Document and Entity Information
Document and Entity Information | 12 Months Ended |
May 31, 2018USD ($)shares | |
Document and Entity Information | |
Entity Registrant Name | NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ |
Entity Central Index Key | 70,502 |
Document Type | 10-K |
Document Period End Date | May 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --05-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Public Float | $ | $ 0 |
Entity Common Stock, Shares Outstanding | shares | 0 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | ||
Income Statement [Abstract] | ||||
Interest income | $ 1,077,357 | $ 1,036,634 | $ 1,012,636 | |
Interest expense | [1],[2] | (792,735) | (741,738) | (681,850) |
Net interest income | 284,622 | 294,896 | 330,786 | |
Benefit (provision) for loan losses | 18,575 | (5,978) | 646 | |
Net interest income after benefit (provision) for loan losses | 303,197 | 288,918 | 331,432 | |
Non-interest income: | ||||
Fee and other income | 17,578 | 19,713 | 21,785 | |
Derivative gains (losses) | 231,721 | 94,903 | (309,841) | |
Results of operations of foreclosed assets | 0 | (1,749) | (6,899) | |
Total non-interest income | 249,299 | 112,867 | (294,955) | |
Non-interest expense: | ||||
Salaries and employee benefits | (51,422) | (47,769) | (44,590) | |
Other general and administrative expenses | (39,462) | (38,457) | (41,753) | |
Gains (losses) on early extinguishment of debt | 0 | 192 | (333) | |
Other non-interest expense | (1,943) | (1,948) | (1,260) | |
Total non-interest expense | (92,827) | (87,982) | (87,936) | |
Income (loss) before income taxes | 459,669 | 313,803 | (51,459) | |
Income tax expense | (2,305) | (1,704) | (57) | |
Net income (loss) | 457,364 | 312,099 | (51,516) | |
Less: Net (income) loss attributable to noncontrolling interests | (2,178) | (2,193) | 1,863 | |
Net income (loss) attributable to CFC | $ 455,186 | $ 309,906 | $ (49,653) | |
[1] | (1) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized as interest expense immediately as incurred. | |||
[2] | (2) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Depending on the nature of the fee, amounts may be deferred and recognized as interest expense ratably over the term of the arrangement or recognized immediately as incurred. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 457,364 | $ 312,099 | $ (51,516) |
Other comprehensive income (loss): | |||
Unrealized gains (losses) on available-for-sale investment securities | (3,222) | 4,614 | 3,468 |
Unrealized losses on foreclosed assets | 0 | 0 | (5,575) |
Unrealized losses on cash flow hedges | (1,059) | 0 | 0 |
Reclassification of losses on foreclosed assets to net income | 0 | 9,823 | 0 |
Reclassification of derivative gains to net income | (663) | (785) | (888) |
Defined benefit plan adjustments | 313 | (1,535) | (31) |
Other comprehensive income (loss) | (4,631) | 12,117 | (3,026) |
Total comprehensive income (loss) | 452,733 | 324,216 | (54,542) |
Less: Total comprehensive (income) loss attributable to noncontrolling interests | (2,178) | (2,193) | 1,867 |
Total comprehensive income (loss) attributable to CFC | $ 450,555 | $ 322,023 | $ (52,675) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Assets: | |||
Cash and cash equivalents | $ 230,999 | $ 166,615 | |
Restricted cash | 7,825 | 21,806 | |
Time deposits | 101,000 | 226,000 | |
Investment securities: | |||
Available for sale, at fair value | 89,332 | 92,554 | |
Held to maturity, at amortized cost | 519,519 | 0 | |
Total investment securities | 608,851 | 92,554 | |
Loans to members | 25,178,608 | 24,367,044 | [1] |
Less: Allowance for loan losses | (18,801) | (37,376) | |
Loans to members, net | 25,159,807 | 24,329,668 | |
Accrued interest receivable | 127,442 | 111,493 | |
Other receivables | 39,220 | 45,469 | |
Fixed assets, net | 116,031 | 122,260 | |
Derivative assets | 244,526 | 49,481 | |
Other assets | 54,503 | 40,346 | |
Total assets | 26,690,204 | 25,205,692 | |
Liabilities: | |||
Accrued interest payable | 149,284 | 137,476 | |
Short-term borrowings | 3,795,910 | 3,342,900 | |
Long-term debt | 18,714,960 | 17,955,594 | |
Subordinated deferrable debt | 742,410 | 742,274 | |
Members’ subordinated certificates: | |||
Membership subordinated certificates | 630,448 | 630,098 | |
Loan and guarantee subordinated certificates | 528,386 | 567,830 | |
Member capital securities | 221,148 | 221,097 | |
Total members’ subordinated certificates | 1,379,982 | 1,419,025 | |
Total debt outstanding | 24,633,262 | 23,459,793 | |
Deferred income | 65,922 | 73,972 | |
Derivative liabilities | 275,932 | 385,337 | |
Other liabilities | 59,951 | 50,309 | |
Total liabilities | 25,184,351 | 24,106,887 | |
Commitments and contingencies | |||
Equity: | |||
Retained equity | 1,465,789 | 1,056,778 | |
Accumulated other comprehensive income | 8,544 | 13,175 | |
Total CFC equity | 1,474,333 | 1,069,953 | |
Noncontrolling interests | 31,520 | 28,852 | |
Total equity | 1,505,853 | 1,098,805 | |
Total liabilities and equity | $ 26,690,204 | $ 25,205,692 | |
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Noncontrolling interests | Total CFC equity | Accumulated other comprehensive income | CFC retained equity | Unallocated Net Income (Loss) | Members' capital reserve | Patronage Capital Allocated | Membership Fees and Education Fund |
Balance at May. 31, 2015 | $ 911,786 | $ 27,464 | $ 884,322 | $ 4,080 | $ 880,242 | $ (293,212) | $ 501,731 | $ 668,980 | $ 2,743 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | (51,516) | (1,863) | (49,653) | (49,653) | (220,827) | 85,917 | 84,257 | 1,000 | |
Other comprehensive loss | (3,026) | (4) | (3,022) | (3,022) | |||||
Patronage capital retirement | (39,384) | 0 | (39,384) | (39,384) | (39,384) | ||||
Other | (482) | 489 | (971) | (971) | 429 | (429) | 0 | (971) | |
Balance at May. 31, 2016 | 817,378 | 26,086 | 791,292 | 1,058 | 790,234 | (513,610) | 587,219 | 713,853 | 2,772 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 312,099 | 2,193 | 309,906 | 309,906 | 175,379 | 43,086 | 90,441 | 1,000 | |
Other comprehensive loss | 12,117 | 0 | 12,117 | 12,117 | |||||
Patronage capital retirement | (42,490) | 0 | (42,490) | (42,490) | 103 | (42,593) | |||
Other | (299) | 573 | (872) | (872) | 0 | 0 | 0 | (872) | |
Balance at May. 31, 2017 | 1,098,805 | 28,852 | 1,069,953 | 13,175 | 1,056,778 | (338,128) | 630,305 | 761,701 | 2,900 |
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 457,364 | 2,178 | 455,186 | 455,186 | 301,694 | 57,480 | 95,012 | 1,000 | |
Other comprehensive loss | (4,631) | 0 | (4,631) | (4,631) | |||||
Patronage capital retirement | (45,220) | 0 | (45,220) | (45,220) | 0 | (45,220) | |||
Other | (465) | 490 | (955) | (955) | 0 | 0 | 0 | (955) | |
Balance at May. 31, 2018 | $ 1,505,853 | $ 31,520 | $ 1,474,333 | $ 8,544 | $ 1,465,789 | $ (36,434) | $ 687,785 | $ 811,493 | $ 2,945 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 457,364 | $ 312,099 | $ (51,516) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of deferred loan fees | (11,296) | (14,072) | (18,751) |
Amortization of debt issuance costs and deferred charges | 10,456 | 9,484 | 8,478 |
Amortization of discount on long-term debt | 10,164 | 9,501 | 8,693 |
Amortization of issuance costs for bank revolving lines of credit | 5,346 | 5,531 | 5,535 |
Depreciation and amortization | 7,931 | 7,173 | 7,327 |
Provision (benefit) for loan losses | (18,575) | 5,978 | (646) |
Results of operations of foreclosed assets | 0 | 1,749 | 6,899 |
Derivative forward value (gains) losses | (306,002) | (179,381) | 221,083 |
Changes in operating assets and liabilities: | |||
Accrued interest receivable | (15,949) | 1,778 | (6,225) |
Accrued interest payable | 11,808 | 4,480 | 9,299 |
Deferred income | 3,246 | 9,393 | 21,822 |
Other | 741 | 5,855 | 15,560 |
Net cash provided by operating activities | 155,234 | 179,568 | 227,558 |
Cash flows from investing activities: | |||
Advances on loans, net | (811,164) | (1,145,673) | (1,693,084) |
Investment in fixed assets | (15,194) | (17,793) | (9,806) |
Net cash proceeds from sale of foreclosed assets | 0 | 51,042 | 5,414 |
Proceeds from foreclosed assets | 0 | 0 | (4,349) |
Net proceeds from time deposits | 125,000 | 114,000 | 145,000 |
Purchases of held-to-maturity investments | (510,598) | 0 | 0 |
Proceeds from maturities of held-to-maturity investments | 1,394 | 0 | 0 |
Change in restricted cash | 13,981 | (17,178) | (4,143) |
Net cash used in investing activities | (1,196,581) | (1,015,602) | (1,560,968) |
Cash flows from financing activities: | |||
Proceeds from (repayments of) short-term borrowings, net | 126,211 | 409,871 | (154,072) |
Proceeds from short-term borrowings with original maturity greater than 90 days | 1,331,910 | 1,003,185 | 890,242 |
Repayments of short term-debt with original maturity greater than 90 days | (1,005,111) | (1,009,004) | (925,076) |
Payments for issuance costs for revolving bank lines of credit | (2,441) | (2,548) | (3,009) |
Proceeds from issuance of long-term debt, net of issuance costs | 2,349,885 | 2,923,868 | 2,920,669 |
Payments for retirement of long-term debt | (1,611,002) | (2,460,730) | (1,709,283) |
Payments for issuance costs for subordinated deferrable debt | 0 | (68) | 0 |
Proceeds from issuance of subordinated debt | 0 | 0 | 346,433 |
Proceeds from issuance of members’ subordinated certificates | 6,136 | 3,626 | 5,654 |
Payments for retirement of members’ subordinated certificates | (45,180) | (28,220) | (43,596) |
Payments for retirement of patronage capital | (44,667) | (41,871) | (38,848) |
Repayments for membership fees, net | (10) | 0 | 0 |
Net cash provided by financing activities | 1,105,731 | 798,109 | 1,289,114 |
Net increase (decrease) in cash and cash equivalents | 64,384 | (37,925) | (44,296) |
Beginning cash and cash equivalents | 166,615 | 204,540 | 248,836 |
Ending cash and cash equivalents | 230,999 | 166,615 | 204,540 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 766,059 | 712,742 | 649,845 |
Cash paid for income taxes | 321 | 407 | 72 |
Noncash financing and investing activities: | |||
Loan provided in connection with the sale of foreclosed assets | $ 0 | $ 60,000 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Notes) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company National Rural Utilities Cooperative Finance Corporation (“CFC”) is a member-owned cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation and transmission (“power supply”) systems and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes. National Cooperative Services Corporation (“NCSC”) is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. NCSC’s principal purpose is to provide financing to members of CFC, entities eligible to be members of CFC and the for-profit and nonprofit entities that are owned, operated or controlled by or provide significant benefit to certain members of CFC. NCSC’s membership consists of distribution systems, power supply systems and statewide and regional associations that are members of CFC. CFC is the primary source of funding for NCSC and manages NCSC’s business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia. Rural Telephone Finance Cooperative (“RTFC”) is a taxable Subchapter T cooperative association originally incorporated in South Dakota in 1987 and reincorporated as a member-owned cooperative association in the District of Columbia in 2005. RTFC’s principal purpose is to provide financing for its rural telecommunications members and their affiliates. RTFC’s membership consists of a combination of not-for-profit and for-profit entities. CFC is the sole lender to and manages the business operations of RTFC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. RTFC pays CFC a fee and, in exchange, CFC reimburses RTFC for loan losses under a guarantee agreement. As permitted under Subchapter T of the Internal Revenue Code, RTFC pays income tax based on its net income, excluding patronage-sourced earnings allocated to its patrons. RTFC is headquartered with CFC in Dulles, Virginia. Basis of Presentation and Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The most significant estimates and assumptions involve determining the allowance for loan losses and the fair value of financial assets and liabilities. While management makes its best judgment, actual amounts or results could differ from these estimates. Certain reclassifications have been made to previously reported amounts to conform to the current-period presentation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of CFC, variable interest entities (“VIEs”) where CFC is the primary beneficiary and subsidiary entities created and controlled by CFC to hold foreclosed assets. CFC did no t have any entities that held foreclosed assets as of May 31, 2018 or May 31, 2017 . All intercompany balances and transactions have been eliminated. NCSC and RTFC are VIEs that are required to be consolidated by CFC. Unless stated otherwise, references to “we, “our” or “us” relate to CFC and its consolidated entities. Variable Interest Entities A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its activities without additional subordinated financial support provided by another party, or where the group of equity holders does not have: (i) the ability to make decisions about the entity’s activities that most significantly impact its economic performance; (ii) the obligation to absorb the entity’s expected losses; or (iii) the right to receive the entity’s expected residual returns. NCSC and RTFC meet the definition of variable interest entities because they do not have sufficient equity investment at risk to finance their activities without additional financial support. When evaluating an entity for possible consolidation, we must determine whether or not we have a variable interest in the entity. If it is determined that we do not have a variable interest in the entity, no further analysis is required and we do not consolidate the entity. If we have a variable interest in the entity, we must evaluate whether we are the primary beneficiary based on an assessment of quantitative and qualitative factors. We are considered the primary beneficiary holder if we have a controlling financial interest in the VIE that provides (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We consolidate the results of NCSC and RTFC with CFC because CFC is the primary beneficiary holder. Cash and Cash Equivalents Cash, certificates of deposit, due from banks and other investments with original maturities of less than 90 days are classified as cash and cash equivalents. Restricted Cash Restricted cash totaled $8 million and $22 million as of May 31, 2018 and 2017 , respectively. On July 1, 2016, CFC completed the sale of Caribbean Asset Holdings, LLC (“CAH”), an entity that held foreclosed assets, to ATN VI Holdings, LLC. In connection with the sale, $16 million of the sale proceeds was deposited into escrow to fund potential indemnification claims following the closing. Of this amount, $14.5 million was designated to cover general indemnification claims and has been released back to us. The remaining $1.5 million was designated to cover indemnification of certain tax liens and remains in escrow. We continue to be liable for certain indemnification obligations, if raised and substantiated, regardless of whether amounts are held in escrow. Time Deposits Time deposits are deposits that we make with financial institutions in interest-bearing accounts. These deposits have a maturity of less than one year as of the reporting date and are valued at carrying value, which approximates fair value. Investment Securities We record purchases and sales of securities on a trade-date basis. We currently classify and account for our investment securities as either available for sale (“AFS”) or held to maturity (“HTM”) based on our investment strategy and management’s assessment of our intent and ability to hold the securities until maturity. Securities that we may sell prior to maturity in response to changes in our investment strategy, liquidity needs, credit risk mitigating considerations, market risk profile or for other reasons are classified as AFS. Securities that we have the positive intent and ability to hold until maturity are classified as HTM. Our investment securities classified as AFS consist of investments in Federal Agricultural Mortgage Corporation (“Farmer Mac”) Series A common stock and Farmer Mac Series A, Series B and Series C non-cumulative preferred stock. AFS securities are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded as a component of accumulated other comprehensive income. Our investment securities classified as HTM consist of investments in certificates of deposit with maturities greater than 90 days, commercial paper, corporate debt securities, commercial mortgage-backed securities (“MBS”) and other asset-backed securities (“ABS”). We have the positive intent and ability to hold these securities to maturity. As such, we have classified them as HTM on our consolidated balance sheet. HTM securities are carried at amortized cost on our consolidated balance sheets. Interest income on fixed-income securities, including amortization of premiums and accretion of discounts, is generally recognized over the contractual life of the securities based on the effective yield method. We regularly evaluate our investment securities whose fair value has declined below the amortized cost to assess whether the decline in fair value is other than temporary. We recognize any other-than-temporary impairment amounts in earnings. Loans to Members Loans to members are classified as held for investment and reported at amortized cost, which is measured based on the outstanding principal balance net of unamortized deferred loan origination costs. Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method, into interest income over the life of the loan. Nonperforming Loans A loan is considered past due if a full payment of interest and principal is not received within 30 days of its due date. Loans are classified as nonperforming when the collection of interest and principal has become 90 days past due; court proceedings indicate that collection of interest and principal in accordance with the contractual terms is unlikely; or the full and timely collection of interest or principal becomes otherwise. Once a loan is classified as nonperforming, we typically place the loan on nonaccrual status and reverse any accrued and unpaid interest recorded during the period in which the loan is classified as nonperforming. We generally apply all cash received during the nonaccrual period to the reduction of principal, thereby foregoing interest income recognition. The decision to return a loan to accrual status is determined on a case-by-case basis. We fully charge off or write down loans to the estimated net realizable value in the period that it becomes evident that collectability of the full contractual amount is highly unlikely; however, our efforts to recover all charged-off amounts may continue. The determination to write off all or a portion of a loan balance is made based on various factors on a case-by-case basis including, but not limited to, cash flow analysis and the fair value of collateral securing the borrower’s loans. Impaired Loans A loan is considered impaired when, based on current information and events, we determine that it is probable that we will be unable to collect all interest and principal amounts due as scheduled in accordance with the contractual terms of the loan agreement, other than an insignificant delay in payment or insignificant shortfall in payment amount. Factors considered in determining impairment may include, but are not limited to: • the review of the borrower’s audited financial statements and interim financial statements if available, • the borrower’s payment history, • communication with the borrower, • economic conditions in the borrower’s service territory, • pending legal action involving the borrower, • restructure agreements between us and the borrower, and • estimates of the value of the borrower’s assets that have been pledged as collateral to secure our loans. We recognize interest income on impaired loans on a case-by-case basis. An impaired loan to a borrower that is nonperforming will typically be placed on nonaccrual status and we will reverse all accrued and unpaid interest. We generally apply all cash received during the nonaccrual period to the reduction of principal, thereby foregoing interest income recognition. Interest income may be recognized on an accrual basis for restructured impaired loans where the borrower is performing and is expected to continue to perform based on agreed-upon terms. We may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties. Concessionary modifications are classified as troubled debt restructurings (“TDRs”) unless the modification results in only an insignificant delay in payments to be received. All of our restructured loans are considered TDRs. Allowance for Loan Losses We maintain an allowance for loan losses that represents management’s estimate of probable losses inherent in our loan portfolio as of each balance sheet date. Our allowance for loan losses consists of a collective allowance for loans in our portfolio that are not individually impaired and a specific allowance for loans identified as individually impaired. The allowance for loan losses is reported separately on the consolidated balance sheet, and the provision for loan losses is separately reported on our consolidated statement of operations. We review the estimates and assumptions used in the calculations of the allowance for loan losses on a quarterly basis. The estimate of the allowance for loan losses is based on a review of the composition of the loan portfolio, past loss experience, specific problem loans, current economic conditions, available market data and/or projection of future cash flows and other pertinent factors that in management’s judgment may contribute to incurred losses. The allowance is based on estimates and, accordingly, actual losses may differ from the allowance amount. The methodology used to calculate the allowance for loan losses is summarized below. Collective Allowance The collective loss reserve is calculated using an internal model to estimate incurred losses for segments within our loan portfolio that have similar risk characteristics. The segments reflect each of our consolidated entities: CFC, NCSC and RTFC. Our segments are further stratified into loan pools based on member borrower type—distribution, power supply, and statewide and associates—and borrower risk ratings. We then apply loss factors to the outstanding principal balance of each of these loan pools to determine the collective allowance for loan losses. The loss factors reflect the probability of default, or default rate, and the loss severity, or loss given default, for each loan pool. We derive the total quantitative loss estimate by applying the default rate, based on a five-year loss emergence period, and recovery rate, based on our historical experience, to each loan pool. Following is additional information on the key inputs and assumptions used in determining our collective allowance for loan losses. • Internal risk ratings . As part of our credit risk management process, we regularly evaluate each borrower and loan facility in our loan portfolio and assign an internal risk rating. Our borrower risk rating is intended to reflect probability of default. The risk ratings are based on the following quantitative and qualitative factors: ◦ general financial condition of the borrower; ◦ our judgment of the quality of the borrower’s management; ◦ our judgment of the borrower’s competitive position within its service territory and industry; ◦ our estimate of the potential impact of proposed regulation and litigation; and ◦ other factors specific to individual borrowers or classes of borrowers. • Loss emergence period: The loss emergence period, or the time it takes from when a loss-triggering event happens in the loan portfolio until it is identified and a problem loan is charged off, repaid or otherwise resolved, is based on CFC’s historical average loss emergence experience. • Default rates : Because we have limited default history from which to develop default estimates, we utilize third-party industry default data to estimate default rates. We currently obtain this information from the U.S. utility default rate table published annually by S&P Global Inc. (“S&P”). This table provides historical expected default rates for the utility sector based on credit rating levels and remaining maturity. We correlate our internal risk ratings to the S&P credit ratings provided in the utility default rate table and apply the S&P default rates for our estimated loss emergence period to our loan pools. • Recovery rates. To estimate our loss severity in the event of default, we utilize our historical charge-off experience for each borrower type, which is subject to adjustment based on management’s quantitative and qualitative assessment of current conditions. Specific Allowance We generally measure impairment for individually impaired loans based on the difference between the recorded investment of the loan and the present value of the expected future cash flows discounted at the loan’s effective interest rate. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral, which we determine based on the current fair value of the collateral less estimated selling costs. Loans are considered to be collateral dependent if repayment of the loan is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. In calculating the impairment on a loan, the estimates of the expected future cash flows or collateral value are the key estimates made by management. Changes in the estimated future cash flows or collateral value affect the amount of the calculated impairment. The change in cash flows required to make the change in the calculated impairment material will be different for each borrower and depend on the period covered, the effective interest rate at the time the loan became impaired and the amount of the loan outstanding. Estimates are not used to determine our investment in the receivables or the discount rate since, in all cases, the investment is equal to the loan balance outstanding at the reporting date, and the discount rate is equal to the effective interest rate on the loan at the time the loan became impaired. Unadvanced Loan Commitments Unadvanced commitments represent amounts for which we have approved and executed loan contracts, but the funds have not been advanced. The majority of the unadvanced commitments reported represent amounts that are subject to material adverse change clauses at the time of the loan advance. Prior to making an advance on these facilities, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. The remaining unadvanced commitments relate to line of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we would be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the loan commitment. Unadvanced loan commitments related to line of credit loans are typically for periods not to exceed five years and are generally revolving facilities used for working capital and backup liquidity purposes. Historically, we have experienced a very low utilization rate on line of credit loan facilities, whether or not there is a material adverse change clause. Since we generally do not charge a fee on the unadvanced portion of the majority of our loan facilities, our borrowers will typically request long-term facilities to fund construction work plans and other capital expenditures for periods of up to five years and draw down on the facility over that time. In addition, borrowers will typically request an amount in excess of their immediate estimated loan requirements to avoid the expense related to seeking additional loan funding for unexpected items. These factors contribute to our expectation that the majority of the unadvanced loan commitments will expire without being fully drawn upon and that the total unadvanced amount does not necessarily represent future cash funding requirements. Reserve for Unadvanced Loan Commitments We maintain a reserve for unadvanced loan commitments and committed lines of credit. This reserve is included as a component of other liabilities on our consolidated balance sheets, and changes in the reserve are included in other non-interest expense on our consolidated statements of operations. Our estimate of the reserve for potential losses on these commitments takes into consideration various factors, including the existence of a material adverse change clause, the historical utilization of the committed lines of credit, the probability of funding, historical loss experience on unadvanced loan commitments and other inputs along with management judgment consistent with the methodology used to determine our allowance for loan losses. Fixed Assets Fixed assets are recorded at cost less accumulated depreciation. We recognize depreciation expense for each category of our depreciable fixed assets on a straight-line basis over the estimated useful life, which ranges from three to 40 years. We recognized depreciation expense of $8 million , $7 million and $7 million in fiscal year 2018 , 2017 and 2016 , respectively. The table below displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment. May 31, (Dollars in thousands) 2018 2017 Building and building equipment $ 50,210 $ 50,236 Furniture and fixtures 6,080 5,852 Computer software and hardware 45,389 40,469 Other 1,006 1,034 Depreciable fixed assets 102,685 97,591 Less: Accumulated depreciation (47,705 ) (41,274 ) Net depreciable fixed assets 54,980 56,317 Land 23,796 37,847 Software development 37,255 28,096 Fixed assets, net $ 116,031 $ 122,260 Assets Held for Sale An asset is classified as held for sale when (i) management commits to a plan to sell the asset or business; (ii) the asset or business is available for sale in its present condition; (iii) the asset or business is actively marketed for sale at a reasonable price; (iv) the sale is expected to be completed within one year; and (v) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. Long-lived assets classified as held for sale are initially measured at the lower of their carrying amount or fair value less cost to sell. If the carrying value exceeds the estimated fair value less cost to sell in the period the held for sale criteria are met, an impairment charge is recorded equal to the amount by which the carrying amount exceeds the fair value less cost to sell. Subsequent changes in the long-lived asset’s fair value less cost to sell is reported as an adjustment to the carrying amount to the extent that the adjusted carrying amount does not exceed the carrying amount of the long-lived asset at the time it was initially classified as held for sale. In 2007, CFC purchased a parcel of land, consisting of approximately 28 acres, located in Loudoun County, Virginia as a potential site to construct a new facility for our headquarters. We subsequently identified another site in Loudoun County for our headquarters, purchased the land and built our headquarters facility at that location. On March 14, 2018, CFC entered into a purchase and sale agreement (“the agreement”), subsequently amended on April 23, 2018, for the sale of this real estate property in excess of its carrying value of $14 million , subject to certain terms and conditions. Although we currently believe the disposition of this property is probable within the next 12 months, there can be no assurance that the disposition will be consummated in accordance with the terms of the agreement. The property was previously included in fixed assets, net on our consolidated balance sheet. In the third quarter of fiscal year 2018, we designated the property as held for sale fiscal year 2018 and reclassified it from fixed assets, net to other assets on our consolidated balance sheet. Based on the estimated sale proceeds less cost to sell, we expect to record a gain on the sale of this property. Foreclosed Assets Foreclosed assets acquired through our lending activities in satisfaction of indebtedness may be held in operating entities created and controlled by CFC and presented separately in our consolidated balance sheets under foreclosed assets, net. These assets are initially recorded at estimated fair value as of the date of acquisition. Subsequent to acquisition, foreclosed assets not classified as held for sale are evaluated for impairment, and the results of operations and any impairment are reported on our consolidated statements of operations under results of operations of foreclosed assets. When foreclosed assets meet the accounting criteria to be classified as held for sale, they are recorded at the lower of cost or fair value less estimated cost to sell at the date of transfer, with the amount at the date of transfer representing the new cost basis. Subsequent changes are recognized in our consolidated statements of operations under results of operations of foreclosed assets. We also review foreclosed assets classified as held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to estimated fair values. We did not carry any foreclosed assets on our consolidated balance sheet as of May 31, 2018 or May 31, 2017 . Debt We report debt at cost net of unamortized issuance costs and discounts or premiums. Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue. Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt. Derivative Instruments We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as over-the-counter (“OTC”) derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. In accordance with the accounting standards for derivatives and hedging activities, we record derivative instruments at fair value as either a derivative asset or derivative liability on our consolidated balance sheets. We report derivative asset and liability amounts on a gross basis based on individual contracts, which does not take into consideration the effects of master netting agreements or collateral netting. Derivatives in a gain position are reported as derivative assets on our consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our consolidated balance sheets as a component of either accrued interest receivable or accrued interest payable. If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of net accrued periodic derivative cash settlements and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses). If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of the hedge relationship. Changes in the fair value of derivatives designated as qualifying fair value hedges are recorded in earnings together with offsetting changes in the fair value of the hedged item and any related ineffectiveness. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”), to the extent that the hedge relationships are effective, and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses) in our consolidated statement of operations. We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting. Accordingly, changes in the fair value of interest rate swaps are reported in our consolidated statements of operations under derivative gains (losses). Net periodic cash settlements related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows. We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances or repricings. Changes in the fair value of treasury locks designated as cash flow hedges are recorded as a component of OCI and reclassified from AOCI into interest expense when the forecasted transaction occurs using the effective interest method. Any ineffectiveness is recognized as a component of derivative gains (losses) in our consolidated statements of operations. At June 1, 2001, as a result of the adoption of the derivative accounting guidance that required derivatives to be reported at fair value on the balance sheet, we recorded a transition adjustment net loss in AOCI. The transition adjustment net loss is being reclassified into earnings and reported as a component of derivative gains (losses) in our consolidated statements of operations. We expect to continue to reclassify the remaining balance of the transition adjustment to earnings through 2029. Guarantee Liability We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members’ debt. The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations. The contingent portion of the guarantee liability represents management’s estimate of our exposure to losses within the guarantee portfolio. The methodology used to estimate the contingent guarantee liability is consistent with the methodology used to determine the allowance for loan losses. We have recorded a noncontingent guarantee liability for all new or modified guarantees since January 1, 2003. Our noncontingent guarantee liability represents our obligation to stand ready to perform over the term of our guarantees and liquidity obligations that we have entered into or modified since January 1, 2003. Our noncontingent obligation is estimated based on guarantee and liquidity fees charged for guarantees issued, which represents management’s estimate of the fair value of our obligation to stand ready to perform. The fees are deferred and amortized using the straight-line method into interest income over the term of the guarantee. Fair Value Valuation Processes We present certain financial instruments at fair value, including available-for-sale investment securities and derivatives. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (also referred to as an exit price). We have various processes and controls in place to ensure that fair value is reasonably estimated. We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early-termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity excluding common stock and preferred stock investments that have no stated maturity. Fair Val |
Variable Interest Entities (Not
Variable Interest Entities (Notes) | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity Disclosure | NOTE 2—VARIABLE INTEREST ENTITIES NCSC and RTFC meet the definition of a VIE because they do not have sufficient equity investment at risk to finance their activities without financial support. CFC is the primary source of funding for NCSC and the sole source of funding for RTFC. Under the terms of management agreements, CFC manages the business operations of NCSC and RTFC. CFC also unconditionally guarantees full indemnification for any loan losses of NCSC and RTFC pursuant to guarantee agreements with each company. CFC earns management and guarantee fees from its agreements with NCSC and RTFC. All loans that require NCSC board approval also require CFC board approval. CFC is not a member of NCSC and does not elect directors to the NCSC board. If CFC becomes a member of NCSC, it would control the nomination process for one NCSC director. NCSC members elect directors to the NCSC board based on one vote for each member. NCSC is a service organization member of CFC. All loans that require RTFC board approval also require approval by CFC for funding under RTFC’s credit facilities with CFC. CFC is not a member of RTFC and does not elect directors to the RTFC board. RTFC is a non-voting associate of CFC. RTFC members elect directors to the RTFC board based on one vote for each member. NCSC and RTFC creditors have no recourse against CFC in the event of a default by NCSC and RTFC, unless there is a guarantee agreement under which CFC has guaranteed NCSC or RTFC debt obligations to a third party. The following table provides information on incremental consolidated assets and liabilities of VIEs included in CFC’s consolidated financial statements, after applying intercompany eliminations, as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Total loans outstanding $ 1,149,574 $ 968,343 Other assets 10,280 10,157 Total assets $ 1,159,854 $ 978,500 Long-term debt $ 8,000 $ 10,000 Other liabilities 33,923 36,899 Total liabilities $ 41,923 $ 46,899 The following table provides information on CFC’s credit commitments to NCSC and RTFC, and its potential exposure to loss as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 CFC credit commitments $ 5,500,000 $ 5,500,000 Outstanding commitments: Borrowings payable to CFC (1) 1,116,465 931,686 Credit enhancements: CFC third-party guarantees 12,005 14,697 Other credit enhancements 14,655 20,963 Total credit enhancements (2) 26,660 35,660 Total outstanding commitments 1,143,125 967,346 CFC available credit commitments $ 4,356,875 $ 4,532,654 ____________________________ (1) Borrowings payable to CFC are eliminated in consolidation. (2) Excludes interest due on these instruments. CFC loans to NCSC and RTFC are secured by all assets and revenue of NCSC and RTFC. CFC’s maximum potential exposure, including interest due, for the credit enhancements totaled $28 million . The maturities for obligations guaranteed by CFC extend through 2031. |
Investment Securities (Notes)
Investment Securities (Notes) | 12 Months Ended |
May 31, 2018 | |
Investments [Abstract] | |
