2022

Annual Report 

of the Farm Credit Administration

Regulator of the Farm Credit System
ii | Farm Credit Administration

Contents

About this report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

About FCA and the Farm Credit System . . . . . . . . . . . . . . . . . . . . . . . . 3

Examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Our authorities and governance . . . . . . . . . . . . . . . . . . . . . . . . . 4

The Farm Credit System Insurance Corporation . . . . . . . . . . . . . 4

Message from the board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Our priorities and progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Current conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

In conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

FCS banks and associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FCS structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Borrowers served . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

System funding for other lenders . . . . . . . . . . . . . . . . . . . . . . . . 15

Farm debt and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Financial condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Serving young, beginning, and small farmers and ranchers . . . . . . . 29

Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Examining and regulating the banks and associations . . . . . . . . . . . . 35

Examination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Farmer Mac . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Examining and regulating Farmer Mac . . . . . . . . . . . . . . . . . . . 43

Financial condition of Farmer Mac . . . . . . . . . . . . . . . . . . . . . . 44

FCA’s organization and leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Organization of FCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

FCA’s leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Accessibility: 

This annual report is illustrated with photos of American farmers and ranchers of a range of ages, 

genders, races and abilities, including African American, Asian, Caucasian, and disabled (amputee) in 

agricultural settings, including wheat harvest, orchard, cattle ranching, and nursery operation. Farm 

animals of all types are also illustrated. These photographs are artifacted, but essential graphs and 

chart graphics are described in readable body text and, when necessary, in Alt Text.
2022 FCA Annual Report | 1

About this report

This is the Farm Credit Administration’s annual report to 

Congress. Section 5.17(a)(3) of the Farm Credit Act of 1971, as 

amended, requires this report to include the following:

• An annual report to Congress on the condition of the Farm 

Credit System (FCS or System) and its institutions and on the 

manner and extent to which the objectives of the Farm Credit 

Act are being carried out

• A summary and analysis of the annual reports submitted to 

us by the FCS banks regarding programs for serving young, 

beginning, and small farmers and ranchers

The report also includes information about our agency and the work 

we do to ensure that the System continues to meet its mission and to 

operate safely and soundly. 
FCA’s mission is to ensure that System 

institutions and Farmer Mac are safe, 

sound, and dependable sources of credit 

and related services for all creditworthy 

and eligible persons in agriculture 

and rural America.
2022 FCA Annual Report | 3

About FCA and the Farm Credit System

1 Although Farmer Mac is an FCS institution under the Farm Credit Act, we discuss Farmer Mac separately from the 

other institutions of the FCS. Therefore, throughout this report, unless Farmer Mac is explicitly mentioned, the Farm 

Credit System refers only to the banks and associations of the System. For more information about Farmer Mac, see 

page 43.

The Farm Credit Administration 

is an independent agency in the executive 

branch of the U.S. government. We are 

responsible for regulating and supervising 

the Farm Credit System (its banks, associations, and related entities) and the Federal 

Agricultural Mortgage Corporation (Farmer Mac).1

The System is a nationwide network of 

borrower-owned financial institutions that 

provide credit to farmers, ranchers, residents of rural communities, agricultural 

and rural utility cooperatives, and other 

eligible borrowers.

Farmer Mac is a federally chartered corporation that provides a secondary market 

for agricultural real estate loans, government-guaranteed portions of certain loans, 

rural housing mortgage loans, and eligible 

rural utility cooperative loans.

FCA’s mission is to ensure that System 

institutions and Farmer Mac are safe, 

sound, and dependable sources of credit 

and related services for all creditworthy 

and eligible persons in agriculture and 

rural America. We have two primary functions: examination and regulation. 

Examination 

We conduct onsite examinations at every 

System institution on a regular basis to 

• evaluate its financial condition; 

• evaluate its compliance with laws and 

regulations; 

• identify any risks that may affect the 

institution or the System as a whole; 

and 

• ensure it is fulfilling its public mission 

to serve the credit and related needs 

of farmers and ranchers, including 

those who are young, beginning, or 

small. 

If a System institution violates a law or 

regulation or operates in an unsafe or unsound manner, we use our supervisory and 

enforcement authorities to bring about 

appropriate corrective action. 

Regulation 

We issue policies and regulations governing how System institutions conduct their 

business and interact with borrowers. 

These policies and regulations focus on 

• protecting System safety and 

soundness; 

• implementing the Farm Credit Act; 

• providing minimum requirements for 

lending, related services, investments, 

capital, and mission; and 

• ensuring adequate financial disclosure and governance. 

We also approve corporate charter 

changes, System debt issuances, and other 

financial and operational matters. 
4 | Farm Credit Administration

Our authorities and governance 

FCA derives its powers and authorities 

from the Farm Credit Act of 1971, as 

amended (12 U.S.C. 2001–2279cc). The 

U.S. Senate Committee on Agriculture, 

Nutrition, and Forestry and the U.S. House 

of Representatives Committee on Agriculture oversee FCA and the FCS. 

FCA does not receive a federal appropriation. We maintain a revolving fund 

financed primarily by assessments from 

the institutions we regulate. Other sources 

of income for the revolving fund are interest earned on investments with the U.S. 

Treasury and reimbursements for services 

we provide to federal agencies and others. 

FCA’s access to the revolving fund, however, is regulated through congressional 

appropriations legislation.

FCA is governed by a full-time, 

three-person board whose members are 

appointed by the president of the United States with the advice and consent 

of the Senate. Board members serve a 

six-year term and may remain on the 

board until a successor is appointed. The 

president designates one member as 

chairman of the board, who serves in that 

capacity until the end of his or her term. 

The chairman also serves as our chief 

executive officer. For information about 

our current board, see page 48. 

The Farm Credit System Insurance 

Corporation 

FCA board members also serve as the 

board of directors for the Farm Credit System Insurance Corporation (FCSIC), which 

was established by the Agricultural Credit 

Act of 1987 in the wake of the agricultural 

credit crisis of the 1980s. The purpose of 

FCSIC is to protect investors in Systemwide 

debt securities by insuring the timely payment of principal and interest on obligations issued by FCS banks. 

It fulfills this purpose by maintaining 

the Farm Credit Insurance Fund, a reserve 

that represents the corporation’s equity. 

FCSIC reports the balance of the Insurance Fund in its quarterly financial statements, which are posted on its website at 

www.fcsic.gov. 

6 | Farm Credit Administration

Message from the board

As members of the Farm Credit Administration board, we are pleased 

to present FCA’s 2022 annual report. The Farm Credit System (System), which 

FCA oversees and regulates, has faced many challenges since September 2022, 

when we published our last annual report, but we can report with confidence 

that the System remains fundamentally safe and sound. It is well-positioned to 

meet the credit needs of American agriculture and rural communities. 

We provide this message from the board as 

an introduction to the 2022 annual report. 

We outline our priorities and the progress 

we’ve made toward achieving them. We 

also describe current conditions (as of late 

summer 2023) in the Farm Credit System, 

Farmer Mac, and in the general and farm 

economies. The balance of this report focuses on results from 2022.

Our priorities and progress 

One important development since publication of our last annual report is the filling 

of the vacancy on the FCA board. In October 2022, we welcomed Vincent Logan, 

a member of the Osage Nation and the 

agency’s first openly LGBTQ board member. Later that month President Biden appointed Mr. Logan to the position of board 

chairman and CEO. 

Chairman Logan previously served 

under the Obama Administration as the 

special trustee for American Indians at the 

U.S. Department of the Interior. He has 

worked in New York both as a lawyer, practicing in aircraft, shipping, and equipment 

finance, and as an investment advisor, focusing on institutional asset management 

and permanent fund development. He 

has also served as a director to the Federal Reserve Bank of St. Louis, Little Rock 

Branch. The board and FCA have already 

benefitted greatly from the experience and 

perspective of our newest member. 

Under Chairman Logan’s leadership, 

the agency has been emphasizing good 

governance and innovation; diversity and 

inclusion; service to young, beginning, 

and small (YBS) farmers and ranchers; and 

— as always — the safety and soundness 

of the Farm Credit System. The following 

provides more information about each of 

these priorities.

Good governance and innovation

Good governance at Farm Credit System 

institutions has long been an important 

board priority. System institutions must be 

governed effectively to attract a wide range 

of investors to Farm Credit securities, 

which System banks sell to raise funds to 

lend to farmers, ranchers, and other eligible, creditworthy borrowers. 

In August of 2021, FCA took action to 

support good governance by finalizing 

new regulations on standards of conduct. 

These regulations, which took effect 

in January 2023, require each System 
2022 FCA Annual Report | 7

institution to have or develop a standards 

of conduct program in order to integrate 

ethical values into its corporate culture. 

FCA examiners are now evaluating the implementation of these regulations, and we 

look forward to hearing their findings. 

Over the past year, Chairman Logan has 

visited with System institutions, emphasizing the importance of good governance 

and discussing the value of innovation 

with System leaders. New tools, such as 

artificial intelligence and cloud computing, are transforming the financial world, 

and many customers expect their financial 

institutions to offer services that rely on 

innovative solutions and best practices. At 

the same time, we recognize that the innovations that are appropriate for large institutions will not necessarily be appropriate 

for small associations.

To remain competitive in this evolving 

field, the System must embrace appropriate innovations while remaining mindful 

of associated risks. Good governance, 

which includes strong internal controls, 

can help mitigate the risks of innovation. 

