|
3,295
|
|
|
|
3,296
|
|
|
|
3,295
|
|
|
|
3,296
|
|
|
|
3,295
|
|
|
|
3,296
|
|
|
|
|
Core
earnings
|
|
$
|
20,459
|
|
|
$
|
22,381
|
|
|
$
|
19,360
|
|
|
$
|
21,847
|
|
|
$
|
17,881
|
|
|
$
|
16,768
|
|
|
$
|
15,970
|
|
|
$
|
15,012
|
|
|
$
|
13,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Losses)/gains on
undesignated financial derivatives due to fair
value changes
|
|
|
(96)
|
|
|
|
3,625
|
|
|
|
6,709
|
|
|
|
(2,279)
|
|
|
|
(261)
|
|
|
|
995
|
|
|
|
801
|
|
|
|
8,683
|
|
|
|
17,906
|
|
|
|
|
(Losses)/gains on
hedging activities due to fair value changes
|
|
|
(853)
|
|
|
|
1,051
|
|
|
|
1,687
|
|
|
|
2,564
|
|
|
|
(3)
|
|
|
|
1,742
|
|
|
|
1,420
|
|
|
|
(3,878)
|
|
|
|
(673)
|
|
|
|
|
Unrealized
gains/(losses) on trading assets
|
|
|
57
|
|
|
|
(3)
|
|
|
|
11
|
|
|
|
16
|
|
|
|
60
|
|
|
|
-
|
|
|
|
(2)
|
|
|
|
(82)
|
|
|
|
(474)
|
|
|
|
|
Amortization of
premiums/discounts and deferred gains on
assets consolidated at fair value
|
|
|
67
|
|
|
|
(38)
|
|
|
|
196
|
|
|
|
(686)
|
|
|
|
(129)
|
|
|
|
(954)
|
|
|
|
(117)
|
|
|
|
(127)
|
|
|
|
(40)
|
|
|
|
|
Net effects of
terminations or net settlements on financial
derivatives and hedging activities
|
|
|
(312)
|
|
|
|
546
|
|
|
|
232
|
|
|
|
1,242
|
|
|
|
632
|
|
|
|
862
|
|
|
|
232
|
|
|
|
948
|
|
|
|
2,150
|
|
|
|
|
Re-measurement of net
deferred tax asset due to enactment of
new tax legislation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,365)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
Income tax effect
related to reconciling items
|
|
|
238
|
|
|
|
(1,088)
|
|
|
|
(1,855)
|
|
|
|
(180)
|
|
|
|
(105)
|
|
|
|
(926)
|
|
|
|
(816)
|
|
|
|
(1,941)
|
|
|
|
(6,604)
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
|
19,560
|
|
|
$
|
26,474
|
|
|
$
|
26,340
|
|
|
$
|
22,524
|
|
|
$
|
16,710
|
|
|
$
|
18,487
|
|
|
$
|
17,488
|
|
|
$
|
18,615
|
|
|
$
|
25,465
|
|
|
|
(1) As of
May 1, 2017, Farmer Mac transferred its entire 65% ownership
interest in AgVisory back to the limited liability
company.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/farmer-mac-reports-2018-results----double-digit-earnings-growth-300799230.html
SOURCE Farmer Mac