INVESTMENT SECURITIES | NOTE 3—INVESTMENT SECURITIES The accounting and measurement framework for investment securities differs depending on the security classification. We currently classify and account for our investment securities as either AFS or HTM based on our investment strategy and management’s assessment of our intent and ability to hold the securities until maturity. See “Note 1—Summary of Significant Accounting Policies” for additional information on our investment securities. During the second quarter of fiscal year 2018, we commenced the purchase of additional investment securities, consisting primarily of certificates of deposit with maturities greater than 90 days, commercial paper, corporate debt securities, commercial MBS and other ABS. Pursuant to our investment policy guidelines, all fixed-income securities, at the time of purchase, must be rated at least investment grade and on stable outlook based on external credit ratings from at least two of the leading global credit rating agencies, when available, or the corresponding equivalent, when not available. Securities rated investment grade, that is those rated Baa3 or higher by Moody’s Investors Service (“Moody’s”) or BBB- or higher by S&P or BBB- or higher by Fitch Ratings Inc. (“Fitch”), are generally considered by the rating agencies to be of lower credit risk than non-investment grade securities. We have the positive intent and ability to hold these securities to maturity. As such, we have classified them as held to maturity on our consolidated balance sheets. We did no t have any securities classified as HTM as of May 31, 2017 . Amortized Cost and Fair Value of Investment Securities The following tables present the amortized cost and fair value of our investment securities and the corresponding gross unrealized gains and losses, by classification category and major security type, as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: Farmer Mac—series A non-cumulative preferred stock $ 30,000 $ 480 $ — $ 30,480 Farmer Mac—series B non-cumulative preferred stock 25,000 1,000 — 26,000 Farmer Mac—series C non-cumulative preferred stock 25,000 872 — 25,872 Farmer Mac—class A common stock 538 6,442 — 6,980 Total investment securities, available for sale 80,538 8,794 — 89,332 Held to maturity: Certificates of deposit 4,148 — — 4,148 Commercial paper 9,134 — — 9,134 U.S. agency debt securities 2,000 16 — 2,016 Corporate debt securities 455,721 714 (4,595 ) 451,840 Commercial MBS: Agency 7,024 63 — 7,087 Non-agency 3,453 3 (3 ) 3,453 Total commercial MBS 10,477 66 (3 ) 10,540 U.S. state and municipality debt securities 2,147 24 — 2,171 Foreign government debt securities 1,241 9 — 1,250 Other ABS (1) 34,651 11 (215 ) 34,447 Total investment securities, held to maturity 519,519 840 (4,813 ) 515,546 Total investment securities $ 600,057 $ 9,634 $ (4,813 ) $ 604,878 ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. May 31, 2017 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: Farmer Mac—series A non-cumulative preferred stock $ 30,000 $ 1,585 $ — $ 31,585 Farmer Mac—series B non-cumulative preferred stock 25,000 1,940 — 26,940 Farmer Mac—series C non-cumulative preferred stock 25,000 4,150 — 29,150 Farmer Mac—class A common stock 538 4,341 — 4,879 Total investment securities, available for sale $ 80,538 $ 12,016 $ — $ 92,554 For additional information on the unrealized gains (losses) losses recorded on our AFS investment securities, see “Note 10—Equity—Accumulated Other Comprehensive Income.” Investment Securities in Gross Unrealized Loss Position An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. The following table presents the fair value and gross unrealized losses for investments in a gross loss position, aggregated by security type, and the length of time the securities have been in a continuous unrealized loss position as of May 31, 2018 . The securities are segregated between investments that have been in a continuous unrealized loss position for less than 12 months and 12 months or more based on the point in time that the fair value declined below the amortized cost basis. We did not have any investment securities in a gross unrealized loss position as of May 31, 2017 . May 31, 2018 Unrealized Loss Position Less than 12 Months Unrealized Loss Position 12 Months or Longer Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Held to maturity: Corporate debt securities $ 280,139 $ (4,595 ) $ — $ — $ 280,139 $ (4,595 ) Commercial MBS, non-agency 1,451 (3 ) — — 1,451 (3 ) Other ABS (1) 27,012 (215 ) — — 27,012 (215 ) Total investment securities $ 308,602 $ (4,813 ) $ — $ — $ 308,602 $ (4,813 ) ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. Other-Than-Temporary Impairment We conduct periodic reviews of all securities with unrealized losses to evaluate whether the impairment is other than temporary. The number of individual securities in an unrealized loss position was 225 as of May 31, 2018 . We have assessed each security with gross unrealized losses included in the above table for credit impairment. As part of that assessment, we concluded that the unrealized losses are driven by changes in market interest rates rather than by adverse changes in the credit quality of these securities. Based on our assessment, we expect to recover the entire amortized cost basis of these securities, as we do not intend to sell any of the securities and have concluded that it is more likely than not that we will not be required to sell prior to recovery of the amortized cost basis. Accordingly, we currently consider the impairment of these securities to be temporary. Contractual Maturity and Yield The following table presents, by major security type, the remaining contractual maturity based on amortized cost and fair value as of May 31, 2018 of our HTM investment securities. Because borrowers may have the right to call or prepay certain obligations, the expected maturities of our investments may differ from the scheduled contractual maturities presented below. May 31, 2018 (Dollars in thousands) Due in 1 Year or Less Due >1 Year through 5 Years Due >5 Years through 10 Years Due >10 Years Total Amortized cost: Certificates of deposit $ 4,148 $ — $ — $ — $ 4,148 Commercial paper 9,134 — — — 9,134 U.S. agency debt securities — 2,000 — — 2,000 Corporate debt securities 9,111 377,384 69,226 — 455,721 Commercial MBS: Agency — — 7,024 — 7,024 Non-agency — — — 3,453 3,453 Total commercial MBS — — 7,024 3,453 10,477 U.S. state and municipality debt securities — — 2,147 — 2,147 Foreign government debt securities — 1,241 — — 1,241 Other ABS (1) — 33,357 1,294 — 34,651 Total $ 22,393 $ 413,982 $ 79,691 $ 3,453 $ 519,519 Fair value: Certificates of deposit $ 4,148 $ — $ — $ — $ 4,148 Commercial paper 9,134 — — — 9,134 U.S. agency debt securities — 2,016 — — 2,016 Corporate debt securities 9,056 373,284 69,500 — 451,840 Commercial MBS: Agency — — 7,087 — 7,087 Non-agency — — — 3,453 3,453 Total commercial MBS — — 7,087 3,453 10,540 U.S. state and municipality debt securities — — 2,171 — 2,171 Foreign government debt securities — 1,250 — — 1,250 Other ABS (1) — 33,157 1,290 — 34,447 Total $ 22,338 $ 409,707 $ 80,048 $ 3,453 $ 515,546 Weighted-average coupon (2) 1.81 % 2.84 % 3.60 % 2.74 % 2.91 % ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. (2) Calculated based on the weighted-average coupon rate, which excludes the impact of amortization of premium and accretion of discount. The average contractual maturity and weighted-average coupon of our HTM investment securities was four years and 2.91% , respectively, as of May 31, 2018 . The average credit rating of these securities, based on the equivalent lowest credit rating by Moody’s, S&P and Fitch was A- as of May 31, 2018 . Realized Gains and Losses We did not sell any of our investment securities during the year ended May 31, 2018 and May 31, 2017 , and therefore have not recorded any realized gains or losses. |
Loans (Notes)
Loans (Notes) | 12 Months Ended |
May 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans | NOTE 4—LOANS Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are considered loans held for investment. The loans presented on our consolidated balance sheet are classified and accounted for as held for investment. Loans held for investment are carried at the outstanding unpaid principal balance, net of unamortized loan origination costs. We offer fixed- and variable-rate loans and line of credit loans. Borrowers may choose between a fixed interest rate or a variable interest rate for periods of one to 35 years . When a selected fixed interest rate term expires, the borrower may select another fixed-rate term or a variable rate. We consider these fixed- and variable-rate loans, which have repricing terms, as long-term loans. Collateral and security requirements for advances on loan commitments are identical to those required at the time of the initial loan approval. The following table presents the outstanding principal balance of loans to members, including deferred loan origination costs, and unadvanced loan commitments by loan type and member class, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Loans Outstanding Unadvanced Commitments (1) Loans Outstanding Unadvanced Commitments (1) Loan type: Long-term loans: Fixed rate $ 22,696,185 $ — $ 22,136,690 $ — Variable rate 1,039,491 4,952,834 847,419 4,802,319 Total long-term loans 23,735,676 4,952,834 22,984,109 4,802,319 Lines of credit 1,431,818 7,692,784 1,372,221 7,772,655 Total loans outstanding 25,167,494 12,645,618 24,356,330 12,574,974 Deferred loan origination costs 11,114 — 10,714 — Loans to members $ 25,178,608 $ 12,645,618 $ 24,367,044 $ 12,574,974 Member class: CFC: Distribution $ 19,551,511 $ 8,188,376 $ 18,825,366 $ 8,295,146 Power supply 4,397,353 3,407,095 4,504,791 3,276,113 Statewide and associate 69,055 128,025 57,830 144,406 Total CFC 24,017,919 11,723,496 23,387,987 11,715,665 NCSC 786,457 624,663 613,924 584,944 RTFC 363,118 297,459 354,419 274,365 Total loans outstanding 25,167,494 12,645,618 24,356,330 12,574,974 Deferred loan origination costs 11,114 — 10,714 — Loans to members $ 25,178,608 $ 12,645,618 $ 24,367,044 $ 12,574,974 ____________________________ (1) The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. Unadvanced Loan Commitments Unadvanced loan commitments represent approved and executed loan contracts for which funds have not been advanced to borrowers. The following table summarizes the available balance under unadvanced loan commitments as of May 31, 2018 and the related maturities, by fiscal year and thereafter, by loan type: Available Notional Maturities of Unadvanced Loan Commitments (Dollars in thousands) 2019 2020 2021 2022 2023 Thereafter Line of credit loans $ 7,692,784 $ 4,168,751 $ 710,763 $ 805,508 $ 770,971 $ 1,211,791 $ 25,000 Long-term loans 4,952,834 883,840 586,005 652,499 1,714,338 1,104,185 11,967 Total $ 12,645,618 $ 5,052,591 $ 1,296,768 $ 1,458,007 $ 2,485,309 $ 2,315,976 $ 36,967 Unadvanced line of credit commitments accounted for 61% of total unadvanced loan commitments as of May 31, 2018 , while unadvanced long-term loan commitments accounted for 39% of total unadvanced loan commitments. Unadvanced line of credit commitments are typically revolving facilities for periods not to exceed five years. Unadvanced line of credit commitments generally serve as supplemental back-up liquidity to our borrowers. Historically, borrowers have not drawn the full commitment amount for line of credit facilities, and we have experienced a very low utilization rate on line of credit loan facilities regardless of whether or not we are obligated to fund the facility where a material adverse change exists. Our unadvanced long-term loan commitments have a five-year draw period under which a borrower may advance funds prior to the expiration of the commitment. We expect that the majority of the long-term unadvanced loan commitments of $4,953 million will be advanced prior to the expiration of the commitment. Because we historically have experienced a very low utilization rate on line of credit loan facilities, which account for the majority of our total unadvanced loan commitments, we believe the unadvanced loan commitment total of $12,646 million as of May 31, 2018 is not necessarily representative of our future funding cash requirements. Unadvanced Loan Commitments—Conditional The substantial majority of our line of credit commitments and all of our unadvanced long-term loan commitments include material adverse change clauses. Unadvanced loan commitments subject to material adverse change clauses totaled $9,789 million and $9,973 million as of May 31, 2018 and 2017 , respectively. Prior to making an advance on these facilities, we confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. In some cases, the borrower’s access to the full amount of the facility is further constrained by the designated purpose, imposition of borrower-specific restrictions or by additional conditions that must be met prior to advancing funds. Unadvanced Loan Commitments—Unconditional Unadvanced loan commitments not subject to material adverse change clauses at the time of each advance consisted of unadvanced committed lines of credit totaling $2,857 million and $2,602 million as of May 31, 2018 and 2017 , respectively. As such, we are required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the facility. The following table summarizes the available balance under unconditional committed lines of credit as of May 31, 2018 , and maturities by fiscal year. Available Balance Notional Maturities of Unconditional Committed Lines of Credit (Dollars in thousands) 2019 2020 2021 2022 2023 Committed lines of credit $2,857,350 $279,285 $435,151 $444,326 $644,178 $1,054,410 Loan Sales We transfer, from time to time, loans to third parties under our direct loan sale program. Our transfer of loans, which is at par value and sold concurrently with loan closing, meets the applicable accounting criteria for sale accounting. Accordingly, we remove the loans from our consolidated balance sheets when control has been surrendered and recognize a gain or loss. We retain the servicing performance obligations on these loans and recognize related servicing fees on an accrual basis over the period for which servicing activity is provided, as we believe the servicing fee represents adequate compensation. We do not hold any continuing interest in the loans sold to date other than servicing performance obligations. We have no obligation to repurchase loans from the purchaser, except in the case of breaches of representations and warranties. We sold CFC loans with outstanding balances totaling $119 million , $58 million and $99 million at par for cash in fiscal years 2018 , 2017 and 2016 , respectively. We recorded immaterial losses upon the sale of these loans, attributable to the unamortized deferred loan origination costs associated with the transferred loans. Pledging of Loans We are required to pledge eligible mortgage notes in an amount at least equal to the outstanding balance of our secured debt. The following table summarizes our loans outstanding as collateral pledged to secure our collateral trust bonds, Clean Renewable Energy Bonds, notes payable to Farmer Mac and notes payable under the Guaranteed Underwriter Program of the USDA (“Guaranteed Underwriter Program”) and the amount of the corresponding debt outstanding as of May 31, 2018 and 2017 . See “Note 5—Short-Term Borrowings” and “Note 6—Long-Term Debt” for information on our borrowings. May 31, (Dollars in thousands) 2018 2017 Collateral trust bonds: 2007 indenture: Distribution system mortgage notes $ 8,643,344 $ 8,740,572 RUS-guaranteed loans qualifying as permitted investments 140,680 146,373 Total pledged collateral $ 8,784,024 $ 8,886,945 Collateral trust bonds outstanding 7,697,711 7,697,711 1994 indenture: Distribution system mortgage notes $ 243,418 $ 263,007 Collateral trust bonds outstanding 220,000 225,000 Farmer Mac: Distribution and power supply system mortgage notes $ 3,331,775 $ 2,942,456 Notes payable outstanding 2,891,496 2,513,389 Clean Renewable Energy Bonds Series 2009A: Distribution and power supply system mortgage notes $ 12,615 $ 14,943 Cash 415 481 Total pledged collateral $ 13,030 $ 15,424 Notes payable outstanding 11,556 13,214 Federal Financing Bank: Distribution and power supply system mortgage notes $ 5,772,750 $ 5,833,515 Notes payable outstanding 4,856,375 4,985,748 Credit Concentration As a tax-exempt, member-owned finance cooperative, CFC’s principal focus is to provide funding to its rural electric utility cooperative members to assist them in acquiring, constructing and operating electric distribution, power supply systems and related facilities. We serve electric and telecommunications members throughout the United States and its territories, including 50 states, the District of Columbia, American Samoa and Guam. Our consolidated membership totaled 1,449 members and 216 associates as of May 31, 2018 . Texas had the largest concentration of outstanding loans to borrowers in any one state, with approximately 15% of total loans outstanding as of both May 31, 2018 and 2017 . As a result of lending primarily to our rural electric utility cooperative members we have a loan portfolio subject to single-industry and single-obligor concentration risks. Despite our credit concentration risks, we historically have experienced limited defaults and very low credit losses in our electric loan portfolio. Loans outstanding to electric utility organizations represented approximately 99% of total loans outstanding as of May 31, 2018 , unchanged from May 31, 2017 . The remaining loans outstanding in our portfolio were to RTFC members, affiliates and associates in the telecommunications industry. The combined exposure of loans and guarantees outstanding for our 20 largest borrowers represented 23% and 24% of our total combined exposure as of May 31, 2018 and 2017 , respectively. The 20 largest borrowers consisted of nine distribution systems, 10 power supply systems and one NCSC associate member as of May 31, 2018 . The 20 largest borrowers consisted of 10 distribution systems, nine power supply systems and one NCSC associate member as of May 31, 2017 . The largest total loan and guarantee outstanding exposure to a single borrower or controlled group represented approximately 2% of total loans and guarantees outstanding as of both May 31, 2018 and 2017 . Credit Quality We closely monitor loan performance trends to manage and evaluate our credit risk exposure. We seek to provide a balance between meeting the credit needs of our members while also ensuring the sound credit quality of our loan portfolio. Payment status and internal risk ratings are key indicators, among others, of the level of credit risk in our loan portfolio. Except when providing line of credit loans, we generally lend to our members on a senior secured basis. Long-term loans are generally secured on parity with other secured lenders (primarily RUS), if any, by all assets and revenue of the borrower with exceptions typical in utility mortgages. Line of credit loans are generally unsecured. In addition to the collateral pledged to secure our loans, distribution and power supply borrowers also are required to set rates charged to customers to achieve certain specified financial ratios. As part of our strategy in managing our credit risk exposure, we entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. The aggregate unpaid principal balance of designated and Farmer Mac approved loans was $660 million and $843 million as of May 31, 2018 and 2017 , respectively. Under the agreement, we are required to pay Farmer Mac a monthly fee based on the unpaid principal balance of loans covered under the purchase commitment. No loans had been put to Farmer Mac for purchase, pursuant to this agreement, as of May 31, 2018 . Also, we had long-term loans totaling $161 million and $167 million as of May 31, 2018 and 2017 , respectively, guaranteed by RUS. Payment Status of Loans The tables below present the payment status of loans outstanding by member class as of May 31, 2018 and 2017 . As indicated in the table, we did not have any past due loans as of either May 31, 2018 or May 31, 2017 . May 31, 2018 (Dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due (1) Total Past Due Total Loans Outstanding Nonaccrual Loans CFC: Distribution $ 19,551,511 $ — $ — $ — $ 19,551,511 $ — Power supply 4,397,353 — — — 4,397,353 — Statewide and associate 69,055 — — — 69,055 — CFC total 24,017,919 — — — 24,017,919 — NCSC 786,457 — — — 786,457 — RTFC 363,118 — — — 363,118 — Total loans outstanding $ 25,167,494 $ — $ — $ — $ 25,167,494 $ — Percentage of total loans 100.00 % — % — % — % 100.00 % — % May 31, 2017 (Dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due (1) Total Total Loans Outstanding Nonaccrual Loans CFC: Distribution $ 18,825,366 $ — $ — $ — $ 18,825,366 $ — Power supply 4,504,791 — — — 4,504,791 — Statewide and associate 57,830 — — — 57,830 — CFC total 23,387,987 — — — 23,387,987 — NCSC 613,924 — — — 613,924 — RTFC 354,419 — — — 354,419 — Total loans outstanding $ 24,356,330 $ — $ — $ — $ 24,356,330 $ — Percentage of total loans 100.00 % — % — % — % 100.00 % — % ____________________________ (1) All loans 90 days or more past due are on nonaccrual status. Troubled Debt Restructurings We did not have any loans modified as TDRs during the year ended May 31, 2018 . The following table provides a summary of loans modified as TDRs in prior periods, the performance status of these loans and the unadvanced loan commitments related to the TDR loans, by member class, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Loans Outstanding % of Total Loans Unadvanced Commitments Loans Outstanding % of Total Loans Unadvanced Commitments TDR loans: Performing TDR loans: CFC/Distribution $ 6,507 0.03 % $ — $ 6,581 0.02 % $ — RTFC 6,092 0.02 % — 6,592 0.03 — Total performing TDR loans 12,599 0.05 % — 13,173 0.05 — Total TDR loans $ 12,599 0.05 % $ — $ 13,173 0.05 % $ — We did not have any TDR loans classified as nonperforming as of May 31, 2018 or May 31, 2017 . TDR loans classified as performing as of May 31, 2018 and 2017 were performing in accordance with the terms of their respective restructured loan agreement and on accrual status as of the respective reported dates. One borrower with a TDR loan also had a line of credit facility, restricted for fuel purchases only, totaling $6 million as of both May 31, 2018 and 2017 . The outstanding amount under this facility totaled less than $1 million as of both May 31, 2018 and 2017 , and was classified as performing as of each respective date. Nonperforming Loans In addition to TDR loans that may be classified as nonperforming, we also may have nonperforming loans that have not been modified as a TDR. We did not have any loans classified as nonperforming as of either May 31, 2018 or May 31, 2017 . The following table shows foregone interest income for loans on nonaccrual status for the fiscal years ended May 31, 2018, 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Performing TDR loans $ — $ — $ 166 Nonperforming TDR loans — 31 109 Total $ — $ 31 $ 275 Impaired Loans The following table provides information on loans classified as individually impaired as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Recorded Investment Related Allowance Recorded Investment Related Allowance With no specific allowance recorded: CFC $ 6,507 $ — $ 6,581 $ — With a specific allowance recorded: RTFC 6,092 1,198 6,592 1,640 Total impaired loans $ 12,599 $ 1,198 $ 13,173 $ 1,640 The following table presents, by company, the average recorded investment for individually impaired loans and the interest income recognized on these loans for fiscal years ended May 31, 2018, 2017 and 2016 . Average Recorded Investment Interest Income Recognized (Dollars in thousands) 2018 2017 2016 2018 2017 2016 CFC $ 6,524 $ 6,613 $ 6,842 $ 571 $ 562 $ 390 RTFC 6,361 7,736 9,823 318 343 264 Total impaired loans $ 12,885 $ 14,349 $ 16,665 $ 889 $ 905 $ 654 Internal Risk Ratings of Loans As part of our credit risk management process, we monitor and evaluate each borrower and loan in our loan portfolio and assign internal borrower and loan facility risk ratings based on quantitative and qualitative assessments. Our borrower risk ratings are intended to assess probability of default. Each risk rating is reassessed annually following the receipt of the borrower’s audited financial statements; however, interim risk-rating downgrades or upgrades may occur as a result of significant developments or trends. Our borrower risk ratings are aligned with banking regulatory agency credit risk rating definitions of pass and criticized classifications, with criticized divided between special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default. Following is a description of each rating category. • Pass : Borrowers that are not experiencing difficulty and/or not showing a potential or well-defined credit weakness. • Special Mention : Borrowers that may be characterized by a potential credit weakness or deteriorating financial condition that is not sufficiently serious to warrant a classification of substandard or doubtful. • Substandard : Borrowers that display a well-defined credit weakness that may jeopardize the full collection of principal and interest. • Doubtful : Borrowers that have a well-defined credit weakness or weaknesses that make full collection of principal and interest, on the basis of currently known facts, conditions and collateral values, highly questionable and improbable. Loans to borrowers in the pass, special mention and substandard categories are generally considered not to be individually impaired and are included in the loan pools for determining the collective reserve component of the allowance for loan losses. Loans to borrowers in the doubtful category are considered to be impaired and are therefore individually assessed for impairment in determining the specific reserve component of the allowance for loan losses. The following tables present total loans outstanding, by member class and borrower risk-rating category, based on the risk ratings used in the estimation of our allowance for loan losses as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total CFC: Distribution $ 19,429,121 $ 6,853 $ 115,537 $ — $ 19,551,511 Power supply 4,348,328 — 49,025 — 4,397,353 Statewide and associate 69,055 — — — 69,055 CFC total 23,846,504 6,853 164,562 — 24,017,919 NCSC 786,457 — — — 786,457 RTFC 356,503 523 6,092 — 363,118 Total loans outstanding $ 24,989,464 $ 7,376 $ 170,654 $ — $ 25,167,494 May 31, 2017 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total CFC: Distribution $ 18,715,810 $ 109,556 $ — $ — $ 18,825,366 Power supply 4,504,791 — — — 4,504,791 Statewide and associate 56,654 1,176 — — 57,830 CFC total 23,277,255 110,732 — — 23,387,987 NCSC 612,592 1,332 — — 613,924 RTFC 346,944 — 7,475 — 354,419 Total loans outstanding $ 24,236,791 $ 112,064 $ 7,475 $ — $ 24,356,330 The increase in loans classified as substandard of $163 million was attributable to the downgrade of an electric distribution cooperative and its subsidiary as of May 31, 2018 . The electric distribution cooperative provides its customers with distribution and transmission services and is in the early stages of deploying retail broadband service. The borrower is currently experiencing financial difficulties due to recent net losses and weak cash flows. Pursuant to our risk rating guidelines, the borrower’s current financial condition warranted a downgrade to a substandard rating as of May 31, 2018 . The borrower and its subsidiary are current with regard to all principal and interest payments and have never been delinquent. The borrower operates in a territory that is not rate-regulated and has the ability to adjust its electric rates to cover operating costs and service debt. Of the outstanding amount, all but $7 million is secured under our typical collateral requirements for long-term loan advances. We currently expect to collect all principal and interest amounts due from the borrower and its subsidiary. Accordingly, the loans outstanding to this borrower and its subsidiary were not deemed to be impaired as of May 31, 2018 . Allowance for Loan Losses The following tables summarize changes, by company, in the allowance for loan losses as of and for the years ended May 31, 2018, 2017 and 2016 . Year Ended May 31, 2018 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2017 $ 29,499 $ 2,910 $ 4,967 $ 37,376 Benefit for loan losses (17,199 ) (828 ) (548 ) (18,575 ) Balance as of May 31, 2018 $ 12,300 $ 2,082 $ 4,419 $ 18,801 Year Ended May 31, 2017 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2016 $ 24,559 $ 3,134 $ 5,565 $ 33,258 Provision (benefit) for loan losses 4,781 (224 ) 1,421 5,978 Charge-offs — — (2,119 ) (2,119 ) Recoveries 159 — 100 259 Net (charge-offs) recoveries 159 — (2,019 ) (1,860 ) Balance as of May 31, 2017 $ 29,499 $ 2,910 $ 4,967 $ 37,376 Year Ended May 31, 2016 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2015 $ 23,716 $ 5,441 $ 4,533 $ 33,690 Provision (benefit) for loan losses 629 (2,307 ) 1,032 (646 ) Recoveries 214 — — 214 Balance as of May 31, 2016 $ 24,559 $ 3,134 $ 5,565 $ 33,258 The tables below present, by company, the components of our allowance for loan losses and the recorded investment of the related loans as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) CFC NCSC RTFC Total Ending balance of the allowance: Collective allowance $ 12,300 $ 2,082 $ 3,221 $ 17,603 Specific allowance — — 1,198 1,198 Total ending balance of the allowance $ 12,300 $ 2,082 $ 4,419 $ 18,801 Recorded investment in loans: Collectively evaluated loans $ 24,011,412 $ 786,457 $ 357,026 $ 25,154,895 Individually evaluated loans 6,507 — 6,092 12,599 Total recorded investment in loans $ 24,017,919 $ 786,457 $ 363,118 $ 25,167,494 Total recorded investment in loans, net (1) $ 24,005,619 $ 784,375 $ 358,699 $ 25,148,693 May 31, 2017 (Dollars in thousands) CFC NCSC RTFC Total Ending balance of the allowance: Collective allowance $ 29,499 $ 2,910 $ 3,327 $ 35,736 Specific allowance — — 1,640 1,640 Total ending balance of the allowance $ 29,499 $ 2,910 $ 4,967 $ 37,376 Recorded investment in loans: Collectively evaluated loans $ 23,381,406 $ 613,924 $ 347,827 $ 24,343,157 Individually evaluated loans 6,581 — 6,592 13,173 Total recorded investment in loans $ 23,387,987 $ 613,924 $ 354,419 $ 24,356,330 Total recorded investment in loans, net (1) $ 23,358,488 $ 611,014 $ 349,452 $ 24,318,954 ___________________________ (1) Excludes unamortized deferred loan origination costs of $ 11 million as of both May 31, 2018 and 2017 . In the fourth quarter of fiscal year 2018 , we increased the recovery rate assumptions used in determining the collective allowance for our electric distribution and power supply loan portfolios to reflect management’s updated assessment of expected recovery rates in the event of a borrower default. The increase in recovery rate assumptions for these loan portfolios was the primary driver of the $18 million reduction in our allowance for loan losses to $19 million as of May 31, 2018 , from $37 million as of May 31, 2017 . Our electric utility loan portfolio has continued to exhibit strong credit performance. In fiscal year 2018 , for the fifth consecutive fiscal year, we had no payment defaults, charge-offs, delinquent loans or nonperforming loans in our electric utility loan portfolio. Although we downgraded one electric distribution cooperative and its subsidiary, which had combined total loans outstanding of $165 million , to substandard as of May 31, 2018 , we believe that, in the event of default, we would recover substantially all of the outstanding amount based on the historical average recovery rates for defaulted loans in our electric distribution and power supply loan portfolios. Reserve for Unadvanced Commitments We also maintain a reserve for unadvanced loan commitments at a level estimated by management to provide for probable losses under these commitments as of each balance sheet date. Unadvanced loan commitments are analyzed and segregated by loan type and risk using our internal risk-rating scales. We use these risk classifications, in combination with the probability of commitment usage, and any other pertinent information to estimate a reserve for unadvanced loan commitments, which we record as a component of other liabilities on our consolidated balance sheets. The reserve for these commitments was less than $1 million as of both May 31, 2018 and 2017 . |
Short-Term Borrowings (Notes)
Short-Term Borrowings (Notes) | 12 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowings | NOTE 5—SHORT-TERM BORROWINGS The following table provides comparative information on our short-term borrowings and weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Interest Rate Amount Weighted-Average Interest Rate Short-term borrowings: Commercial paper sold through dealers, net of discounts $ 1,064,266 1.87 % $ 999,691 0.93 % Commercial paper sold directly to members, at par 1,202,105 1.89 928,158 0.95 Select notes 780,472 2.04 696,889 1.12 Daily liquidity fund notes 400,635 1.50 527,990 0.80 Medium-term notes sold to members 248,432 1.90 190,172 1.50 Farmer Mac notes payable (1) 100,000 2.23 — — Total short-term borrowings $ 3,795,910 1.88 $ 3,342,900 0.99 ___________________________ (1) Advanced under the revolving note purchase agreement with Farmer Mac dated July 31, 2015. See “Note 6—Long-Term Debt” for additional information on this revolving note purchase agreement with Farmer Mac. We issue commercial paper for periods of one to 270 days . We also issue select notes for periods ranging from 30 to 270 days . Select notes are unsecured obligations that do not require backup bank lines of credit for liquidity purposes. These notes require a larger minimum investment than our commercial paper sold to members and, as a result, offer a higher interest rate than our commercial paper. We also issue daily liquidity fund notes, which are unsecured obligations that do not require backup bank lines of credit for liquidity purposes. We also issue medium-term notes, which represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members. Committed Bank Revolving Line of Credit Agreements We had $3,085 million and $3,165 million of commitments under committed bank revolving line of credit agreements as of May 31, 2018 and 2017 , respectively. Under our current committed bank revolving line of credit agreements, we have the ability to request up to $300 million of letters of credit, which would result in a reduction in the remaining available amount under the facilities. On November 20, 2017, we amended and restated the three-year and five-year committed bank revolving line of credit agreements to extend the maturity dates to November 20, 2020 and November 20, 2022, respectively, and to terminate certain third-party bank commitments totaling $40 million under the three-year agreement and $40 million under the five-year agreement. As a result, the total commitment amount from third-parties under the three-year facility and the five-year facility is $1,493 million and $1,592 million , respectively, resulting in a combined total commitment amount under the two facilities of $3,085 million . The following table presents the total commitment, the net amount available for use and the outstanding letters of credit under our committed bank revolving line of credit agreements as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in millions) Total Commitment Letters of Credit Outstanding Net Available for Use Total Commitment Letters of Credit Outstanding Net Available for Use Maturity Annual Facility Fee (1) 3-year agreement — — — 1,533 — 1,533 November 19, 2019 7.5 bps 3-year agreement 1,492 — 1,492 — — — November 20, 2020 7.5 bps Total 3-year agreement 1,492 — 1,492 1,533 — 1,533 5-year agreement — — — 1,632 1 1,631 November 19, 2021 10 bps 5-year agreement 1,593 3 1,590 — — — November 20, 2022 10 bps Total 5-year agreement 1,593 3 1,590 1,632 1 1,631 Total $ 3,085 $ 3 $ 3,082 $ 3,165 $ 1 $ 3,164 ___________________________ (1) Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement. We had no borrowings outstanding under our committed bank revolving line of credit agreements as of May 31, 2018 and 2017 , and we were in compliance with all covenants and conditions under the agreements as of each date. |
Long-Term Debt (Notes)
Long-Term Debt (Notes) | 12 Months Ended |
May 31, 2018 | |
Debt Instruments [Abstract] | |
Long-Term Debt | NOTE 6—LONG-TERM DEBT The following table displays long-term debt outstanding and the weighted-average interest rates, by debt type, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Maturity Date Amount Weighted- Average Maturity Date Unsecured long-term debt: Medium-term notes sold through dealers $ 3,026,472 3.51 % 2018-2032 $ 2,386,956 3.48 % 2018-2032 Medium-term notes sold to members 395,389 2.56 2018-2037 422,779 2.18 2017-2037 Subtotal medium-term notes 3,421,861 3.40 2,809,735 3.29 Unamortized discount (1,256 ) (382 ) Debt issuance costs (22,237 ) (21,903 ) Total unsecured medium-term notes 3,398,368 2,787,450 Unsecured notes payable: 18,892 3.84 2022-2023 22,799 3.98 2022-2023 Unamortized discount (277 ) (379 ) Debt issuance costs (68 ) (94 ) Total unsecured notes payable 18,547 3.84 22,326 3.98 Total unsecured long-term debt 3,416,915 3.40 2,809,776 3.29 Secured long-term debt: Collateral trust bonds 7,917,711 3.89 2018-2032 7,922,711 4.08 2018-2032 Unamortized discount (250,421 ) (258,329 ) Debt issuance costs (28,197 ) (30,334 ) Total collateral trust bonds 7,639,093 7,634,048 Guaranteed Underwriter Program notes payable 4,856,375 2.85 2025-2038 4,985,748 2.83 2025-2037 Debt issuance costs (232 ) (264 ) Total Guaranteed Underwriter Program notes payable 4,856,143 4,985,484 Farmer Mac notes payable 2,791,496 2.90 2018-2048 2,513,389 1.71 2018-2047 Other secured notes payable 11,556 2.74 2024 13,214 2.81 2024 Debt issuance costs (243 ) (317 ) Total other secured notes payable 11,313 12,897 Total secured notes payable 7,658,952 2.87 7,511,770 2.45 Total secured long-term debt 15,298,045 3.39 15,145,818 3.29 Total long-term debt $ 18,714,960 3.39 $ 17,955,594 3.29 The following table presents the amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2018 and thereafter. (Dollars in thousands) Amount Weighted-Average Interest Rate 2019 $ 2,745,434 5.47 % 2020 1,462,907 2.24 2021 1,737,341 2.64 2022 1,576,418 2.79 2023 1,127,810 2.67 Thereafter 10,065,050 3.30 Total $ 18,714,960 3.39 Medium-Term Notes Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members. Collateral Trust Bonds Collateral trust bonds represent secured obligations sold to investors in the capital markets. Collateral trust bonds are secured by the pledge of mortgage notes or eligible securities in an amount at least equal to the principal balance of the bonds outstanding. On July 12, 2018, we redeemed $300 million of our $1 billion 10.375% collateral trust bonds due November 1, 2018. The principal and accrued distributions at the redemption date were paid with a combination of cash on hand and cash from commercial paper issuances. Secured Notes Payable We had outstanding secured notes payable totaling $4,856 million and $4,985 million as of May 31, 2018 and 2017 , respectively, under bond purchase agreements with the Federal Financing Bank and a bond guarantee agreement with RUS issued under the Guaranteed Underwriter Program, which provides guarantees to the Federal Financing Bank. We pay RUS a fee of 30 basis points per year on the total amount outstanding. On November 9, 2017, we closed on a $750 million committed loan facility (“Series M”) from the Federal Financing Bank under the Guaranteed Underwriter Program. Pursuant to this facility, we may borrow any time before July 15, 2022. Each advance is subject to quarterly amortization and a final maturity not longer than 20 years from the advance date. On January 16, 2018 we redeemed $325 million of notes payable outstanding under the Guaranteed Underwriter Program, with an original maturity of April 15, 2026. During the year ended May 31, 2018 , we borrowed $250 million under our committed loan facilities with the Federal Financing Bank. We had up to $1,225 million available for access under the Guaranteed Underwriter Program as of May 31, 2018 . We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under the Guaranteed Underwriter Program. See “Note 4—Loans” for additional information on the collateral pledged to secure notes payable under this program. We have two revolving note purchase agreements with Farmer Mac, which together allow us to borrow up to $5,500 million from Farmer Mac. On February 26, 2018, we amended our first revolving note purchase agreement with Farmer Mac dated March 24, 2011. Under the amended agreement, we can currently borrow, subject to market conditions, up to $ 5,200 million at any time through January 11, 2022, and such date shall automatically extend on each anniversary date of the closing for an additional year, unless prior to any such anniversary date, Farmer Mac provides us with a notice that the draw period will not be extended beyond the remaining term. This revolving note purchase agreement allows us to borrow, repay and re-borrow funds at any time through maturity, as market conditions permit, provided that the outstanding principal amount at any time does not exceed the total available under the agreement. Each borrowing under the revolving note purchase agreement is evidenced by a pricing agreement setting forth the interest rate, maturity date and other related terms as we may negotiate with Farmer Mac at the time of each such borrowing. We may select a fixed rate or variable rate at the time of each advance with a maturity as determined in the applicable pricing agreement. Under this note purchase agreement with Farmer Mac, we had outstanding secured notes payable totaling $2,791 million and $2,513 million , as of May 31, 2018 and 2017 , respectively. We borrowed $325 million under this note purchase agreement with Farmer Mac during the year ended May 31, 2018 . Under the terms of the second revolving note purchase agreement with Farmer Mac dated July 31, 2015, we can borrow up to $300 million at any time through July 31, 2018 at a fixed spread over LIBOR. This agreement also allows us to borrow, repay and re-borrow funds at any time through maturity, provided that the outstanding principal amount at any time does not exceed the total available under the agreement. The second revolving note purchase agreement with Farmer Mac was amended effective July 31, 2018 to extended the maturity to December 20, 2023. Prior to the maturity date, Farmer Mac may terminate the agreement on periodic facility renewal dates set forth in the agreement upon 30 days written notice to us. We may terminate the agreement upon 30 days written notice at any time. We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under each of our Farmer Mac revolving note purchase agreements. See “Note 4—Loans” for additional information on the collateral pledged to secure notes payable under these programs. We were in compliance with all covenants and conditions under our senior debt indentures as of May 31, 2018 and 2017 . |