In his conversations with System leaders, 

Chairman Logan has encouraged them to 

pursue innovation and good governance as 

twin priorities. Doing so will allow them 

to profit from the benefits of innovation 

while preserving the safety and soundness 

of their institutions. 

Diversity and inclusion

Over the years, FCA has received numerous accolades for its diversity and inclusion efforts. For example, in 2019, based 

on the Federal Employee Viewpoint Survey 

conducted by the Office of Personnel 

Management and the annual ratings from 

the Partnership for Public Service, FCA 

was ranked first among small agencies 

on efforts to increase diversity. We were 

again ranked first in this category in 2022. 

And we’re pleased to report that Chairman 

Logan, with the full support of the board, 

has been strengthening our diversity and 

inclusion efforts still further. 

One of his first actions was to elevate 

the status of our Office of Equal Employment Opportunity and Inclusion, to redirect its reporting structure directly to the 

Office of the Chairman, and to increase the 

resources available to it. He added a staff 

position to the office and filled the position 

by hiring a subject-matter expert to focus 

on recruiting and outreach to a variety 

of groups, including veterans and Native 

Americans. He also increased the diversity 

FCA Board Chairman 

and CEO Vincent 

Logan (seated), Board 

Member Glen Smith 

(left), and FCA Board 

Member Jeffery Hall.
8 | Farm Credit Administration

of the agency’s senior staff team by hiring 

FCA’s first-ever Latina chief of staff.

In July, Chairman Logan issued an informational memorandum on diversity and 

inclusion to the institutions we regulate. 

Titled “Revisiting diversity and inclusion 

10 years after implementation of the business planning rule,” the memorandum 

reviews the requirements of our business 

planning regulations and identifies ways 

for System institutions to strengthen their 

service to underserved groups. The chairman has also emphasized diversity and 

inclusion in his many visits with System 

institutions since joining the agency.

Service to YBS producers 

Another priority, which often overlaps 

with our diversity and inclusion objectives, 

is our commitment to strengthening the 

System’s service to young, beginning, and 

small farmers and ranchers. We’ve continued to make good progress in this area.

Members of staff have reviewed the 

many comments we received on the proposed YBS rule, which we issued in May 

2022. They are addressing these comments 

in a draft final rule, which is on track to 

be published this fall, as scheduled in our 

most recent submission for the Unified 

Agenda. 

As we’ve stated in previous annual reports, one of our key objectives has been 

to modernize YBS data collection. To that 

end, we plan to transition next year to a 

new reporting system that will give us a 

clearer picture of YBS lending by allowing 

us to better break down and categorize 

loan data. It will also provide greater consistency in reporting, leverage the Farm 

Credit System’s existing data systems, and 

reduce regulatory reporting burden for 

institutions over the long term. 

2 Unlike the banks that failed earlier this year, System banks should not be susceptible to bank runs because they 

do not accept deposits.

In addition, we are modernizing the 

criteria by which producers qualify for 

the small-farmer category. Currently, we 

define small farmers and ranchers as 

those with gross annual sales of less than 

$250,000. Since the value of $250,000 is 

much less today than it was when we first 

implemented the YBS reporting requirements, we will raise this figure to $350,000 

beginning next year in line with the U.S. 

Department of Agriculture’s criteria for 

small farmers and ranchers. 

We’re excited about these improvements and look forward to seeing the benefits of the enhanced data collection. The 

improvements will allow us to measure 

YBS lending more accurately, which will in 

turn help us better evaluate strategies for 

strengthening YBS service and the effectiveness of each institution’s YBS program. 

Safety and soundness

For the regulator of the Farm Credit System, no priority can be greater than its 

safety and soundness. As we saw this past 

spring, unsafe banking practices can lead 

to bank failures, and failures of large institutions can have a destabilizing effect on 

the whole economy.2

To keep System institutions safe and 

sound, our examiners continually monitor 

System institutions for signs of weakness. 

We also closely track developments in 

the economy, such as the recent interest 

rate increases, to ensure that institutions 

have the necessary capital and risk management processes to withstand difficult 

times.

Our National Oversight Plan for 2023 

calls for FCA examiners to pay special 

attention to the institutions’ strategic 

business plans, particularly with respect to 

capital adequacy and portfolio planning. 
2022 FCA Annual Report | 9

Our examiners are reviewing plans to 

make sure that each institution’s capitalization goals and strategies reflect the current challenges facing the institution.

Our examiners are also evaluating institutions’ stress-testing scenarios to make 

sure the scenarios can accurately capture 

the impacts of macroeconomic headwinds 

on the financial performance of borrowers, which in turn affects the portfolio 

quality of System lenders. In addition, FCA 

examiners are reviewing the guidance that 

institutions are providing to their staff 

regarding loan underwriting and credit 

administration to make sure this guidance 

adequately addresses the increased risks 

of the current environment. 

The next section of this message describes many of the risks that we’re monitoring as we continue to oversee the safety 

and soundness of the System.

Current conditions 

Following is a brief update about current 

conditions in the Farm Credit System and 

Farmer Mac, as well as conditions in the 

general and farm economies. 

The Farm Credit System 

Despite rising interest rates, weaker commodity prices, and higher input costs, 

the Farm Credit System reported solid 

financial results for the first half of 2023, 

including favorable earnings, low portfolio 

credit risk, and a strong capital base. For 

the six months ended June 30, System net 

income equaled $3.51 billion, down from 

$3.57 billion for the same period a year 

ago. Higher provisions for credit losses 

and noninterest expenses, largely offset by 

increases in net interest income and noninterest income, accounted for the slight 

drop in net income. 

The System’s loan portfolio continued 

to perform well. Although nonperforming 

assets (nonaccrual loans, accruing loans 

that are 90 days or more past due, and other property owned) were up slightly, from 

0.47% of outstanding loans at Dec. 31 to 

0.57% at June 30, the overall level remains 

low. Nonaccrual loans, which represent 

the largest share of nonperforming assets, 

increased to $2.0 billion at June 30, compared with $1.3 billion at Dec. 31. Loans 

classified less than acceptable were 3.8% 

of the System’s loan portfolio, up from 

3.6% a year ago. 

A strong capital base ensures that 

System institutions have the risk-bearing 

capacity to support U.S. farmers and 

ranchers during uncertain times. At June 

30, System capital totaled $71.2 billion, 

compared with $68.6 billion at Dec. 31. 

Capital as a percentage of total assets was 

14.7%, up from 14.4% at year-end. Regulatory capital ratios at all System banks and 

associations were well above minimum 

capital requirements.

Having strong capital levels and ample 

liquidity helps protect the System from 

capital market disruptions, such as the 

one that occurred following the bank failures in spring 2023. Our staff monitored 

the System closely during this period. 

Fortunately, it experienced no significant 

impacts from these failures, and we expect it to continue to have ready access to 

the capital markets that supply the funds 

System institutions lend to farmers, ranchers, and other eligible borrowers. 

Farmer Mac 

Farmer Mac, also part of the Farm Credit 

System, remains safe and sound. For the 

first half of 2023, its outstanding business 

volume grew from $25.9 billion to $26.7 

billion, or 3.1%. The Agricultural Finance 

portfolio, which includes Farm & Ranch 

and Corporate AgFinance, was the primary contributor to this growth, increasing 

by $0.5 billion (2.4%) over the six-month 

For the regulator 

of the Farm Credit 

System,

no priority can 

be greater than 

its safety and 

soundness.
10 | Farm Credit Administration

period. Rural Infrastructure Finance volume, which includes rural utility and renewable energy volume, increased by $0.4 

billion (5.3%). 

Farmer Mac’s core capital was $1.4 billion as of June 30, 2023, up 9.4% for the 

12-month period, which is $566.3 million 

above the minimum requirement. Farmer 

Mac’s credit risk remained stable for the 

six-month period. Loans classified as 90 

days past due increased from 0.41% to 

0.42% of the Agricultural Finance mortgage loan portfolio. As a percentage of 

total outstanding agricultural finance 

volume, special-mention and substandard 

volume increased from 4.7% at year-end 

2022 to 5.1% six months later. 

The general economy 

Inflation took center stage in 2022. Global supply chains and U.S. labor markets 

struggled to adjust to surging consumer 

demand. Russia’s invasion of Ukraine 

introduced substantial uncertainty into 

global energy and commodity markets, 

pushing prices up further. The Federal Reserve responded by raising interest rates 

to the highest level since 2007. 

As of August 2023, inflation has begun 

to ease following multiple interest rate 

increases, supply chain improvements, 

and a more typical pattern in consumer 

purchases of goods and services. Consumer spending and a rebound in business spending are supporting economic 

growth.

With the unemployment rate near historic lows, the labor market continues to 

experience strong wage growth. However, 

wage increases have made labor more expensive even though a high proportion of 

the working-age population is either working or actively looking for work. 

As 2023 continues to unfold, the 

U.S. economy faces several challenges. 

Consumer spending could weaken if 

consumers rack up more debt at higher 

interest rates. Changes in consumer borrowing and debt repayment performance 

are key to economic growth this year. Also, 

weakness in the commercial real estate 

market could affect lenders with heavy 

exposure to the sector. Finally, the dollar’s continued strength reduces the cost 

of imported goods but negatively affects 

export-dependent sectors like agriculture. 

