Company: AGM-PH
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000845877-25-000033
Chunk: 179

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 7
Chunk 179
---
 However, the accrual 

61

of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.

Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

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

Results of Operations

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

62

Table 6

Reconciliation of Net Income Attributable to Common Stockholders to Core EarningsFor the Years Ended December 31,202420232022(in thousands, except per share amounts)Net income attributable to common stockholders$180,428 $172,838 $150,979 Less reconciling items:   Gains on undesignated financial derivatives due to fair value changes (see Table 13)3,344 5,142 13,495 Gains/(losses) on hedging activities due to fair value changes11,548 (5,394)5,343 Unrealized (losses)/gains on trading securities(85)1,979 (917)Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value45 175 39 Net effects of terminations or net settlements on financial derivatives(1,666)227 15,794 Issuance costs on the retirement of preferred stock(1,619)— — Income tax effect related to reconciling items(2,769)(447)(7,089)Sub-total8,798 1,682 26,665 Core