Subordinated Deferrable Debt (N
Subordinated Deferrable Debt (Notes) | 12 Months Ended |
May 31, 2018 | |
Subordinated Debt [Abstract] | |
Subordinated Deferrable Debt | NOTE 7—SUBORDINATED DEFERRABLE DEBT Subordinated deferrable debt is long-term debt that is subordinated to our outstanding debt and senior to subordinated certificates held by our members. Our 4.75% and 5.25% subordinated debt due 2043 and 2046, respectively, was issued for a term of up to 30 years , pays interest semi-annually, may be called at par after 10 years, converts to a variable rate after 10 years, and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding five consecutive years. To date, we have not exercised our right to defer interest payments. The following table presents subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Interest Rate Amount Weighted-Average Interest Rate 4.75% due 2043 with a call date of April 30, 2023 $ 400,000 4.75 % $ 400,000 4.75 % 5.25% due 2046 with a call date of April 20, 2026 350,000 5.25 350,000 5.25 Debt issuance costs (7,590 ) (7,726 ) Total subordinated deferrable debt $ 742,410 4.98 $ 742,274 4.98 |
Members' Subordinated Certifica
Members' Subordinated Certificates (Notes) | 12 Months Ended |
May 31, 2018 | |
Subordinated Borrowings [Abstract] | |
Members' Subordinated Certificates | NOTE 8—MEMBERS’ SUBORDINATED CERTIFICATES Membership Subordinated Certificates CFC members were required to purchase membership subordinated certificates as a condition of membership. Such certificates are interest-bearing, unsecured, subordinated debt. Members may purchase the certificates over time as a percentage of the amount they borrow from CFC. Membership certificates typically have an original maturity of 100 years and pay interest at 5% semi-annually. The weighted-average maturity for all membership subordinated certificates outstanding was 58 years and 59 years as of May 31, 2018 and 2017 , respectively. NCSC and RTFC members are not required to purchase membership certificates as a condition of membership. Loan and Guarantee Subordinated Certificates Members obtaining long-term loans, certain line of credit loans or guarantees may be required to purchase additional loan or guarantee subordinated certificates with each such loan or guarantee based on the borrower’s debt-to-equity ratio with CFC. These certificates are unsecured, subordinated debt and may be interest bearing or non-interest bearing. Under our current policy, most borrowers requesting standard loans are not required to buy subordinated certificates as a condition of a loan or guarantee. Borrowers meeting certain criteria, including but not limited to, high leverage ratios, or borrowers requesting large facilities, may be required to purchase loan or guarantee subordinated certificates or member capital securities (described below) as a condition of the loan. Loan subordinated certificates have the same maturity as the related long-term loan. Some certificates may amortize annually based on the outstanding loan balance. The interest rates payable on guarantee subordinated certificates purchased in conjunction with our guarantee program vary in accordance with applicable CFC policy. Guarantee subordinated certificates have the same maturity as the related guarantee. Member Capital Securities CFC offers member capital securities to its voting members. Member capital securities are interest-bearing, unsecured obligations of CFC, which are subordinate to all existing and future senior and subordinated indebtedness of CFC held by non-members of CFC, but rank proportionally to our member subordinated certificates. Member capital securities mature 30 years from the date of issuance, typically pay interest at 5% and are callable at par at our option 10 years from the date of issuance and anytime thereafter. These securities represent voluntary investments in CFC by the members. The following table displays members’ subordinated certificates and the weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amounts Outstanding Weighted- Interest Rate Amounts Outstanding Weighted- Interest Rate Membership subordinated certificates: Certificates maturing 2020 through 2118 $ 630,173 $ 629,011 Subscribed and unissued (1) 275 1,087 Total membership subordinated certificates 630,448 4.94 % 630,098 4.94 % Loan and guarantee subordinated certificates: Interest-bearing loan subordinated certificates maturing through 2045 300,738 310,518 Non-interest-bearing loan subordinated certificates maturing through 2047 162,263 171,862 Subscribed and unissued (1) 57 61 Total loan subordinated certificates 463,058 2.71 482,441 2.70 Interest-bearing guarantee subordinated certificates maturing through 2044 48,177 68,238 Non-interest-bearing guarantee subordinated certificates maturing through 2043 17,151 17,151 Total guarantee subordinated certificates 65,328 4.50 85,389 4.85 Total loan and guarantee subordinated certificates 528,386 2.93 567,830 3.02 Member capital securities: Securities maturing through 2048 221,148 5.00 221,097 5.00 Total members’ subordinated certificates $ 1,379,982 4.18 $ 1,419,025 4.18 ___________________________ (1) The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding. The following table presents the amount of members’ subordinated certificates maturing in each of the five fiscal years following May 31, 2018 and thereafter. (Dollars in thousands) Amount Maturing (1) Weighted-Average Interest Rate 2019 $ 9,818 2.82 % 2020 13,360 2.85 2021 42,932 3.64 2022 14,381 2.92 2023 30,908 2.70 Thereafter 1,268,251 4.27 Total $ 1,379,650 4.18 ___________________________ (1) Excludes $0.3 million in subscribed and unissued member subordinated certificates for which a payment has been received, but no certificate has been issued. Amortizing member loan subordinated certificates totaling $274 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $16 million in fiscal year 2018 and represented 6% of amortizing loan subordinated certificates outstanding. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities (Notes) | 12 Months Ended |
May 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | NOTE 9—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Use of Derivatives We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and Treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as OTC derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. Outstanding Notional Amount and Maturities of Derivatives Not Designated as Accounting Hedges The notional amount provides an indication of the volume of our derivatives activity, but this amount is not recorded on our consolidated balance sheets. The notional amount is used only as the basis on which interest payments are determined and is not the amount exchanged. The following table shows the outstanding notional amounts and the weighted-average rate paid and received for our interest rate swaps, by type, as of May 31, 2018 and 2017 . The substantial majority of our interest rate swaps use an index based on the London Interbank Offered Rate (“LIBOR”) for either the pay or receive leg of the swap agreement. May 31, 2018 2017 (Dollars in thousands) Notional Amount Weighted- Average Rate Paid Weighted- Average Rate Received Notional Weighted- Weighted- Pay-fixed swaps $ 6,987,999 2.83 % 2.30 % $ 6,807,013 2.85 % 1.16 % Receive-fixed swaps 3,824,000 2.93 2.50 3,699,000 1.72 2.64 Total interest rate swaps 10,811,999 2.86 2.37 10,506,013 2.46 1.68 Forward pay-fixed swaps 256,154 285,383 Total $ 11,068,153 $ 10,791,396 The following table presents the maturities for each of the next five fiscal years and thereafter based on the notional amount of our interest rate swaps as of May 31, 2018 . Notional Amount Notional Amortization and Maturities (Dollars in thousands) 2019 2020 2021 2022 2023 Thereafter Interest rate swaps $11,068,153 $499,999 $1,318,007 $476,998 $487,310 $350,590 $7,935,249 Cash Flow Hedges In anticipation of the repricing of $100 million in notes payable outstanding under the Guaranteed Underwriter Program, we entered into a treasury rate lock agreement with a notional amount of $100 million on May 25, 2018. The agreement, which matures on October 12, 2018, was designated as a cash flow hedge of the forecasted transaction. This cash flow hedge was recorded at fair value on our consolidated balance sheets as of May 31, 2018 , and the related unrealized loss of $1 million was recorded in AOCI. Impact of Derivatives on Consolidated Balance Sheets The following table displays the fair value of the derivative assets and derivative liabilities recorded on our consolidated balance sheets and the related outstanding notional amount by derivatives type as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Fair Value Notional Balance Fair Value Notional Balance Derivative assets: Interest rate swaps $ 244,526 $ 5,264,971 $ 49,481 $ 3,754,120 Derivative liabilities: Treasury rate lock—cash flow hedge $ (1,059 ) $ 100,000 $ — $ — Interest rate swaps (274,873 ) 5,803,182 (385,337 ) 7,037,276 Total derivative liabilities $ (275,932 ) $ 5,903,182 $ (385,337 ) $ 7,037,276 All of our master swap agreements include netting provisions that allow for offsetting of all contracts with a given counterparty in the event of default by one of the two parties. However, as indicated above, in “Note 1—Summary of Significant Accounting Policies,” we report derivative asset and liability amounts on a gross basis by individual contracts. The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2018 and 2017 , and provides information on the impact of netting provisions and collateral pledged. May 31, 2018 Gross Amount of Recognized Assets/ Liabilities Gross Amount Offset in the Balance Sheet Net Amount of Assets/ Liabilities Presented in the Balance Sheet Gross Amount Not Offset in the Balance Sheet (Dollars in thousands) Financial Instruments Cash Collateral Pledged Net Amount Derivative assets: Interest rate swaps $ 244,526 $ — $ 244,526 $ 196,633 $ — $ 47,893 Derivative liabilities: Treasury rate lock—cash flow hedge 1,059 — 1,059 — — 1,059 Interest rate swaps 274,873 — 274,873 196,633 — 78,240 May 31, 2017 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 49,481 $ — $ 49,481 $ 49,481 $ — $ — Derivative liabilities: Interest rate swaps 385,337 — 385,337 49,481 — 335,856 Impact of Derivatives on Consolidated Statements of Operations and AOCI Derivative gains (losses) reported in our consolidated statements of operations consist of derivative cash settlements and derivative forward value gains (losses). Derivative cash settlements represent net contractual interest expense accruals on interest rate swaps during the period. The derivative forward value gains (losses) represent the change in fair value of our interest rate swaps during the reporting period due to changes in the estimate of future interest rates over the remaining life of our derivative contracts. The following table presents the components of the derivative gains (losses) reported in our consolidated statements of operations for our interest rate swaps for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Derivative cash settlements $ (74,281 ) $ (84,478 ) $ (88,758 ) Derivative forward value gains (losses) 306,002 179,381 (221,083 ) Derivative gains (losses) $ 231,721 $ 94,903 $ (309,841 ) As described above, during fiscal year 2018 , we entered into a treasury rate lock agreement that was designated as a cash flow hedge of a forecasted transaction. The related unrealized loss of $1 million was recorded in AOCI for fiscal year 2018 . This cash flow hedge matures on October 12, 2018, when we expect to reassess the hedge for effectiveness. We did not have any derivatives designated as accounting hedges during fiscal years 2017 or 2016 . Credit Risk-Related Contingent Features Our derivative contracts typically contain mutual early-termination provisions, generally in the form of a credit rating trigger. Under the mutual credit rating trigger provisions, either counterparty may, but is not obligated to, terminate and settle the agreement if the credit rating of the other counterparty falls below a level specified in the agreement. If a derivative contract is terminated, the amount to be received or paid by us would be equal to the prevailing fair value, as defined in the agreement, as of the termination date. Our senior unsecured credit ratings from Moody’s and S&P were A2 and A, respectively, as of May 31, 2018 . Both Moody’s and S&P had our ratings on stable outlook as of May 31, 2018 . The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2018 , and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, below Baa3/BBB-, or to or below Ba2/BB+ by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assumed that the amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements for each counterparty. The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts. (Dollars in thousands) Notional Amount Payable Due from CFC Receivable Due to CFC Net (Payable)/Receivable Impact of rating downgrade trigger: Falls below A3/A- (1) $ 54,890 $ (9,355 ) $ — $ (9,355 ) Falls below Baa1/BBB+ 7,164,065 (60,054 ) 38,057 (21,997 ) Falls to or below Baa2/BBB (2) 530,980 — 4,533 4,533 Falls below Baa3/BBB- 257,271 (11,625 ) — (11,625 ) Total $ 8,007,206 $ (81,034 ) $ 42,590 $ (38,444 ) ___________________________ (1) Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. (2) Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody’s or S&P, respectively. On March 30, 2018, the master swap agreement with one of our counterparties was amended to include a ratings trigger and early termination provision based on a downgrade of CFC’s senior unsecured credit ratings below Baa3, BBB- or BBB- by Moody’s, S&P or Fitch, respectively, for any future swap transaction entered into under the agreement. We have outstanding notional amount of derivatives with this counterparty subject to this rating trigger, which is not included in the above table, totaling $200 million as of May 31, 2018 . These contracts were in a loss position of $1 million as of May 31, 2018 . Our largest counterparty exposure, based on the outstanding notional amount, accounted for approximately 24% and 23% of the total outstanding notional amount of derivatives as of May 31, 2018 and 2017 , respectively. The aggregate fair value amount, including the credit valuation adjustment, of all interest rate swaps with rating triggers that were in a net liability position was $81 million as of May 31, 2018 . |
Equity (Notes)
Equity (Notes) | 12 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Equity | NOTE 10—EQUITY Total equity increased by $407 million to $1,506 million as of May 31, 2018 . The increase was primarily attributable to our reported net income of $457 million for the year ended May 31, 2018 , which was partially offset by the patronage capital retirement of $45 million in September 2017. The following table presents the components of equity as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Membership fees $ 969 $ 971 Educational fund 1,976 1,929 Total membership fees and educational fund 2,945 2,900 Patronage capital allocated 811,493 761,701 Members’ capital reserve 687,785 630,305 Unallocated net income (loss): Prior year-end cumulative derivative forward value losses (332,525 ) (507,904 ) Current year derivative forward value gains (1) 301,694 175,379 Current year-end cumulative derivative forward value losses (30,831 ) (332,525 ) Other unallocated net income (loss) (5,603 ) (5,603 ) Unallocated net income (loss) (36,434 ) (338,128 ) CFC retained equity 1,465,789 1,056,778 Accumulated other comprehensive income 8,544 13,175 Total CFC equity 1,474,333 1,069,953 Noncontrolling interests 31,520 28,852 Total equity $ 1,505,853 $ 1,098,805 ____________________________ (1) Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the consolidated variable interest entities NCSC and RTFC. See “Note 14—Business Segments” for the statements of operations for CFC. District of Columbia cooperative law requires cooperatives to allocate net earnings to patrons, to a general reserve in an amount sufficient to maintain a balance of at least 50% of paid-in capital and to a cooperative educational fund, as well as permits additional allocations to board-approved reserves. District of Columbia cooperative law also requires that a cooperative’s net earnings be allocated to all patrons in proportion to their individual patronage and each patron’s allocation be distributed to the patron unless the patron agrees that the cooperative may retain its share as additional capital. Annually, the CFC Board of Directors allocates its net earnings to its patrons in the form of patronage capital, to a cooperative educational fund, to a general reserve, if necessary, and to board-approved reserves. An allocation to the general reserve is made, if necessary, to maintain the balance of the general reserve at 50% of the membership fees collected. CFC’s bylaws require the allocation to the cooperative educational fund to be at least 0.25% of its net earnings. Funds from the cooperative educational fund are disbursed annually to statewide cooperative organizations to fund the teaching of cooperative principles and for other cooperative education programs. Currently, CFC has one additional board-approved reserve, the members’ capital reserve. The CFC Board of Directors determines the amount of net earnings that is allocated to the members’ capital reserve, if any. The members’ capital reserve represents net earnings that CFC holds to increase equity retention. The net earnings held in the members’ capital reserve have not been specifically allocated to members, but may be allocated to individual members in the future as patronage capital if authorized by the CFC Board of Directors. All remaining net earnings are allocated to CFC’s members in the form of patronage capital. The amount of net earnings allocated to each member is based on the member’s patronage of CFC’s lending programs during the year. No interest is earned by members on allocated patronage capital. There is no effect on CFC’s total equity as a result of allocating net earnings to members in the form of patronage capital or to board-approved reserves. The CFC Board of Directors has voted annually to retire a portion of the patronage capital allocation. Upon retirement, patronage capital is paid out in cash to the members to whom it was allocated. CFC’s total equity is reduced by the amount of patronage capital retired to its members and by amounts disbursed from board-approved reserves. Net earnings are based on CFC’s adjusted net income, which excludes the impact of derivative forward value gains (losses). The current policy of the CFC Board of Directors is to retire 50% of the prior year’s allocated patronage capital and hold the remaining 50% for 25 years . The retirement amount and timing remains subject to annual approval by the CFC Board of Directors. In July 2018 , the CFC Board of Directors authorized the allocation of the fiscal year 2018 net earnings as follows: $95 million to members in the form of patronage, $57 million to the members’ capital reserve and $1 million to the cooperative educational fund. In July 2018 , the CFC Board of Directors authorized the retirement of allocated net earnings totaling $48 million , representing 50% of the fiscal year 2018 allocation. We expect to return this amount to members in cash in the first quarter of fiscal year 2019 . Future allocations and retirements of net earnings may be made annually as determined by the CFC Board of Directors with due regard for its financial condition. The CFC Board of Directors has the authority to change the current practice for allocating and retiring net earnings at any time, subject to applicable laws and regulations. In July 2017 , the CFC Board of Directors authorized the allocation of the fiscal year 2017 net earnings as follows: $90 million to members in the form of patronage capital, $43 million to the members’ capital reserve and $1 million to the cooperative educational fund. In July 2017 , the CFC Board of Directors authorized the retirement of patronage capital totaling $45 million , which represented 50% of the fiscal year 2017 allocation of patronage capital of $90 million . We returned the $45 million to members in cash in September 2017. The remaining portion of the allocated amount will be retained by CFC for 25 years under guidelines adopted by the CFC Board of Directors in June 2009. Total equity includes noncontrolling interest, which represents 100% of NCSC and RTFC equity, as the members of NCSC and RTFC own or control 100% of the interest in their respective companies. In accordance with District of Columbia cooperative law and its bylaws and board policies, RTFC allocates its net earnings to its patrons, a cooperative educational fund and a general reserve, if necessary. RTFC’s bylaws require that it allocate at least 1% of net income to a cooperative educational fund. Funds from the cooperative educational fund are disbursed annually to fund the teaching of cooperative principles and for other cooperative education programs. An allocation to the general reserve is made, if necessary, to maintain the balance of the general reserve at 50% of the membership fees collected. The remainder is allocated to borrowers in proportion to their patronage. RTFC retires at least 20% of its annual allocation, if any, to members in cash prior to filing the applicable tax return. Any additional amounts are retired as determined by the RTFC Board of Directors taking into consideration RTFC’s financial condition. NCSC’s bylaws require that it allocate at least 0.25% of its net earnings to a cooperative educational fund and an amount to the general reserve required to maintain the general reserve balance at 50% of membership fees collected. Funds from the cooperative educational fund are disbursed annually to fund the teaching of cooperative principles and for other cooperative education programs. The NCSC Board of Directors has the authority to determine if and when net earnings will be allocated. There is no effect on noncontrolling interest as a result of NCSC and RTFC allocating net earnings to members or board-approved reserves. There is a reduction to noncontrolling interest as a result of the cash retirement of amounts allocated to members or to disbursements from board-approved reserves. Accumulated Other Comprehensive Income The following tables summarize, by component, the activity in AOCI as of and for the years ended May 31, 2018 and 2017 . Year Ended May 31, 2018 (Dollars in thousands) Unrealized Gains (Losses) AFS Securities Unrealized Gains Unrealized Gains (Losses) Cash Flow Hedges Unrealized Losses Foreclosed Assets Unrealized Losses Defined Benefit Plan Total Beginning balance $ 12,016 $ 3,531 171 $ — $ (2,543 ) $ 13,175 Unrealized losses (3,222 ) — (1,059 ) — (194 ) (4,475 ) (Gains) losses reclassified into earnings — (492 ) (171 ) — 507 (156 ) Other comprehensive income (loss) (3,222 ) (492 ) (1,230 ) — 313 (4,631 ) Ending balance $ 8,794 $ 3,039 $ (1,059 ) $ — $ (2,230 ) $ 8,544 Year Ended May 31, 2017 (Dollars in thousands) Unrealized Gains (Losses) AFS Securities Unrealized Gains Derivatives Unrealized Gains Cash Flow Hedge Unrealized Losses Foreclosed Assets Unrealized Losses Defined Benefit Plan Total Beginning balance $ 7,402 $ 4,044 $ 443 $ (9,823 ) $ (1,008 ) $ 1,058 Unrealized gains (losses) 4,614 — — — (1,535 ) 3,079 (Gains) losses reclassified into earnings — (513 ) (272 ) 9,823 — 9,038 Other comprehensive income (loss) 4,614 (513 ) (272 ) 9,823 (1,535 ) 12,117 Ending balance $ 12,016 $ 3,531 $ 171 $ — $ (2,543 ) $ 13,175 We expect to reclassify less than $1 million of amounts in AOCI related to unrealized derivative gains into earnings over the next 12 months. |
Employee Benefits (Notes)
Employee Benefits (Notes) | 12 Months Ended |
May 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits | NOTE 11—EMPLOYEE BENEFITS National Rural Electric Cooperative Association (“NRECA”) Retirement Security Plan CFC is a participant in the NRECA Retirement Security Plan (“the Retirement Security Plan”), a multiple-employer defined benefit pension plan. The employer identification number of the Retirement Security Plan is 53-0116145, and the plan number is 333. Plan information is available publicly through the annual Form 5500, including attachments. The Retirement Security Plan is a qualified plan in which all employees are eligible to participate upon completion of one year of service. Under this plan, participating employees are entitled to receive annually, under a 50% joint and surviving spouse annuity, 1.70% of the average of their five highest base salaries during their participation in the plan, multiplied by the number of years of participation in the plan. The risks of participating in the multiple-employer plan are different from the risks of single-employer plans due to the following characteristics of the plan: • Assets contributed to the multiple-employer plan by one participating employer may be used to provide benefits to employees of other participating employers. • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If CFC chooses to stop participating in the plan, CFC may be required to pay a withdrawal liability representing an amount based on the underfunded status of the Plan. Because of the current funding status of the Retirement Security Plan, it is not subject to a certified zone status determination under the Pension Protection Act of 2006. Based on the Pension Protection Act (“PPA”) funding target and PPA actuarial value of the plan assets, it was more than 80% funded as of January 1, 2018 , 2017 and 2016 . We made contributions to the Retirement Security Plan of $5 million , $4 million and $4 million in fiscal year 2018 , 2017 and 2016 , respectively. In each of these years, our contribution represented less than 5% of total contributions made to the plan by all participating employers. Our contribution did not include a surcharge. CFC’s expense is limited to the annual premium to participate in the Retirement Security Plan. Because it is a multiple-employer plan, there is no funding liability for CFC for the plan. There were no funding improvement plans, rehabilitation plans implemented or pending and no required minimum contributions. There are no collective bargaining agreements in place that cover CFC’s employees. Pension Restoration Plan The Pension Restoration Plan (“PRP”) is a nonqualified defined benefit plan established to provide supplemental benefits to certain eligible employees whose compensation exceeds the IRS limits for the qualified Retirement Security Plan. The PRP restores the value of the Retirement Security Plan for eligible officers to the level it would be if the IRS limits on annual pay and annual annuity benefits were not in place. The limit was $275,000 for calendar year 2018 . The PRP which is administered by NRECA, was frozen as of December 31, 2014. The benefit and payout formula under the nonqualified PRP component of the Retirement Security Plan is similar to that under the qualified plan component. Under the PRP, the amount NRECA invoices us for the Retirement Security Plan is based on the full compensation paid to each covered employee. Upon retirement of an employee covered under the PRP, NRECA will calculate the retirement benefits to be paid both with and without consideration of the IRS compensation limits. We will then pay the nonqualified supplemental benefit to the covered employee. NRECA will provide a credit for supplemental benefit payments made by us to covered employees against future contributions we are required to make to the Retirement Security Plan. The three participating executive officers have satisfied the provisions established to receive the benefit from this plan. Since there is no longer a risk of forfeiture of the benefit under the PRP, we will make distributions from the plan to each of the named executive officers included in the plan and the distributions will be credited back to us by NRECA. Accordingly, the distributions have no impact on our consolidated financial statements. Executive Benefit Restoration Plan NRECA restricted additional participation in the PRP in December 2014. We therefore adopted a supplemental top-hat Executive Benefit Restoration (“EBP”) Plan, effective January 1, 2015. The EBR Plan is a nonqualified, unfunded plan maintained by CFC to provide retirement benefits to a select group of executive officers whose compensation exceeds IRS limits for qualified defined benefit plans. There is a risk of forfeiture if participants leave the company prior to becoming fully vested in the EBR Plan. There were seven plan participants as of May 31, 2018 . The unfunded projected benefit obligation of this plan, which is included on our consolidated balance sheets as a component of other liabilities, was $4 million as of both May 31, 2018 and 2017 . We recognized pension expense for this plan of less than $1 million in each of fiscal years 2018, 2017 and 2016. Defined Contribution Plan CFC offers a 401(k) defined contribution savings program, the 401(k) Pension Plan, to all employees who have completed a minimum of 1,000 hours of service in either the first 12 consecutive months or first full calendar year of employment. We contribute an amount up to 2% of an employee’s salary each year for all employees participating in the program with a minimum 2% employee contribution. We contributed less than $1 million to the plan in each of fiscal years 2018 , 2017 and 2016 . |
Guarantees (Notes)
Guarantees (Notes) | 12 Months Ended |
May 31, 2018 | |
Guarantees [Abstract] | |
Guarantees | NOTE 12—GUARANTEES We guarantee certain contractual obligations of our members so they may obtain various forms of financing. We use the same credit policies and monitoring procedures in providing guarantees as we do for loans and commitments. If a member system defaults on its obligation to pay debt service, then we are obligated to pay any required amounts under our guarantees. Meeting our guarantee obligations satisfies the underlying obligation of our member systems and prevents the exercise of remedies by the guarantee beneficiary based upon a payment default by a member system. In general, the member system is required to repay any amount advanced by us with interest, pursuant to the documents evidencing the member system’s reimbursement obligation. The following table summarizes total guarantees, by type of guarantee and member class, as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Total by type: Long-term tax-exempt bonds (1) $ 316,985 $ 468,145 Letters of credit (2) 343,970 307,321 Other guarantees 144,206 114,151 Total $ 805,161 $ 889,617 Total by member class: CFC: Distribution $ 201,993 $ 126,188 Power supply 587,837 743,678 Statewide and associate 3,326 5,054 CFC total 793,156 874,920 NCSC 10,431 13,123 RTFC 1,574 1,574 Total $ 805,161 $ 889,617 ____________________________ (1) Represents the outstanding principal amount of long-term fixed-rate and variable-rate guaranteed bonds. (2) Reflects our maximum potential exposure for letters of credit. We guarantee debt issued in connection with the construction or acquisition of pollution control, solid waste disposal, industrial development and electric distribution facilities, classified as long-term tax-exempt bonds in the table above. We unconditionally guarantee to the holders or to trustees for the benefit of holders of these bonds the full principal, interest, and in most cases, premium, if any, on each bond when due. If a member system defaults in its obligation to pay debt service, then we are obligated to pay any required amounts under our guarantees. Such payment will prevent the occurrence of an event of default that would otherwise permit acceleration of the bond issue. In general, the member system is required to repay any amount advanced by us with interest, pursuant to the documents evidencing the member system’s reimbursement obligation. Long-term tax-exempt bonds of $317 million and $468 million as of May 31, 2018 and 2017 , respectively, consisted of $250 million and $400 million , respectively, of adjustable or variable-rate bonds that may be converted to a fixed rate as specified in the applicable indenture for each bond offering. We are unable to determine the maximum amount of interest that we may be required to pay related to the remaining adjustable and variable-rate bonds. Many of these bonds have a call provision that allows us to call the bond in the event of a default, which would limit our exposure to future interest payments on these bonds. Our maximum potential exposure generally is secured by mortgage liens on the members’ assets and future revenue. If a member’s debt is accelerated because of a determination that the interest thereon is not tax-exempt, the member’s obligation to reimburse us for any guarantee payments will be treated as a long-term loan. The remaining long-term tax-exempt bonds of $67 million as of May 31, 2018 are fixed-rate. The maximum potential exposure for these bonds, including the outstanding principal of $67 million and related interest through maturity, totaled $95 million as of May 31, 2018 . The maturities for long-term tax-exempt bonds and the related guarantees extend through calendar year 2042. Of the outstanding letters of credit of $344 million and $307 million as of May 31, 2018 and 2017 , respectively, $120 million and $125 million , respectively, were secured. We did not have any letters of credit outstanding that provided for standby liquidity for adjustable and floating-rate tax-exempt bonds issued for the benefit of our members as of May 31, 2018 . Letters of credit include $76 million to provide standby liquidity for adjustable and floating-rate tax-exempt bonds issued for the benefit of our members as of May 31, 2017 . Security provisions include a mortgage lien on substantially all of the member’s assets, future revenue and the member’s investment in our commercial paper. The maturities for the outstanding letters of credit as May 31, 2018 extend through calendar year 2027. In addition to the letters of credit listed in the table above, under master letter of credit facilities in place as of May 31, 2018 , we may be required to issue up to an additional $67 million in letters of credit to third parties for the benefit of our members. All of our master letter of credit facilities were subject to material adverse change clauses at the time of issuance as of May 31, 2018 . Prior to issuing a letter of credit, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with the letter of credit terms and conditions. The maximum potential exposure for other guarantees was $145 million and $115 million as of May 31, 2018 and 2017 , respectively, all of which were unsecured. The maturities for these other guarantees listed in the table above extend through calendar year 2025. Guarantees under which our right of recovery from our members was not secured totaled $344 million and $297 million and represented 43% and 33% of total guarantees as of May 31, 2018 and 2017 , respectively. In addition to the guarantees described above, we were also the liquidity provider for $250 million of variable-rate tax-exempt bonds as of May 31, 2018 , issued for our member cooperatives. While the bonds are in variable-rate mode, in return for a fee, we have unconditionally agreed to purchase bonds tendered or put for redemption if the remarketing agents are unable to sell such bonds to other investors. We were not required to perform as liquidity provider pursuant to these obligations during fiscal years 2018 , 2017 or 2016 . Guarantee Liability We recorded a guarantee liability of $11 million and $15 million as of May 31, 2018 and 2017 , respectively, which represents the contingent and noncontingent exposures related to guarantees and liquidity obligations. The contingent guarantee liability was $1 million as of both May 31, 2018 and 2017 , based on management’s estimate of exposure to losses within the guarantee portfolio. The remaining balance of the total guarantee liability of $10 million and $14 million as of May 31, 2018 and 2017 , respectively, relates to our noncontingent obligation to stand ready to perform over the term of our guarantees and liquidity obligations that we have entered into or modified since January 1, 2003. The following table details the scheduled maturities of our outstanding guarantees in each of the five fiscal years following May 31, 2018 and thereafter: (Dollars in thousands) Amount Maturing 2019 $ 265,684 2020 66,142 2021 121,700 2022 27,515 2023 160,541 Thereafter 163,579 Total $ 805,161 |
Fair Value Measurement (Notes)
Fair Value Measurement (Notes) | 12 Months Ended |