The farm economy 

For much of 2022, the U.S. food system 

had to contend with more costly inputs 

and supply chain problems, with major 

cost increases for energy, transportation, 

chemicals, equipment, and labor. Still, 

economic growth fueled demand for farm 

products domestically and internationally, 

providing critical support to commodity 

prices.

In the first half of 2023, farm prices and 

input costs have fallen from last year’s 

peaks. Crop prices declined as fears that 

the Ukraine conflict would cause global 

food shortages eased and expectations 

rose for larger crop production because 

of better weather conditions this year. 

Meanwhile, the cost of some inputs such 

as fertilizer have declined, and improved 

global supply chains have increased the 

availability of farm equipment. However, 

some costs, such as labor and interest 

expenses, remain elevated. 

For grain farmers, margins are likely 

to tighten because the reduction in commodity prices is generally expected to 

exceed declines in input costs. Producers 

and their lenders will need to be ready for 

financial pressures ahead. A positive sign 

for crop producers was a summer weather 

rally that offered an opportunity to lock in 

more attractive prices for fall harvest than 

those available earlier in the year.

As for livestock, cattle producer margins 

in 2022 were generally favorable because 
2022 FCA Annual Report | 11

strong domestic and export demand and 

limited production supported prices. 

Production declines have only accelerated 

in 2023 because the improved drought 

situation across much of the country has 

encouraged herd expansion, which limits 

beef production. In contrast, weak prices 

in the dairy, hog, and poultry sectors have 

pushed margins into the red in the first 

half of 2023. 

Government payments to farmers have 

bolstered farm income in recent years, 

with significant support from ad hoc and 

pandemic-related assistance. Under current farm programs, payments would not 

be activated until market prices drop well 

below current levels. Provisions in the 

next Farm Bill, which may not pass until 

next year, will likely affect future government assistance. 

Regardless of the course of the farm 

economy, the Farm Credit System will 

continue its vital role of providing financing at competitive rates to the agriculture 

industry. 

In conclusion 

Having described our priorities and the 

challenges facing the institutions we regulate, we will conclude with a few thoughts 

on the resources with which we address 

these priorities and challenges. As always, 

our staff is our greatest strength and our 

most valuable resource. 

While our examiners, policy analysts, 

and economists focus on our mission-critical work, our internal support teams work 

hard to ensure that we manage our finances effectively, provide the IT infrastructure 

and support we need, and continuously 

improve internal processes to maximize 

efficiency. 

Like many government agencies, we 

face the problem of losing critical institutional knowledge and expertise as 

more experienced employees retire. To 

address this problem, we focus heavily on 

our university recruitment strategy and 

our commitment to internal professional 

development and mobility.

Through leadership from our Office 

of Equal Employment Opportunity and 

Inclusion, we are recruiting from a wide 

variety of institutions of higher learning, 

including historically Black colleges and 

universities, Hispanic-serving institutions, 

and other institutions with students from 

underserved communities. We continue to 

fortify our partnership with employee-led 

groups. And our robust training program 

ensures that our new employees can acquire the knowledge and skills they need 

to grow and receive promotions as more 

senior employees retire.

After recruiting good people and training them well, we then focus on retaining 

them. Through small-group meetings, 

Chairman Logan has heard from almost 

every employee in our agency, and we as a 

board work hard to understand and meet 

the needs of all our employees. In 2022, we 

paid particular attention to retaining newly hired examiners.

As members of the FCA board, we have 

the great privilege to lead this agency and 

its dedicated staff of public servants, and 

we are grateful for the opportunity to contribute to the agency’s important public 

mission: to ensure a safe and reliable 

source of credit for American agriculture 

and rural communities. 

Vincent G. Logan

FCA Board Chairman and CEO

Jeffery S. Hall 

FCA Board Member

Glen R. Smith 

FCA Board Member
The banks and associations of the Farm 

Credit System form a network of borrowerowned cooperative financial institutions and 

service organizations serving all 50 states and 

the Commonwealth of Puerto Rico. 
2022 FCA Annual Report | 13

FCS banks and associations

The banks and associations of 

the Farm Credit System form a network 

of borrower-owned cooperative financial 

institutions and service organizations serving all 50 states and the Commonwealth 

of Puerto Rico. Created by Congress in 

1916 to provide American agriculture with 

a dependable source of credit, the FCS is 

the nation’s oldest government-sponsored 

enterprise.

As federally chartered cooperatives, 

the banks and associations of the Farm 

Credit System are limited-purpose lenders. 

Congress created them to improve “the income and well-being of American farmers 

and ranchers” by providing credit and related services for them, their cooperatives, 

and “selected farm-related businesses 

necessary for efficient farm operations.” 

Congress also gave the Farm Credit System 

the authority to support rural economic 

development by financing rural residences 

and rural utilities.

Congress formed the banks and associations of the FCS as a system of 

member-owned cooperatives to ensure 

that farmers, ranchers, and agricultural 

cooperatives can participate in the management, control, and ownership of their 

institutions. The participation of member-borrowers helps keep the institutions 

focused on serving their members’ needs.

The System helps to meet broad public 

needs by providing liquidity and competition in rural credit markets in both 

good and bad economic times. The accomplishment of this public goal benefits 

all eligible borrowers, including young, 

beginning, and small farmers, as well as 

rural homeowners.

The System obtains the money it lends 

by selling debt obligations in national and 

international money markets through 

the Federal Farm Credit Banks Funding 

Corporation. Established under the Farm 

Credit Act, the Funding Corporation issues 

and markets debt securities on behalf of 

the FCS banks to raise funds. The System’s 

debt issuances are subject to FCA approval. The U.S. government does not guarantee the obligations that the System issues.

The banks are jointly and severally 

liable for the principal and interest on all 

Systemwide debt securities. Therefore, if 

a bank is unable to pay the principal or 

interest on a Systemwide debt security 

and if the Farm Credit Insurance Fund 

has been exhausted, then FCA must call 

on all non-defaulting banks to satisfy the 

liability.

FCS structure

The System is composed of the following 

four banks:

• CoBank, ACB

• AgriBank, FCB

• AgFirst Farm Credit Bank

• Farm Credit Bank of Texas

As of July 1, 2023, these banks provide 

loans to 59 associations, which in turn 

make loans to farmers, ranchers, and other eligible borrowers. (See figure 1.) Three 

of these banks are structured as farm credit banks; the other, CoBank, is structured 
14 | Farm Credit Administration

as an agricultural credit bank with a farm 

credit bank subsidiary. 

All but one of the System’s 59 associations are structured as agricultural credit 

associations (ACAs) with two subsidiaries—a production credit association (PCA) 

and a federal land credit association 

(FLCA). The PCA primarily makes agricultural production and intermediate-term 

loans, and the FLCA primarily makes real 

estate loans. FLCAs are federal land bank 

associations that have direct-lending authority. The ACA’s parent-subsidiary structure allows the association to preserve 

the tax-exempt status of the FLCA and to 

build and use capital more efficiently. The 

remaining association (Plains Land Bank) 

is a stand-alone FLCA.

In addition to funding 17 ACAs through 

its farm credit bank, CoBank has a nationwide charter to make loans to agricultural and aquatic cooperatives and rural 

utilities, as well as to other persons or 

organizations that have transactions with, 

or are owned by, the cooperatives. CoBank 

finances U.S. agricultural exports and imports and provides international banking 

services for farmer-owned cooperatives. 

Borrowers served

Under the Farm Credit Act of 1971, as 

amended, the System has the authority, 

subject to certain conditions, to make the 

following types of loans:

Figure 1

Chartered territories of FCS banks

As of July 1, 2023

Note: As of July 1, 2023, CoBank funds 17 associations in the indicated areas and serves cooperatives nationwide; Farm Credit Bank 

of Texas funds 14 associations; AgriBank funds 12 associations; and AgFirst Farm Credit Bank funds 16 associations. The Farm Credit 

System contains a total of 63 banks and associations.
2022 FCA Annual Report | 15

• Agricultural real estate loans

• Agricultural production and intermediate-term loans (e.g., for farm 

equipment)

• Loans to producers and harvesters of 

aquatic products

• Loans to certain farmer-owned agricultural processing facilities and 

farm-related businesses

• Loans to farmer-owned agricultural 

cooperatives

• Rural home mortgages

• Loans that finance agricultural exports and imports

• Loans to rural utilities

• Loans to farmers and ranchers for 

other credit needs

Also, under its similar-entity authority, the 

System may participate with other lenders 

to make loans to those who are not eligible 

to borrow directly from the System but 

whose activities are functionally similar 

to those of eligible borrowers. Through 

these participations, the System diversifies 

its portfolio, reducing the risks associated 

with serving a single industry.

As required by law, borrowers own stock 

or participation certificates in System 

institutions. The FCS had approximately 

957,000 loans and 640,000 stockholders at 

year-end 2022. Approximately 87% of the 

stockholders were farmers or cooperatives 

with voting stock. The remaining percent 

were nonvoting stockholders, including 

rural homeowners and other financing institutions that borrow from the System.

Nationwide, the System had $373.3 billion in gross loans outstanding as of Dec. 

31, 2022. Loans for agricultural production 

and agricultural real estate purposes represented by far the largest type of lending, 

with $239.2 billion, or 64%, of the total 

dollar amount of loans outstanding. 

See figure 2.