May 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | NOTE 13—FAIR VALUE MEASUREMENT Fair Value of Financial Instruments We use fair value measurements for the initial recording of certain assets and liabilities and periodic remeasurement of certain assets and liabilities on a recurring or nonrecurring basis. The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy that prioritizes the inputs into the valuation techniques used to measure fair value. The levels of the fair value hierarchy, in priority order, include Level 1, Level 2 and Level 3. We describe the valuation technique for each level in “Note 1—Summary of Significant Accounting Policies.” The following tables present the carrying value and fair value for all of our financial instruments, including those carried at amortized cost, as of May 31, 2018 and 2017 . The tables also display the classification within the fair value hierarchy of the valuation technique used in estimating fair value. May 31, 2018 Fair Value Measurements Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 230,999 $ 230,999 $ 230,999 $ — $ — Restricted cash 7,825 7,825 7,825 — — Time deposits 101,000 101,000 — 101,000 — Investment securities, available for sale 89,332 89,332 89,332 — — Investment securities, held to maturity 519,519 515,546 — 515,546 — Deferred compensation investments 5,194 5,194 5,194 — — Loans to members, net 25,159,807 24,167,886 — — 24,167,886 Accrued interest receivable 127,442 127,442 — 127,442 — Debt service reserve funds 17,151 17,151 17,151 — — Derivative assets 244,526 244,526 — 244,526 — Liabilities: Short-term borrowings $ 3,795,910 $ 3,795,799 $ — $ 3,695,799 $ 100,000 Long-term debt 18,714,960 18,909,276 — 11,373,216 7,536,060 Accrued interest payable 149,284 149,284 — 149,284 — Guarantee liability 10,589 10,454 — — 10,454 Derivative liabilities 275,932 275,932 — 275,932 — Subordinated deferrable debt 742,410 766,088 — 766,088 — Members’ subordinated certificates 1,379,982 1,380,004 — — 1,380,004 May 31, 2017 Fair Value Measurements Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 166,615 $ 166,615 $ 166,615 $ — $ — Restricted cash 21,806 21,806 21,806 — — Time deposits 226,000 226,000 — 226,000 — Investment securities, available for sale 92,554 92,554 92,554 — — Deferred compensation investments 4,693 4,693 4,693 — — Loans to members, net 24,329,668 24,182,724 — — 24,182,724 Accrued interest receivable 111,493 111,493 — 111,493 — Debt service reserve funds 17,151 17,151 17,151 — — Derivative assets 49,481 49,481 — 49,481 — Liabilities: Short-term borrowings $ 3,342,900 $ 3,342,990 $ — $ 3,342,990 $ — Long-term debt 17,955,594 18,744,331 — 11,215,290 7,529,041 Accrued interest payable 137,476 137,476 — 137,476 — Guarantee liability 15,241 16,204 — — 16,204 Derivative liabilities 385,337 385,337 — 385,337 — Subordinated deferrable debt 742,274 788,079 — 788,079 — Members’ subordinated certificates 1,419,025 1,419,048 — — 1,419,048 Following is a description of the valuation techniques we use to estimate fair value, the significant inputs used in those techniques, if applicable, and the classification within the fair value hierarchy. Cash and Cash Equivalents Cash and cash equivalents include cash and certificates of deposit with original maturities of less than 90 days. Cash and cash equivalents are valued at the carrying value, which approximates fair value and are classified within Level 1 of the fair value hierarchy. Restricted Cash Restricted cash consists of cash and cash equivalents for which use is contractually restricted. The carrying value of restricted cash approximates fair value and is classified within Level 1 of the fair value hierarchy. Time Deposits Time deposits with financial institutions in interest-bearing accounts have maturities of less than one year as of the reporting date and are valued at the carrying value, which approximates fair value, and are classified within Level 2 of the fair value hierarchy. Investment Securities, Available for Sale Our investments in equity securities consist of investments in Farmer Mac Class A common stock and Series A, Series B and Series C preferred stock. These securities are classified as available for sale and reported at fair value in our consolidated balance sheets. We determine the fair value based on quoted prices on the stock exchange where the stock is traded. That stock exchange with respect to Farmer Mac Class A common stock is an active market based on the volume of shares transacted. Fair values for these securities are classified within Level 1 of the fair value hierarchy. Investment Securities, Held to Maturity As discussed above in “Note 3—Investment Securities,” we did no t have any securities classified as HTM as of May 31, 2017 . During the second quarter of fiscal year 2018, we commenced the purchase of additional investment securities, consisting primarily of certificates of deposit, commercial paper and corporate debt securities, commercial MBS and other ABS traded in secondary markets. We designated these securities as HTM. Management estimates the fair value of our HTM securities utilizing the assistance of third-party pricing services. Methodologies employed, controls relied upon and inputs used by third-party pricing vendors are subject to management review when such services are provided. This review may consist of, in part, obtaining and evaluating control reports issued and pricing methodology materials distributed. We review the pricing methodologies provided by the vendors in order to determine if observable market information is being used to determine the fair value versus unobservable inputs. Investment securities traded in secondary markets are typically valued using unadjusted vendor prices. These investment securities, which include those measured using unadjusted vendor prices, are generally classified as Level 2 because the valuation typically involves using quoted market prices for similar securities, pricing models, discounted cash flow analyses using significant observable market where available or a combination of multiple valuation techniques for which all significant assumptions are observable in the market. Deferred Compensation Investments CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees. Such amounts deferred by employees are invested by the company. The deferred compensation investments are presented as other assets in the consolidated balance sheets in the other assets category at fair value. We calculate fair value based on the daily published and quoted net asset value and these investments are classified within Level 1 of the fair value hierarchy. Loans to Members, Net As part of receiving a loan from us, our members have additional requirements and rights that are not typical of other financial institutions, such as the ability to receive a patronage capital allocation, the general requirement to purchase subordinated certificates or member capital securities to meet their capital contribution requirements as a condition of obtaining additional credit from us, the option to select fixed rates from one year to maturity with the fixed rate resetting or repricing at the end of each selected rate term, the ability to convert from a fixed rate to another fixed rate or the variable rate at any time, and certain interest rate discounts that are specific to the borrower’s activity with us. These features make it difficult to obtain market data for similar loans. Therefore, we must use other methods to estimate the fair value. Fair values for fixed-rate loans are estimated using a discounted cash flow technique by discounting the expected future cash flows using the current rates at which we would make similar loans to new borrowers for the same remaining maturities. The maturity date used in the fair value calculation of loans with a fixed rate for a selected rate term is the next repricing date since these borrowers must reprice their loans at various times throughout the life of the loan at the current market rate. Loans with different risk characteristics, specifically nonperforming and restructured loans, are valued by using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities. See below for more details about how we calculate the fair value of certain impaired loans. The carrying value of our variable-rate loans adjusted for credit risk approximates fair value since variable-rate loans are eligible to be reset at least monthly. Loans to members are classified within Level 3 of the fair value hierarchy. Accrued Interest Receivable Accrued interest receivable represents accrued interest to be collected on our loans to members and derivative instruments and is valued at the carrying value, which approximates fair value. Accrued interest receivable is classified within Level 2 of the fair value hierarchy. Debt Service Reserve Funds Debt service reserve funds represent cash and/or investments on deposit with the bond trustee for tax-exempt bonds that we guarantee. Debt service reserve fund investments include actively traded tax-exempt municipal bonds and commercial paper. The carrying value approximates the fair value and the valuation technique is classified as Level 1. Short-Term Borrowings Short-term borrowings consist of commercial paper, select notes, bank bid notes, daily liquidity fund notes, medium-term notes and notes payable. The fair value of short-term borrowings with maturities less than or equal to 90 days is carrying value, which is a reasonable estimate of fair value. The fair value of short-term borrowings with maturities greater than 90 days is estimated based on discounted cash flows using discount rates consistent with current market rates for similar products with similar remaining terms. Short-term borrowings classified within Level 2 of the fair value hierarchy include dealer commercial paper, daily liquidity fund notes, member commercial paper and select notes. Short-term borrowings classified within Level 2 also include our medium-term notes with an original maturity equal to or less than one year. The fair value of short-term medium-term notes classified within Level 2 of the fair value hierarchy were determined based on discounted cash flows using a pricing model that incorporates available market information such as indicative benchmark yields and credit spread assumptions that are provided by third-party pricing services such as the banks that underwrite our other debt transactions. Short-term borrowings classified within Level 3 include notes payable with an original maturity equal to or less than one year. These short-term notes payable are issued in private placement transactions and there is no secondary trading of such debt. As these short-term notes payable are issued at a variable rate and with a maturity of less than 90 days, the fair value equals the carrying value, which is a reasonable estimate of fair value. Long-Term Debt Long-term debt consists of collateral trust bonds, medium-term notes and long-term notes payable. We issue substantially all collateral trust bonds and some medium-term notes in underwritten public transactions. Collateral trust bonds and medium-term notes are classified within Level 2 of the fair value hierarchy. The fair value of long-term debt classified within Level 2 of the fair value hierarchy was determined based on discounted cash flows. There is no active secondary trading for the underwritten collateral trust bonds and medium-term notes; therefore, dealer quotes and recent market prices are both used in estimating fair value. There is essentially no secondary market for the medium-term notes issued to our members or in transactions that are not underwritten; therefore, fair value is estimated based on observable benchmark yields and spreads for similar instruments supplied by banks that underwrite our other debt transactions. The long-term notes payable are issued in private placement transactions and there is no secondary trading of such debt. Long-term notes payable are classified within Level 3 of the fair value hierarchy. The fair value was determined based on discounted cash flows using benchmark yields and spreads for similar instruments supplied by underwriter quotes for similar instruments, if available. Secondary trading quotes for our debt instruments used in the determination of fair value incorporate our credit risk. Accrued Interest Payable Accrued interest payable represents accrued interest to be paid on our debt and derivative instruments and is valued at the carrying value, which approximates fair value. Accrued interest payable is classified within Level 2 of the fair value hierarchy. Guarantees The fair value of our guarantee liability is based on the fair value of our contingent and noncontingent exposure related to our guarantees. The fair value of our contingent exposure for guarantees is based on management’s estimate of our exposure to losses within the guarantee portfolio using a discounted cash flow method. The fair value of our noncontingent exposure for guarantees issued is estimated based on the total unamortized balance of guarantee fees paid and guarantee fees to be paid discounted at our current short-term funding rate, which represents management’s estimate of the fair value of our obligation to stand ready to perform. Guarantees are classified within Level 3 of the fair value hierarchy. Subordinated Deferrable Debt Subordinated deferrable debt outstanding was issued in underwritten public transactions. There is no active secondary trading for this subordinated deferrable debt; therefore, dealer quotes and recent market prices are both used in estimating fair value based on a discounted cash flow method. Subordinated deferrable debt is classified within Level 2 of the fair value hierarchy. Members’ Subordinated Certificates Members’ subordinated certificates include (i) membership subordinated certificates issued to our members, (ii) loan and guarantee subordinated certificates issued as a condition of obtaining loan funds or guarantees and (iii) member capital securities issued as voluntary investments by our members. Generally, members’ subordinated certificates are nontransferable other than among members with CFC’s consent and there is no ready market from which to obtain fair value quotes. These certificates are valued at par and are classified within Level 3 of the fair value hierarchy. Derivative Instruments We account for derivative instruments in the consolidated balance sheets as either an asset or liability measured at fair value. We only enter into swap agreements with counterparties that are participating in our revolving lines of credit at the time the exchange agreements are executed. All of our swap agreements are subject to master netting agreements. There is not an active secondary market for the types of interest rate swaps we use. We determine the fair value of our derivatives using models that incorporate observable market inputs, such as spot LIBOR rates, Eurodollar futures contracts and market swap rates. These inputs can vary depending on the type of derivative and nature of the underlying rate, price or index upon which the derivative’s value is based. The impact of counterparty nonperformance risk is considered when measuring the fair value of derivative assets. Internal pricing is compared against additional pricing sources, such as external valuation agents and other sources. Pricing variances among different pricing sources are analyzed and validated. The technique for determining the fair value for our interest rate swaps is classified as Level 2. Commitments The fair value of our commitments is estimated based on the carrying value, or zero. Extensions of credit under these commitments, if exercised, would result in loans priced at market rates. Recurring Fair Value Measurements The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of May 31, 2018 and 2017 and the classification of the valuation technique within the fair value hierarchy. May 31, 2018 2017 (Dollars in thousands) Level 1 Level 2 Total Level 1 Level 2 Total Investment securities available for sale $ 89,332 $ — $ 89,332 $ 92,554 $ — $ 92,554 Deferred compensation investments 5,194 — 5,194 4,693 — 4,693 Derivative assets — 244,526 244,526 — 49,481 49,481 Derivative liabilities — 275,932 275,932 — 385,337 385,337 Transfers Between Levels We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2 and Level 3 accordingly. Observable market data includes, but is not limited to, quoted prices and market transactions. Changes in economic conditions or market liquidity generally will drive changes in availability of observable market data. Changes in availability of observable market data, which also may result in changes in the valuation technique used, are generally the cause of transfers between levels. We did not have any transfers between levels for financial instruments measured at fair value on a recurring basis for the years ended May 31, 2018 and 2017 . Nonrecurring Fair Value Measurements We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. Any adjustments to fair value usually result from application of lower-of-cost or fair value accounting or write-downs of individual assets. Assets measured at fair value on a nonrecurring basis as of May 31, 2018 and 2017 consisted of certain impaired loans. The fair value of these assets is determined based on the use of significant unobservable inputs, which are considered Level 3 in the fair value hierarchy. We did not have any assets or liabilities reported in our consolidated financial statements at fair value on a nonrecurring basis during the years ended May 31, 2018 and 2017 . Significant Unobservable Level 3 Inputs Impaired Loans We utilize the fair value of estimated cash flows or the collateral underlying the loan to determine the fair value and specific allowance for impaired loans. The valuation technique used to determine fair value of the impaired loans provided by both our internal staff and third-party specialists includes market multiples (i.e., comparable companies). The significant unobservable inputs used in the determination of fair value for individually impaired loans is a multiple of earnings before interest, taxes, depreciation and amortization based on various factors (i.e., financial condition of the borrower). In estimating the fair value of the collateral, we may use third-party valuation specialists, internal estimates or a combination of both. The significant unobservable inputs for estimating the fair value of impaired collateral-dependent loans are reviewed by our Credit Risk Management group to assess the reasonableness of the assumptions used and the accuracy of the work performed. In cases where we rely on third-party inputs, we use the final unadjusted third-party valuation analysis as support for any adjustments to our consolidated financial statements and disclosures. Because of the limited amount of impaired loans as of May 31, 2018 and 2017 , we do not believe that potential changes in the significant unobservable inputs used in the determination of the fair value for impaired loans will have a material impact on the fair value measurement of these assets or our results of operations. |
Business Segments (Notes)
Business Segments (Notes) | 12 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Business Segments | NOTE 14—BUSINESS SEGMENTS Our consolidated financial statements include the financial results of CFC, NCSC and RTFC and certain entities created and controlled by CFC to hold foreclosed assets. Separate financial statements are produced for CFC, NCSC and RTFC and are the primary reports that management reviews in evaluating performance. The separate financial statements for CFC represent the consolidation of the financial results for CFC and the entities controlled by CFC. For more detail on the requirement to consolidate the financial results of NCSC and RTFC see “Note 1—Summary of Significant Accounting Policies.” The consolidated CFC financial statements include three operating segments: CFC, NCSC and RTFC. The NCSC and RTFC operating segments are not required to be separately reported as the financial results of NCSC and RTFC do not meet the quantitative thresholds outlined by the accounting standards for segment reporting as of May 31, 2018 . As a result, we have elected to aggregate the NCSC and RTFC financial results into a combined “Other” segment. CFC is the primary source of funding to NCSC. CFC is the sole source of funding to RTFC. Pursuant to a guarantee agreement, CFC has agreed to indemnify NCSC and RTFC for loan losses. The loan loss allowance at NCSC and RTFC is offset by a guarantee receivable from CFC. The following tables display segment results for the years ended May 31, 2018, 2017 and 2016 , and assets attributable to each segment as of May 31, 2018 and 2017 . Year Ended May 31, 2018 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,067,016 $ 49,182 $ (38,841 ) $ 1,077,357 Interest expense (791,836 ) (39,740 ) 38,841 (792,735 ) Net interest income 275,180 9,442 — 284,622 Benefit for loan losses 18,575 — — 18,575 Net interest income after benefit for loan losses 293,755 9,442 — 303,197 Non-interest income: Fee and other income 17,369 1,372 (1,163 ) 17,578 Derivative gains (losses): Derivative cash settlements (71,906 ) (2,375 ) — (74,281 ) Derivative forward value gains 301,694 4,308 — 306,002 Derivative gains 229,788 1,933 — 231,721 Total non-interest income 247,157 3,305 (1,163 ) 249,299 Non-interest expense: General and administrative expenses (83,783 ) (7,101 ) — (90,884 ) Other non-interest expense (1,943 ) (1,163 ) 1,163 (1,943 ) Total non-interest expense (85,726 ) (8,264 ) 1,163 (92,827 ) Income before income taxes 455,186 4,483 — 459,669 Income tax expense — (2,305 ) — (2,305 ) Net income $ 455,186 $ 2,178 $ — $ 457,364 May 31, 2018 CFC Other Elimination Consolidated Assets: Total loans outstanding $ 25,134,384 $ 1,149,575 $ (1,116,465 ) $ 25,167,494 Deferred loan origination costs 11,114 — — 11,114 Less: Allowance for loan losses (18,801 ) — — (18,801 ) Loans to members, net 25,126,697 1,149,575 (1,116,465 ) 25,159,807 Other assets 1,520,118 106,455 (96,176 ) 1,530,397 Total assets $ 26,646,815 $ 1,256,030 $ (1,212,641 ) $ 26,690,204 Year Ended May 31, 2017 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,026,302 $ 43,502 $ (33,170 ) $ 1,036,634 Interest expense (740,695 ) (34,250 ) 33,207 (741,738 ) Net interest income 285,607 9,252 37 294,896 Provision for loan losses (5,978 ) — — (5,978 ) Net interest income after provision for loan losses 279,629 9,252 37 288,918 Non-interest income: Fee and other income 18,858 3,528 (2,673 ) 19,713 Derivative gains (losses): Derivative cash settlements (81,489 ) (2,989 ) — (84,478 ) Derivative forward value gains 175,379 4,002 — 179,381 Derivative gains 93,890 1,013 — 94,903 Results of operations of foreclosed assets (1,749 ) — — (1,749 ) Total non-interest income 110,999 4,541 (2,673 ) 112,867 Non-interest expense: General and administrative expenses (78,965 ) (7,261 ) — (86,226 ) Gains on early extinguishment of debt 192 — — 192 Other non-interest expense (1,949 ) (2,635 ) 2,636 (1,948 ) Total non-interest expense (80,722 ) (9,896 ) 2,636 (87,982 ) Income before income taxes 309,906 3,897 — 313,803 Income tax expense — (1,704 ) — (1,704 ) Net income $ 309,906 $ 2,193 $ — $ 312,099 May 31, 2017 CFC Other Elimination Consolidated Assets: Total loans outstanding $ 24,319,673 $ 968,343 $ (931,686 ) $ 24,356,330 Deferred loan origination costs 10,714 — — 10,714 Less: Allowance for loan losses (37,376 ) — — (37,376 ) Loans to members, net 24,293,011 968,343 (931,686 ) 24,329,668 Other assets 865,867 104,643 (94,486 ) 876,024 Total assets $ 25,158,878 $ 1,072,986 $ (1,026,172 ) $ 25,205,692 Year Ended May 31, 2016 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,001,241 $ 45,798 $ (34,403 ) $ 1,012,636 Interest expense (680,661 ) (35,665 ) 34,476 (681,850 ) Net interest income 320,580 10,133 73 330,786 Benefit for loan losses 646 — — 646 Net interest income after benefit for loan losses 321,226 10,133 73 331,432 Non-interest income: Fee and other income 21,164 4,350 (3,729 ) 21,785 Derivative losses: Derivative cash settlements (85,316 ) (3,442 ) — (88,758 ) Derivative forward value losses (220,827 ) (256 ) — (221,083 ) Derivative losses (306,143 ) (3,698 ) — (309,841 ) Results of operations from foreclosed assets (6,899 ) — — (6,899 ) Total non-interest income (291,878 ) 652 (3,729 ) (294,955 ) Non-interest expense: General and administrative expenses (77,407 ) (8,936 ) — (86,343 ) Losses on early extinguishment of debt (333 ) — — (333 ) Other non-interest expense (1,261 ) (3,655 ) 3,656 (1,260 ) Total non-interest expense (79,001 ) (12,591 ) 3,656 (87,936 ) Loss before income taxes (49,653 ) (1,806 ) — (51,459 ) Income tax expense — (57 ) — (57 ) Net loss $ (49,653 ) $ (1,863 ) $ — $ (51,516 ) |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
General Information | The Company National Rural Utilities Cooperative Finance Corporation (“CFC”) is a member-owned cooperative association incorporated under the laws of the District of Columbia in April 1969. CFC’s principal purpose is to provide its members with financing to supplement the loan programs of the Rural Utilities Service (“RUS”) of the United States Department of Agriculture (“USDA”). CFC makes loans to its rural electric members so they can acquire, construct and operate electric distribution, generation and transmission (“power supply”) systems and related facilities. CFC also provides its members with credit enhancements in the form of letters of credit and guarantees of debt obligations. As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities. CFC is exempt from federal income taxes. National Cooperative Services Corporation (“NCSC”) is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association. NCSC’s principal purpose is to provide financing to members of CFC, entities eligible to be members of CFC and the for-profit and nonprofit entities that are owned, operated or controlled by or provide significant benefit to certain members of CFC. NCSC’s membership consists of distribution systems, power supply systems and statewide and regional associations that are members of CFC. CFC is the primary source of funding for NCSC and manages NCSC’s business operations under a management agreement that is automatically renewable on an annual basis unless terminated by either party. NCSC pays CFC a fee and, in exchange, CFC reimburses NCSC for loan losses under a guarantee agreement. As a taxable cooperative, NCSC pays income tax based on its reported taxable income and deductions. NCSC is headquartered with CFC in Dulles, Virginia. Rural Telephone Finance Cooperative (“RTFC”) is a taxable Subchapter T cooperative association originally incorporated in South Dakota in 1987 and reincorporated as a member-owned cooperative association in the District of Columbia in 2005. RTFC’s principal purpose is to provide financing for its rural telecommunications members and their affiliates. RTFC’s membership consists of a combination of not-for-profit and for-profit entities. CFC is the sole lender to and manages the business operations of RTFC through a management agreement that is automatically renewable on an annual basis unless terminated by either party. RTFC pays CFC a fee and, in exchange, CFC reimburses RTFC for loan losses under a guarantee agreement. As permitted under Subchapter T of the Internal Revenue Code, RTFC pays income tax based on its net income, excluding patronage-sourced earnings allocated to its patrons. RTFC is headquartered with CFC in Dulles, Virginia. |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. The most significant estimates and assumptions involve determining the allowance for loan losses and the fair value of financial assets and liabilities. While management makes its best judgment, actual amounts or results could differ from these estimates. Certain reclassifications have been made to previously reported amounts to conform to the current-period presentation. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of CFC, variable interest entities (“VIEs”) where CFC is the primary beneficiary and subsidiary entities created and controlled by CFC to hold foreclosed assets. CFC did no t have any entities that held foreclosed assets as of May 31, 2018 or May 31, 2017 . All intercompany balances and transactions have been eliminated. NCSC and RTFC are VIEs that are required to be consolidated by CFC. Unless stated otherwise, references to “we, “our” or “us” relate to CFC and its consolidated entities. |
Variable Interest Entities | Variable Interest Entities A VIE is an entity that has a total equity investment at risk that is not sufficient to finance its activities without additional subordinated financial support provided by another party, or where the group of equity holders does not have: (i) the ability to make decisions about the entity’s activities that most significantly impact its economic performance; (ii) the obligation to absorb the entity’s expected losses; or (iii) the right to receive the entity’s expected residual returns. NCSC and RTFC meet the definition of variable interest entities because they do not have sufficient equity investment at risk to finance their activities without additional financial support. When evaluating an entity for possible consolidation, we must determine whether or not we have a variable interest in the entity. If it is determined that we do not have a variable interest in the entity, no further analysis is required and we do not consolidate the entity. If we have a variable interest in the entity, we must evaluate whether we are the primary beneficiary based on an assessment of quantitative and qualitative factors. We are considered the primary beneficiary holder if we have a controlling financial interest in the VIE that provides (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. We consolidate the results of NCSC and RTFC with CFC because CFC is the primary beneficiary holder. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash, certificates of deposit, due from banks and other investments with original maturities of less than 90 days are classified as cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash totaled $8 million and $22 million as of May 31, 2018 and 2017 , respectively. On July 1, 2016, CFC completed the sale of Caribbean Asset Holdings, LLC (“CAH”), an entity that held foreclosed assets, to ATN VI Holdings, LLC. In connection with the sale, $16 million of the sale proceeds was deposited into escrow to fund potential indemnification claims following the closing. Of this amount, $14.5 million was designated to cover general indemnification claims and has been released back to us. The remaining $1.5 million was designated to cover indemnification of certain tax liens and remains in escrow. We continue to be liable for certain indemnification obligations, if raised and substantiated, regardless of whether amounts are held in escrow. |
Investments | Time Deposits Time deposits are deposits that we make with financial institutions in interest-bearing accounts. These deposits have a maturity of less than one year as of the reporting date and are valued at carrying value, which approximates fair value. Investment Securities We record purchases and sales of securities on a trade-date basis. We currently classify and account for our investment securities as either available for sale (“AFS”) or held to maturity (“HTM”) based on our investment strategy and management’s assessment of our intent and ability to hold the securities until maturity. Securities that we may sell prior to maturity in response to changes in our investment strategy, liquidity needs, credit risk mitigating considerations, market risk profile or for other reasons are classified as AFS. Securities that we have the positive intent and ability to hold until maturity are classified as HTM. Our investment securities classified as AFS consist of investments in Federal Agricultural Mortgage Corporation (“Farmer Mac”) Series A common stock and Farmer Mac Series A, Series B and Series C non-cumulative preferred stock. AFS securities are carried at fair value on our consolidated balance sheets with unrealized gains and losses recorded as a component of accumulated other comprehensive income. Our investment securities classified as HTM consist of investments in certificates of deposit with maturities greater than 90 days, commercial paper, corporate debt securities, commercial mortgage-backed securities (“MBS”) and other asset-backed securities (“ABS”). We have the positive intent and ability to hold these securities to maturity. As such, we have classified them as HTM on our consolidated balance sheet. HTM securities are carried at amortized cost on our consolidated balance sheets. Interest income on fixed-income securities, including amortization of premiums and accretion of discounts, is generally recognized over the contractual life of the securities based on the effective yield method. We regularly evaluate our investment securities whose fair value has declined below the amortized cost to assess whether the decline in fair value is other than temporary. We recognize any other-than-temporary impairment amounts in earnings. |
Loans to Members | Loans to Members Loans to members are classified as held for investment and reported at amortized cost, which is measured based on the outstanding principal balance net of unamortized deferred loan origination costs. Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method, into interest income over the life of the loan |
Non-performing Loans | Nonperforming Loans A loan is considered past due if a full payment of interest and principal is not received within 30 days of its due date. Loans are classified as nonperforming when the collection of interest and principal has become 90 days past due; court proceedings indicate that collection of interest and principal in accordance with the contractual terms is unlikely; or the full and timely collection of interest or principal becomes otherwise. Once a loan is classified as nonperforming, we typically place the loan on nonaccrual status and reverse any accrued and unpaid interest recorded during the period in which the loan is classified as nonperforming. We generally apply all cash received during the nonaccrual period to the reduction of principal, thereby foregoing interest income recognition. The decision to return a loan to accrual status is determined on a case-by-case basis. We fully charge off or write down loans to the estimated net realizable value in the period that it becomes evident that collectability of the full contractual amount is highly unlikely; however, our efforts to recover all charged-off amounts may continue. The determination to write off all or a portion of a loan balance is made based on various factors on a case-by-case basis including, but not limited to, cash flow analysis and the fair value of collateral securing the borrower’s loans. |
Impaired Loans | Impaired Loans A loan is considered impaired when, based on current information and events, we determine that it is probable that we will be unable to collect all interest and principal amounts due as scheduled in accordance with the contractual terms of the loan agreement, other than an insignificant delay in payment or insignificant shortfall in payment amount. Factors considered in determining impairment may include, but are not limited to: • the review of the borrower’s audited financial statements and interim financial statements if available, • the borrower’s payment history, • communication with the borrower, • economic conditions in the borrower’s service territory, • pending legal action involving the borrower, • restructure agreements between us and the borrower, and • estimates of the value of the borrower’s assets that have been pledged as collateral to secure our loans. We recognize interest income on impaired loans on a case-by-case basis. An impaired loan to a borrower that is nonperforming will typically be placed on nonaccrual status and we will reverse all accrued and unpaid interest. We generally apply all cash received during the nonaccrual period to the reduction of principal, thereby foregoing interest income recognition. Interest income may be recognized on an accrual basis for restructured impaired loans where the borrower is performing and is expected to continue to perform based on agreed-upon terms. We may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties. Concessionary modifications are classified as troubled debt restructurings (“TDRs”) unless the modification results in only an insignificant delay in payments to be received. All of our restructured loans are considered TDRs. |
Allowance for Credit Losses | Allowance for Loan Losses We maintain an allowance for loan losses that represents management’s estimate of probable losses inherent in our loan portfolio as of each balance sheet date. Our allowance for loan losses consists of a collective allowance for loans in our portfolio that are not individually impaired and a specific allowance for loans identified as individually impaired. The allowance for loan losses is reported separately on the consolidated balance sheet, and the provision for loan losses is separately reported on our consolidated statement of operations. We review the estimates and assumptions used in the calculations of the allowance for loan losses on a quarterly basis. The estimate of the allowance for loan losses is based on a review of the composition of the loan portfolio, past loss experience, specific problem loans, current economic conditions, available market data and/or projection of future cash flows and other pertinent factors that in management’s judgment may contribute to incurred losses. The allowance is based on estimates and, accordingly, actual losses may differ from the allowance amount. The methodology used to calculate the allowance for loan losses is summarized below. Collective Allowance The collective loss reserve is calculated using an internal model to estimate incurred losses for segments within our loan portfolio that have similar risk characteristics. The segments reflect each of our consolidated entities: CFC, NCSC and RTFC. Our segments are further stratified into loan pools based on member borrower type—distribution, power supply, and statewide and associates—and borrower risk ratings. We then apply loss factors to the outstanding principal balance of each of these loan pools to determine the collective allowance for loan losses. The loss factors reflect the probability of default, or default rate, and the loss severity, or loss given default, for each loan pool. We derive the total quantitative loss estimate by applying the default rate, based on a five-year loss emergence period, and recovery rate, based on our historical experience, to each loan pool. Following is additional information on the key inputs and assumptions used in determining our collective allowance for loan losses. • Internal risk ratings . As part of our credit risk management process, we regularly evaluate each borrower and loan facility in our loan portfolio and assign an internal risk rating. Our borrower risk rating is intended to reflect probability of default. The risk ratings are based on the following quantitative and qualitative factors: ◦ general financial condition of the borrower; ◦ our judgment of the quality of the borrower’s management; ◦ our judgment of the borrower’s competitive position within its service territory and industry; ◦ our estimate of the potential impact of proposed regulation and litigation; and ◦ other factors specific to individual borrowers or classes of borrowers. • Loss emergence period: The loss emergence period, or the time it takes from when a loss-triggering event happens in the loan portfolio until it is identified and a problem loan is charged off, repaid or otherwise resolved, is based on CFC’s historical average loss emergence experience. • Default rates : Because we have limited default history from which to develop default estimates, we utilize third-party industry default data to estimate default rates. We currently obtain this information from the U.S. utility default rate table published annually by S&P Global Inc. (“S&P”). This table provides historical expected default rates for the utility sector based on credit rating levels and remaining maturity. We correlate our internal risk ratings to the S&P credit ratings provided in the utility default rate table and apply the S&P default rates for our estimated loss emergence period to our loan pools. • Recovery rates. To estimate our loss severity in the event of default, we utilize our historical charge-off experience for each borrower type, which is subject to adjustment based on management’s quantitative and qualitative assessment of current conditions. Specific Allowance We generally measure impairment for individually impaired loans based on the difference between the recorded investment of the loan and the present value of the expected future cash flows discounted at the loan’s effective interest rate. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral, which we determine based on the current fair value of the collateral less estimated selling costs. Loans are considered to be collateral dependent if repayment of the loan is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. In calculating the impairment on a loan, the estimates of the expected future cash flows or collateral value are the key estimates made by management. Changes in the estimated future cash flows or collateral value affect the amount of the calculated impairment. The change in cash flows required to make the change in the calculated impairment material will be different for each borrower and depend on the period covered, the effective interest rate at the time the loan became impaired and the amount of the loan outstanding. Estimates are not used to determine our investment in the receivables or the discount rate since, in all cases, the investment is equal to the loan balance outstanding at the reporting date, and the discount rate is equal to the effective interest rate on the loan at the time the loan became impaired. Unadvanced Loan Commitments Unadvanced commitments represent amounts for which we have approved and executed loan contracts, but the funds have not been advanced. The majority of the unadvanced commitments reported represent amounts that are subject to material adverse change clauses at the time of the loan advance. Prior to making an advance on these facilities, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. The remaining unadvanced commitments relate to line of credit loans that are not subject to a material adverse change clause at the time of each loan advance. As such, we would be required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the loan commitment. Unadvanced loan commitments related to line of credit loans are typically for periods not to exceed five years and are generally revolving facilities used for working capital and backup liquidity purposes. Historically, we have experienced a very low utilization rate on line of credit loan facilities, whether or not there is a material adverse change clause. Since we generally do not charge a fee on the unadvanced portion of the majority of our loan facilities, our borrowers will typically request long-term facilities to fund construction work plans and other capital expenditures for periods of up to five years and draw down on the facility over that time. In addition, borrowers will typically request an amount in excess of their immediate estimated loan requirements to avoid the expense related to seeking additional loan funding for unexpected items. These factors contribute to our expectation that the majority of the unadvanced loan commitments will expire without being fully drawn upon and that the total unadvanced amount does not necessarily represent future cash funding requirements. Reserve for Unadvanced Loan Commitments We maintain a reserve for unadvanced loan commitments and committed lines of credit. This reserve is included as a component of other liabilities on our consolidated balance sheets, and changes in the reserve are included in other non-interest expense on our consolidated statements of operations. Our estimate of the reserve for potential losses on these commitments takes into consideration various factors, including the existence of a material adverse change clause, the historical utilization of the committed lines of credit, the probability of funding, historical loss experience on unadvanced loan commitments and other inputs along with management judgment consistent with the methodology used to determine our allowance for loan losses. |