System funding for other lenders

Other financing institutions 

Under the Farm Credit Act, System banks 

may further serve the credit needs of rural 

America by providing funding to certain 

non-System lending institutions described 

in our regulations as “other financing 

institutions” (OFIs). These include the 

following:

Figure 2

Farm Credit System lending by type

As of Dec. 31, 2022

Long-term real estate — 46.3%

Production and 

 intermediate-term — 17.8%

Processing and 

marketing — 11.3%

Loans to cooperatives — 5.2%

Agricultural export finance — 2.7%

Farm-related business — 1.6%

Lease receivables — 1.1%

Other financing institutions — 0.3%

Rural power — 7.5%

Rural communications — 3.3%

Rural water/wastewater — 1.0%

Rural homes — 1.9%

Source: 2022 Annual Information Statement of the Federal Farm Credit Banks Funding Corporation.
16 | Farm Credit Administration

• Commercial banks

• Savings institutions

• Credit unions

• Trust companies

• Agricultural credit corporations

• Other specified agricultural lenders 

that are significantly involved in 

lending to agricultural and aquatic 

producers and harvesters

As of Dec. 31, 2022, the System served 

17 OFIs, the same number as in 2021. 

Outstanding loan volume to OFIs stood at 

nearly $1.1 billion at year-end.

Syndications and loan participations with 

non-FCS lenders

In addition to the authority to provide 

services to OFIs, the Farm Credit Act gives 

FCS banks and associations the authority to partner with financial institutions 

outside the System in making loans to 

agriculture and rural America. Generally, 

System institutions partner with these 

financial institutions through loan syndications and participations to increase 

diversification and earnings (when they 

purchase volume) or to reduce credit risk 

and comply with lending limits (when they 

sell volume).

A loan syndication (or “syndicated bank 

facility”) is a large loan for which a group 

of financial institutions work together to 

provide funds. Usually, one financial institution takes the lead, acting as an agent 

for all syndicate members and serving as 

a liaison between them and the borrower. 

The System’s gross loan syndication volume grew by more than $5.9 billion over 

the past year to $32.2 billion at year-end 

2022.

Loan participations are loans in which 

two or more lenders share in providing 

loan funds to a borrower. At year-end 

2022, the System had $8.1 billion in net 

eligible-borrower loan participations with 

non-System lenders.

As noted above, FCS institutions also 

have the authority to lend to “similar-entity” 

borrowers (that is, those who are not 

eligible to borrow directly from the System 

but whose operations are functionally 

similar to those of eligible borrowers). 

This authority allows FCS institutions to 

participate with other lenders in loans to 

similar-entity borrowers. The System had 

$23.1 billion in net similar-entity loan 

participations with non-System lenders as 

of Dec. 31, 2022, up from $17.9 billion the 

prior year (figure 3). 

Farm debt and market shares 

The U.S. Department of Agriculture’s 

estimate of total farm business debt for the 

year ended Dec. 31, 2021, was $474 billion, 

up 7.4% from its $441 billion estimate for 

year-end 2020. The System’s market share 

of total farm business debt rose from 

44.4% at the end of 2020 to 45.3% at the 

end of 2021. (See figure 4. Also, please 

note that 2022 data was not available at the 

time of publication of this report. 

Except for brief periods, the FCS has 

held the largest market share of farm 

business debt secured by real estate. At 

year-end 2021, the System held 48.8% of 

this $325 billion of debt; by comparison, 

commercial banks held 31.1%. Commercial banks have historically dominated 

non-real estate farm lending. At year-end 

2021, commercial banks held 43.4% of this 

$149 billion of debt, and the System held 

37.8%.

Financial condition

The System reported strong 2022 financial 

results, including robust loan growth, 

increased earnings, and strong portfolio 
2022 FCA Annual Report | 17

Figure 3

Loan participation transactions with non-System lenders, 2012–2022

As of Dec. 31

Dollars in billions

$0

$5

$10

$15

$20

$25

Net loan participations involving eligible borrowers

Net similar-entity loan participations

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source: Farm Credit System Call Reports.

Figure 4

Estimated market shares of U.S. farm business debt

As of Dec. 31, 2021

Farmer Mac — 2.0%

Farm Service Agency — 3.2%

Life insurance companies — 4.5%

Individuals and others — 10.1%

Commercial banks — 35.0%

Farm Credit System — 45.3%

Source: FCA’s Office of Data Analytics and Economics, based on Feb. 7, 2023, data from USDA’s Economic Research Service.
18 | Farm Credit Administration

credit quality. Capital and liquidity levels 

were sound and remained well above regulatory minimums. Despite rapidly rising 

interest rates, FCS banks had reliable access to debt capital markets.

Tables 1 and 2 provide a summary of 

the System’s major financial indicators. 

For more information on the condition 

and performance of the System, see the 

2022 Annual Information Statement of the 

Farm Credit System on the website of the 

Federal Farm Credit Banks Funding Corporation. 

While the System is financially sound, 

a small number of individual FCS institutions displayed some material weaknesses 

in 2022. As the System’s regulator, we 

addressed these weaknesses by increasing 

our oversight and supervision of these 

institutions. For more information on our 

supervisory and enforcement approach, 

see pages 35 to 38. 

Significant global economic and geopolitical uncertainty characterized 2022. Russia’s invasion of Ukraine upended global 

energy and commodity markets, and global supply chains and U.S. labor markets 

struggled to adjust to surging consumer 

demand. These factors contributed to a 

further increase in inflation, which had 

already been on the rise. The Federal Reserve responded by raising interest rates 

to the highest level since 2007. Although 

economic growth slowed in response to 

higher rates, labor markets remained tight 

as unemployment hovered near historic 

lows. Wage growth, production cost increases, and consumer demand tempered 

efforts to lower inflation.

The farm economy remained resilient 

despite volatile market conditions, rising 

production costs, labor shortages, and supply chain disruptions. For agricultural producers, cost increases extended beyond 

higher labor and interest costs to include 

major increases for energy, transportation, fertilizer, chemicals, and feed. Still, 

2022 net farm income was significantly 

above its 20-year average.

Because of strong demand and only 

modest production increases, commodity 

prices remained favorable for producers, 

but rising costs limited profits. Livestock 

and dairy sectors were particularly affected by higher feed costs. For much of the 

year, drought in the western United States 

also created major challenges for producers in affected areas, especially in the 

cattle sector.

Earnings

The System reported solid earnings 

growth in 2022. For the year, System consolidated net income totaled $7.3 billion, 

up $472 million or 6.9% from 2021 

(See figure 5). Growth in net income was 

largely the result of a $778 million increase 

in net interest income, partially offset by 

Figure 5

FCS net income, 2013–2022

As of Dec. 31

Dollars in billions

0%

2%

4%

6%

8%

10%

12%

$0

$1

$2

$3

$4

$5

$6

$7

$8

Return on 

average capital

Return on 

average assets Net income (loss)

2022202120202019201820172016201520142013

Rate of return

Source: Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.
2022 FCA Annual Report | 19

$192 million in higher loan provisions and 

$318 million in higher noninterest expenses. 

The increase in net interest income 

was primarily driven by higher average 

earning assets resulting from strong 

growth in the System’s loan portfolio. In 

2022, average earning assets grew by $44.3 

billion, or 11.2%, to $441.0 billion. Rising 

interest rates hurt net interest spread and 

net interest margin in 2022. Net interest 

spread decreased 17 basis points to 2.16% 

primarily because of higher debt costs. 

Net interest margin decreased 7 basis 

points to 2.39%. A 10 basis point increase 

in the rate on earning assets funded by 

noninterest sources (principally capital) 

partially offset the decrease in net interest 

Table 1

Farm Credit System major financial indicators, by annual comparison

Dec. 31, 2022

Dollars in millions

Item 31-Dec-22 31-Dec-21 31-Dec-20 31-Dec-19 31-Dec-18

Total assets $477,063 $435,957 $400,693 $365,359 $348,992

Gross loan volume $373,266 $343,929 $315,490 $286,964 $273,378

Bonds and notes $395,576 $356,446 $325,214 $295,499 $283,276

Nonperforming assets1 $1,755 $1,578 $1,897 $2,347 $2,282

Net income, full year $7,268 $6,796 $6,002 $5,446 $5,332

Nonperforming assets/Gross loans 

and other property owned 0.47% 0.46% 0.60% 0.82% 0.83%

Capital and insurance/Assets2 14.38% 15.94% 16.36% 16.90% 16.75%

Retained earnings/Assets 12.01% 12.59% 12.92% 13.41% 13.31%

Return on average assets 1.59% 1.66% 1.57% 1.54% 1.59%

Return on average capital 10.45% 9.94% 9.26% 8.91% 9.29%

Net interest margin3 2.39% 2.46% 2.46% 2.42% 2.46%

Efficiency ratio4 35.1% 35.3% 35.9% 36.2% 35.2%

Operating expenses/Average loans5 1.12% 1.14% 1.18% 1.18% 1.17%

Sources: FCA’s Consolidated Reporting System as of Dec. 31 and the Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.

1 Nonperforming assets are defined as nonaccrual loans, accruing restructured loans, accrual loans 90 or more days past due, and other property owned.

2 Capital excludes mandatorily redeemable preferred stock and protected borrower capital. Insurance refers to the funds in the Farm Credit Insurance Fund 

administered by the Farm Credit System Insurance Corporation.

3 Net interest margin ratio measures net income produced by interest-earning assets, including the effect of loanable funds. This ratio is a key indicator of the 

effectiveness of loan pricing.