Fixed Assets | Fixed Assets Fixed assets are recorded at cost less accumulated depreciation. We recognize depreciation expense for each category of our depreciable fixed assets on a straight-line basis over the estimated useful life, which ranges from three to 40 years. We recognized depreciation expense of $8 million , $7 million and $7 million in fiscal year 2018 , 2017 and 2016 , respectively. The table below displays the components of our fixed assets. Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment. May 31, (Dollars in thousands) 2018 2017 Building and building equipment $ 50,210 $ 50,236 Furniture and fixtures 6,080 5,852 Computer software and hardware 45,389 40,469 Other 1,006 1,034 Depreciable fixed assets 102,685 97,591 Less: Accumulated depreciation (47,705 ) (41,274 ) Net depreciable fixed assets 54,980 56,317 Land 23,796 37,847 Software development 37,255 28,096 Fixed assets, net $ 116,031 $ 122,260 |
Assets Held for Sale | Assets Held for Sale An asset is classified as held for sale when (i) management commits to a plan to sell the asset or business; (ii) the asset or business is available for sale in its present condition; (iii) the asset or business is actively marketed for sale at a reasonable price; (iv) the sale is expected to be completed within one year; and (v) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. Long-lived assets classified as held for sale are initially measured at the lower of their carrying amount or fair value less cost to sell. If the carrying value exceeds the estimated fair value less cost to sell in the period the held for sale criteria are met, an impairment charge is recorded equal to the amount by which the carrying amount exceeds the fair value less cost to sell. Subsequent changes in the long-lived asset’s fair value less cost to sell is reported as an adjustment to the carrying amount to the extent that the adjusted carrying amount does not exceed the carrying amount of the long-lived asset at the time it was initially classified as held for sale. In 2007, CFC purchased a parcel of land, consisting of approximately 28 acres, located in Loudoun County, Virginia as a potential site to construct a new facility for our headquarters. We subsequently identified another site in Loudoun County for our headquarters, purchased the land and built our headquarters facility at that location. On March 14, 2018, CFC entered into a purchase and sale agreement (“the agreement”), subsequently amended on April 23, 2018, for the sale of this real estate property in excess of its carrying value of $14 million , subject to certain terms and conditions. Although we currently believe the disposition of this property is probable within the next 12 months, there can be no assurance that the disposition will be consummated in accordance with the terms of the agreement. The property was previously included in fixed assets, net on our consolidated balance sheet. In the third quarter of fiscal year 2018, we designated the property as held for sale fiscal year 2018 and reclassified it from fixed assets, net to other assets on our consolidated balance sheet. Based on the estimated sale proceeds less cost to sell, we expect to record a gain on the sale of this property. |
Foreclosed Assets | Foreclosed Assets Foreclosed assets acquired through our lending activities in satisfaction of indebtedness may be held in operating entities created and controlled by CFC and presented separately in our consolidated balance sheets under foreclosed assets, net. These assets are initially recorded at estimated fair value as of the date of acquisition. Subsequent to acquisition, foreclosed assets not classified as held for sale are evaluated for impairment, and the results of operations and any impairment are reported on our consolidated statements of operations under results of operations of foreclosed assets. When foreclosed assets meet the accounting criteria to be classified as held for sale, they are recorded at the lower of cost or fair value less estimated cost to sell at the date of transfer, with the amount at the date of transfer representing the new cost basis. Subsequent changes are recognized in our consolidated statements of operations under results of operations of foreclosed assets. We also review foreclosed assets classified as held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to estimated fair values. We did not carry any foreclosed assets on our consolidated balance sheet as of May 31, 2018 or May 31, 2017 |
Debt | Debt We report debt at cost net of unamortized issuance costs and discounts or premiums. Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue. Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt. Borrowings with an original contractual maturity of greater than one year are classified as long-term debt. |
Derivative Financial Instruments | Derivative Instruments We are an end user of derivative financial instruments and do not engage in derivative trading. We use derivatives, primarily interest rate swaps and treasury rate locks, to manage interest rate risk. Derivatives may be privately negotiated contracts, which are often referred to as over-the-counter (“OTC”) derivatives, or they may be listed and traded on an exchange. We generally engage in OTC derivative transactions. In accordance with the accounting standards for derivatives and hedging activities, we record derivative instruments at fair value as either a derivative asset or derivative liability on our consolidated balance sheets. We report derivative asset and liability amounts on a gross basis based on individual contracts, which does not take into consideration the effects of master netting agreements or collateral netting. Derivatives in a gain position are reported as derivative assets on our consolidated balance sheets, while derivatives in a loss position are reported as derivative liabilities. Accrued interest related to derivatives is reported on our consolidated balance sheets as a component of either accrued interest receivable or accrued interest payable. If we do not elect hedge accounting treatment, changes in the fair value of derivative instruments, which consist of net accrued periodic derivative cash settlements and derivative forward value amounts, are recognized in our consolidated statements of operations under derivative gains (losses). If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of the hedge relationship. Changes in the fair value of derivatives designated as qualifying fair value hedges are recorded in earnings together with offsetting changes in the fair value of the hedged item and any related ineffectiveness. Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”), to the extent that the hedge relationships are effective, and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction. Any ineffectiveness in the hedging relationship is recognized as a component of derivative gains (losses) in our consolidated statement of operations. We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting. Accordingly, changes in the fair value of interest rate swaps are reported in our consolidated statements of operations under derivative gains (losses). Net periodic cash settlements related to interest rate swaps are classified as an operating activity in our consolidated statements of cash flows. We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances or repricings. Changes in the fair value of treasury locks designated as cash flow hedges are recorded as a component of OCI and reclassified from AOCI into interest expense when the forecasted transaction occurs using the effective interest method. Any ineffectiveness is recognized as a component of derivative gains (losses) in our consolidated statements of operations. At June 1, 2001, as a result of the adoption of the derivative accounting guidance that required derivatives to be reported at fair value on the balance sheet, we recorded a transition adjustment net loss in AOCI. The transition adjustment net loss is being reclassified into earnings and reported as a component of derivative gains (losses) in our consolidated statements of operations. We expect to continue to reclassify the remaining balance of the transition adjustment to earnings through 2029. |
Guarantee Liability | Guarantee Liability We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members’ debt. The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations. The contingent portion of the guarantee liability represents management’s estimate of our exposure to losses within the guarantee portfolio. The methodology used to estimate the contingent guarantee liability is consistent with the methodology used to determine the allowance for loan losses. We have recorded a noncontingent guarantee liability for all new or modified guarantees since January 1, 2003. Our noncontingent guarantee liability represents our obligation to stand ready to perform over the term of our guarantees and liquidity obligations that we have entered into or modified since January 1, 2003. Our noncontingent obligation is estimated based on guarantee and liquidity fees charged for guarantees issued, which represents management’s estimate of the fair value of our obligation to stand ready to perform. The fees are deferred and amortized using the straight-line method into interest income over the term of the guarantee. |
Fair Value of Financial Instruments | Fair Value Valuation Processes We present certain financial instruments at fair value, including available-for-sale investment securities and derivatives. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (also referred to as an exit price). We have various processes and controls in place to ensure that fair value is reasonably estimated. We consider observable prices in the principal market in our valuations where possible. Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date. With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early-termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity excluding common stock and preferred stock investments that have no stated maturity. Fair Value Hierarchy The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. Fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized below: • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2: Observable market-based inputs, other than quoted prices in active markets for identical assets or liabilities • Level 3: Unobservable inputs The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted prices in active markets or observable market parameters. When quoted prices and observable data in active markets are not fully available, management’s judgment is necessary to estimate fair value. Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value. |
Membership Fees | Membership Fees Members are charged a one-time membership fee based on member class. CFC distribution system members, power supply system members and national associations of cooperatives pay a $1,000 membership fee. CFC service organization members pay a $200 membership fee and CFC associates pay a $1,000 fee. RTFC voting members pay a $1,000 membership fee and RTFC associates pay a $100 fee. NCSC members pay a $100 membership fee. Membership fees are accounted for as members’ equity. |
Financial Instruments with Off-Balance Sheet Risk | Financial Instruments with Off-Balance Sheet Risk In the normal course of business, we are a party to financial instruments with off-balance sheet risk to meet the financing needs of our member borrowers. These financial instruments include committed lines of credit, standby letters of credit and guarantees of members’ obligations. |
Interest Income | Interest Income Interest income on loans and investments is recognized using the effective interest method. The following table presents interest income, categorized by loan and investment type, for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Interest income by interest-earning asset type: Long-term fixed-rate loans (1) $ 1,000,492 $ 980,173 $ 959,701 Long-term variable-rate loans 27,152 19,902 19,858 Line of credit loans 38,195 25,389 24,864 TDR loans (2) 889 905 512 Nonperforming loans — — 142 Other income, net (3) (1,185 ) (1,082 ) (1,088 ) Total loans 1,065,543 1,025,287 1,003,989 Cash, time deposits and investment securities 11,814 11,347 8,647 Total interest income $ 1,077,357 $ 1,036,634 $ 1,012,636 ____________________________ (1) Includes loan conversion fees, which are generally deferred and recognized as interest income using the effective interest method. (2) Troubled debt restructured (“TDR”) loans. (3) Consists of late payment fees and net amortization of deferred loan fees and loan origination costs. Deferred income of $66 million and $74 million as of May 31, 2018 and 2017 , respectively, consists primarily of deferred loan conversion fees totaling $60 million and $68 million , respectively. These fees are presented as deferred income on our consolidated balance sheets and recognized in interest income using the effective interest method. |
Interest Expense | Interest Expense The following table presents interest expense, by debt product type, for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Interest expense by debt product type: (1)(2) Short-term borrowings $ 50,616 $ 26,684 $ 14,728 Medium-term notes 111,814 99,022 86,270 Collateral trust bonds 336,079 340,854 333,338 Guaranteed Underwriter Program notes payable 140,551 142,661 143,240 Farmer Mac notes payable 56,004 33,488 20,529 Other notes payable 1,509 1,780 2,051 Subordinated deferrable debt 37,661 37,657 21,245 Subordinated certificates 58,501 59,592 60,449 Total interest expense $ 792,735 $ 741,738 $ 681,850 ____________________________ (1) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized as interest expense immediately as incurred. (2) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Depending on the nature of the fee, amounts may be deferred and recognized as interest expense ratably over the term of the arrangement or recognized immediately as incurred. |
Early Extinguishment of Debt | Early Extinguishment of Debt We redeem outstanding debt early from time to time to manage liquidity and interest rate risk. When we redeem outstanding debt early, we recognize a gain or loss related to the difference between the amount paid to redeem the debt and the net book value of the extinguished debt as a component of non-interest expense in the gain (loss) on early extinguishment of debt line item. |
Income Taxes | Income Taxes While CFC is exempt under Section 501(c)(4) of the Internal Revenue Code, it is subject to tax on unrelated business taxable income. NCSC is a taxable cooperative that pays income tax on the full amount of its reportable taxable income and allowable deductions. RTFC is a taxable cooperative under Subchapter T of the Internal Revenue Code and is not subject to income taxes on income from patronage sources that is allocated to its borrowers, as long as the allocation is properly noticed and at least 20% of the amount allocated is retired in cash prior to filing the applicable tax return. On December 22, 2017, the president of the United States signed and enacted into law H.R. 1, the Tax Cuts and Jobs Act (“The Act”), which, except for certain provisions, is effective for tax years beginning on or after January 1, 2018. The Act significantly changed existing U.S. tax law and included numerous provisions that affect businesses. One of the primary changes is a reduction in the federal statutory corporate U.S. income tax rate to 21% percent from 35% and other changes that impact business-related exclusions, deductions and credits. CFC is exempt from federal income tax under Section 501(c)(4) of the Internal Revenue Code. NCSC and RTFC are subject to federal income tax; however, their annual taxable income and federal income tax is not material to our consolidated results of operations, financial condition or liquidity. RTFC’s deduction of the allocation of patronage capital to its members historically has resulted in a significant reduction in its annual taxable income and federal income tax. The income tax benefit (expense) recorded in the consolidated statement of operations represents the income tax benefit (expense) at the applicable combined federal and state income tax rates resulting in a statutory tax rate. The statutory tax rate for NCSC and RTFC was 34% and 35% , respectively, for fiscal year 2018. The statutory tax rate for NCSC and RTFC was 38% and 40% , respectively, for fiscal year 2017 and the statutory tax rate for both NCSC and RTFC was 38% for fiscal year 2016. Substantially all of the income tax expense recorded in our consolidated statements of operations relates to NCSC. NCSC had a deferred tax asset of $2 million and $4 million as of May 31, 2018 and 2017 , respectively, primarily arising from differences in the accounting and tax treatment for derivatives. We believe that it is more likely than not that the deferred tax assets will be realized through taxable earnings. |
New Accounting Pronouncements | Derivatives and Hedging—Targeted Improvements to Accounting for Hedging Activities In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12, Derivatives and Hedging—Targeted Improvements to Accounting for Hedging Acti vities, which expands the types of risk-management strategies that qualify for hedge accounting treatment to more closely align the results of hedge accounting with the economics of certain risk-management activities and simplifies certain hedge documentation and assessment requirement. It also eliminates the concept of separately recording hedge ineffectiveness and expands disclosure requirements. The guidance is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted in any interim period or fiscal year before the effective date. The guidance is effective for us beginning June 1, 2019. Hedge accounting is elective, and we currently apply hedge accounting on a limited basis, specifically when we enter into treasury rate lock agreements. If we continue to elect not to apply hedge accounting to our interest rate swaps, the adoption of the new guidance will not have a material impact on our consolidated financial statements. Receivables—Nonrefundable Fees and Other Cost In March 2017, FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs, which shortens the amortization period for the premium on certain callable debt securities to the earliest call date rather the maturity date. The guidance is applicable to any individual debt security, purchased at a premium, with an explicit and noncontingent call feature with a fixed price on a preset date. The guidance does not impact the accounting for purchased callable debt securities held at a discount; the discount will continue to amortize to the maturity date. The guidance is effective for public entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This update is effective for us beginning June 1, 2019. Adoption of the guidance requires modified retrospection transition as of the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings. We do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements. Statement of Cash Flows—Restricted Cash In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows—Restricted Cash, which addresses the presentation of restricted cash in the statement of cash flows. The guidance requires that the statement of cash flows explain the change in the beginning-of-period and end-of-period total of cash, cash equivalents and restricted cash balances. We currently explain the change during the period in total of cash and cash equivalents on our consolidated statements of cash flows. The guidance is effective for public entities in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and must be applied retrospectively. We adopted this guidance on June 1, 2018 with retrospective application. Beginning with the first quarter of fiscal year 2019, we will change the presentation of our consolidated statement of cash flows to explain the changes in cash and cash equivalents and restricted cash and revise prior- period amounts to conform to this presentation. We will also disclose the total for cash and cash equivalents and restricted cash on our consolidated balance sheets to correspond to the statement of cash flows. Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments In June 2016, FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model and establishes a single allowance framework based on a current expected credit loss model for financial assets carried at amortized cost, including loans and held-to-maturity debt securities. The current expected loss model requires an entity to estimate the credit losses expected over the life of the credit exposure upon initial recognition of that exposure when the financial asset is originated or acquired, which will generally result in earlier recognition of credit losses. The guidance also amends the other-than-temporary model for available-for-sale debt securities by requiring the use of an allowance, rather than directly reducing the carrying value of the security. The new guidance also requires expanded credit quality disclosures. The new standard is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This update is effective for us beginning June 1, 2020. We do not expect to early adopt this guidance. Upon adoption, we will be required to record a cumulative-effect adjustment to retained earnings. The impact on our consolidated financial statements from the adoption of this new guidance will depend on the composition and risk profile of our loan portfolio as of the date of adoption. Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, FASB issued ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which amends certain aspects of the recognition, measurement, presentation and disclosure of certain financial instruments, including equity investments and liabilities measured at fair value under the fair value option. The main provisions include a requirement that all investments in equity securities be measured at fair value through earnings, with certain exceptions, and a requirement to present separately in other comprehensive income the portion of the total change in fair value attributable to an entity’s own credit risk for financial liabilities where the fair value option has been elected. We adopted this guidance on June 1, 2018. Upon adoption, we recorded a cumulative-effect adjustment that resulted in an increase in retained earnings of $9 million and a corresponding decrease in AOCI. Beginning in the first quarter of fiscal year 2019, we will record unrealized changes in the fair value of our investments in equity securities classified as available for sale in earnings. Previously, such unrealized gains and losses were reflected in other comprehensive income. Revenue from Contracts with Customers In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers, which modifies the guidance used to recognize revenue from contracts with customers for transfers of goods or services and transfers of nonfinancial assets. This guidance applies to all contracts with customers to provide goods or services in the ordinary course of business, except for certain contracts specifically excluded from the scope, including financial instruments, guarantees, insurance contracts and leases. As a financial institution, substantially all of our revenue is in the form of interest income derived from financial instruments, primarily our investments in loans and securities. Given the scope exception for financial instruments, the guidance has no impact on our recognition and measurement of interest income and excludes the vast majority of our other transactions, such as financial guarantees and derivatives. The guidance became effective for us on June 1, 2018. Adoption of the guidance did not have an impact on our consolidated financial statements. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of fixed assets | May 31, (Dollars in thousands) 2018 2017 Building and building equipment $ 50,210 $ 50,236 Furniture and fixtures 6,080 5,852 Computer software and hardware 45,389 40,469 Other 1,006 1,034 Depreciable fixed assets 102,685 97,591 Less: Accumulated depreciation (47,705 ) (41,274 ) Net depreciable fixed assets 54,980 56,317 Land 23,796 37,847 Software development 37,255 28,096 Fixed assets, net $ 116,031 $ 122,260 |
Schedule of components of interest income | Interest income on loans and investments is recognized using the effective interest method. The following table presents interest income, categorized by loan and investment type, for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Interest income by interest-earning asset type: Long-term fixed-rate loans (1) $ 1,000,492 $ 980,173 $ 959,701 Long-term variable-rate loans 27,152 19,902 19,858 Line of credit loans 38,195 25,389 24,864 TDR loans (2) 889 905 512 Nonperforming loans — — 142 Other income, net (3) (1,185 ) (1,082 ) (1,088 ) Total loans 1,065,543 1,025,287 1,003,989 Cash, time deposits and investment securities 11,814 11,347 8,647 Total interest income $ 1,077,357 $ 1,036,634 $ 1,012,636 ____________________________ (1) Includes loan conversion fees, which are generally deferred and recognized as interest income using the effective interest method. (2) Troubled debt restructured (“TDR”) loans. (3) Consists of late payment fees and net amortization of deferred loan fees and loan origination costs. |
Schedule of components of interest expense | The following table presents interest expense, by debt product type, for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Interest expense by debt product type: (1)(2) Short-term borrowings $ 50,616 $ 26,684 $ 14,728 Medium-term notes 111,814 99,022 86,270 Collateral trust bonds 336,079 340,854 333,338 Guaranteed Underwriter Program notes payable 140,551 142,661 143,240 Farmer Mac notes payable 56,004 33,488 20,529 Other notes payable 1,509 1,780 2,051 Subordinated deferrable debt 37,661 37,657 21,245 Subordinated certificates 58,501 59,592 60,449 Total interest expense $ 792,735 $ 741,738 $ 681,850 ____________________________ (1) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized as interest expense immediately as incurred. (2) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Depending on the nature of the fee, amounts may be deferred and recognized as interest expense ratably over the term of the arrangement or recognized immediately as incurred. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table provides information on incremental consolidated assets and liabilities of VIEs included in CFC’s consolidated financial statements, after applying intercompany eliminations, as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Total loans outstanding $ 1,149,574 $ 968,343 Other assets 10,280 10,157 Total assets $ 1,159,854 $ 978,500 Long-term debt $ 8,000 $ 10,000 Other liabilities 33,923 36,899 Total liabilities $ 41,923 $ 46,899 |
Schedule of Variable Interest Entities, Credit Commitments | The following table provides information on CFC’s credit commitments to NCSC and RTFC, and its potential exposure to loss as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 CFC credit commitments $ 5,500,000 $ 5,500,000 Outstanding commitments: Borrowings payable to CFC (1) 1,116,465 931,686 Credit enhancements: CFC third-party guarantees 12,005 14,697 Other credit enhancements 14,655 20,963 Total credit enhancements (2) 26,660 35,660 Total outstanding commitments 1,143,125 967,346 CFC available credit commitments $ 4,356,875 $ 4,532,654 ____________________________ (1) Borrowings payable to CFC are eliminated in consolidation. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
May 31, 2018 | |
Investments [Abstract] | |
Schedule of investments in equity securities | The following tables present the amortized cost and fair value of our investment securities and the corresponding gross unrealized gains and losses, by classification category and major security type, as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: Farmer Mac—series A non-cumulative preferred stock $ 30,000 $ 480 $ — $ 30,480 Farmer Mac—series B non-cumulative preferred stock 25,000 1,000 — 26,000 Farmer Mac—series C non-cumulative preferred stock 25,000 872 — 25,872 Farmer Mac—class A common stock 538 6,442 — 6,980 Total investment securities, available for sale 80,538 8,794 — 89,332 Held to maturity: Certificates of deposit 4,148 — — 4,148 Commercial paper 9,134 — — 9,134 U.S. agency debt securities 2,000 16 — 2,016 Corporate debt securities 455,721 714 (4,595 ) 451,840 Commercial MBS: Agency 7,024 63 — 7,087 Non-agency 3,453 3 (3 ) 3,453 Total commercial MBS 10,477 66 (3 ) 10,540 U.S. state and municipality debt securities 2,147 24 — 2,171 Foreign government debt securities 1,241 9 — 1,250 Other ABS (1) 34,651 11 (215 ) 34,447 Total investment securities, held to maturity 519,519 840 (4,813 ) 515,546 Total investment securities $ 600,057 $ 9,634 $ (4,813 ) $ 604,878 ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. May 31, 2017 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale: Farmer Mac—series A non-cumulative preferred stock $ 30,000 $ 1,585 $ — $ 31,585 Farmer Mac—series B non-cumulative preferred stock 25,000 1,940 — 26,940 Farmer Mac—series C non-cumulative preferred stock 25,000 4,150 — 29,150 Farmer Mac—class A common stock 538 4,341 — 4,879 Total investment securities, available for sale $ 80,538 $ 12,016 $ — $ 92,554 |
Schedule of Unrealized Loss on Investments | The following table presents the fair value and gross unrealized losses for investments in a gross loss position, aggregated by security type, and the length of time the securities have been in a continuous unrealized loss position as of May 31, 2018 . The securities are segregated between investments that have been in a continuous unrealized loss position for less than 12 months and 12 months or more based on the point in time that the fair value declined below the amortized cost basis. We did not have any investment securities in a gross unrealized loss position as of May 31, 2017 . May 31, 2018 Unrealized Loss Position Less than 12 Months Unrealized Loss Position 12 Months or Longer Total (Dollars in thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Held to maturity: Corporate debt securities $ 280,139 $ (4,595 ) $ — $ — $ 280,139 $ (4,595 ) Commercial MBS, non-agency 1,451 (3 ) — — 1,451 (3 ) Other ABS (1) 27,012 (215 ) — — 27,012 (215 ) Total investment securities $ 308,602 $ (4,813 ) $ — $ — $ 308,602 $ (4,813 ) ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. |
Investments Classified by Contractual Maturity Date | The following table presents, by major security type, the remaining contractual maturity based on amortized cost and fair value as of May 31, 2018 of our HTM investment securities. Because borrowers may have the right to call or prepay certain obligations, the expected maturities of our investments may differ from the scheduled contractual maturities presented below. May 31, 2018 (Dollars in thousands) Due in 1 Year or Less Due >1 Year through 5 Years Due >5 Years through 10 Years Due >10 Years Total Amortized cost: Certificates of deposit $ 4,148 $ — $ — $ — $ 4,148 Commercial paper 9,134 — — — 9,134 U.S. agency debt securities — 2,000 — — 2,000 Corporate debt securities 9,111 377,384 69,226 — 455,721 Commercial MBS: Agency — — 7,024 — 7,024 Non-agency — — — 3,453 3,453 Total commercial MBS — — 7,024 3,453 10,477 U.S. state and municipality debt securities — — 2,147 — 2,147 Foreign government debt securities — 1,241 — — 1,241 Other ABS (1) — 33,357 1,294 — 34,651 Total $ 22,393 $ 413,982 $ 79,691 $ 3,453 $ 519,519 Fair value: Certificates of deposit $ 4,148 $ — $ — $ — $ 4,148 Commercial paper 9,134 — — — 9,134 U.S. agency debt securities — 2,016 — — 2,016 Corporate debt securities 9,056 373,284 69,500 — 451,840 Commercial MBS: Agency — — 7,087 — 7,087 Non-agency — — — 3,453 3,453 Total commercial MBS — — 7,087 3,453 10,540 U.S. state and municipality debt securities — — 2,171 — 2,171 Foreign government debt securities — 1,250 — — 1,250 Other ABS (1) — 33,157 1,290 — 34,447 Total $ 22,338 $ 409,707 $ 80,048 $ 3,453 $ 515,546 Weighted-average coupon (2) 1.81 % 2.84 % 3.60 % 2.74 % 2.91 % ____________________________ (1) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. (2) Calculated based on the weighted-average coupon rate, which excludes the impact of amortization of premium and accretion of discount. |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
May 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Summary of loans outstanding to members and unadvanced commitments by loan type and by member class | The following table presents the outstanding principal balance of loans to members, including deferred loan origination costs, and unadvanced loan commitments by loan type and member class, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Loans Outstanding Unadvanced Commitments (1) Loans Outstanding Unadvanced Commitments (1) Loan type: Long-term loans: Fixed rate $ 22,696,185 $ — $ 22,136,690 $ — Variable rate 1,039,491 4,952,834 847,419 4,802,319 Total long-term loans 23,735,676 4,952,834 22,984,109 4,802,319 Lines of credit 1,431,818 7,692,784 1,372,221 7,772,655 Total loans outstanding 25,167,494 12,645,618 24,356,330 12,574,974 Deferred loan origination costs 11,114 — 10,714 — Loans to members $ 25,178,608 $ 12,645,618 $ 24,367,044 $ 12,574,974 Member class: CFC: Distribution $ 19,551,511 $ 8,188,376 $ 18,825,366 $ 8,295,146 Power supply 4,397,353 3,407,095 4,504,791 3,276,113 Statewide and associate 69,055 128,025 57,830 144,406 Total CFC 24,017,919 11,723,496 23,387,987 11,715,665 NCSC 786,457 624,663 613,924 584,944 RTFC 363,118 297,459 354,419 274,365 Total loans outstanding 25,167,494 12,645,618 24,356,330 12,574,974 Deferred loan origination costs 11,114 — 10,714 — Loans to members $ 25,178,608 $ 12,645,618 $ 24,367,044 $ 12,574,974 ____________________________ (1) The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Schedule of Available Balance and Maturities of Lines of Credit [Table Text Block] | The following table summarizes the available balance under unadvanced loan commitments as of May 31, 2018 and the related maturities, by fiscal year and thereafter, by loan type: Available Notional Maturities of Unadvanced Loan Commitments (Dollars in thousands) 2019 2020 2021 2022 2023 Thereafter Line of credit loans $ 7,692,784 $ 4,168,751 $ 710,763 $ 805,508 $ 770,971 $ 1,211,791 $ 25,000 Long-term loans 4,952,834 883,840 586,005 652,499 1,714,338 1,104,185 11,967 Total $ 12,645,618 $ 5,052,591 $ 1,296,768 $ 1,458,007 $ 2,485,309 $ 2,315,976 $ 36,967 |
Summary of available balance under committed lines of credit and the related maturities by fiscal year | The following table summarizes the available balance under unconditional committed lines of credit as of May 31, 2018 , and maturities by fiscal year. Available Balance Notional Maturities of Unconditional Committed Lines of Credit (Dollars in thousands) 2019 2020 2021 2022 2023 Committed lines of credit $2,857,350 $279,285 $435,151 $444,326 $644,178 $1,054,410 |
Summary of loans outstanding as collateral pledged to secure the entity's collateral trust bonds, Clean Renewable Energy Bonds and notes payable to the Federal Agricultural Mortgage Corporation and the amount of the corresponding debt outstanding | The following table summarizes our loans outstanding as collateral pledged to secure our collateral trust bonds, Clean Renewable Energy Bonds, notes payable to Farmer Mac and notes payable under the Guaranteed Underwriter Program of the USDA (“Guaranteed Underwriter Program”) and the amount of the corresponding debt outstanding as of May 31, 2018 and 2017 . See “Note 5—Short-Term Borrowings” and “Note 6—Long-Term Debt” for information on our borrowings. May 31, (Dollars in thousands) 2018 2017 Collateral trust bonds: 2007 indenture: Distribution system mortgage notes $ 8,643,344 $ 8,740,572 RUS-guaranteed loans qualifying as permitted investments 140,680 146,373 Total pledged collateral $ 8,784,024 $ 8,886,945 Collateral trust bonds outstanding 7,697,711 7,697,711 1994 indenture: Distribution system mortgage notes $ 243,418 $ 263,007 Collateral trust bonds outstanding 220,000 225,000 Farmer Mac: Distribution and power supply system mortgage notes $ 3,331,775 $ 2,942,456 Notes payable outstanding 2,891,496 2,513,389 Clean Renewable Energy Bonds Series 2009A: Distribution and power supply system mortgage notes $ 12,615 $ 14,943 Cash 415 481 Total pledged collateral $ 13,030 $ 15,424 Notes payable outstanding 11,556 13,214 Federal Financing Bank: Distribution and power supply system mortgage notes $ 5,772,750 $ 5,833,515 Notes payable outstanding 4,856,375 4,985,748 |
Schedule of analysis of the age of the recorded investment in loans outstanding by member class | The tables below present the payment status of loans outstanding by member class as of May 31, 2018 and 2017 . As indicated in the table, we did not have any past due loans as of either May 31, 2018 or May 31, 2017 . May 31, 2018 (Dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due (1) Total Past Due Total Loans Outstanding Nonaccrual Loans CFC: Distribution $ 19,551,511 $ — $ — $ — $ 19,551,511 $ — Power supply 4,397,353 — — — 4,397,353 — Statewide and associate 69,055 — — — 69,055 — CFC total 24,017,919 — — — 24,017,919 — NCSC 786,457 — — — 786,457 — RTFC 363,118 — — — 363,118 — Total loans outstanding $ 25,167,494 $ — $ — $ — $ 25,167,494 $ — Percentage of total loans 100.00 % — % — % — % 100.00 % — % May 31, 2017 (Dollars in thousands) Current 30-89 Days Past Due 90 Days or More Past Due (1) Total Total Loans Outstanding Nonaccrual Loans CFC: Distribution $ 18,825,366 $ — $ — $ — $ 18,825,366 $ — Power supply 4,504,791 — — — 4,504,791 — Statewide and associate 57,830 — — — 57,830 — CFC total 23,387,987 — — — 23,387,987 — NCSC 613,924 — — — 613,924 — RTFC 354,419 — — — 354,419 — Total loans outstanding $ 24,356,330 $ — $ — $ — $ 24,356,330 $ — Percentage of total loans 100.00 % — % — % — % 100.00 % — % ____________________________ (1) All loans 90 days or more past due are on nonaccrual status. |
Schedule of nonperforming and restructured loans | The following table provides a summary of loans modified as TDRs in prior periods, the performance status of these loans and the unadvanced loan commitments related to the TDR loans, by member class, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Loans Outstanding % of Total Loans Unadvanced Commitments Loans Outstanding % of Total Loans Unadvanced Commitments TDR loans: Performing TDR loans: CFC/Distribution $ 6,507 0.03 % $ — $ 6,581 0.02 % $ — RTFC 6,092 0.02 % — 6,592 0.03 — Total performing TDR loans 12,599 0.05 % — 13,173 0.05 — Total TDR loans $ 12,599 0.05 % $ — $ 13,173 0.05 % $ — |
Summary of foregone interest income as a result of holding loans on non-accrual status | The following table shows foregone interest income for loans on nonaccrual status for the fiscal years ended May 31, 2018, 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Performing TDR loans $ — $ — $ 166 Nonperforming TDR loans — 31 109 Total $ — $ 31 $ 275 |
Summary of recorded investment in individually-impaired loans and the related specific valuation allowance by member class | The following table provides information on loans classified as individually impaired as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Recorded Investment Related Allowance Recorded Investment Related Allowance With no specific allowance recorded: CFC $ 6,507 $ — $ 6,581 $ — With a specific allowance recorded: RTFC 6,092 1,198 6,592 1,640 Total impaired loans $ 12,599 $ 1,198 $ 13,173 $ 1,640 |