4 The efficiency ratio measures total noninterest expenses for the preceding 12 months divided by the sum of net interest income and noninterest income for the 

preceding 12 months.

5 Operating expenses divided by average gross loans.
20 | Farm Credit Administration

spread. The System’s return on average assets was 1.59%, down from 1.66% in 2021. 

The return on average capital increased to 

10.45% from 9.94%.

As cooperative institutions, FCS banks 

and associations typically pass on a 

portion of their earnings as patronage 

distributions to their borrower-owners. 

For 2022, System institutions declared a 

total of $3.2 billion in patronage distributions—$2.8 billion in cash, $258 million 

to allocated retained earnings, and $111 

million to capital stock and participation 

certificates. This represents 44.2% of the 

System’s net income for 2022, the same as 

for 2021. The System also distributed $147 

million in cash from allocated retained 

earnings from patronage distributions in 

previous years.

System growth

The System continued to experience 

strong growth in 2022. Total assets increased to $477.1 billion, up $41.1 billion, 

Table 2

Farm Credit System major financial indicators, by district

Dec. 31, 2022

Dollars in millions

Institution 

Name

Total 

Assets

Gross 

Loan 

Volume

Nonaccrual 

Loans

Allowance 

for Loan 

Losses

Cash and 

Investments

Capital 

Stock1

Total 

Capital

Net 

Income

FCS banks

AgFirst $42,073 $31,469 $37 ($26) $10,172 $301 $1,452 $412

AgriBank $156,463 $133,471 $42 ($32) $21,451 $4,665 $7,186 $791

CoBank $188,843 $140,088 $145 ($681) $46,394 $4,000 $10,225 $1,449

Texas $35,990 $28,265 $30 ($16) $7,099 $545 $1,623 $270

Total2 $422,919 $332,941 $254 ($755) $85,116 $9,176 $20,164 $2,766

FCS associations

AgFirst $28,810 $27,892 $138 ($155) $30 $183 $5,641 $622

AgriBank $147,611 $137,400 $371 ($289) $2,927 $163 $25,971 $2,561

CoBank $84,054 $78,166 $393 ($307) $1,782 $54 $14,744 $1,768

Texas $28,715 $27,662 $110 ($70) $133 $72 $4,227 $603

Total2 $289,243 $271,104 $1,012 ($821) $4,887 $502 $50,622 $5,619

Total FCS2 $477,063 $373,266 $1,266 ($1,576) $89,896 $2,134 $68,601 $7,268

Sources: FCA’s Consolidated Reporting System as of Dec. 31, 2022, and the 2022 Annual Information Statement of the Federal Farm Credit Banks Funding 

Corporation.

1 Includes capital stock and participation certificates, excludes mandatorily redeemable preferred stock and protected borrower capital.

2 Cannot be derived by adding the categories above because of intradistrict and intra-System eliminations used in Reports to Investors. Also, the total FCS numbers 

exclude mandatorily redeemable preferred stock and protected borrower capital, but they do include restricted capital from the Farm Credit Insurance Fund.
2022 FCA Annual Report | 21

or 9.4%, from 2021. Gross loan balances 

increased 8.5%, or $29.3 billion, to $373.3 

billion. (See figure 6 and table 3.)

For 2022, portfolio growth was concentrated in agricultural real estate mortgages, rural infrastructure, and processing 

and marketing operations.

Real estate mortgages, the largest segment of the loan portfolio at just over 46%, 

increased by $8.3 billion, or 5.0%, from a 

year ago. Agribusiness lending increased 

by $6.9 billion, or 11.3%, primarily in the 

processing and marketing segment. Rural 

infrastructure volume grew by $7.2 billion, 

or 19.5%, mainly in the power and communications sectors.

Several factors contributed to the 

demand for real estate mortgage loans, 

including strong commodity prices, robust exports, and demand for fixed-rate 

financing in anticipation of rising interest 

rates. For production and agribusiness 

lending, increased loan demand reflected 

greater seasonal financing needs and earlier-than-normal purchases of production 

inputs because of rising input costs.

With respect to portfolio commodity 

concentrations, loan volume increased 

across most major commodity categories 

in 2022. At year-end, the cash grains and 

cattle sectors were the System’s two largest 

commodity categories, equaling almost 

25% of the total loan portfolio. For the 

year, loan volume for these sectors increased 2.7% and 6.7%, respectively.

Asset quality

Despite the challenges of market volatility, 

rising input costs, and drought in the West, 

the System’s portfolio performed well, and 

loan quality was strong.

As of Dec. 31, 2022, nonperforming 

loans totaled $1.73 billion, or 0.46% of 

gross loans outstanding. This is up slightly 

from $1.54 billion, or 0.45%, at year-end 

2021 (See figure 7.) Loan delinquencies 

Figure 6

Annual growth rate of FCS loans outstanding, 2011 – 2022

-2%

0%

2%

4%

6%

8%

10%

12%

202220212020201920182017201620152014201320122011

Source: Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.

Figure 7

FCS nonperforming loans, 2017 – 2022

As of Dec. 31

0.00%

0.25%

0.50%

0.75%

1.00%

Nonaccrual loans Restructured loans Past-due loans

2017 2018 2019 2020 2021 2022

Percentage of gross loans

Source: Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.
22 | Farm Credit Administration

Table 3

FCS gross loans outstanding

As of Dec. 31

Dollars in millions

Loan Type 2022 2021 2020 2019 2018

Percent 

Change 

from 2018

Percent 

Change 

from 2021

Agricultural real estate 

mortgage loans $172,806 $164,535 $147,623 $132,215 $126,310 36.8% 5.0%

Agricultural production and 

intermediate-term loans $66,427 62,620 57,973 56,095 53,447 24.3% 6.1%

Agribusiness loans to the following:

Processing and marketing 

operations $41,973 34,308 31,939 28,205 24,832 69.0% 22.3%

Cooperatives $19,525 21,286 20,020 17,776 17,589 11.0% -8.3%

Farm-related businesses $5,998 5,053 4,453 4,068 3,692 62.5% 18.7%

Rural infrastructure loans by type of utility:

Power $27,880 23,621 22,066 19,432 20,100 38.7% 18.0%

Communication $12,453 10,272 9,708 7,847 6,755 84.4% 21.2%

Water / wastewater $3,882 3,122 2,703 2,390 2,305 68.4% 24.3%

Rural residential real estate $7,043 6,883 6,928 7,405 7,308 -3.6% 2.3%

Agricultural export finance $10,071 7,079 6,873 6,712 6,581 53.0% 42.3%

Lease receivables $4,146 4,165 4,345 3,902 3,630 14.2% -0.5%

Loans to other financing 

institutions $1,062 985 859 917 829 28.1% 7.8%

Total $373,266 $343,929 $315,490 $286,964 $273,378 36.5% 8.5%

Source: Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.
2022 FCA Annual Report | 23

(accruing loans that are 30 days or more 

past due) remained largely unchanged at 

0.29% of total accruing loans compared 

with 0.27% at year-end 2021. In total, 96.8% 

of System loans were classified as acceptable, up from 95.7% at year-end 2021.

Provisions for loan losses remained low 

at $40 million in 2022. The allowance for 

loan losses decreased to $1.58 billion, or 

0.42% of loans outstanding, down from 

$1.63 billion, or 0.47% of loans outstanding, at year-end 2021. Net loan charge-offs 

increased slightly to $38 million in 2022 

from $19 million in 2021, but the overall 

level remained very low.

Capital

System capital levels remained sound 

in 2022. At Dec. 31, total capital equaled 

$68.6 billion, compared with $69.5 billion 

at year-end 2021. (Please note that these 

numbers include restricted capital, which 

amounted to $6.7 billion at year-end 2022. 

Restricted capital is the amount held in the 

Farm Credit Insurance Fund.) At year-end, 

the System’s capital-to-assets ratio was 

14.4%, compared with 15.9% a year ago. 

The most significant reason for the 

decrease in the capital-to-assets ratio was 

the increase in accumulated other comprehensive loss. This increase stemmed 

mainly from unrealized losses caused by 

higher interest rates on the fair value of 

existing fixed-rate investment securities. 

Held primarily for liquidity purposes, 

these investments are composed of securities issued by the U.S. government or its 

agencies. We expect these securities to be 

held to maturity, in which case no losses 

would be realized.

As shown in figure 8, retained earnings 

are the most significant component of 

System capital, equaling 83.5% of total 

capital at year-end 2022, up from 79.0% 

a year ago. FCA regulations establish the 

minimum capital levels that each FCS 

bank and association must achieve and 

maintain. As of Dec. 31, 2022, capital levels 

at all System banks and associations were 

above the regulatory minimum capital 

requirements.

Funding and liquidity

The System funds loans and investments 

primarily with consolidated Systemwide 

debt, along with a substantial amount of 

equity capital. The Funding Corporation, 

the fiscal agent for System banks, sells debt 

securities daily, such as discount notes, 

bonds, and designated bonds, on behalf 

of the System. This process allows funds 

to flow efficiently from worldwide capital 

market investors to agriculture and rural 

America, thereby providing rural communities with ready access to global capital. 

During 2022, global capital markets saw 

the COVID-19 pandemic wane, but its impact and the actions to counter its impact 

unleashed the highest level of inflation 

experienced in 40 years. To quell this high 

inflation, the Federal Reserve, along with 

most other central banks, took aggressive measures to reverse accommodative 

monetary policies that had been instituted 

during the COVID-19 pandemic. 