Schedule of average recorded investment in impaired loans and the interest income recognized by member class | The following table presents, by company, the average recorded investment for individually impaired loans and the interest income recognized on these loans for fiscal years ended May 31, 2018, 2017 and 2016 . Average Recorded Investment Interest Income Recognized (Dollars in thousands) 2018 2017 2016 2018 2017 2016 CFC $ 6,524 $ 6,613 $ 6,842 $ 571 $ 562 $ 390 RTFC 6,361 7,736 9,823 318 343 264 Total impaired loans $ 12,885 $ 14,349 $ 16,665 $ 889 $ 905 $ 654 |
Schedule of loan portfolio by risk rating category and member class based on available data | The following tables present total loans outstanding, by member class and borrower risk-rating category, based on the risk ratings used in the estimation of our allowance for loan losses as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total CFC: Distribution $ 19,429,121 $ 6,853 $ 115,537 $ — $ 19,551,511 Power supply 4,348,328 — 49,025 — 4,397,353 Statewide and associate 69,055 — — — 69,055 CFC total 23,846,504 6,853 164,562 — 24,017,919 NCSC 786,457 — — — 786,457 RTFC 356,503 523 6,092 — 363,118 Total loans outstanding $ 24,989,464 $ 7,376 $ 170,654 $ — $ 25,167,494 May 31, 2017 (Dollars in thousands) Pass Special Mention Substandard Doubtful Total CFC: Distribution $ 18,715,810 $ 109,556 $ — $ — $ 18,825,366 Power supply 4,504,791 — — — 4,504,791 Statewide and associate 56,654 1,176 — — 57,830 CFC total 23,277,255 110,732 — — 23,387,987 NCSC 612,592 1,332 — — 613,924 RTFC 346,944 — 7,475 — 354,419 Total loans outstanding $ 24,236,791 $ 112,064 $ 7,475 $ — $ 24,356,330 |
Summary of the activity in the loan loss allowance reflecting disaggregation by company of the allowance for loan losses held at CFC based on borrower type | The following tables summarize changes, by company, in the allowance for loan losses as of and for the years ended May 31, 2018, 2017 and 2016 . Year Ended May 31, 2018 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2017 $ 29,499 $ 2,910 $ 4,967 $ 37,376 Benefit for loan losses (17,199 ) (828 ) (548 ) (18,575 ) Balance as of May 31, 2018 $ 12,300 $ 2,082 $ 4,419 $ 18,801 Year Ended May 31, 2017 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2016 $ 24,559 $ 3,134 $ 5,565 $ 33,258 Provision (benefit) for loan losses 4,781 (224 ) 1,421 5,978 Charge-offs — — (2,119 ) (2,119 ) Recoveries 159 — 100 259 Net (charge-offs) recoveries 159 — (2,019 ) (1,860 ) Balance as of May 31, 2017 $ 29,499 $ 2,910 $ 4,967 $ 37,376 Year Ended May 31, 2016 (Dollars in thousands) CFC NCSC RTFC Total Balance as of May 31, 2015 $ 23,716 $ 5,441 $ 4,533 $ 33,690 Provision (benefit) for loan losses 629 (2,307 ) 1,032 (646 ) Recoveries 214 — — 214 Balance as of May 31, 2016 $ 24,559 $ 3,134 $ 5,565 $ 33,258 |
Schedule of loan loss allowance and the recorded investment in outstanding loans by impairment methodology and by company | The tables below present, by company, the components of our allowance for loan losses and the recorded investment of the related loans as of May 31, 2018 and 2017 . May 31, 2018 (Dollars in thousands) CFC NCSC RTFC Total Ending balance of the allowance: Collective allowance $ 12,300 $ 2,082 $ 3,221 $ 17,603 Specific allowance — — 1,198 1,198 Total ending balance of the allowance $ 12,300 $ 2,082 $ 4,419 $ 18,801 Recorded investment in loans: Collectively evaluated loans $ 24,011,412 $ 786,457 $ 357,026 $ 25,154,895 Individually evaluated loans 6,507 — 6,092 12,599 Total recorded investment in loans $ 24,017,919 $ 786,457 $ 363,118 $ 25,167,494 Total recorded investment in loans, net (1) $ 24,005,619 $ 784,375 $ 358,699 $ 25,148,693 May 31, 2017 (Dollars in thousands) CFC NCSC RTFC Total Ending balance of the allowance: Collective allowance $ 29,499 $ 2,910 $ 3,327 $ 35,736 Specific allowance — — 1,640 1,640 Total ending balance of the allowance $ 29,499 $ 2,910 $ 4,967 $ 37,376 Recorded investment in loans: Collectively evaluated loans $ 23,381,406 $ 613,924 $ 347,827 $ 24,343,157 Individually evaluated loans 6,581 — 6,592 13,173 Total recorded investment in loans $ 23,387,987 $ 613,924 $ 354,419 $ 24,356,330 Total recorded investment in loans, net (1) $ 23,358,488 $ 611,014 $ 349,452 $ 24,318,954 ___________________________ (1) Excludes unamortized deferred loan origination costs of $ 11 million as of both May 31, 2018 and 2017 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of short-term debt outstanding and the weighted-average effective interest rates | The following table provides comparative information on our short-term borrowings and weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Interest Rate Amount Weighted-Average Interest Rate Short-term borrowings: Commercial paper sold through dealers, net of discounts $ 1,064,266 1.87 % $ 999,691 0.93 % Commercial paper sold directly to members, at par 1,202,105 1.89 928,158 0.95 Select notes 780,472 2.04 696,889 1.12 Daily liquidity fund notes 400,635 1.50 527,990 0.80 Medium-term notes sold to members 248,432 1.90 190,172 1.50 Farmer Mac notes payable (1) 100,000 2.23 — — Total short-term borrowings $ 3,795,910 1.88 $ 3,342,900 0.99 |
Schedule of total available and outstanding letters of credit under the revolving credit agreements | The following table presents the total commitment, the net amount available for use and the outstanding letters of credit under our committed bank revolving line of credit agreements as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in millions) Total Commitment Letters of Credit Outstanding Net Available for Use Total Commitment Letters of Credit Outstanding Net Available for Use Maturity Annual Facility Fee (1) 3-year agreement — — — 1,533 — 1,533 November 19, 2019 7.5 bps 3-year agreement 1,492 — 1,492 — — — November 20, 2020 7.5 bps Total 3-year agreement 1,492 — 1,492 1,533 — 1,533 5-year agreement — — — 1,632 1 1,631 November 19, 2021 10 bps 5-year agreement 1,593 3 1,590 — — — November 20, 2022 10 bps Total 5-year agreement 1,593 3 1,590 1,632 1 1,631 Total $ 3,085 $ 3 $ 3,082 $ 3,165 $ 1 $ 3,164 ___________________________ |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
May 31, 2018 | |
Debt Instruments [Abstract] | |
Summary of long-term debt outstanding and the weighted-average effective interest rates | The following table displays long-term debt outstanding and the weighted-average interest rates, by debt type, as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Maturity Date Amount Weighted- Average Maturity Date Unsecured long-term debt: Medium-term notes sold through dealers $ 3,026,472 3.51 % 2018-2032 $ 2,386,956 3.48 % 2018-2032 Medium-term notes sold to members 395,389 2.56 2018-2037 422,779 2.18 2017-2037 Subtotal medium-term notes 3,421,861 3.40 2,809,735 3.29 Unamortized discount (1,256 ) (382 ) Debt issuance costs (22,237 ) (21,903 ) Total unsecured medium-term notes 3,398,368 2,787,450 Unsecured notes payable: 18,892 3.84 2022-2023 22,799 3.98 2022-2023 Unamortized discount (277 ) (379 ) Debt issuance costs (68 ) (94 ) Total unsecured notes payable 18,547 3.84 22,326 3.98 Total unsecured long-term debt 3,416,915 3.40 2,809,776 3.29 Secured long-term debt: Collateral trust bonds 7,917,711 3.89 2018-2032 7,922,711 4.08 2018-2032 Unamortized discount (250,421 ) (258,329 ) Debt issuance costs (28,197 ) (30,334 ) Total collateral trust bonds 7,639,093 7,634,048 Guaranteed Underwriter Program notes payable 4,856,375 2.85 2025-2038 4,985,748 2.83 2025-2037 Debt issuance costs (232 ) (264 ) Total Guaranteed Underwriter Program notes payable 4,856,143 4,985,484 Farmer Mac notes payable 2,791,496 2.90 2018-2048 2,513,389 1.71 2018-2047 Other secured notes payable 11,556 2.74 2024 13,214 2.81 2024 Debt issuance costs (243 ) (317 ) Total other secured notes payable 11,313 12,897 Total secured notes payable 7,658,952 2.87 7,511,770 2.45 Total secured long-term debt 15,298,045 3.39 15,145,818 3.29 Total long-term debt $ 18,714,960 3.39 $ 17,955,594 3.29 |
Schedule of amount of long-term debt maturities | The following table presents the amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2018 and thereafter. (Dollars in thousands) Amount Weighted-Average Interest Rate 2019 $ 2,745,434 5.47 % 2020 1,462,907 2.24 2021 1,737,341 2.64 2022 1,576,418 2.79 2023 1,127,810 2.67 Thereafter 10,065,050 3.30 Total $ 18,714,960 3.39 |
Subordinated Deferrable Debt (T
Subordinated Deferrable Debt (Tables) | 12 Months Ended |
May 31, 2018 | |
Subordinated Debt [Abstract] | |
Schedule of Subordinated Borrowing | The following table presents subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Interest Rate Amount Weighted-Average Interest Rate 4.75% due 2043 with a call date of April 30, 2023 $ 400,000 4.75 % $ 400,000 4.75 % 5.25% due 2046 with a call date of April 20, 2026 350,000 5.25 350,000 5.25 Debt issuance costs (7,590 ) (7,726 ) Total subordinated deferrable debt $ 742,410 4.98 $ 742,274 4.98 |
Members' Subordinated Certifi29
Members' Subordinated Certificates (Tables) | 12 Months Ended |
May 31, 2018 | |
Members' subordinated certificates | |
Schedule of Subordinated Borrowing | The following table presents subordinated deferrable debt outstanding and the weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amount Weighted- Average Interest Rate Amount Weighted-Average Interest Rate 4.75% due 2043 with a call date of April 30, 2023 $ 400,000 4.75 % $ 400,000 4.75 % 5.25% due 2046 with a call date of April 20, 2026 350,000 5.25 350,000 5.25 Debt issuance costs (7,590 ) (7,726 ) Total subordinated deferrable debt $ 742,410 4.98 $ 742,274 4.98 |
Schedule of amount of members' subordinated certificates maturing in each of the five fiscal years | The following table presents the amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2018 and thereafter. (Dollars in thousands) Amount Weighted-Average Interest Rate 2019 $ 2,745,434 5.47 % 2020 1,462,907 2.24 2021 1,737,341 2.64 2022 1,576,418 2.79 2023 1,127,810 2.67 Thereafter 10,065,050 3.30 Total $ 18,714,960 3.39 |
Subordinated certificates | |
Members' subordinated certificates | |
Schedule of Subordinated Borrowing | The following table displays members’ subordinated certificates and the weighted-average interest rates as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Amounts Outstanding Weighted- Interest Rate Amounts Outstanding Weighted- Interest Rate Membership subordinated certificates: Certificates maturing 2020 through 2118 $ 630,173 $ 629,011 Subscribed and unissued (1) 275 1,087 Total membership subordinated certificates 630,448 4.94 % 630,098 4.94 % Loan and guarantee subordinated certificates: Interest-bearing loan subordinated certificates maturing through 2045 300,738 310,518 Non-interest-bearing loan subordinated certificates maturing through 2047 162,263 171,862 Subscribed and unissued (1) 57 61 Total loan subordinated certificates 463,058 2.71 482,441 2.70 Interest-bearing guarantee subordinated certificates maturing through 2044 48,177 68,238 Non-interest-bearing guarantee subordinated certificates maturing through 2043 17,151 17,151 Total guarantee subordinated certificates 65,328 4.50 85,389 4.85 Total loan and guarantee subordinated certificates 528,386 2.93 567,830 3.02 Member capital securities: Securities maturing through 2048 221,148 5.00 221,097 5.00 Total members’ subordinated certificates $ 1,379,982 4.18 $ 1,419,025 4.18 ___________________________ (1) The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding. |
Schedule of amount of members' subordinated certificates maturing in each of the five fiscal years | The following table presents the amount of members’ subordinated certificates maturing in each of the five fiscal years following May 31, 2018 and thereafter. (Dollars in thousands) Amount Maturing (1) Weighted-Average Interest Rate 2019 $ 9,818 2.82 % 2020 13,360 2.85 2021 42,932 3.64 2022 14,381 2.92 2023 30,908 2.70 Thereafter 1,268,251 4.27 Total $ 1,379,650 4.18 ___________________________ (1) Excludes $0.3 million in subscribed and unissued member subordinated certificates for which a payment has been received, but no certificate has been issued. Amortizing member loan subordinated certificates totaling $274 million are amortizing annually based on the unpaid principal balance of the related loan. Amortization payments on these certificates totaled $16 million in fiscal year 2018 and represented 6% of amortizing loan subordinated certificates outstanding. |
Derivative Instruments and He30
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
May 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts outstanding and the weighted average interest rate paid and received for the entity's interest rate swaps | The following table shows the outstanding notional amounts and the weighted-average rate paid and received for our interest rate swaps, by type, as of May 31, 2018 and 2017 . The substantial majority of our interest rate swaps use an index based on the London Interbank Offered Rate (“LIBOR”) for either the pay or receive leg of the swap agreement. May 31, 2018 2017 (Dollars in thousands) Notional Amount Weighted- Average Rate Paid Weighted- Average Rate Received Notional Weighted- Weighted- Pay-fixed swaps $ 6,987,999 2.83 % 2.30 % $ 6,807,013 2.85 % 1.16 % Receive-fixed swaps 3,824,000 2.93 2.50 3,699,000 1.72 2.64 Total interest rate swaps 10,811,999 2.86 2.37 10,506,013 2.46 1.68 Forward pay-fixed swaps 256,154 285,383 Total $ 11,068,153 $ 10,791,396 |
Schedule of Derivative Instruments Maturity | The following table presents the maturities for each of the next five fiscal years and thereafter based on the notional amount of our interest rate swaps as of May 31, 2018 . Notional Amount Notional Amortization and Maturities (Dollars in thousands) 2019 2020 2021 2022 2023 Thereafter Interest rate swaps $11,068,153 $499,999 $1,318,007 $476,998 $487,310 $350,590 $7,935,249 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table displays the fair value of the derivative assets and derivative liabilities recorded on our consolidated balance sheets and the related outstanding notional amount by derivatives type as of May 31, 2018 and 2017 . May 31, 2018 2017 (Dollars in thousands) Fair Value Notional Balance Fair Value Notional Balance Derivative assets: Interest rate swaps $ 244,526 $ 5,264,971 $ 49,481 $ 3,754,120 Derivative liabilities: Treasury rate lock—cash flow hedge $ (1,059 ) $ 100,000 $ — $ — Interest rate swaps (274,873 ) 5,803,182 (385,337 ) 7,037,276 Total derivative liabilities $ (275,932 ) $ 5,903,182 $ (385,337 ) $ 7,037,276 |
Offsetting Assets | The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2018 and 2017 , and provides information on the impact of netting provisions and collateral pledged. May 31, 2018 Gross Amount of Recognized Assets/ Liabilities Gross Amount Offset in the Balance Sheet Net Amount of Assets/ Liabilities Presented in the Balance Sheet Gross Amount Not Offset in the Balance Sheet (Dollars in thousands) Financial Instruments Cash Collateral Pledged Net Amount Derivative assets: Interest rate swaps $ 244,526 $ — $ 244,526 $ 196,633 $ — $ 47,893 Derivative liabilities: Treasury rate lock—cash flow hedge 1,059 — 1,059 — — 1,059 Interest rate swaps 274,873 — 274,873 196,633 — 78,240 May 31, 2017 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 49,481 $ — $ 49,481 $ 49,481 $ — $ — Derivative liabilities: Interest rate swaps 385,337 — 385,337 49,481 — 335,856 |
Offsetting Liabilities | The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2018 and 2017 , and provides information on the impact of netting provisions and collateral pledged. May 31, 2018 Gross Amount of Recognized Assets/ Liabilities Gross Amount Offset in the Balance Sheet Net Amount of Assets/ Liabilities Presented in the Balance Sheet Gross Amount Not Offset in the Balance Sheet (Dollars in thousands) Financial Instruments Cash Collateral Pledged Net Amount Derivative assets: Interest rate swaps $ 244,526 $ — $ 244,526 $ 196,633 $ — $ 47,893 Derivative liabilities: Treasury rate lock—cash flow hedge 1,059 — 1,059 — — 1,059 Interest rate swaps 274,873 — 274,873 196,633 — 78,240 May 31, 2017 Gross Amount Gross Amount Net Amount of Assets/ Liabilities Gross Amount (Dollars in thousands) Financial Cash Net Derivative assets: Interest rate swaps $ 49,481 $ — $ 49,481 $ 49,481 $ — $ — Derivative liabilities: Interest rate swaps 385,337 — 385,337 49,481 — 335,856 |
Summary of gains and losses recorded on the consolidated statements of operations for the entity's interest rate swaps | The following table presents the components of the derivative gains (losses) reported in our consolidated statements of operations for our interest rate swaps for fiscal years 2018 , 2017 and 2016 . Year Ended May 31, (Dollars in thousands) 2018 2017 2016 Derivative cash settlements $ (74,281 ) $ (84,478 ) $ (88,758 ) Derivative forward value gains (losses) 306,002 179,381 (221,083 ) Derivative gains (losses) $ 231,721 $ 94,903 $ (309,841 ) |
Schedule of notional amounts of derivative instruments having rating triggers | The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2018 , and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, below Baa3/BBB-, or to or below Ba2/BB+ by Moody’s or S&P, respectively. In calculating the payment amounts that would be required upon termination of the derivative contracts, we assumed that the amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements for each counterparty. The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts. (Dollars in thousands) Notional Amount Payable Due from CFC Receivable Due to CFC Net (Payable)/Receivable Impact of rating downgrade trigger: Falls below A3/A- (1) $ 54,890 $ (9,355 ) $ — $ (9,355 ) Falls below Baa1/BBB+ 7,164,065 (60,054 ) 38,057 (21,997 ) Falls to or below Baa2/BBB (2) 530,980 — 4,533 4,533 Falls below Baa3/BBB- 257,271 (11,625 ) — (11,625 ) Total $ 8,007,206 $ (81,034 ) $ 42,590 $ (38,444 ) ___________________________ (1) Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. (2) Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody’s or S&P, respectively. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of components of equity | The following table presents the components of equity as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Membership fees $ 969 $ 971 Educational fund 1,976 1,929 Total membership fees and educational fund 2,945 2,900 Patronage capital allocated 811,493 761,701 Members’ capital reserve 687,785 630,305 Unallocated net income (loss): Prior year-end cumulative derivative forward value losses (332,525 ) (507,904 ) Current year derivative forward value gains (1) 301,694 175,379 Current year-end cumulative derivative forward value losses (30,831 ) (332,525 ) Other unallocated net income (loss) (5,603 ) (5,603 ) Unallocated net income (loss) (36,434 ) (338,128 ) CFC retained equity 1,465,789 1,056,778 Accumulated other comprehensive income 8,544 13,175 Total CFC equity 1,474,333 1,069,953 Noncontrolling interests 31,520 28,852 Total equity $ 1,505,853 $ 1,098,805 |
Summary of activity in accumulated other comprehensive income account by component | The following tables summarize, by component, the activity in AOCI as of and for the years ended May 31, 2018 and 2017 . Year Ended May 31, 2018 (Dollars in thousands) Unrealized Gains (Losses) AFS Securities Unrealized Gains Unrealized Gains (Losses) Cash Flow Hedges Unrealized Losses Foreclosed Assets Unrealized Losses Defined Benefit Plan Total Beginning balance $ 12,016 $ 3,531 171 $ — $ (2,543 ) $ 13,175 Unrealized losses (3,222 ) — (1,059 ) — (194 ) (4,475 ) (Gains) losses reclassified into earnings — (492 ) (171 ) — 507 (156 ) Other comprehensive income (loss) (3,222 ) (492 ) (1,230 ) — 313 (4,631 ) Ending balance $ 8,794 $ 3,039 $ (1,059 ) $ — $ (2,230 ) $ 8,544 Year Ended May 31, 2017 (Dollars in thousands) Unrealized Gains (Losses) AFS Securities Unrealized Gains Derivatives Unrealized Gains Cash Flow Hedge Unrealized Losses Foreclosed Assets Unrealized Losses Defined Benefit Plan Total Beginning balance $ 7,402 $ 4,044 $ 443 $ (9,823 ) $ (1,008 ) $ 1,058 Unrealized gains (losses) 4,614 — — — (1,535 ) 3,079 (Gains) losses reclassified into earnings — (513 ) (272 ) 9,823 — 9,038 Other comprehensive income (loss) 4,614 (513 ) (272 ) 9,823 (1,535 ) 12,117 Ending balance $ 12,016 $ 3,531 $ 171 $ — $ (2,543 ) $ 13,175 |
Guarantees (Tables)
Guarantees (Tables) | 12 Months Ended |
May 31, 2018 | |
Guarantees [Abstract] | |
Summary of total guarantees by type of guarantee and member class | The following table summarizes total guarantees, by type of guarantee and member class, as of May 31, 2018 and 2017 . May 31, (Dollars in thousands) 2018 2017 Total by type: Long-term tax-exempt bonds (1) $ 316,985 $ 468,145 Letters of credit (2) 343,970 307,321 Other guarantees 144,206 114,151 Total $ 805,161 $ 889,617 Total by member class: CFC: Distribution $ 201,993 $ 126,188 Power supply 587,837 743,678 Statewide and associate 3,326 5,054 CFC total 793,156 874,920 NCSC 10,431 13,123 RTFC 1,574 1,574 Total $ 805,161 $ 889,617 ____________________________ (1) Represents the outstanding principal amount of long-term fixed-rate and variable-rate guaranteed bonds. (2) Reflects our maximum potential exposure for letters of credit. |
Schedule of maturities of outstanding guarantees | The following table details the scheduled maturities of our outstanding guarantees in each of the five fiscal years following May 31, 2018 and thereafter: (Dollars in thousands) Amount Maturing 2019 $ 265,684 2020 66,142 2021 121,700 2022 27,515 2023 160,541 Thereafter 163,579 Total $ 805,161 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
May 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying and fair values for entity's financial instruments | The following tables present the carrying value and fair value for all of our financial instruments, including those carried at amortized cost, as of May 31, 2018 and 2017 . The tables also display the classification within the fair value hierarchy of the valuation technique used in estimating fair value. May 31, 2018 Fair Value Measurements Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 230,999 $ 230,999 $ 230,999 $ — $ — Restricted cash 7,825 7,825 7,825 — — Time deposits 101,000 101,000 — 101,000 — Investment securities, available for sale 89,332 89,332 89,332 — — Investment securities, held to maturity 519,519 515,546 — 515,546 — Deferred compensation investments 5,194 5,194 5,194 — — Loans to members, net 25,159,807 24,167,886 — — 24,167,886 Accrued interest receivable 127,442 127,442 — 127,442 — Debt service reserve funds 17,151 17,151 17,151 — — Derivative assets 244,526 244,526 — 244,526 — Liabilities: Short-term borrowings $ 3,795,910 $ 3,795,799 $ — $ 3,695,799 $ 100,000 Long-term debt 18,714,960 18,909,276 — 11,373,216 7,536,060 Accrued interest payable 149,284 149,284 — 149,284 — Guarantee liability 10,589 10,454 — — 10,454 Derivative liabilities 275,932 275,932 — 275,932 — Subordinated deferrable debt 742,410 766,088 — 766,088 — Members’ subordinated certificates 1,379,982 1,380,004 — — 1,380,004 May 31, 2017 Fair Value Measurements Level (Dollars in thousands) Carrying Value Fair Value Level 1 Level 2 Level 3 Assets: Cash and cash equivalents $ 166,615 $ 166,615 $ 166,615 $ — $ — Restricted cash 21,806 21,806 21,806 — — Time deposits 226,000 226,000 — 226,000 — Investment securities, available for sale 92,554 92,554 92,554 — — Deferred compensation investments 4,693 4,693 4,693 — — Loans to members, net 24,329,668 24,182,724 — — 24,182,724 Accrued interest receivable 111,493 111,493 — 111,493 — Debt service reserve funds 17,151 17,151 17,151 — — Derivative assets 49,481 49,481 — 49,481 — Liabilities: Short-term borrowings $ 3,342,900 $ 3,342,990 $ — $ 3,342,990 $ — Long-term debt 17,955,594 18,744,331 — 11,215,290 7,529,041 Accrued interest payable 137,476 137,476 — 137,476 — Guarantee liability 15,241 16,204 — — 16,204 Derivative liabilities 385,337 385,337 — 385,337 — Subordinated deferrable debt 742,274 788,079 — 788,079 — Members’ subordinated certificates 1,419,025 1,419,048 — — 1,419,048 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of May 31, 2018 and 2017 and the classification of the valuation technique within the fair value hierarchy. May 31, 2018 2017 (Dollars in thousands) Level 1 Level 2 Total Level 1 Level 2 Total Investment securities available for sale $ 89,332 $ — $ 89,332 $ 92,554 $ — $ 92,554 Deferred compensation investments 5,194 — 5,194 4,693 — 4,693 Derivative assets — 244,526 244,526 — 49,481 49,481 Derivative liabilities — 275,932 275,932 — 385,337 385,337 |
Fair Value Measurements, Nonrecurring | the years ended May 31, 2018 and 2017 . |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment presentation for the consolidated statements of operations and consolidated balance sheets | The following tables display segment results for the years ended May 31, 2018, 2017 and 2016 , and assets attributable to each segment as of May 31, 2018 and 2017 . Year Ended May 31, 2018 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,067,016 $ 49,182 $ (38,841 ) $ 1,077,357 Interest expense (791,836 ) (39,740 ) 38,841 (792,735 ) Net interest income 275,180 9,442 — 284,622 Benefit for loan losses 18,575 — — 18,575 Net interest income after benefit for loan losses 293,755 9,442 — 303,197 Non-interest income: Fee and other income 17,369 1,372 (1,163 ) 17,578 Derivative gains (losses): Derivative cash settlements (71,906 ) (2,375 ) — (74,281 ) Derivative forward value gains 301,694 4,308 — 306,002 Derivative gains 229,788 1,933 — 231,721 Total non-interest income 247,157 3,305 (1,163 ) 249,299 Non-interest expense: General and administrative expenses (83,783 ) (7,101 ) — (90,884 ) Other non-interest expense (1,943 ) (1,163 ) 1,163 (1,943 ) Total non-interest expense (85,726 ) (8,264 ) 1,163 (92,827 ) Income before income taxes 455,186 4,483 — 459,669 Income tax expense — (2,305 ) — (2,305 ) Net income $ 455,186 $ 2,178 $ — $ 457,364 May 31, 2018 CFC Other Elimination Consolidated Assets: Total loans outstanding $ 25,134,384 $ 1,149,575 $ (1,116,465 ) $ 25,167,494 Deferred loan origination costs 11,114 — — 11,114 Less: Allowance for loan losses (18,801 ) — — (18,801 ) Loans to members, net 25,126,697 1,149,575 (1,116,465 ) 25,159,807 Other assets 1,520,118 106,455 (96,176 ) 1,530,397 Total assets $ 26,646,815 $ 1,256,030 $ (1,212,641 ) $ 26,690,204 Year Ended May 31, 2017 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,026,302 $ 43,502 $ (33,170 ) $ 1,036,634 Interest expense (740,695 ) (34,250 ) 33,207 (741,738 ) Net interest income 285,607 9,252 37 294,896 Provision for loan losses (5,978 ) — — (5,978 ) Net interest income after provision for loan losses 279,629 9,252 37 288,918 Non-interest income: Fee and other income 18,858 3,528 (2,673 ) 19,713 Derivative gains (losses): Derivative cash settlements (81,489 ) (2,989 ) — (84,478 ) Derivative forward value gains 175,379 4,002 — 179,381 Derivative gains 93,890 1,013 — 94,903 Results of operations of foreclosed assets (1,749 ) — — (1,749 ) Total non-interest income 110,999 4,541 (2,673 ) 112,867 Non-interest expense: General and administrative expenses (78,965 ) (7,261 ) — (86,226 ) Gains on early extinguishment of debt 192 — — 192 Other non-interest expense (1,949 ) (2,635 ) 2,636 (1,948 ) Total non-interest expense (80,722 ) (9,896 ) 2,636 (87,982 ) Income before income taxes 309,906 3,897 — 313,803 Income tax expense — (1,704 ) — (1,704 ) Net income $ 309,906 $ 2,193 $ — $ 312,099 May 31, 2017 CFC Other Elimination Consolidated Assets: Total loans outstanding $ 24,319,673 $ 968,343 $ (931,686 ) $ 24,356,330 Deferred loan origination costs 10,714 — — 10,714 Less: Allowance for loan losses (37,376 ) — — (37,376 ) Loans to members, net 24,293,011 968,343 (931,686 ) 24,329,668 Other assets 865,867 104,643 (94,486 ) 876,024 Total assets $ 25,158,878 $ 1,072,986 $ (1,026,172 ) $ 25,205,692 Year Ended May 31, 2016 (Dollars in thousands) CFC Other Elimination Consolidated Statement of operations: Interest income $ 1,001,241 $ 45,798 $ (34,403 ) $ 1,012,636 Interest expense (680,661 ) (35,665 ) 34,476 (681,850 ) Net interest income 320,580 10,133 73 330,786 Benefit for loan losses 646 — — 646 Net interest income after benefit for loan losses 321,226 10,133 73 331,432 Non-interest income: Fee and other income 21,164 4,350 (3,729 ) 21,785 Derivative losses: Derivative cash settlements (85,316 ) (3,442 ) — (88,758 ) Derivative forward value losses (220,827 ) (256 ) — (221,083 ) Derivative losses (306,143 ) (3,698 ) — (309,841 ) Results of operations from foreclosed assets (6,899 ) — — (6,899 ) Total non-interest income (291,878 ) 652 (3,729 ) (294,955 ) Non-interest expense: General and administrative expenses (77,407 ) (8,936 ) — (86,343 ) Losses on early extinguishment of debt (333 ) — — (333 ) Other non-interest expense (1,261 ) (3,655 ) 3,656 (1,260 ) Total non-interest expense (79,001 ) (12,591 ) 3,656 (87,936 ) Loss before income taxes (49,653 ) (1,806 ) — (51,459 ) Income tax expense — (57 ) — (57 ) Net loss $ (49,653 ) $ (1,863 ) $ — $ (51,516 ) |
Summary of Significant Accoun35
Summary of Significant Accounting Policies Fixed Assets (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Fixed Assets | ||
Fixed assets, gross | $ 102,685 | $ 97,591 |
Less: accumulated depreciation | (47,705) | (41,274) |
Net depreciable fixed assets | 54,980 | 56,317 |
Fixed assets, net | 116,031 | 122,260 |
Building and building equipment | ||
Fixed Assets | ||
Fixed assets, gross | 50,210 | 50,236 |
Furniture and fixtures | ||
Fixed Assets | ||
Fixed assets, gross | 6,080 | 5,852 |
Computer software and hardware | ||
Fixed Assets | ||
Fixed assets, gross | 45,389 | 40,469 |
Other | ||
Fixed Assets | ||
Fixed assets, gross | 1,006 | 1,034 |
Land | ||
Fixed Assets | ||
Fixed assets, gross | 23,796 | 37,847 |
Construction-in-progress and software | ||
Fixed Assets | ||
Fixed assets, gross | $ 37,255 | $ 28,096 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Deferred Loan Conversion Fees | $ 60,000 | $ 68,000 | ||
Components of interest income | ||||
Interest income | (1,077,357) | (1,036,634) | $ (1,012,636) | |
Investment Income, Interest | 11,814 | 11,347 | 8,647 | |
Fixed rate | ||||
Components of interest income | ||||
Interest income | [1] | (1,000,492) | (980,173) | (959,701) |
Variable rate | ||||
Components of interest income | ||||
Interest income | (27,152) | (19,902) | (19,858) | |
Lines of credit | ||||
Components of interest income | ||||
Interest income | (38,195) | (25,389) | (24,864) | |
Restructured loans | ||||
Components of interest income | ||||
Interest income | [2] | (889) | (905) | (512) |
Non-performing loans | ||||
Components of interest income | ||||
Interest income | 0 | 0 | (142) | |
Fee income | ||||
Components of interest income | ||||
Interest income | [3] | (1,185) | (1,082) | (1,088) |
Loans Receivable [Member] | ||||
Components of interest income | ||||
Interest income | $ (1,065,543) | $ (1,025,287) | $ (1,003,989) | |
[1] | Includes loan conversion fees, which are generally deferred and recognized as interest income using the effective interest method. | |||
[2] | Troubled debt restructured (“TDR”) loans | |||
[3] | Consists of late payment fees and net amortization of deferred loan fees and loan origination costs. |
Summary of Significant Accoun37
Summary of Significant Accounting Policies Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | ||
Interest expense on debt: | ||||
Total interest expense | [1],[2] | $ 792,735 | $ 741,738 | $ 681,850 |
Short-term borrowings | ||||
Interest expense on debt: | ||||
Interest expense on debt | [1],[2] | 50,616 | 26,684 | 14,728 |
Medium-term notes | ||||
Interest expense on debt: | ||||
Interest expense on debt | [1],[2] | 111,814 | 99,022 | 86,270 |
Collateral trust bonds | ||||
Interest expense on debt: | ||||
Interest expense on debt | [1],[2] | 336,079 | 340,854 | 333,338 |
Guaranteed Underwriter Program Notes Payable | ||||
Interest expense on debt: | ||||
Interest expense on debt | 140,551 | 142,661 | 143,240 | |
Farmer Mac Notes Payable | ||||
Interest expense on debt: | ||||
Interest expense on debt | 56,004 | 33,488 | 20,529 | |
Long-term notes payable | ||||
Interest expense on debt: | ||||
Interest expense on debt | 1,509 | 1,780 | 2,051 | |
Subordinated deferrable debt | ||||
Interest expense on debt: | ||||
Interest expense on debt | [1],[2] | 37,661 | 37,657 | 21,245 |
Subordinated certificates | ||||
Interest expense on debt: | ||||
Interest expense on debt | [1],[2] | $ 58,501 | $ 59,592 | $ 60,449 |
[1] | (1) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized as interest expense immediately as incurred. | |||
[2] | (2) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Depending on the nature of the fee, amounts may be deferred and recognized as interest expense ratably over the term of the arrangement or recognized immediately as incurred. |
Summary of Significant Accoun38
Summary of Significant Accounting Policies Additional Information (Details) - USD ($) | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | Jul. 01, 2016 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Repossessed Assets | $ 0 | $ 0 | ||
Deferred income | 65,922,000 | 73,972,000 | ||
Real Estate Held-for-sale | 14,000,000 | |||
Restricted cash | 7,825,000 | 21,806,000 | ||
Escrow Deposit | 1,500,000 | $ 16,000,000 | ||
Escrow Deposit Released | 14,500,000 | |||
Depreciation and amortization | 7,931,000 | 7,173,000 | $ 7,327,000 | |
Deferred Loan Conversion Fees | 60,000,000 | 68,000,000 | ||
Accumulated other comprehensive income | $ 8,544,000 | $ 13,175,000 | $ 1,058,000 | |
Maximum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 40 years | |||
Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 3 years | |||
NCSC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | $ 100 | |||
Effective percentage of tax rate | 34.00% | 38.00% | 38.00% | |
Deferred Tax Assets, Net | $ 2,000,000 | $ 4,000,000 | ||
RTFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Effective percentage of tax rate | 35.00% | 40.00% | 38.00% | |
RTFC | Minimum | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Percentage of income from patronage sources allocated to borrowers to be retired in cash prior to filing the applicable tax return | 20.00% | |||
Distribution system members | CFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | $ 1,000 | |||
Service organization members | CFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | 200 | |||
Associates | CFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | 1,000 | |||
Associates | RTFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | 100 | |||
Voting members | RTFC | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Membership fees (in dollars per share) | $ 1,000 | |||
Unadvanced commitments not subject to material adverse change clauses | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Loans and Leases Receivable Unadvanced Commitments Period Maximum | 5 years | |||
Unadvanced commitments | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Loans and Leases Receivable Unadvanced Commitments Period Maximum | 5 years |
Variable Interest Entities Cons
Variable Interest Entities Consolidated Assets and Liabilities of VIEs included in CFC's Consolidated Financial Statements (Details) (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Variable Interest Entity [Line Items] | |||
Loans to members | $ 25,178,608 | $ 24,367,044 | [1] |
Other assets | 54,503 | 40,346 | |
Assets | 26,690,204 | 25,205,692 | |
Long-term Debt | 18,714,960 | 17,955,594 | |
Other liabilities | 59,951 | 50,309 | |
Liabilities | 25,184,351 | 24,106,887 | |
Variable Interest Entity, Primary Beneficiary, Aggregated Disclosure | |||
Variable Interest Entity [Line Items] | |||
Loans to members | 1,149,574 | 968,343 | |
Other assets | 10,280 | 10,157 | |
Assets | 1,159,854 | 978,500 | |
Long-term Debt | 8,000 | 10,000 | |
Other liabilities | 33,923 | 36,899 | |
Liabilities | $ 41,923 | $ 46,899 | |
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Variable Interest Entities - In
Variable Interest Entities - Information on CFCs Credit Commitments to NCSC and RTFC (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Variable Interest Entity [Line Items] | ||
Guarantor Obligations, Current Carrying Value | $ 805,161 | $ 889,617 |
Consolidated variable interest entities | ||
Variable Interest Entity [Line Items] | ||
CFC credit commitments | 5,500,000 | 5,500,000 |
Other Borrowings | 1,116,465 | 931,686 |
Guarantor Obligations, Current Carrying Value | 12,005 | 14,697 |
Other credit enhancements | 14,655 | 20,963 |
Total credit enhancements(2) | 26,660 | 35,660 |
Total outstanding commitments | 1,143,125 | 967,346 |
CFC available credit commitments | $ 4,356,875 | $ 4,532,654 |
Variable Interest Entities Co41
Variable Interest Entities Consolidated membership (Details) | May 31, 2018associatemember |
Variable Interest Entity [Line Items] | |
Number of Members in Consolidated Membership | member | 1,449 |
Number of Associates in Consolidated Membership | associate | 216 |
Variable Interest Entities Addi
Variable Interest Entities Additional Information (Details) $ in Millions | 12 Months Ended |
May 31, 2018USD ($)directorvote | |
Variable Interest Entity [Line Items] | |
Number of States in which Electric and Telecommunications Members are Located | 50 |
Consolidated variable interest entities | |
Variable Interest Entity [Line Items] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ | $ 28 |
RTFC | Consolidated variable interest entities | |
Variable Interest Entity [Line Items] | |
Number of votes by each member for election of directors | 1 |
NCSC | Consolidated variable interest entities | |
Variable Interest Entity [Line Items] | |
Number of directors for whom nomination process is controlled | director | 1 |
Number of votes by each member for election of directors | 1 |
Investment Securities Investmen
Investment Securities Investment Securities and Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Investments | |||
Amortized Cost | $ 80,538 | $ 80,538 | |
Gross Unrealized Gains | 8,794 | 12,016 | |
Gross Unrealized Losses | 0 | 0 | |
Available for sale, at fair value | 89,332 | 92,554 | |
Debt Securities, Held-to-maturity | 519,519 | 0 | |
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 840 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | (4,813) | ||
Debt Securities, Held-to-maturity, Fair Value | 515,546 | ||
Available-for-sale Securities and Held-to-maturity Securities, Amortized Cost Basis | 600,057 | ||
Available-for-sale Securities and Held-to-maturity Securities, Accumulated Gross Unrealized Gain, before Tax | 9,634 | ||
Available-for-sale Securities and Held-to-maturity Securities, Accumulated Gross Unrealized Loss, before Tax | (4,813) | ||
Available-for-sale Securities and Held-to-maturity Securities, Fair Value | 604,878 | ||
Certificates of deposit | |||
Investments | |||
Debt Securities, Held-to-maturity | 4,148 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 0 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 4,148 | ||
Commercial paper | |||
Investments | |||
Debt Securities, Held-to-maturity | 9,134 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 0 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 9,134 | ||
U.S. agency debt securities | |||
Investments | |||
Debt Securities, Held-to-maturity | 2,000 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 16 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 2,016 | ||
Corporate debt securities | |||
Investments | |||
Debt Securities, Held-to-maturity | 455,721 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 714 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | (4,595) | ||
Debt Securities, Held-to-maturity, Fair Value | 451,840 | ||
Agency | |||
Investments | |||
Debt Securities, Held-to-maturity | 7,024 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 63 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 7,087 | ||
Non-agency | |||
Investments | |||
Debt Securities, Held-to-maturity | 3,453 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 3 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | (3) | ||
Debt Securities, Held-to-maturity, Fair Value | 3,453 | ||
Total commercial MBS | |||
Investments | |||
Debt Securities, Held-to-maturity | 10,477 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 66 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | (3) | ||
Debt Securities, Held-to-maturity, Fair Value | 10,540 | ||
U.S. state and municipality debt securities | |||
Investments | |||
Debt Securities, Held-to-maturity | 2,147 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 24 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 2,171 | ||
Foreign government debt securities | |||
Investments | |||
Debt Securities, Held-to-maturity | 1,241 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | 9 | ||
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 1,250 | ||
Asset-backed Securities | |||
Investments | |||
Debt Securities, Held-to-maturity | [1] | 34,651 | |
Debt Securities, Held-to-maturity, Accumulated Unrecognized Gain | [1] | 11 | |
Debt Securities, Held-to-maturity, Accumulated Unrecognized Loss | [1] | (215) | |
Debt Securities, Held-to-maturity, Fair Value | [1] | 34,447 | |
Preferred Stock | Farmer Mac—series A non-cumulative preferred stock | |||
Investments | |||
Amortized Cost | 30,000 | 30,000 | |
Gross Unrealized Gains | 480 | 1,585 | |
Gross Unrealized Losses | 0 | 0 | |
Available for sale, at fair value | 30,480 | 31,585 | |
Preferred Stock | Farmer Mac—series B non-cumulative preferred stock | |||
Investments | |||
Amortized Cost | 25,000 | 25,000 | |
Gross Unrealized Gains | 1,000 | 1,940 | |
Gross Unrealized Losses | 0 | 0 | |
Available for sale, at fair value | 26,000 | 26,940 | |
Preferred Stock | Farmer Mac—series C non-cumulative preferred stock | |||
Investments | |||
Amortized Cost | 25,000 | 25,000 | |
Gross Unrealized Gains | 872 | 4,150 | |
Gross Unrealized Losses | 0 | 0 | |
Available for sale, at fair value | 25,872 | 29,150 | |
Common Stock | Farmer Mac—class A common stock | |||
Investments | |||
Amortized Cost | 538 | 538 | |
Gross Unrealized Gains | 6,442 | 4,341 | |
Gross Unrealized Losses | 0 | 0 | |
Available for sale, at fair value | $ 6,980 | $ 4,879 | |
[1] | Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. |
Investment Securities Fair Valu
Investment Securities Fair Value and Gross Unrealized Losses for Investments in a Gross Loss Position (Details) $ in Thousands | May 31, 2018USD ($) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31) | |
Less than 12 months, Fair value, held-to-maturity | $ 308,602 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 4,813 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 308,602 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | 4,813 |
Corporate debt securities | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31) | |
Less than 12 months, Fair value, held-to-maturity | 280,139 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 4,595 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 280,139 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | 4,595 |
Non-agency | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31) | |
Less than 12 months, Fair value, held-to-maturity | 1,451 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 3 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 1,451 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | 3 |
Asset-backed Securities | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Aggregate Loss [Abstract] (Deprecated 2018-01-31) | |
Less than 12 months, Fair value, held-to-maturity | 27,012 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 215 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 27,012 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | $ 215 |
Investment Securities Remaining
Investment Securities Remaining Contractual Maturity Based on Amortized Cost and Fair Value of HTM by Type (Details) (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Schedule of Held-to-maturity Securities [Line Items] | |||
Due in 1 Year or Less | $ 22,393 | ||
Due 1 Year through 5 Years | 413,982 | ||
Due 5 Years through 10 Years | 79,691 | ||
Due 10 Years | 3,453 | ||
Debt Securities, Held-to-maturity | 519,519 | $ 0 | |
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling within One Year, Fair Value | 22,338 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Fair Value | 409,707 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 80,048 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 3,453 | ||
Debt Securities, Held-to-maturity, Fair Value | $ 515,546 | ||
Held to Maturity Securities Expected Debt Maturities Next Rolling Twelve Months Weighted Average Yield | 1.81% | ||
Held to Maturity Securities, Expected Debt Maturities, Rolling Year Two Through Five, Weighted-Average Yield | 2.84% | ||
Held-to-Maturity Securities, Expected Debt Maturities, Rolling Year Six Through Ten, Weighted-Average Yield | 3.60% | ||
Debt Securities, Held-to-maturity, Maturity, after 10 Years, Weighted Average Yield | 2.74% | ||
Held To Maturity Securities Expected Debt Maturities Weighted Average Yield | 2.91% | ||
Certificates of deposit | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due in 1 Year or Less | $ 4,148 | ||
Debt Securities, Held-to-maturity | 4,148 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling within One Year, Fair Value | 4,148 | ||
Debt Securities, Held-to-maturity, Fair Value | 4,148 | ||
Commercial paper | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due in 1 Year or Less | 9,134 | ||
Debt Securities, Held-to-maturity | 9,134 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling within One Year, Fair Value | 9,134 | ||
Debt Securities, Held-to-maturity, Fair Value | 9,134 | ||
U.S. agency debt securities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 1 Year through 5 Years | 2,000 | ||
Debt Securities, Held-to-maturity | 2,000 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Fair Value | 2,016 | ||
Debt Securities, Held-to-maturity, Fair Value | 2,016 | ||
Corporate debt securities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due in 1 Year or Less | 9,111 | ||
Due 1 Year through 5 Years | 377,384 | ||
Due 5 Years through 10 Years | 69,226 | ||
Debt Securities, Held-to-maturity | 455,721 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling within One Year, Fair Value | 9,056 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Fair Value | 373,284 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 69,500 | ||
Debt Securities, Held-to-maturity, Fair Value | 451,840 | ||
Agency | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 5 Years through 10 Years | 7,024 | ||
Debt Securities, Held-to-maturity | 7,024 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 7,087 | ||
Debt Securities, Held-to-maturity, Fair Value | 7,087 | ||
Non-agency | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 10 Years | 3,453 | ||
Debt Securities, Held-to-maturity | 3,453 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 3,453 | ||
Debt Securities, Held-to-maturity, Fair Value | 3,453 | ||
Total commercial MBS | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 5 Years through 10 Years | 7,024 | ||
Due 10 Years | 3,453 | ||
Debt Securities, Held-to-maturity | 10,477 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 7,087 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 3,453 | ||
Debt Securities, Held-to-maturity, Fair Value | 10,540 | ||
U.S. state and municipality debt securities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 5 Years through 10 Years | 2,147 | ||
Debt Securities, Held-to-maturity | 2,147 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 2,171 | ||
Debt Securities, Held-to-maturity, Fair Value | 2,171 | ||
Foreign government debt securities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 1 Year through 5 Years | 1,241 | ||
Debt Securities, Held-to-maturity | 1,241 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Fair Value | 1,250 | ||
Debt Securities, Held-to-maturity, Fair Value | 1,250 | ||
Asset-backed Securities | |||
Schedule of Held-to-maturity Securities [Line Items] | |||
Due 1 Year through 5 Years | 33,357 | ||
Due 5 Years through 10 Years | 1,294 | ||
Debt Securities, Held-to-maturity | [1] | 34,651 | |
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Fair Value | 33,157 | ||
Debt Securities, Held-to-maturity, Maturity, Allocated and Single Maturity Date, Rolling after Five Through Ten Years, Fair Value | 1,290 | ||
Debt Securities, Held-to-maturity, Fair Value | [1] | $ 34,447 | |
[1] | Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans. |
Investment Securities Additiona
Investment Securities Additional Information (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Proceeds from Sale, Maturity and Collection of Investments | $ 0 | $ 0 |
Debt and Equity Securities, Realized Gain (Loss) | 0 | 0 |
Debt Securities, Held-to-maturity | $ 519,519,000 | $ 0 |
Held-to-maturity security in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | 225 | |
Average Contractual Maturity of Held-to-maturity Securities | 4 years | |
Held To Maturity Securities Expected Debt Maturities Weighted Average Yield | 2.91% |
Loans Loans - Outstanding Princ
Loans Loans - Outstanding Principal Balance and Unadvanced Commitments (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | ||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | $ 25,167,494 | $ 24,356,330 | |
Deferred origination costs | 11,114 | 10,714 | [1] | |
Loans to members | 25,178,608 | 24,367,044 | [1] | |
Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 12,645,618 | 12,574,974 | |
CFC | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | 24,017,919 | 23,387,987 | |
CFC | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 11,723,496 | 11,715,665 | |
CFC | Distribution | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 19,551,511 | 18,825,366 | [1] | |
CFC | Distribution | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 8,188,376 | 8,295,146 | |
CFC | Power supply | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 4,397,353 | 4,504,791 | [1] | |
CFC | Power supply | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 3,407,095 | 3,276,113 | |
CFC | Statewide and associate | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 69,055 | 57,830 | [1] | |
CFC | Statewide and associate | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 128,025 | 144,406 | |
NCSC | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 786,457 | 613,924 | [1] | |
NCSC | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 624,663 | 584,944 | |
RTFC | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 363,118 | 354,419 | [1] | |
RTFC | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 297,459 | 274,365 | |
Fixed rate | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 22,696,185 | 22,136,690 | [1] | |
Variable rate | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 1,039,491 | 847,419 | [1] | |
Variable rate | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 4,952,834 | 4,802,319 | |
Long-term loans | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 23,735,676 | 22,984,109 | [1] | |
Long-term loans | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | 4,952,834 | 4,802,319 | |
Lines of credit | ||||
Loans outstanding | ||||
Loans and Leases Receivable, Net of Deferred Income | 1,431,818 | 1,372,221 | [1] | |
Lines of credit | Unadvanced commitments | ||||
Loans outstanding | ||||
Available Balance | [1] | $ 7,692,784 | $ 7,772,655 | |
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Loans Unadvanced Commitments -
Loans Unadvanced Commitments - Available Balance and Maturity (Details) - Unadvanced commitments - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Available Balance | [1] | $ 12,645,618 | $ 12,574,974 |
2,019 | 5,052,591 | ||
2,020 | 1,296,768 | ||
2,021 | 1,458,007 | ||
2,022 | 2,485,309 | ||
2,023 | 2,315,976 | ||
Thereafter | 36,967 | ||
Lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Available Balance | [1] | 7,692,784 | 7,772,655 |
2,019 | 4,168,751 | ||
2,020 | 710,763 | ||
2,021 | 805,508 | ||
2,022 | 770,971 | ||
2,023 | 1,211,791 | ||
Thereafter | 25,000 | ||
Long-term loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Available Balance | [1] | 4,952,834 | $ 4,802,319 |
2,019 | 883,840 | ||
2,020 | 586,005 | ||
2,021 | 652,499 | ||
2,022 | 1,714,338 | ||
2,023 | 1,104,185 | ||
Thereafter | $ 11,967 | ||
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Loans Committed Lines of Credit
Loans Committed Lines of Credit - Available Balance and Maturity (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Unadvanced commitments | |||
Unadvanced Loan Commitments | |||
2,019 | $ 5,052,591 | ||
2,020 | 1,296,768 | ||
2,021 | 1,458,007 | ||
2,022 | 2,485,309 | ||
2,023 | 2,315,976 | ||
Available Balance | [1] | 12,645,618 | $ 12,574,974 |
Unadvanced commitments not subject to material adverse change clauses | |||
Unadvanced Loan Commitments | |||
2,019 | 279,285 | ||
2,020 | 435,151 | ||
2,021 | 444,326 | ||
2,022 | 644,178 | ||
2,023 | 1,054,410 | ||
Available Balance | $ 2,857,350 | $ 2,602,000 | |
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Loans Loans Outstanding Pledged
Loans Loans Outstanding Pledged as Collateral (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Pledging of Loans and Loans on Deposit | ||
Cash | $ 7,825 | $ 21,806 |
Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 8,784,024 | 8,886,945 |
Debt outstanding | 7,697,711 | 7,697,711 |
Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 220,000 | 225,000 |
Secured notes payable | Federal Agricultural Mortgage Corporation | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 2,891,496 | 2,513,389 |
Clean Renewable Energy Bonds Series 2009A | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 11,556 | 13,214 |
Cash | 415 | 481 |
Total pledged collateral | 13,030 | 15,424 |
Guaranteed Underwriter Program Notes Payable | ||
Pledging of Loans and Loans on Deposit | ||
Debt outstanding | 4,856,375 | 4,985,748 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 8,643,344 | 8,740,572 |
Mortgage notes | Distribution system mortgage notes | Collateral trust bonds 1994 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 243,418 | 263,007 |
Mortgage notes | Distribution and power supply system mortgage notes | Federal Agricultural Mortgage Corporation | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 3,331,775 | 2,942,456 |
Mortgage notes | Distribution and power supply system mortgage notes | Clean Renewable Energy Bonds Series 2009A | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 12,615 | 14,943 |
RUS guaranteed loans qualifying as permitted investments | Collateral trust bonds 2007 indenture | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | 140,680 | 146,373 |
Mortgage Receivables on Deposit | Distribution and power supply system mortgage notes | Federal Financing Bank | ||
Pledging of Loans and Loans on Deposit | ||
Loans outstanding and pledged as collateral | $ 5,772,750 | $ 5,833,515 |
Loans Loans - Payment Status (D
Loans Loans - Payment Status (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | ||
Payment Status of Loans | ||||
Current | $ 25,167,494 | $ 24,356,330 | ||
Past Due | 0 | 0 | ||
Loans and Leases Receivable, Net of Deferred Income | [1] | 25,167,494 | 24,356,330 | |
Non-accrual loans | $ 0 | $ 0 | ||
As a % of total loans | ||||
Current | 100.00% | 100.00% | ||
30-89 days past due | 0.00% | 0.00% | ||
90 days or more past due | 0.00% | 0.00% | ||
Total past due | 0.00% | 0.00% | ||
Total financing receivables | 100.00% | 100.00% | ||
Non-accrual loans | 0.00% | 0.00% | ||
CFC | ||||
Payment Status of Loans | ||||
Current | $ 24,017,919 | $ 23,387,987 | ||
Past Due | 0 | 0 | ||
Loans and Leases Receivable, Net of Deferred Income | [1] | 24,017,919 | 23,387,987 | |
Non-accrual loans | 0 | 0 | ||
CFC | Distribution | ||||
Payment Status of Loans | ||||
Current | 19,551,511 | 18,825,366 | ||
Past Due | 0 | 0 | ||
Loans and Leases Receivable, Net of Deferred Income | 19,551,511 | 18,825,366 | [1] | |
Non-accrual loans | 0 | 0 | ||
CFC | Power supply | ||||
Payment Status of Loans | ||||
Current | 4,397,353 | 4,504,791 | ||
Past Due | 0 | 0 | ||
Loans and Leases Receivable, Net of Deferred Income | 4,397,353 | 4,504,791 | [1] | |
Non-accrual loans | 0 | 0 | ||
CFC | Statewide and associate | ||||
Payment Status of Loans | ||||
Current | 69,055 | 57,830 | ||
Loans and Leases Receivable, Net of Deferred Income | 69,055 | 57,830 | [1] | |
NCSC | ||||
Payment Status of Loans | ||||
Current | 786,457 | 613,924 | ||
Past Due | 0 | |||
Loans and Leases Receivable, Net of Deferred Income | 786,457 | 613,924 | [1] | |
Non-accrual loans | 0 | 0 | ||
RTFC | ||||
Payment Status of Loans | ||||
Current | 363,118 | 354,419 | ||
Past Due | 0 | |||
Loans and Leases Receivable, Net of Deferred Income | 363,118 | 354,419 | [1] | |
Non-accrual loans | 0 | 0 | ||
30-89 Days Past Due | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
30-89 Days Past Due | CFC | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
30-89 Days Past Due | CFC | Distribution | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
30-89 Days Past Due | NCSC | ||||
Payment Status of Loans | ||||
Past Due | 0 | |||
30-89 Days Past Due | RTFC | ||||
Payment Status of Loans | ||||
Past Due | 0 | |||
90 Days or More Past Due | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
90 Days or More Past Due | CFC | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
90 Days or More Past Due | CFC | Distribution | ||||
Payment Status of Loans | ||||
Past Due | 0 | 0 | ||
90 Days or More Past Due | CFC | Power supply | ||||
Payment Status of Loans | ||||
Past Due | 0 | |||
90 Days or More Past Due | NCSC | ||||
Payment Status of Loans | ||||
Past Due | $ 0 | |||
90 Days or More Past Due | RTFC | ||||
Payment Status of Loans | ||||
Past Due | $ 0 | |||
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Loans Troubled Debt Restructure
Loans Troubled Debt Restructured Loans (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Financing Receivable, Modifications [Line Items] | ||
Loans and Leases Receivable Commercial, Net of Deferred Income, Percentage | 100.00% | 100.00% |
Performing TDR Loans | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Recorded Investment | $ 12,599 | $ 13,173 |
Performing TDR Loans As Percentage of Total Loans | 0.05% | 0.05% |
TDR Financing Receivable | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Recorded Investment | $ 12,599 | $ 13,173 |
Loans and Leases Receivable Commercial, Net of Deferred Income, Percentage | 0.05% | 0.05% |
CFC | Performing TDR Loans | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Recorded Investment | $ 6,507 | $ 6,581 |
Performing TDR Loans As Percentage of Total Loans | 0.03% | 0.02% |
RTFC | Performing TDR Loans | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Recorded Investment | $ 6,092 | $ 6,592 |
Performing TDR Loans As Percentage of Total Loans | 0.02% | 0.03% |
Loans Loans - Foregone Interest
Loans Loans - Foregone Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | $ 0 | $ 31 | $ 275 |
Restructured loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 0 | 0 | 166 |
Nonperforming TDR loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | $ 0 | $ 31 | $ 109 |
Loans Impaired Loans - Recorded
Loans Impaired Loans - Recorded Investment and Allowance (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||
Total impaired loans | $ 12,599 | $ 13,173 |
Related allowance | 1,198 | 1,640 |
CFC | ||
Impaired Loans | ||
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 6,507 | 6,581 |
RTFC | ||
Recorded investment in individually-impaired loans and the related specific valuation allowance | ||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 6,092 | 6,592 |
Related allowance | $ 1,198 | $ 1,640 |
Loans Impaired Loans - Average
Loans Impaired Loans - Average Recorded Investment and Interest Income Recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Impaired Loans | |||
Total impaired loans | $ 12,885 | $ 14,349 | $ 16,665 |
Interest impaired loans | 889 | 905 | 654 |
CFC | |||
Impaired Loans | |||
Total impaired loans | 6,524 | 6,613 | 6,842 |
Interest impaired loans | 571 | 562 | 390 |
RTFC | |||
Impaired Loans | |||
Total impaired loans | 6,361 | 7,736 | 9,823 |
Interest impaired loans | $ 318 | $ 343 | $ 264 |
Loans Loans - Internal Risk Rat
Loans Loans - Internal Risk Rating (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | ||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | $ 25,167,494 | $ 24,356,330 | |
CFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | 24,017,919 | 23,387,987 | |
CFC | Distribution | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 19,551,511 | 18,825,366 | [1] | |
CFC | Power supply | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 4,397,353 | 4,504,791 | [1] | |
CFC | Statewide and associate | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 69,055 | 57,830 | [1] | |
NCSC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 786,457 | 613,924 | [1] | |
RTFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 363,118 | 354,419 | [1] | |
Pass | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 24,989,464 | 24,236,791 | ||
Pass | CFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 23,846,504 | 23,277,255 | ||
Pass | CFC | Distribution | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 19,429,121 | 18,715,810 | ||
Pass | CFC | Power supply | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 4,348,328 | 4,504,791 | ||
Pass | CFC | Statewide and associate | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 69,055 | 56,654 | ||
Pass | NCSC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 786,457 | 612,592 | ||
Pass | RTFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 356,503 | 346,944 | ||
Special Mention | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 7,376 | 112,064 | ||
Special Mention | CFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 6,853 | 110,732 | ||
Special Mention | CFC | Distribution | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 6,853 | 109,556 | ||
Special Mention | CFC | Power supply | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 0 | |||
Special Mention | CFC | Statewide and associate | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 1,176 | |||
Special Mention | NCSC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 1,332 | |||
Special Mention | RTFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 523 | |||
Substandard | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 170,654 | 7,475 | ||
Substandard | CFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 164,562 | |||
Substandard | CFC | Distribution | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 115,537 | |||
Substandard | CFC | Power supply | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 49,025 | |||
Substandard | RTFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 6,092 | 7,475 | ||
Doubtful | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | 0 | 0 | ||
Doubtful | RTFC | ||||
Credit Quality | ||||
Loans and Leases Receivable, Net of Deferred Income | $ 0 | $ 0 | ||
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Loans Allowance for Loan Losses
Loans Allowance for Loan Losses Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at the beginning of the period | $ 37,376 | $ 33,258 | $ 33,690 |
(Recovery of) provision for loan losses | (18,575) | (5,978) | (646) |
Charge-offs of allowance for loan losses applied against loan balances | (2,119) | ||
Recoveries of loans previously charged-off | 259 | 214 | |
Balance at the end of the period | 18,801 | 37,376 | 33,258 |
Allowance for Loan and Lease Losses Write-offs, Net | (1,860) | ||
CFC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at the beginning of the period | 29,499 | 24,559 | 23,716 |
(Recovery of) provision for loan losses | (17,199) | 4,781 | (629) |
Charge-offs of allowance for loan losses applied against loan balances | 0 | ||
Recoveries of loans previously charged-off | 159 | 214 | |
Balance at the end of the period | 12,300 | 29,499 | 24,559 |
Allowance for Loan and Lease Losses Write-offs, Net | 159 | ||
NCSC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at the beginning of the period | 2,910 | 3,134 | 5,441 |
(Recovery of) provision for loan losses | (828) | (224) | (2,307) |
Charge-offs of allowance for loan losses applied against loan balances | 0 | ||
Recoveries of loans previously charged-off | 0 | ||
Balance at the end of the period | 2,082 | 2,910 | 3,134 |
RTFC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Balance at the beginning of the period | 4,967 | 5,565 | 4,533 |
(Recovery of) provision for loan losses | 548 | (1,421) | 1,032 |
Charge-offs of allowance for loan losses applied against loan balances | (2,119) | ||
Recoveries of loans previously charged-off | 100 | ||
Balance at the end of the period | $ 4,419 | 4,967 | $ 5,565 |
Allowance for Loan and Lease Losses Write-offs, Net | $ (2,019) |
Loans Allowance for Loan Loss58
Loans Allowance for Loan Losses Components and Related Loan Investments (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Ending balance of the allowance: | ||||||
Collectively evaluated | $ 17,603 | $ 35,736 | ||||
Individually evaluated | 1,198 | 1,640 | ||||
Loans and Leases Receivable, Allowance | 18,801 | 37,376 | $ 33,258 | $ 33,690 | ||
Recorded investment in loans: | ||||||
Collectively evaluated | 25,154,895 | 24,343,157 | ||||
Individually evaluated | 12,599 | 13,173 | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | 25,167,494 | 24,356,330 | |||
Loans and Leases Receivable, Net Amount | [2] | 25,148,693 | 24,318,954 | |||
Deferred origination costs | 11,114 | 10,714 | [1] | |||
CFC | ||||||
Ending balance of the allowance: | ||||||
Collectively evaluated | 12,300 | 29,499 | ||||
Individually evaluated | 0 | |||||
Loans and Leases Receivable, Allowance | 12,300 | 29,499 | 24,559 | 23,716 | ||
Recorded investment in loans: | ||||||
Collectively evaluated | 24,011,412 | 23,381,406 | ||||
Individually evaluated | 6,507 | 6,581 | ||||
Loans and Leases Receivable, Net of Deferred Income | [1] | 24,017,919 | 23,387,987 | |||
Loans and Leases Receivable, Net Amount | [2] | 24,005,619 | 23,358,488 | |||
NCSC | ||||||
Ending balance of the allowance: | ||||||
Collectively evaluated | 2,082 | 2,910 | ||||
Individually evaluated | 0 | 0 | ||||
Loans and Leases Receivable, Allowance | 2,082 | 2,910 | 3,134 | 5,441 | ||
Recorded investment in loans: | ||||||
Collectively evaluated | 786,457 | 613,924 | ||||
Individually evaluated | 0 | |||||
Loans and Leases Receivable, Net of Deferred Income | 786,457 | 613,924 | [1] | |||
Loans and Leases Receivable, Net Amount | [2] | 784,375 | 611,014 | |||
RTFC | ||||||
Ending balance of the allowance: | ||||||
Collectively evaluated | 3,221 | 3,327 | ||||
Individually evaluated | 1,198 | 1,640 | ||||
Loans and Leases Receivable, Allowance | 4,419 | 4,967 | $ 5,565 | $ 4,533 | ||
Recorded investment in loans: | ||||||
Collectively evaluated | 357,026 | 347,827 | ||||
Individually evaluated | 6,092 | 6,592 | ||||
Loans and Leases Receivable, Net of Deferred Income | 363,118 | 354,419 | [1] | |||
Loans and Leases Receivable, Net Amount | [2] | $ 358,699 | $ 349,452 | |||
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. | |||||
[2] | Excludes unamortized deferred loan origination costs of $11 million as of both May 31, 2018 and 2017 |
Loans Additional Information (D
Loans Additional Information (Details) | 12 Months Ended | |||||
May 31, 2018USD ($)associatepower_supply_systemdistribution_systemborrowermember | May 31, 2017USD ($)associatepower_supply_systemdistribution_systemborrower | May 31, 2016USD ($) | May 31, 2015USD ($) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Financing Receivable, Modifications, Subsequent Default, Recorded Investment | $ 0 | |||||
Allowance for Doubtful Accounts Receivable, Write-offs | 0 | |||||
Delinquent Amount at End of Period on Loans Managed and Securitized or Asset-backed Financing Arrangement | 0 | |||||
Loans and Leases Receivable, Allowance | 18,801,000 | $ 37,376,000 | $ 33,258,000 | $ 33,690,000 | ||
Allowance for Loan and Lease Losses, Period Increase (Decrease) | $ 18,000,000 | |||||
Unadvanced Line of Credit Commitments as Percentage of unadvanced loan commitments | 61.00% | |||||
Unadvanced Long-term Loans Commitments as Percentage of unadvanced loan commitments | 39.00% | |||||
Loans Receivable Cost of Loans Sold | $ 119,000,000 | 58,000,000 | 99,000,000 | |||
Number of States in which Electric and Telecommunications Members are Located | 50 | |||||
Number of Members in Consolidated Membership | member | 1,449 | |||||
Number of Associates in Consolidated Membership | associate | 216 | |||||
Loans and Leases Receivable, Net of Deferred Income | [1] | $ 25,167,494,000 | 24,356,330,000 | |||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount | $ 1,000,000 | |||||
Number of Borrowers With TDR Loans | 1 | 1 | ||||
Loans and Leases Receivable, Commitments to Purchase or Sell | $ 0 | |||||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | $ 0 | $ 31,000 | 275,000 | |||
Minimum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Term of Loans | 1 year | |||||
Maximum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Term of Loans | 35 years | |||||
Performing Line of Credit for Troubled Debt Restructuring Borrower [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | $ 6,000,000 | |||||
Loans and Leases Receivable, Net of Deferred Income | 1,000,000 | |||||
Nonperforming TDR loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 0 | |||||
Loans and Leases Receivable, Impaired, Interest Lost on Nonaccrual Loans | 0 | 31,000 | 109,000 | |||
Performing TDR Loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | 6,000,000 | |||||
Substandard | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Increase (Decrease) in Finance Receivables | 163,000,000 | |||||
Loans and Leases Receivable, Net of Deferred Income | 170,654,000 | 7,475,000 | ||||
RTFC | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Allowance | 4,419,000 | 4,967,000 | $ 5,565,000 | $ 4,533,000 | ||
Loans and Leases Receivable, Net of Deferred Income | 363,118,000 | 354,419,000 | [1] | |||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 6,092,000 | 6,592,000 | ||||
RTFC | Nonperforming TDR loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 0 | |||||
RTFC | Non-performing loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Impaired Financing Receivable, with Related Allowance, Recorded Investment | 0 | 0 | ||||
RTFC | Substandard | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Net of Deferred Income | 6,092,000 | 7,475,000 | ||||
Unadvanced commitments | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | [1] | 12,645,618,000 | 12,574,974,000 | |||
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount | 1,000,000 | |||||
Unadvanced commitments | RTFC | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | [1] | 297,459,000 | 274,365,000 | |||
Commitments to Extend Credit Subject to Material Adverse Change Clause [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | 9,789,000,000 | 9,973,000,000 | ||||
Unadvanced commitments not subject to material adverse change clauses | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | 2,857,350,000 | 2,602,000,000 | ||||
Long-term loans | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Net of Deferred Income | 23,735,676,000 | 22,984,109,000 | [1] | |||
Long-term loans | Unadvanced commitments | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Available Balance | [1] | $ 4,952,834,000 | $ 4,802,319,000 | |||
Loans outstanding | Geographic Concentration Risk | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Percentage of concentration | 15.00% | 15.00% | ||||
Loans outstanding | Credit concentration | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Concentration Risk Number of Borrowers | borrower | 20 | 20 | ||||
Percentage of concentration | 2.00% | 2.00% | ||||
Loans outstanding | Credit concentration | Distribution | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Concentration Risk Number of Borrowers | distribution_system | 9 | 10 | ||||
Loans outstanding | Credit concentration | Power supply | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Concentration Risk Number of Borrowers | power_supply_system | 10 | 9 | ||||
Loans outstanding | Credit concentration | Associates | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Concentration Risk Number of Borrowers | associate | 1 | 1 | ||||
Loans outstanding | Customer Concentration Risk [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Percentage of concentration | 23.00% | 24.00% | ||||
Loans outstanding | Product Concentration Risk [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Percentage of concentration | 99.00% | 99.00% | ||||
Loans Guaranteed by Farmer Mac | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Net of Deferred Income | $ 660,000,000 | $ 843,000,000 | ||||
RUS guaranteed loans qualifying as permitted investments | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Net of Deferred Income | 161,000,000 | $ 167,000,000 | ||||
Unsecured Loans | Substandard | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans and Leases Receivable, Net of Deferred Income | $ 7,000,000 | |||||
[1] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Short-Term Borrowings Short-Ter
Short-Term Borrowings Short-Term Debt Outstanding and Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Short-term Debt [Line Items] | ||
Short-term Debt | $ 3,795,910 | $ 3,342,900 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.88% | 0.99% |
Commercial paper sold through dealers, net of discounts | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 1,064,266 | $ 999,691 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.87% | 0.93% |
Commercial paper sold directly to members, at par | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 1,202,105 | $ 928,158 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.89% | 0.95% |
Select notes | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 780,472 | $ 696,889 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.04% | 1.12% |
Daily liquidity fund notes | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 400,635 | $ 527,990 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.50% | 0.80% |
Medium-term notes sold to members | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 248,432 | $ 190,172 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 1.90% | 1.50% |
Farmer Mac Notes Payable | ||
Short-term Debt [Line Items] | ||
Short-term Debt | $ 100,000 | $ 0 |
Short-term Debt, Weighted Average Interest Rate, at Point in Time | 2.23% | 0.00% |
Short-Term Borrowings Commitmen
Short-Term Borrowings Commitments under Revolving Credit Agreements (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Three Year Agreement | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,493,000 | ||
Five Year Agreement | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 1,592,000 | ||
Revolving credit agreements | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 3,085,000 | $ 3,165,000 | |
Letters of Credit Outstanding, Amount | 3,000 | 1,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 3,082,000 | 3,164,000 | |
Revolving credit agreements | Three Year Agreement | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 1,492,000 | 1,533,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,492,000 | $ 1,533,000 | |
Debt Instrument, Maturity Date | Nov. 20, 2020 | Nov. 19, 2019 | |
Line of Credit Facility, Commitment Fee Percentage | 0.075% | 0.075% | |
Revolving credit agreements | Five Year Agreement | |||
Short-term Debt [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,593,000 | $ 1,632,000 | |
Letters of Credit Outstanding, Amount | 3,000 | 1,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,590,000 | $ 1,631,000 | |
Debt Instrument, Maturity Date | Nov. 20, 2022 | Nov. 19, 2021 | |
Line of Credit Facility, Commitment Fee Percentage | 0.10% | 0.10% |
Short-Term Borrowings Additiona
Short-Term Borrowings Additional Information (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Short-term Debt [Line Items] | ||
Short-term Debt | $ 3,795,910,000 | $ 3,342,900,000 |
Select notes | ||
Short-term Debt [Line Items] | ||
Short-term Debt | 780,472,000 | 696,889,000 |
Three Year Agreement | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,493,000,000 | |
Line Of Credit Facility Terminated | 40,000,000 | |
Five Year Agreement | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,592,000,000 | |
Line Of Credit Facility Terminated | $ 40,000,000 | |
Minimum | Commercial paper | ||
Short-term Debt [Line Items] | ||
Term of debt | 1 day | |
Minimum | Select notes | ||
Short-term Debt [Line Items] | ||
Term of debt | 30 days | |
Maximum | Commercial paper | ||
Short-term Debt [Line Items] | ||
Term of debt | 270 days | |
Maximum | Select notes | ||
Short-term Debt [Line Items] | ||
Term of debt | 270 days | |
Revolving credit agreements | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,085,000,000 | 3,165,000,000 |
Letter of Credit Maximum Amount Available | 300,000,000 | |
Short-term Debt | 0 | 0 |
Revolving credit agreements | Three Year Agreement | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,492,000,000 | 1,533,000,000 |
Revolving credit agreements | Five Year Agreement | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,593,000,000 | 1,632,000,000 |
CFC | Revolving credit agreements | ||
Short-term Debt [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 3,085,000,000 | $ 3,165,000,000 |
Long-Term Debt Long-Term Debt O
Long-Term Debt Long-Term Debt Outstanding and Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 18,714,960 | $ 17,955,594 |
Weighted-Average Interest Rate | 3.39% | 3.29% |
Medium-term notes sold through dealers | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 3,026,472 | $ 2,386,956 |
Weighted-Average Interest Rate | 3.51% | 3.48% |
Medium-term notes sold to members | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 395,389 | $ 422,779 |
Weighted-Average Interest Rate | 2.56% | 2.18% |
Unsecured medium-term notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 3,421,861 | $ 2,809,735 |
Unamortized discount | (1,256) | (382) |
Unamortized Debt Issuance Expense | (22,237) | (21,903) |
Long-term Debt | $ 3,398,368 | $ 2,787,450 |
Weighted-Average Interest Rate | 3.40% | 3.29% |
Unsecured notes payable: | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 18,892 | $ 22,799 |
Unamortized discount | (277) | (379) |
Unamortized Debt Issuance Expense | $ (68) | $ (94) |
Weighted-Average Interest Rate | 3.84% | 3.98% |
Unsecured notes payable | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 18,547 | $ 22,326 |
Weighted-Average Interest Rate | 3.84% | 3.98% |
Unsecured long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 3,416,915 | $ 2,809,776 |
Weighted-Average Interest Rate | 3.40% | 3.29% |
Collateral trust bonds | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 7,917,711 | $ 7,922,711 |
Unamortized discount | (250,421) | (258,329) |
Unamortized Debt Issuance Expense | (28,197) | (30,334) |
Long-term Debt | $ 7,639,093 | $ 7,634,048 |
Weighted-Average Interest Rate | 3.89% | 4.08% |
Guaranteed Underwriter Program Notes Payable | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 4,856,375 | $ 4,985,748 |
Unamortized Debt Issuance Expense | (232) | (264) |
Long-term Debt | $ 4,856,143 | $ 4,985,484 |
Weighted-Average Interest Rate | 2.85% | 2.83% |
Farmer Mac notes payable | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 2,791,496 | $ 2,513,389 |
Weighted-Average Interest Rate | 2.90% | 1.71% |
Other secured notes payable | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 11,556 | $ 13,214 |
Unamortized Debt Issuance Expense | (243) | (317) |
Long-term Debt | $ 11,313 | $ 12,897 |
Weighted-Average Interest Rate | 2.74% | 2.81% |
Debt Instrument, Maturity Date | Dec. 31, 2024 | Dec. 31, 2024 |
Secured notes payable | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 7,658,952 | $ 7,511,770 |
Weighted-Average Interest Rate | 2.87% | 2.45% |
Secured long-term debt | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 15,298,045 | $ 15,145,818 |
Weighted-Average Interest Rate | 3.39% | 3.29% |
Minimum | Medium-term notes sold through dealers | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 |
Minimum | Medium-term notes sold to members | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2018 | Dec. 31, 2017 |
Minimum | Unsecured notes payable: | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2022 | Dec. 31, 2022 |
Minimum | Collateral trust bonds | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 |
Minimum | Guaranteed Underwriter Program Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2025 | Dec. 31, 2025 |
Minimum | Farmer Mac notes payable | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2018 | Dec. 31, 2018 |
Maximum | Medium-term notes sold through dealers | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2032 | Dec. 31, 2032 |
Maximum | Medium-term notes sold to members | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2037 | Dec. 31, 2037 |
Maximum | Unsecured notes payable: | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2023 | Dec. 31, 2023 |
Maximum | Collateral trust bonds | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2032 | Dec. 31, 2032 |
Maximum | Guaranteed Underwriter Program Notes Payable | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2038 | Dec. 31, 2037 |
Maximum | Farmer Mac notes payable | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Maturity Date | Dec. 31, 2047 | Dec. 31, 2047 |
Long-Term Debt Long-Term Debt M
Long-Term Debt Long-Term Debt Maturities (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Amount Maturing | ||
Long-term Debt | $ 18,714,960 | $ 17,955,594 |
Weighted-Average Interest Rate | ||
Total (as a percent) | 3.39% | 3.29% |
Long-Term Debt | ||
Amount Maturing | ||
2,019 | $ 2,745,434 | |
2,020 | 1,462,907 | |
2,021 | 1,737,341 | |
2,022 | 1,576,418 | |
2,023 | 1,127,810 | |
Thereafter | 10,065,050 | |
Long-term Debt | $ 18,714,960 | |
Weighted-Average Interest Rate | ||
2019 (as a percent) | 5.47% | |
2020 (as a percent) | 2.24% | |