As a result of these measures, global 

interest rates catapulted from historically 

low levels to significantly higher levels. 

Despite this volatile environment, the System was able to maintain reliable access to 

the debt capital markets. However, interest 

rates on its debt securities moved markedly higher, and the issuance of some types 

of debt instruments required substantial 

premiums. Investors continued to favor 

the System’s debt offerings for a variety of 

reasons: 

• The System is a government-sponsored enterprise (GSE), and certain 

regulatory requirements promote 

investment in GSE debt. 
24 | Farm Credit Administration

• The System’s financial performance 

continued to be strong. 

• The System had significant market 

share, accounting for nearly 20.5% of 

GSE debt outstanding at year-end 2022.

Risk premiums for pricing on System debt 

securities remained favorable during most 

of 2022, particularly for maturities under 

five years. However, continuing market 

volatility caused risk premiums demanded 

by investors to widen significantly at 

times, particularly for callable and longer-term debt securities. The primary 

causes of this widening were the significant rise in inflation and the aggressive 

actions by the Federal Reserve and other 

central banks to curtail inflation by 

sharply increasing interest rates and reducing the assets held on their balance 

sheets. 

At year-end 2022, Systemwide debt outstanding was $390.0 billion, representing 

a 10.5% increase from the preceding yearend. Several factors contributed to the 

$37.2 billion increase in Systemwide debt 

outstanding. Gross loans increased $29.3 

billion in 2022, while the System’s combined investments, federal funds, and cash 

balances increased by $9.1 billion. 

The amount of outstanding debt on 

which the System exercised its call options 

continued its precipitous decrease in 2022 

as the Federal Reserve rapidly increased 

short-term interest rates throughout the 

year. The target federal funds range increased from 0.0% to 0.25% at the start 

Figure 8

FCS capital, 2015–2022

As of Dec. 31

$0

$10

$20

$30

$40

$50

$60

$70

$80 Capital/As

Capital stock and 

participation 

certificates

Additional 

paid-in-capital

Preferred stock

Restricted capital

Retained earnings 

and other*

2015 2016 2017 2018 2019 2020 2021 2022

Dollars in billions

Capital as a percentage of assets

Capital-toassets ratio

12%

14%

16%

18%

20%

22%

16.1%

14.4%

$48.8

$52.3

$55.4

$58.4

$61.7

$65.5

$69.5 $68.6

Source: Annual Information Statements of the Federal Farm Credit Banks Funding Corporation.

Note: Retained earnings include accumulated other comprehensive income or loss.
2022 FCA Annual Report | 25

of 2022 to 4.25% to 4.5% by year end. The 

Federal Reserve also began to reverse 

monetary policy actions, which had 

helped reduce longer-term interest rates 

as well. The System exercised calls on only 

$2.3 billion in 2022, compared with $35.6 

billion during 2021, and a record $115.2 

billion in 2020. 

Favorable investor sentiment continued 

to provide the System with access to a 

wide range of debt maturities in 2022 but 

at increased interest costs due in large part 

to the Federal Reserve actions described 

above. The weighted average of remaining 

maturities decreased slightly to 3.1 years 

at the end of 2022 from 3.2 years at the end 

of 2021. Meanwhile, the weighted-average 

interest rates for insured debt increased 

significantly, from 0.80% as of Dec. 31, 

2021, to 2.78% as of Dec. 31, 2022. 

The System had $3.416 billion in outstanding preferred stock at the end of 

2022, a decrease of $577 million from the 

previous year-end. As of the end of 2022, 

outstanding subordinated debt stood at 

$398 million, unchanged from year-end 

2021. All preferred stock and subordinated 

debt issuances are the sole obligations of 

their respective issuing institutions. 

To participate in the issuance of an 

FCS debt security, a System bank must 

maintain—free from any lien or other 

pledge—specified eligible assets (available 

collateral) that are at least equal in value to 

the total amount of its outstanding debt securities. Securities subject to the available 

collateral requirements include Systemwide debt securities for which the bank is 

primarily liable, investment bonds, and 

other debt securities that the bank may 

have issued individually, such as limited 

life (term) preferred stock and subordinated debt. 

Furthermore, our regulations require 

each FCS bank to maintain a tier 1 leverage ratio (primarily unallocated retained 

earnings, certain common cooperative 

equities, and noncumulative perpetual 

preferred stock, divided by total assets) 

of not less than 4%. FCA regulations also 

provide for a tier 1 leverage ratio buffer 

of an additional 1%. Certain restrictions 

apply if the buffer does not exceed 1%. 

Throughout 2022, all System banks maintained their tier 1 leverage ratios and their 

leverage buffer ratios above the required 

minimums, with 5.15% being the lowest 

for any individual bank as of Dec. 31, 2022. 

All System banks have kept their days 

of liquidity, primarily intended as a secondary source of funding, well above the 

required minimum levels. The lowest 

liquidity levels at any individual bank as of 

Dec. 31, 2022, were as follows: 

• 25 days (15 days regulatory minimum) 

of level 1 assets 

• 73 days (30 days regulatory minimum) 

of level 1 and 2 assets 

• 129 days (90 days regulatory minimum) of level 1, 2, and 3 assets 

• 159 days overall (including the supplemental liquidity buffer) 

In addition to the protections provided by 

the joint and several liability provisions, 

the Funding Corporation and the System 

banks have entered into the following voluntary agreements: 

• The Amended and Restated Market 

Access Agreement, which establishes 

certain financial thresholds and provides the Funding Corporation with 

operational oversight and control 

over the System banks’ participation 

in Systemwide debt obligations. 

• The Amended and Restated Contractual Interbank Performance Agreement, 

which is tied to the Market Access 

Agreement and establishes certain 

measures that monitor the financial 

FCA regulations 

establish the 

minimum capital 

levels that each 

FCS bank and 

association must 

achieve and 

maintain.
26 | Farm Credit Administration

condition and performance of the 

institutions in each FCS bank’s district. 

For all of 2022, all Farm Credit System 

banks-maintained scores above the 

benchmarks in the Contractual Interbank Performance Agreement.

Ratings

FCA uses the Financial Institution Rating 

System (FIRS) to assess the safety and 

soundness of each FCS institution. Similar to the systems used by other federal 

banking regulators, FIRS is a framework 

of component and composite ratings to 

help FCA examiners evaluate significant 

financial, asset quality, and management 

factors. FIRS ratings range from 1 for a 

sound institution to 5 for an institution 

that is likely to fail. 

As figure 9 shows, the financial condition and performance of the FCS remains 

strong. The System’s strength reduces the 

risk to investors in FCS debt, to the Farm 

Credit System Insurance Corporation, and 

to FCS institution stockholders. As of Jan. 

1, 2023, 61 FCS institutions were rated 1 or 

2 (95% of all institutions) and 3 institutions 

were rated 3 or worse (5%). The institutions rated 3 or worse represented just 

over 1.0% of the System’s total assets.

Figure 9

Financial Institution Rating System (FIRS) composite ratings 

for the FCS, 2019–2023

0%

20%

40%

60%

80%

100%

Rated 1 Rated 2 Rated 3 or worse

01/01/2019 01/01/2020 01/01/2021 01/01/2022 01/01/2023

Percentage of rated institutions

7 7 4 4

32 35 35 32

34 30 32 33

3

26

35

Source: FCA’s FIRS ratings database.

Note: Figure 9 reflects ratings for only actively reporting Farm Credit System banks and associa

tions. Also, the numbers shown on the bars reflect the total number of institutions with a given 

rating; please refer to the y-axis to determine the percentage of institutions receiving a given rating.
2022 FCA Annual Report | 27
28 | Farm Credit Administration

Each association must 

report annually to its 

supervisory bank on 

the operations and 

achievements of its YBS 

program, and each bank 

must provide to FCA an 

annual summary of its 

district associations’ 

reports. 
2022 FCA Annual Report | 29

Serving young, beginning, and small farmers 

and ranchers 

FCA supports the Farm Credit 

System’s mission to serve young, beginning, and small (YBS) farmers, ranchers, 

and producers and harvesters of aquatic 

products. We define young farmers as 

those who are 35 years old or younger, 

beginning farmers as those who have been 

farming for 10 years or less, and small 

farmers as those with less than $250,000 in 

annual sales.

The System’s YBS mission is outlined in 

the Farm Credit Act, and we have adopted 

regulations to implement the YBS provisions of the act. The Farm Credit Act and 

FCA regulations stipulate that each FCS 

bank must have written policies that direct 

each of the associations it supervises to 

have the following:

• A program for furnishing sound and 

constructive credit and financially 

related services to YBS farmers

• A mission statement describing the 

program’s objectives and specific 

means to achieve the objectives

• Annual quantitative targets for credit 

to YBS farmers

• Outreach efforts and annual qualitative goals for offering credit and 

related services that meet the needs 

of YBS farmers

An association’s board oversight and 

reporting are key parts of every YBS 

program. Each association must report 

annually to its supervisory bank on the 

operations and achievements of its YBS 

program, and each bank must provide 

to FCA an annual summary of its district 

associations’ reports. Each association also 

must establish an internal controls program to ensure that it provides credit in a 

safe and sound manner.

In addition, FCA regulations require 

association business plans to include a 

marketing plan and strategies with special 

emphasis on diversity and inclusion within 

each market segment. Operational and 

strategic business plans must include the 

goals and targets for the association’s YBS 

lending. System associations must also 

coordinate with other government and 

private sources of credit in implementing 

their YBS programs. FCA’s oversight and 

examination activities monitor each institution’s assessment of its performance and 

market penetration in the YBS area.

We continue to work with stakeholders 

to further improve financing opportunities 

for YBS farmers and ranchers.

Results

The following summarizes the lending 

information that System institutions 

provided for their YBS programs. 

(See tables 4A and 4B.) 

In 2022, the System made a total of 

313,439 new loans, totaling $134.5 billion. 

The total number of outstanding loans at 

year-end 2022 was 957,161, amounting to 

$383.3 billion. 

Young: The System reported making 56,100 

new loans to young farmers in 2022, and 
30 | Farm Credit Administration

the volume of these loans amounted to 

$13.1 billion. New loans made to young 

farmers in 2022 represented 17.9% of all 

loans the System made during the year 

and 9.7% of the dollar volume of loans 

made. At the end of 2022, the System reported 188,756 loans outstanding to young 

farmers, totaling $39.3 billion.

Beginning: The System reported making 

78,742 new loans to beginning farmers 

in 2022, and the volume of these loans 

amounted to $21.5 billion. New loans 

made to beginning farmers in 2022 represented 25.1% of all System loans made 

during the year and 16.0% of the dollar 

volume of loans made. At the end of 2022, 

the System reported 305,742 loans outstanding to beginning farmers, totaling 

$70.9 billion. 

Small: System institutions reported making 129,288 new loans to small farmers 

in 2022, totaling $19.1 billion. New loans 

made to small farmers in 2022 represented 

41.2% of all System loans made during 

the year and 14.2% of the dollar volume of 

loans made. At the end of 2022, the System 

reported 473,549 loans outstanding to 

small farmers, totaling $70.3 billion. 

Please note: Because the YBS mission is 

focused on each borrower group separately, data are reported separately for each of 

the three YBS categories. Since some loans 

Table 4A

YBS loans made during 2022

YBS Category

Number 

of Loans

Percentage of 

Total Number of 

System Loans

Dollar Volume of 

Loans in Millions

Percentage 

of Total Volume 

of System Loans

Average 

Loan Size

Young 56,100 17.9% $13,085 9.7% $233,248

Beginning 78,742 25.1% $21,532 16.0% $273,451

Small 129,288 41.2% $19,105 14.2% $147,775

Table 4B

YBS loans outstanding as of Dec. 31, 2022

YBS Category

Number 

of Loans

Percentage of 

Total Number of 

System Loans

Dollar Volume of 

Loans in Millions

Percentage 

of Total Volume 

of System Loans

Average 

Loan Size

Young 188,756 19.7% $39,338 10.3% $208,407

Beginning 305,742 31.9% $70,857 18.5% $231,753

Small 473,549 49.5% $70,322 18.3% $148,500

Sources: Annual Young, Beginning, and Small Farmer Reports submitted by each System lender through the FCS banks.

Note: The YBS totals listed in tables 4A and 4B include loans, advancements, commitments, and participation interests to farmers, ranchers, and aquatic producers. 

The totals exclude rural home loans made under FCA regulation 613.3030, loans to cooperatives, and the activities of the Farm Credit Leasing Services Corporation.
2022 FCA Annual Report | 31

fit more than one category, adding the 

loans across categories does not produce 

an accurate measure of the System’s YBS 

lending.

New loans made in 2022 by dollar volume 

and number of loans

From Dec. 31, 2021, to Dec. 31, 2022, the 

System’s total new loan dollar volume decreased by 1.7%. New loan dollar volume 

to young farmers decreased by 12.5%, to 

3 Please note that some System institutions revised their totals for loan numbers and dollar volume after FCA’s 

2021 annual report was published. This revision was part of the normal course of business adjustments to their call 

report data. As a result, the System totals reported for 2021 changed slightly from the totals reported in last year’s 

annual report, and one should not calculate year-over-year increases on the basis of totals reported in last year’s 

annual report.

beginning farmers by 17.9%, and to small 

farmers by 25.3%. (See table 5.)3

The number of total System loans made 

during the year decreased by 17.2%. The 

number of loans to young farmers decreased by 17.1%, to beginning farmers by 

18.9%, and to small farmers by 22.9%.

In 2022, several key factors led to reduced System lending:

• Rising interest rates and fewer refinanced loans

Table 5

Change in new YBS lending from 2021 to 2022

YBS Category Dollar Volume Loan Numbers

Young -12.5% -17.1%

Beginning -17.9% -18.9%

Small -25.3% -22.9%
32 | Farm Credit Administration

• Changing economic conditions and 

less demand for a rural lifestyle

• End of the Paycheck Protection 

Program

Although the numbers fell dramatically 

from the previous year, they are fairly 

consistent with pre-pandemic trends. 

The numbers were significantly elevated 

during the pandemic.

Outstanding loans by dollar volume and 

number of loans

Total dollar volume outstanding increased 

for both total FCS lending and YBS lending. Total System loan dollar volume outstanding increased by 9.4%. Loan dollar 

volume outstanding to young farmers 

increased by 6.3%, to beginning farmers 

by 9.6%, and to small farmers by 5.3%. 

The growth rate of outstanding loans was 

lower in 2022 than it was in both 2020 and 

2021. (See table 6.)

While the total number of loans 

outstanding for the System as a whole 

decreased by 0.6%, the number of 

outstanding loans to young and beginning 

farmers increased modestly—by 1.3% and 

2.9%, respectively. However, the number 

of small farmer loans outstanding contracted by 1.0%.

Ratio of new and outstanding YBS loans to 

total System loans

The ratio of new YBS loans (by number) 

to total new System loans was 17.9% for 

young farmers, 25.1% for beginning farmers, and 41.2% for small farmers. The ratio 

of outstanding YBS loans (by number) to 

total outstanding System loans was 19.7% 

for young farmers, 31.9% for beginning 

farmers, and 49.5% for small farmers. 

(See figures 10A, 10B, and 10C). Compared 

with 2021, all the ratios remained relatively stable, with some mix in direction.

Table 6

Change in outstanding YBS lending from 2021 to 2022

YBS 

Category Dollar Volume Loan Numbers

Young 6.3% 1.3%

Beginning 9.6% 2.9%

Small 5.3% -1.0%
2022 FCA Annual Report | 33

Figure 10A

Young farmers and ranchers

0

50

100

150

200

Number of young, beginning, 

or small loans outstanding as 

a percentage of FCS loans 

outstanding (right scale)

Number of young, beginning, 

or small loans made as 

a percentage of total 

FCS loans made (right scale)

Number of young, beginning, 

or small loans outstanding 

(left scale)

Number of young, beginning, 

or small loans made (left scale)

2022202120202019201820172016201520142013

0%

5%

10%

15%

20%

Number of loans in thousands

Percentage of total FCS loans made

Figure 10B

Beginning farmers and ranchers

0

50

100

150

200

250

300

350

2022202120202019201820172016201520142013

0%

5%

10%

15%

20%

25%

30%

35%

Number of loans in thousands

Percentage of total FCS loans made

Figure 10C

Small farmers and ranchers

0

100

200

300

400

500

600

2022202120202019201820172016201520142013

0%

10%

20%

30%

40%

50%

60%

Number of loans in thousands

Percentage of total FCS loans made
Managing risk is a 

challenge for all lenders 

but especially for those 

lending to a single sector 

of the economy — in this 

case, agriculture.
2022 FCA Annual Report | 35

Examining and regulating the banks 

and associations

Examination

Managing risk is a challenge for all lenders but especially for those lending to a 

single sector of the economy—in this case, 

agriculture. To manage this risk, Farm 

Credit System institutions must have both 

sufficient capital and effective risk management processes. As the independent 

regulator of the FCS, the Farm Credit 

Administration examines and supervises 

System institutions. Our examiners determine how issues affecting agriculture 

and the economy create risk for System 

institutions.

Our examiners also evaluate whether 

each institution is fulfilling its chartered 

mission to provide credit and financially 

related services to eligible, creditworthy 

customers. They do so in a couple of ways. 

They determine whether each institution 

is complying with mission-related laws 

and regulations. They also evaluate the 

System’s efforts to implement programs 

for serving the credit needs of eligible agricultural producers and cooperatives, including young, beginning, and small (YBS) 

farmers and ranchers.

Our examiners review System institutions’ annual reports and business plans 

and encourage institutions to include a 

discussion of how they are meeting their 

mission. Ongoing oversight and examination efforts continue to address diversity 

and inclusion, as well as YBS data integrity 

and compliance with YBS regulations.

As required by the Farm Credit Act, FCA 

examines each institution at least once 

every 18 months. In between these statutory examinations, we also monitor and 

examine institutions on an ongoing basis. 

We customize our examination activities 

to each institution’s specific risks. To monitor and address FCS risk as effectively and 

efficiently as possible, we assign highest 

priority to institutions, or the parts of an 

institution’s operations, that present the 

greatest risk.

We require institutions to develop and 

maintain programs, policies, procedures, 

and controls to identify and manage risk. 

For example, our regulations require FCS 

institutions to have effective loan underwriting and loan administration processes. 

We also have regulations requiring FCS institutions to maintain strong asset-liability 

management capabilities.