2021 (as a percent) | 2.64% | |
2022 (as a percent) | 2.79% | |
2023 (as a percent) | 2.67% | |
Thereafter (as a percent) | 3.30% | |
Total (as a percent) | 3.39% |
Long-Term Debt Additional Infor
Long-Term Debt Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jul. 12, 2018 | May 31, 2018 | May 31, 2017 | May 31, 2016 | Dec. 01, 2016 | |
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 18,714,960,000 | $ 17,955,594,000 | |||
Debt Instrument Fee Percentage | 3.00% | ||||
Proceeds from issuance of subordinated debt | $ 0 | 0 | $ 346,433,000 | ||
10.375 Percent Collateral Trust Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 10.375% | ||||
Long-term Debt, Gross | $ 1,000,000,000 | ||||
Secured notes payable | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 7,658,952,000 | 7,511,770,000 | |||
Debt Instrument Fee Percentage | 0.30% | ||||
Guaranteed Underwriter Program Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 4,856,143,000 | 4,985,484,000 | |||
Debt Instrument, Unused Borrowing Capacity, Amount | 1,225,000,000 | ||||
Repayments of Secured Debt | 325,000,000 | ||||
Long-term Debt, Gross | 4,856,375,000 | 4,985,748,000 | |||
Proceeds from issuance of subordinated debt | $ 250,000,000 | ||||
Guaranteed Underwriter Program Series M Notes Payable [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument Maximum Borrowing Capacity | $ 750,000,000 | ||||
Term of debt | 20 years | ||||
Federal Agricultural Mortgage Corporation | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument Maximum Borrowing Capacity | $ 5,500,000,000 | ||||
Federal Agricultural Mortgage Corporation | First revolving note purchase agreement with FMAC | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | 2,791,000,000 | 2,513,000,000 | |||
Debt Instrument Maximum Borrowing Capacity | 5,200,000,000 | ||||
Proceeds from issuance of subordinated debt | 325,000,000 | ||||
Federal Agricultural Mortgage Corporation | Second revolving note purchase agreement with FMAC | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 0 | ||||
Debt Instrument Maximum Borrowing Capacity | $ 300,000,000 | ||||
Subsequent Event | 10.375 Percent Collateral Trust Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayments of Secured Debt | $ 300,000,000 |
Subordinated Deferrable Debt Ad
Subordinated Deferrable Debt Additional Information (Details) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Subordinated Deferrable Debt | ||
Interest rate (as a percent) | 4.98333% | 4.98% |
Period after which debt can be called at par | 10 years | |
Debt Instrument, Period after which Debt can be Converted | 10 years | |
Maximum | ||
Subordinated Deferrable Debt | ||
Consecutive period for which interest payment can be deferred | 5 years | |
4.75 percent due 2043 | ||
Subordinated Deferrable Debt | ||
Interest rate (as a percent) | 4.75% | 4.75% |
5.25 Percent Due 2046 | ||
Subordinated Deferrable Debt | ||
Interest rate (as a percent) | 5.25% | 5.25% |
Subordinated Debt | Maximum | ||
Subordinated Deferrable Debt | ||
Term of debt | 30 years |
Subordinated Deferrable Debt Su
Subordinated Deferrable Debt Subordinated Deferrable Debt Outstanding and Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Debt Instrument [Line Items] | ||
Subordinated Debt | $ 742,410 | $ 742,274 |
Interest rate (as a percent) | 4.98333% | 4.98% |
4.75 percent due 2043 | ||
Debt Instrument [Line Items] | ||
Subordinated Debt | $ 400,000 | $ 400,000 |
Interest rate (as a percent) | 4.75% | 4.75% |
5.25 Percent Due 2046 | ||
Debt Instrument [Line Items] | ||
Subordinated Debt | $ 350,000 | $ 350,000 |
Interest rate (as a percent) | 5.25% | 5.25% |
Subordinated Debt | ||
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense | $ (7,590) | $ (7,726) |
Members' Subordinated Certifi68
Members' Subordinated Certificates Outstanding and Weighted-Average Interest Rates (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | ||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 742,410 | $ 742,274 | |
Weighted-Average Interest Rate (as a percent) | 3.39% | 3.29% | |
Subordinated certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 1,379,982 | $ 1,419,025 | |
Weighted-Average Interest Rate (as a percent) | 4.18% | 4.18% | |
Certificates maturing 2020 through 2118 | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 630,173 | $ 629,011 | |
Subscribed and unissued (1) | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | [1] | 275 | 1,087 |
Total membership subordinated certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 630,448 | $ 630,098 | |
Weighted-Average Interest Rate (as a percent) | 4.94% | 4.94% | |
Interest-bearing loan subordinated certificates maturing through 2045 | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 300,738 | $ 310,518 | |
Debt Instrument, Maturity Date | Dec. 31, 2045 | ||
Non-interest-bearing loan subordinated certificates maturing through 2047 | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 162,263 | 171,862 | |
Debt Instrument, Maturity Date | Dec. 31, 2047 | ||
Subscribed and unissued (1) | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | [1] | $ 57 | 61 |
Loan Subordinated Certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 463,058 | $ 482,441 | |
Weighted-Average Interest Rate (as a percent) | 2.71% | 2.70% | |
Interest Bearing Guarantee Subordinated Certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 48,177 | $ 68,238 | |
Debt Instrument, Maturity Date | Dec. 31, 2044 | ||
Non Interest Bearing Guarantee Subordinated Certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 17,151 | 17,151 | |
Debt Instrument, Maturity Date | Dec. 31, 2043 | ||
Guarantee Subordinated Certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 65,328 | $ 85,389 | |
Weighted-Average Interest Rate (as a percent) | 4.50% | 4.85% | |
Loan and guarantee subordinated certificates | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 528,386 | $ 567,830 | |
Weighted-Average Interest Rate (as a percent) | 2.93% | 3.02% | |
Member capital securities | |||
Subordinated Deferrable Debt | |||
Subordinated deferrable debt | $ 221,148 | $ 221,097 | |
Weighted-Average Interest Rate (as a percent) | 5.00% | 5.00% | |
Debt Instrument, Maturity Date | Dec. 31, 2048 | ||
Minimum | Total membership subordinated certificates | |||
Subordinated Deferrable Debt | |||
Debt Instrument, Maturity Date | Dec. 31, 2020 | ||
Maximum | Total membership subordinated certificates | |||
Subordinated Deferrable Debt | |||
Debt Instrument, Maturity Date | Dec. 31, 2118 | ||
[1] | The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase. Upon collection of full payment of the subordinated certificate amount, the certificate will be reclassified from subscribed and unissued to outstanding. |
Members' Subordinated Certifi69
Members' Subordinated Certificates Maturities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | ||
Amount Maturing | |||
Total long-term debt | $ 742,410 | $ 742,274 | |
Members' Certificates, exclusive of certificates amortized annually | |||
Amount Maturing | |||
2,019 | [1] | 9,818 | |
2,020 | [1] | 13,360 | |
2,021 | [1] | 42,932 | |
2,022 | [1] | 14,381 | |
2,023 | [1] | 30,908 | |
Thereafter | [1] | 1,268,251 | |
Total long-term debt | [1] | $ 1,379,650 | |
Weighted-Average Interest Rate | |||
2019 (as a percent) | 2.82% | ||
2020 (as a percent) | 2.85% | ||
2021 (as a percent) | 3.64% | ||
2022 (as a percent) | 2.92% | ||
2023 (as a percent) | 2.70% | ||
Thereafter (as a percent) | 4.27% | ||
Total (as a percent) | 4.18% | ||
Loan Subordinated Certificates | |||
Amount Maturing | |||
Total long-term debt | $ 463,058 | $ 482,441 | |
Other information | |||
Payments not received on certificates subscribed and unissued | 0 | ||
Average amortization of debt | $ 16,000 | ||
Amortization as a percentage of amortizing loan subordinated debt outstanding | 6.00% | ||
Amortizing Member Loan Subordinated Certificates | |||
Amount Maturing | |||
Total long-term debt | $ 274,000 | ||
[1] | Amortization payments on these certificates totaled $16 million in fiscal year 2018 and represented 6% of amortizing loan subordinated certificates outstanding. |
Members' Subordinated Certifi70
Members' Subordinated Certificates Additional Information (Details) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Members' subordinated certificates | ||
Interest rate (as a percent) | 4.98333% | 4.98% |
Membership subordinated certificates | ||
Members' subordinated certificates | ||
Maturity period | 100 years | |
Interest rate (as a percent) | 5.00% | |
Member capital securities | ||
Members' subordinated certificates | ||
Maturity period | 30 years | |
Interest rate (as a percent) | 5.00% | |
Series 2013 Member Capital Securities | ||
Members' subordinated certificates | ||
Member capital security, call option term | 10 years | |
Weighted Average | Membership subordinated certificates | ||
Members' subordinated certificates | ||
Maturity period | 58 years | 59 years |
Derivative Instruments and He71
Derivative Instruments and Hedging Activities Derivatives Notional Amounts and Weighted-Average Rate (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 11,068,153 | $ 10,791,396 |
Pay Fixed Receive Variable Swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 6,987,999 | $ 6,807,013 |
Derivative Weighted Average Interest Rate Paid Percentage | 2.83% | 2.85% |
Derivative Weighted Average Interest Rate Received Percentage | 2.30% | 1.16% |
Pay Variable Receive Fixed Swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 3,824,000 | $ 3,699,000 |
Derivative Weighted Average Interest Rate Paid Percentage | 2.93% | 1.72% |
Derivative Weighted Average Interest Rate Received Percentage | 2.50% | 2.64% |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 10,811,999 | $ 10,506,013 |
Derivative Weighted Average Interest Rate Paid Percentage | 2.86% | 2.46% |
Derivative Weighted Average Interest Rate Received Percentage | 2.37% | 1.68% |
Forward Contracts | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 256,154 | $ 285,383 |
Derivative Instruments and He72
Derivative Instruments and Hedging Activities Derivatives Notional Amount Maturities (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 11,068,153 | $ 10,791,396 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 10,811,999 | $ 10,506,013 |
Derivative Notional Amount Maturing in one year | 499,999 | |
Derivative Notional Amount Maturing in two years | 1,318,007 | |
Derivative Notional Amount Maturing in three years | 476,998 | |
Derivative Notional Amount Maturing in four years | 487,310 | |
Derivative Notional Amount Maturing in five years | 350,590 | |
Derivative Notional Amount Maturing in more than five years | $ 7,935,249 |
Derivative Instruments and He73
Derivative Instruments and Hedging Activities Derivatives - Balance Sheet Impact (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | $ 5,903,182 | $ 7,037,276 |
Derivative liabilities | (275,932) | (385,337) |
Derivative Asset, Notional Amount | 5,264,971 | 3,754,120 |
Derivative assets | 244,526 | 49,481 |
Treasury Lock | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | 100,000 | 0 |
Derivative liabilities | (1,059) | $ 0 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative Liability, Notional Amount | 5,803,182 | |
Derivative liabilities | $ (274,873) |
Derivative Instruments and He74
Derivative Instruments and Hedging Activities Derivatives Offsetting (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Derivative [Line Items] | ||
Derivative assets | $ 244,526 | $ 49,481 |
Derivative liabilities | 275,932 | 385,337 |
Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative Asset, Fair Value, Gross Liability | 0 | 0 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 244,526 | 49,481 |
Derivative, Collateral, Obligation to Return Securities | 196,633 | 49,481 |
Derivative, Collateral, Obligation to Return Cash | 0 | 0 |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 47,893 | 0 |
Derivative liabilities | 274,873 | |
Derivative Liability, Fair Value, Gross Asset | 0 | 0 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 274,873 | 385,337 |
Derivative, Collateral, Right to Reclaim Securities | 196,633 | 49,481 |
Derivative, Collateral, Right to Reclaim Cash | 0 | 0 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 78,240 | 335,856 |
Treasury Lock | ||
Derivative [Line Items] | ||
Derivative liabilities | 1,059 | $ 0 |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral | 1,059 | |
Derivative Liability, Fair Value, Amount Offset Against Collateral | $ 1,059 |
Derivative Instruments and He75
Derivative Instruments and Hedging Activities Derivatives - Income Statement Impact (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Gain (Loss) on Sale of Derivatives | $ (74,281) | $ (84,478) | $ (88,758) |
Unrealized Gain (Loss) on Derivatives | 306,002 | 179,381 | (221,083) |
Derivative gains (losses) | $ 231,721 | $ 94,903 | $ (309,841) |
Derivative Instruments and He76
Derivative Instruments and Hedging Activities Derivatives - Rating Triggers (Details) - Counterparty Group - Interest rate swaps $ in Thousands | May 31, 2018USD ($) | |
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 8,007,206 | |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 81,034 | |
Assets Received for Immediate Settlement Aggregate Fair Value | 42,590 | |
Net Asset Needed for Immediate Settlement Aggregate Fair Value | (38,444) | |
Moodys A3 Rating Standard Poors A Minus Rating | Minimum | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 54,890 | [1] |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 9,355 | |
Assets Received for Immediate Settlement Aggregate Fair Value | 0 | [1] |
Net Asset Needed for Immediate Settlement Aggregate Fair Value | (9,355) | [1] |
Moodys Baa 1 Rating Standard Poor's BBB Plus Rating | Minimum | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 7,164,065 | |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 60,054 | |
Assets Received for Immediate Settlement Aggregate Fair Value | 38,057 | |
Net Asset Needed for Immediate Settlement Aggregate Fair Value | (21,997) | |
Moody's Baa 2 Rating Standard Poor's BBB Rating | Minimum | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 530,980 | [2] |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 0 | [2] |
Assets Received for Immediate Settlement Aggregate Fair Value | 4,533 | [2] |
Net Asset Needed for Immediate Settlement Aggregate Fair Value | 4,533 | [2] |
Moodys Baa 3 Rating Standard Poor's BBB- Plus Rating | Minimum | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | 257,271 | |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 11,625 | |
Net Asset Needed for Immediate Settlement Aggregate Fair Value | $ (11,625) | |
[1] | Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. | |
[2] | Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody’s or S&P, respectively. |
Derivative Instruments and He77
Derivative Instruments and Hedging Activities Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | ||
Derivative [Line Items] | |||
Long-term Debt | $ 18,714,960 | $ 17,955,594 | |
Derivative Liability, Notional Amount | 5,903,182 | 7,037,276 | |
Treasury Lock | |||
Derivative [Line Items] | |||
Derivative Liability, Notional Amount | 100,000 | $ 0 | |
Interest Rate Contracts and Treasury Lock [Member] | |||
Derivative [Line Items] | |||
Derivative, Notional Amount | [1] | 200,000 | |
Assets Needed for Immediate Settlement, Aggregate Fair Value | 1,000 | ||
Interest rate swaps | |||
Derivative [Line Items] | |||
Derivative Liability, Notional Amount | 5,803,182 | ||
Derivative, Net Liability Position, Aggregate Fair Value | $ 81,000 | ||
Percentage of concentration | 24.00% | 23.00% | |
Guaranteed Underwriter Program Notes Payable | |||
Derivative [Line Items] | |||
Long-term Debt | $ 4,856,143 | $ 4,985,484 | |
Designated as Hedging Instrument | Treasury Lock | |||
Derivative [Line Items] | |||
Derivative Liability, Notional Amount | 100,000 | ||
Designated as Hedging Instrument | Guaranteed Underwriter Program Notes Payable | |||
Derivative [Line Items] | |||
Long-term Debt | $ 100,000 | ||
[1] | Rating trigger for CFC falls below A3/A-, while rating trigger for counterparty falls below Baa1/BBB+ by Moody’s or S&P, respectively. |
Equity Equity Components (Detai
Equity Equity Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Components of equity | |||||
Prior years cumulative derivative forward value and foreign currency adjustments | $ (332,525) | $ (507,904) | |||
Unrealized Gain (Loss) on Derivatives | 306,002 | 179,381 | $ (221,083) | ||
Total Cumulative Derivative Forward Value and Foreign Currency Adjustments | (30,831) | (332,525) | |||
Retained equity | 1,465,789 | 1,056,778 | |||
Accumulated other comprehensive income | 8,544 | 13,175 | 1,058 | ||
Total CFC equity | 1,474,333 | 1,069,953 | |||
Noncontrolling interests | 31,520 | 28,852 | |||
Total equity | 1,505,853 | 1,098,805 | 817,378 | $ 911,786 | |
Patronage Refunds | 45,220 | 42,490 | 39,384 | ||
Membership fees | |||||
Components of equity | |||||
Total members' equity | 969 | 971 | |||
Education fund | |||||
Components of equity | |||||
Total members' equity | 1,976 | 1,929 | |||
Retained Earnings, Appropriated Membership Fees and Education Fund [Member] | |||||
Components of equity | |||||
Total members' equity | 2,945 | 2,900 | |||
Total equity | 2,945 | 2,900 | 2,772 | 2,743 | |
Members' capital reserve | |||||
Components of equity | |||||
Total members' equity | 811,493 | 761,701 | |||
Total equity | 687,785 | 630,305 | 587,219 | 501,731 | |
Allocated net income | |||||
Components of equity | |||||
Total members' equity | 687,785 | 630,305 | |||
Total equity | 811,493 | 761,701 | 713,853 | 668,980 | |
Patronage Refunds | 45,220 | 42,593 | 39,384 | ||
Unallocated net income (loss) | |||||
Components of equity | |||||
Total members' equity | (5,603) | (5,603) | |||
Unallocated Net Income (Loss) | |||||
Components of equity | |||||
Total equity | (36,434) | (338,128) | $ (513,610) | $ (293,212) | |
Patronage Refunds | 0 | (103) | |||
CFC | |||||
Components of equity | |||||
Unrealized Gain (Loss) on Derivatives | [1] | (301,694) | (175,379) | ||
CFC | Education fund | |||||
Equity | |||||
Allocation of net earnings | 1,000 | 1,000 | |||
CFC | Members' capital reserve | |||||
Equity | |||||
Allocation of net earnings | 57,000 | 43,000 | |||
CFC | Allocated net income | |||||
Equity | |||||
Allocation of net earnings | 95,000 | 90,000 | |||
Components of equity | |||||
Patronage Refunds | $ 48,000 | $ 45,000 | |||
[1] | Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the consolidated variable interest entities NCSC and RTFC. See “Note 14—Business Segments” for the statements of operations for CFC. |
Equity Accumulated Other Compre
Equity Accumulated Other Comprehensive Income Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | $ 13,175 | $ 1,058 | |
Unrealized gains (losses) on available-for-sale investment securities | (3,222) | 4,614 | $ 3,468 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | (313) | 1,535 | 31 |
Other Comprehensive Income (Loss), Unrealized Gains (Losses) | (4,475) | 3,079 | |
Unrealized losses on foreclosed assets | 0 | 0 | (5,575) |
Other Comprehensive Income Loss Reclassification Adjustment From AOCI Foreclosed Asset | (156) | 9,038 | |
Other comprehensive income | (4,631) | 12,117 | |
Ending balance | 8,544 | 13,175 | 1,058 |
Unrealized Gains (Losses) AFS Securities | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 12,016 | 7,402 | |
Unrealized gains (losses) on available-for-sale investment securities | (3,222) | 4,614 | |
Other comprehensive income | (3,222) | 4,614 | |
Ending balance | 8,794 | 12,016 | 7,402 |
Unrealized Gains Derivatives | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 3,531 | 4,044 | |
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), Adjustments, after Tax | (492) | (513) | |
Other comprehensive income | (492) | (513) | |
Ending balance | 3,039 | 3,531 | 4,044 |
Unrealized Gains (Losses) Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 171 | 443 | |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (1,059) | ||
Other Comprehensive Income (Loss), Net Investment Hedge, Gain (Loss), Reclassification, before Tax | (171) | (272) | |
Other comprehensive income | (1,230) | (272) | |
Ending balance | (1,059) | 171 | 443 |
Unrealized Losses Foreclosed Assets | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | 0 | (9,823) | |
Other Comprehensive Income Loss Reclassification Adjustment From AOCI Foreclosed Asset | 9,823 | ||
Other comprehensive income | 0 | 9,823 | |
Ending balance | 0 | 0 | (9,823) |
Unrealized Losses Defined Benefit Plan | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Beginning balance | (2,543) | (1,008) | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | (194) | (1,535) | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 507 | 0 | |
Other comprehensive income | 313 | (1,535) | |
Ending balance | $ (2,230) | $ (2,543) | $ (1,008) |
Equity Additional Information (
Equity Additional Information (Details) $ in Thousands | 12 Months Ended | |||
May 31, 2018USD ($)reserve | May 31, 2017USD ($) | May 31, 2016USD ($) | May 31, 2015USD ($) | |
Equity | ||||
Stockholders' Equity, Period Increase (Decrease) | $ 407,000 | |||
Total equity | 1,505,853 | $ 1,098,805 | $ 817,378 | $ 911,786 |
Net income (loss) | 457,364 | 312,099 | (51,516) | |
Retirement/allocation of net earnings authorized | $ (45,220) | (42,490) | (39,384) | |
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50.00% | |||
Accumulated other comprehensive income expected to be reclassified into earnings over the next 12 months | $ 1,000 | |||
Patronage Capital Allocated | ||||
Equity | ||||
Total equity | 811,493 | 761,701 | 713,853 | 668,980 |
Net income (loss) | 95,012 | 90,441 | 84,257 | |
Retirement/allocation of net earnings authorized | (45,220) | (42,593) | (39,384) | |
Members' capital reserve | ||||
Equity | ||||
Total equity | 687,785 | 630,305 | 587,219 | $ 501,731 |
Net income (loss) | $ 57,480 | 43,086 | $ 85,917 | |
CFC | ||||
Equity | ||||
General reserve required to be maintained as a percentage of membership fees collected | 50.00% | |||
Number of additional board-approved reserves | reserve | 1 | |||
CFC | Cooperative educational fund | ||||
Equity | ||||
Allocation of net earnings | $ 1,000 | 1,000 | ||
CFC | Cooperative educational fund | Minimum | ||||
Equity | ||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 0.25% | |||
CFC | Patronage Capital Allocated | ||||
Equity | ||||
Retirement/allocation of net earnings authorized | $ (48,000) | (45,000) | ||
Percentage of prior year's allocated patronage capital required to be retired | 50.00% | |||
Percentage of prior year's allocated patronage capital required to be held | 50.00% | |||
Period for which prior year's allocated patronage capital is required to be held | 25 years | |||
Allocation of net earnings | $ 95,000 | 90,000 | ||
Retirement of allocated net earnings, percentage | 50.00% | |||
CFC | Members' capital reserve | ||||
Equity | ||||
Allocation of net earnings | $ 57,000 | $ 43,000 | ||
RTFC | ||||
Equity | ||||
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50.00% | |||
Percentage of ownership by parent | 100.00% | |||
Percentage of ownership by minority owners | 100.00% | |||
RTFC | Minimum | ||||
Equity | ||||
Percentage of retirement of allocated net earnings in cash | 20.00% | |||
RTFC | Cooperative educational fund | Minimum | ||||
Equity | ||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 1.00% | |||
NCSC | ||||
Equity | ||||
Minimum percentage of paid-in-capital required to be maintained under District of Columbia cooperative law | 50.00% | |||
NCSC | Cooperative educational fund | Minimum | ||||
Equity | ||||
Minimum percentage of net earnings to be allocated to cooperative education fund as per bylaws of the entity | 0.25% |
Employee Benefits Additional In
Employee Benefits Additional Information (Details) | 12 Months Ended | |||||
May 31, 2018USD ($)salary | May 31, 2017USD ($) | May 31, 2016USD ($) | Jan. 01, 2018 | Jan. 01, 2017 | Dec. 01, 2016 | |
Defined benefit multiemployer master pension plan | ||||||
Percentage of joint and surviving spouse annuity | 50.00% | |||||
Annuity factor (as a percent) | 1.70% | |||||
Number of highest base salaries | salary | 5 | |||||
Liability, Defined Benefit Pension Plan | $ 4,000,000 | |||||
Contributions made by CFC | 5,000,000 | $ 4,000,000 | $ 4,000,000 | |||
Limit on the compensation to be used in the calculation of pension benefits | 275,000 | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | $ (313,000) | 1,535,000 | 31,000 | |||
401(k) defined contribution savings program | ||||||
Number of consecutive months considered for eligible period of service | 12 months | |||||
Maximum matching contributions by CFC as a percentage of employee's salary | 2.00% | |||||
Minimum employee contribution (as a percent) | 2.00% | |||||
Contributions made by CFC | $ 1,000,000 | 1,000,000 | 1,000,000 | |||
Accumulated other comprehensive income | $ 8,544,000 | $ 13,175,000 | $ 1,058,000 | |||
Minimum | ||||||
Defined benefit multiemployer master pension plan | ||||||
Funded status, more than 80% (as a percent) | 80.00% | 80.00% | 80.00% | |||
401(k) defined contribution savings program | ||||||
Period of service in either the first 12 consecutive months or first full calendar year of employment for eligibility of pension plan | 1000 hours | |||||
Maximum | ||||||
Defined benefit multiemployer master pension plan | ||||||
Contributions made by CFC as a percentage of total contributions by all participating employers | 5.00% | 5.00% | 5.00% | |||
Pension Restoration Plan | ||||||
Defined benefit multiemployer master pension plan | ||||||
Defined Contribution Plan, Number of Employees | 3 | |||||
Executive Benefit Restoration Plan | ||||||
Defined benefit multiemployer master pension plan | ||||||
Pension expense | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
Defined Contribution Plan, Number of Employees | 7 | |||||
Unrealized Losses Defined Benefit Plan | ||||||
Defined benefit multiemployer master pension plan | ||||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | $ (194,000) | (1,535,000) | ||||
401(k) defined contribution savings program | ||||||
Accumulated other comprehensive income | $ (2,230,000) | $ (2,543,000) | $ (1,008,000) |
Guarantees Guarantees Outstandi
Guarantees Guarantees Outstanding (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | |
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | $ 805,161 | $ 889,617 | |
Long-term tax-exempt bonds | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | [1] | 316,985 | 468,145 |
Letters of credit | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | [2] | 343,970 | 307,321 |
Other guarantees | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 144,206 | 114,151 | |
CFC | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 793,156 | 874,920 | |
CFC | Distribution | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 201,993 | 126,188 | |
CFC | Power supply | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 587,837 | 743,678 | |
CFC | Statewide and associate | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 3,326 | 5,054 | |
NCSC | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 1,574 | 1,574 | |
RTFC | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | $ 10,431 | $ 13,123 | |
[1] | Represents the outstanding principal amount of long-term fixed-rate and variable-rate guaranteed bonds. | ||
[2] | Reflects our maximum potential exposure for letters of credit. |
Guarantees Guarantees Maturitie
Guarantees Guarantees Maturities (Details) - Guarantee Obligations $ in Thousands | May 31, 2018USD ($) |
Guarantor Obligations [Line Items] | |
2,018 | $ 265,684 |
2,019 | 66,142 |
2,020 | 121,700 |
2,021 | 27,515 |
2,022 | 160,541 |
Thereafter | 163,579 |
Contractual Obligation | $ 805,161 |
Guarantees Additional Informati
Guarantees Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | ||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | $ 805,161 | $ 889,617 | |
Guarantee Obligations Unsecured | $ 344,000 | $ 297,000 | |
Guarantee Obligations Unsecured Commitment as Percentage of Total Commitment | 43.00% | 33.00% | |
Guarantee Liability Recorded | $ 11,000 | $ 15,000 | |
Guaranty Liabilities Contingent | 1,000 | 1,000 | |
Guaranty Liabilities | 10,000 | 14,000 | |
Variable rate | |||
Guarantor Obligations [Line Items] | |||
Guarantee Obligations Liquidity Provided to Member Carrying Value | 250,000 | ||
Other guarantees | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 144,206 | 114,151 | |
Guarantor Obligations, Maximum Exposure, Undiscounted | 145,000 | 115,000 | |
Financial Standby Letter of Credit | Adjustable and Floating Rate Tax Exempt Bonds | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 0 | ||
Performance Guarantee | Master Letter of Credit | |||
Guarantor Obligations [Line Items] | |||
Letter of Credit Facility Maximum Additional Amount Potentially Required to be Issued | 67,000 | ||
Financial guarantees | Fixed rate | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 67,000 | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | 95,000 | ||
Financial guarantees | Variable rate | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 250,000 | 400,000 | |
Letters of credit | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | [1] | 343,970 | 307,321 |
Guarantee Obligations Secured | 120,000 | 125,000 | |
Letters of credit | Adjustable and Floating Rate Tax Exempt Bonds | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | 76,000 | ||
Long-term tax-exempt bonds | |||
Guarantor Obligations [Line Items] | |||
Guarantor Obligations, Current Carrying Value | [2] | $ 316,985 | $ 468,145 |
[1] | Reflects our maximum potential exposure for letters of credit. | ||
[2] | Represents the outstanding principal amount of long-term fixed-rate and variable-rate guaranteed bonds. |
Fair Value Measurement Fair Val
Fair Value Measurement Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | $ 230,999 | $ 166,615 | $ 204,540 | $ 248,836 |
Cash and Cash Equivalents, Fair Value Disclosure | 230,999 | 166,615 | ||
Restricted cash | 7,825 | 21,806 | ||
Time deposits | 101,000 | 226,000 | ||
Time Deposits, At Fair Value | 101,000 | 226,000 | ||
Available for sale, at fair value | 89,332 | 92,554 | ||
Debt Securities, Held-to-maturity | 519,519 | 0 | ||
Debt Securities, Held-to-maturity, Fair Value | 515,546 | |||
Deferred Compensation Plan Assets | 5,194 | 4,693 | ||
Loans to members, net | 25,159,807 | 24,329,668 | ||
Loans Receivable, Fair Value Disclosure | 24,167,886 | 24,182,724 | ||
Accrued interest receivable | 127,442 | 111,493 | ||
Debt service reserve restricted funds | 17,151 | 17,151 | ||
Derivative assets | 244,526 | 49,481 | ||
Short-term Debt | 3,795,910 | 3,342,900 | ||
Short-term Debt, Fair Value | 3,795,799 | 3,342,990 | ||
Long-term Debt | 18,714,960 | 17,955,594 | ||
Long-term Debt, Fair Value | 18,909,276 | 18,744,331 | ||
Accrued interest payable | 149,284 | 137,476 | ||
Guaranty Liabilities Contingent and Noncontingent | 10,589 | 15,241 | ||
Guarantees, Fair Value Disclosure | 10,454 | 16,204 | ||
Derivative liabilities | 275,932 | 385,337 | ||
Subordinated deferrable debt | 742,410 | 742,274 | ||
Subordinated Debt Obligations, Fair Value Disclosure | 766,088 | 788,079 | ||
Members Subordinated Certificates, Total | 1,379,982 | 1,419,025 | ||
Members Subordinated Certificates, At Fair Value | 1,380,004 | 1,419,048 | ||
Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 230,999 | 166,615 | ||
Restricted cash | 7,825 | 21,806 | ||
Available for sale, at fair value | 89,332 | |||
Deferred Compensation Plan Assets | 5,194 | 4,693 | ||
Debt service reserve restricted funds | 17,151 | 17,151 | ||
Short-term Debt, Fair Value | 0 | 0 | ||
Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Time Deposits, At Fair Value | 101,000 | 226,000 | ||
Debt Securities, Held-to-maturity, Fair Value | 515,546 | |||
Accrued interest receivable | 127,442 | 111,493 | ||
Derivative assets | 244,526 | 49,481 | ||
Short-term Debt, Fair Value | 3,695,799 | 3,342,990 | ||
Long-term Debt, Fair Value | 11,373,216 | 11,215,290 | ||
Accrued interest payable | 149,284 | 137,476 | ||
Derivative liabilities | 275,932 | 385,337 | ||
Subordinated Debt Obligations, Fair Value Disclosure | 766,088 | 788,079 | ||
Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Loans Receivable, Fair Value Disclosure | 24,167,886 | 24,182,724 | ||
Short-term Debt, Fair Value | 100,000 | |||
Long-term Debt, Fair Value | 7,536,060 | 7,529,041 | ||
Guarantees, Fair Value Disclosure | 10,454 | 16,204 | ||
Members Subordinated Certificates, At Fair Value | 1,380,004 | 1,419,048 | ||
Recurring basis | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred Compensation Plan Assets | 5,194 | 4,693 | ||
Derivative assets | 244,526 | 49,481 | ||
Derivative liabilities | 275,932 | 385,337 | ||
Recurring basis | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Deferred Compensation Plan Assets | 4,693 | |||
Recurring basis | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 244,526 | 49,481 | ||
Derivative liabilities | $ 275,932 | $ 385,337 |
Fair Value Measurement Recurrin
Fair Value Measurement Recurring Fair Value Measurements (Details) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment securities | $ 608,851 | $ 92,554 |
Investments, Fair Value Disclosure | 92,554 | |
Deferred Compensation Plan Assets | 5,194 | 4,693 |
Derivative assets | 244,526 | 49,481 |
Derivative liabilities | 275,932 | 385,337 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, Fair Value Disclosure | 92,554 | |
Deferred Compensation Plan Assets | 5,194 | 4,693 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 244,526 | 49,481 |
Derivative liabilities | 275,932 | 385,337 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments, Fair Value Disclosure | 89,332 | 92,554 |
Deferred Compensation Plan Assets | 5,194 | 4,693 |
Derivative assets | 244,526 | 49,481 |
Derivative liabilities | 275,932 | 385,337 |
Recurring basis | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investment securities | 89,332 | 92,554 |
Deferred Compensation Plan Assets | 4,693 | |
Recurring basis | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 244,526 | 49,481 |
Derivative liabilities | $ 275,932 | $ 385,337 |
Fair Value Measurement Addition
Fair Value Measurement Additional Information (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Fair Value Disclosures [Abstract] | ||
Debt Securities, Held-to-maturity | $ 519,519,000 | $ 0 |
Fair Value Assets on a Nonrecurring Basis | 0 | 0 |
Fair Value Liabilities on a Nonrecurring Basis | $ 0 | $ 0 |
Business Segments Segment Resul
Business Segments Segment Results and Total Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |||
Statement of operations: | ||||||
Interest income | $ 1,077,357 | $ 1,036,634 | $ 1,012,636 | |||
Interest expense | [1],[2] | (792,735) | (741,738) | (681,850) | ||
Net interest income | 284,622 | 294,896 | 330,786 | |||
Provision (benefit) for loan losses | 18,575 | (5,978) | 646 | |||
Net interest income after provision for loan losses | 303,197 | 288,918 | 331,432 | |||
Non-interest income: | ||||||
Fee and other income | 17,578 | 19,713 | 21,785 | |||
Gain (Loss) on Sale of Derivatives | (74,281) | (84,478) | (88,758) | |||
Unrealized Gain (Loss) on Derivatives | 306,002 | 179,381 | (221,083) | |||
Derivative gains (losses) | 231,721 | 94,903 | (309,841) | |||
Results of operations of foreclosed assets | 0 | (1,749) | (6,899) | |||
Total non-interest income | 249,299 | 112,867 | (294,955) | |||
Non-interest expense: | ||||||
General and administrative expenses | (90,884) | (86,226) | (86,343) | |||
Gains (losses) on early extinguishment of debt | 0 | 192 | (333) | |||
Other non-interest expense | (1,943) | (1,948) | (1,260) | |||
Total non-interest expense | (92,827) | (87,982) | (87,936) | |||
Income (loss) prior to income taxes | 459,669 | 313,803 | (51,459) | |||
Income tax expense | (2,305) | (1,704) | (57) | |||
Net income (loss) | 457,364 | 312,099 | (51,516) | |||
Assets: | ||||||
Loans and Leases Receivable, Net of Deferred Income | [3] | 25,167,494 | 24,356,330 | |||
Deferred origination costs | 11,114 | 10,714 | [3] | |||
Less: Allowance for loan losses | (18,801) | (37,376) | (33,258) | $ (33,690) | ||
Loans to members, net | 25,159,807 | 24,329,668 | ||||
Other assets | 1,530,397 | 876,024 | ||||
Total assets | 26,690,204 | 25,205,692 | ||||
CFC | ||||||
Statement of operations: | ||||||
Interest income | 1,067,016 | 1,026,302 | 1,001,241 | |||
Interest expense | (791,836) | (740,695) | (680,661) | |||
Net interest income | 275,180 | 285,607 | 320,580 | |||
Provision (benefit) for loan losses | 18,575 | 5,978 | (646) | |||
Net interest income after provision for loan losses | 293,755 | 279,629 | 321,226 | |||
Non-interest income: | ||||||
Fee and other income | 17,369 | 18,858 | 21,164 | |||
Gain (Loss) on Sale of Derivatives | (71,906) | (81,489) | (85,316) | |||
Unrealized Gain (Loss) on Derivatives | 301,694 | 175,379 | (220,827) | |||
Derivative gains (losses) | 229,788 | 93,890 | (306,143) | |||
Results of operations of foreclosed assets | 1,749 | (6,899) | ||||
Total non-interest income | 247,157 | 110,999 | (291,878) | |||
Non-interest expense: | ||||||
General and administrative expenses | (83,783) | (78,965) | (77,407) | |||
Gains (losses) on early extinguishment of debt | 192 | (333) | ||||
Other non-interest expense | (1,943) | (1,949) | (1,261) | |||
Total non-interest expense | (85,726) | (80,722) | (79,001) | |||
Income (loss) prior to income taxes | 455,186 | 309,906 | (49,653) | |||
Net income (loss) | 455,186 | 309,906 | (49,653) | |||
Assets: | ||||||
Loans and Leases Receivable, Net of Deferred Income | 25,134,384 | 24,319,673 | ||||
Deferred origination costs | 11,114 | 10,714 | ||||
Less: Allowance for loan losses | (18,801) | (37,376) | ||||
Loans to members, net | 25,126,697 | 24,293,011 | ||||
Other assets | 1,520,118 | 865,867 | ||||
Total assets | 26,646,815 | 25,158,878 | ||||
Other | ||||||
Statement of operations: | ||||||
Interest income | 49,182 | 43,502 | 45,798 | |||
Interest expense | (39,740) | (34,250) | (35,665) | |||
Net interest income | 9,442 | 9,252 | 10,133 | |||
Net interest income after provision for loan losses | 9,442 | 9,252 | 10,133 | |||
Non-interest income: | ||||||
Fee and other income | 1,372 | 3,528 | 4,350 | |||
Gain (Loss) on Sale of Derivatives | (2,375) | (2,989) | (3,442) | |||
Unrealized Gain (Loss) on Derivatives | (4,308) | 4,002 | (256) | |||
Derivative gains (losses) | 1,933 | 1,013 | (3,698) | |||
Total non-interest income | 3,305 | 4,541 | 652 | |||
Non-interest expense: | ||||||
General and administrative expenses | (7,101) | (7,261) | (8,936) | |||
Other non-interest expense | (1,163) | (2,635) | (3,655) | |||
Total non-interest expense | (8,264) | (9,896) | (12,591) | |||
Income (loss) prior to income taxes | 4,483 | 3,897 | (1,806) | |||
Income tax expense | (2,305) | (1,704) | (57) | |||
Net income (loss) | 2,178 | 2,193 | (1,863) | |||
Assets: | ||||||
Loans and Leases Receivable, Net of Deferred Income | 1,149,575 | 968,343 | ||||
Loans to members, net | 1,149,575 | 968,343 | ||||
Other assets | 106,455 | 104,643 | ||||
Total assets | 1,256,030 | 1,072,986 | ||||
Elimination | ||||||
Statement of operations: | ||||||
Interest income | (38,841) | (33,170) | (34,403) | |||
Interest expense | 38,841 | 33,207 | 34,476 | |||
Net interest income | 0 | 37 | 73 | |||
Net interest income after provision for loan losses | 0 | 37 | 73 | |||
Non-interest income: | ||||||
Fee and other income | (1,163) | (2,673) | (3,729) | |||
Derivative gains (losses) | 0 | 0 | 0 | |||
Total non-interest income | (1,163) | (2,673) | (3,729) | |||
Non-interest expense: | ||||||
General and administrative expenses | 0 | 0 | 0 | |||
Other non-interest expense | 1,163 | 2,636 | 3,656 | |||
Total non-interest expense | 1,163 | 2,636 | $ 3,656 | |||
Assets: | ||||||
Loans and Leases Receivable, Net of Deferred Income | (1,116,465) | (931,686) | ||||
Loans to members, net | (1,116,465) | (931,686) | ||||
Other assets | (96,176) | (94,486) | ||||
Total assets | $ (1,212,641) | $ (1,026,172) | ||||
[1] | (1) Includes amortization of debt discounts and debt issuance costs, which are generally deferred and recognized as interest expense using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized as interest expense immediately as incurred. | |||||
[2] | (2) Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Depending on the nature of the fee, amounts may be deferred and recognized as interest expense ratably over the term of the arrangement or recognized immediately as incurred. | |||||
[3] | The interest rate on unadvanced loan commitments is not set until an advance is made; therefore, all long-term unadvanced loan commitments are reported as variable-rate. However, the borrower may select either a fixed or a variable rate when an advance on a commitment is made. |
Business Segments Additional In
Business Segments Additional Information (Details) | 12 Months Ended |
May 31, 2018operating_segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 3 |