National oversight program 

In addition to monitoring risks that are 

unique to a single institution, we also 

monitor risks that affect the System as a 

whole. Each year we develop a national 

oversight plan that takes certain systemic 

risks into account. In fiscal year 2023, we 

have the following focus areas:

Risk management practices in an uncertain 

environment

System institutions face much uncertainty in the current business environment. In addition to macroeconomic 

headwinds, institutions face operational 

challenges created by the rapid changes 

in information technology. Many external 
36 | Farm Credit Administration

variables are contributing to a volatile 

operating environment. Adverse weather conditions, the potential for reduced 

government support, extreme volatility 

in commodity markets, and significant 

input cost increases have affected and may 

continue to affect producers, as well as 

consumers. These conditions may have a 

long-term effect on certain commodities, 

industries, and operations, and they have 

magnified the importance of strong risk 

management practices. 

In view of these risks, our FY 2023 examination program emphasizes the need 

for System institutions to have adequate 

strategic business plans that focus on capital and portfolio planning. Our examiners 

review each institution’s business plan to 

ensure that the institution is assessing key 

uncertainties in its operating environment 

when evaluating its capital needs and 

capitalization goals and strategies. Similarly, we evaluate whether the institution’s 

stress-testing scenarios are sufficient to 

capture the impacts of the macroeconomic 

headwinds on borrower financial performance and portfolio quality. We also 

review management’s guidance to staff for 

loan underwriting and credit administration to ensure that the guidance adequately addresses these risks.

Also, our examiners continue to monitor how institutions are managing risk 

arising from the evolving IT operations 

landscape. IT operational risks increase as 

System institutions respond to the changing and increasingly complex business 

environment. Cyber risks and threats 

continue to challenge organizations as the 

financial sector becomes more digitized 

and remote work becomes a permanent 

part of many institutions’ business models. 

Moreover, the cost of replacing outdated 

and antiquated legacy financial systems 

can sometimes put a strain on resources. 

Phaseout of the London Interbank Offered 

Rate (LIBOR)

Over the past 18 months, we issued 

three informational memorandums that 

identify action steps and time frames to 

guide the efforts of System institutions to 

transition away from LIBOR. We continue 

to examine the extent to which institutions 

adhere to the sound practices described 

in those informational memorandums. 

We want to make sure that the LIBOR 

phaseout implementation and resource 

commitments of System institutions are 

consistent with the level and complexity of 

their remaining LIBOR exposures.

Implementation of current expected credit 

losses (CECL)

With the implementation of Accounting 

Standards Classification (ASC) Topic 326 on 

Jan. 1, 2023, CECL replaced the incurred 

loss model for estimating allowance needs 

under generally accepted accounting 

principles. Allowance levels under CECL 

continue to incorporate qualitative and 

quantitative factors in estimating credit 

losses, but CECL requires FCS institutions 

to consider a broader range of economic 

data, including past events, current conditions, and reasonable and supportable 

forecasts that affect collectability. Our 

examiners assess whether FCS institutions 

follow sound business practices in developing and implementing CECL models. 

For example, we evaluate CECL-related 

control structures, including internal 

control over financial reporting. We also 

evaluate whether System institutions are 

developing well-documented processes 

and routinely validating model output.

Programs for young, beginning, and small 

farmers and ranchers

Supporting YBS farmers, ranchers, and 

aquatic producers remains of critical importance for the long-term viability of U.S. 
2022 FCA Annual Report | 37

agriculture. Our examiners will continue 

to support the agency’s strategic goal for 

YBS by encouraging the System to support 

YBS producers. In addition, we will continue both developing a system to rate the 

YBS programs at System institutions and 

coordinating with them to improve the usability and consistency of YBS lending and 

nonlending data.

Standards of conduct

Amended regulations governing standards of conduct for the directors and 

employees of System institutions became 

effective on Jan. 1, 2023. The final rule 

requires each System institution to have or 

develop a standards of conduct program 

based on core principles; the purpose of 

the program is to integrate ethical values 

into corporate culture. Our examiners are 

evaluating implementation of the new regulations; their evaluation includes a review 

of the System’s template policy-and-procedure guidance. In addition, our examiners 

continue to review standards of conduct 

programs through routine examinations at 

all institutions. 

Small, low-risk associations

Our examiners also continue to explore 

ways to address the concerns of associations considered low-risk based on size, 

complexity, financial condition, and governance. We are evaluating various possibilities for enhancing the risk-based application of examination expectations for 

smaller institutions with low-risk profiles.

Three tiers of supervision

In examining and overseeing System institutions, we use a three-tiered program: 

normal supervision, special supervision, 

and enforcement actions. Institutions 

under normal supervision are performing 

in a safe and sound manner and are complying with laws and regulations. These 

institutions can correct weaknesses in the 

normal course of business.

For those institutions displaying more 

serious or persistent weaknesses, we shift 

from normal to special supervision, and 

our examination oversight increases accordingly. Under special supervision, we 

give an institution clear and firm guidance 

to address weaknesses, and we give a time 

frame for correcting the problems. 

If informal supervisory approaches 

have not been or are not likely to be successful, we use our formal enforcement 

authorities to ensure that FCS institutions 

are safe and sound and that they comply 

with laws and regulations. We may take an 

enforcement action for several reasons:

• A situation threatens an institution’s 

financial stability.

• An institution has a safety or soundness problem or has violated a law or 

regulation.

• An institution’s board is unable or unwilling to correct problems we have 

identified. 

Our enforcement authorities include the 

following powers:

• To enter into formal agreements

• To issue cease and desist orders

• To levy civil money penalties

• To suspend or remove officers, directors, and other persons

If we take an enforcement action, the FCS 

institution must operate under the conditions of the enforcement document and report back to us on progress in addressing 

the issues identified. The document may 

require the institution to take corrective 

actions, such as reducing risk exposures, 

increasing capital, enhancing earnings, 

and strengthening risk management. Our 

examiners closely monitor the institution’s 

In examining and 

overseeing System 

institutions, we 

use a three-tiered 

program: normal 

supervision, special 

supervision, and 

enforcement 

actions.
38 | Farm Credit Administration

performance to ensure compliance with 

the enforcement action.

As of Jan. 1, 2023, no FCS institutions 

were under an enforcement action.

Borrower rights

We also examine institutions to make sure 

they are complying with the borrower 

rights provisions of the Farm Credit Act. 

These provisions provide certain System 

borrowers and loan applicants with the 

following rights:

• To know the current effective rates 

of interest on their loans by the dates 

the loans close

• To be informed that they are required 

to purchase at-risk stock in their FCS 

institutions

• To receive copies of all the documents 

they have signed by the time their 

loans close

• To be informed promptly as to whether their loan applications have been 

accepted, reduced, or denied

• To be informed of their right to request restructuring for their loans if 

they cannot make timely payments 

and their loans become distressed

• To obtain credit committee reviews of 

denials or reductions of loan requests 

and denials of restructuring requests

• To have the right of first refusal when 

their FCS institutions decide to sell 

agricultural properties their institutions have acquired from them

• To receive cooperation from their FCS 

institutions if they seek mediation

We also receive and review complaints 

from borrowers and loan applicants who 

believe their rights have been denied. If 

we find violations of law or regulations, 

we have several options to bring about 

corrective action. The number of borrower 

complaints decreased from 32 in 2021 to 19 

in 2022. In June 2021, we added an online 

complaint form to our website to provide 

an additional means by which borrowers 

and loan applicants may submit complaints regarding System institutions.

Regulation

As the regulator of the Farm Credit System, we issue regulations, policy statements, and other guidance to ensure that 

the System, including its banks, associations, Farmer Mac, and other related 

entities, complies with the law, operates in 

a safe and sound manner, and efficiently 

carries out its statutory mission. Our regulatory philosophy is to provide an environment that enables the System to safely 

and soundly offer high-quality, reasonably 

priced credit and related services to farmers and ranchers, agricultural cooperatives, rural residents, and other entities on 

which farming depends.

We strive to develop balanced, 

well-reasoned regulations whose benefits 

outweigh their costs. With our regulations, 

we seek to meet two general objectives. 

The first is to ensure that the System 

continues to be a dependable source of 

credit and related services for agriculture 

and rural America while also ensuring 

that System institutions comply with the 

law and with the principles of safety and 

soundness. The second is to promote participation by member-borrowers in the 

management, control, and ownership of 

their System institutions.

Regulatory activity in 2022

The following describe some of FCA’s 

regulatory efforts in 2022, along with 

several projects that will remain active in 

2023. More information on these topics is 
2022 FCA Annual Report | 39

available on our website. From the Laws 

& regulations tab at www.fca.gov, you can 

read our board policy statements, bookletters, informational memorandums, 

proposed rules, and any final rules whose 

effective dates are pending.

Tier 1/tier 2 capital framework guidance —In January 2022, the FCA board 

issued a revised bookletter to provide updated guidance on the tier 1/tier 2 capital 

framework that was implemented on Jan. 

1, 2017, along with amendments to that 

capital rule that took effect on Jan. 1, 2022.

Conservators and receivers —In February 

2022, the FCA board approved a proposed 

rule governing FCA’s appointment of the 

Farm Credit System Insurance Corporation as the conservator or receiver to make 

our regulations consistent with section 

5412 of the Agricultural Improvement Act 

of 2018.

LIBOR transition rule, annual threshold adjustments, and compliance resources —In 

March 2022, the Office of Examination 

issued an informational memorandum 

that discusses regulation updates and 

resources from the Consumer Financial 

Protection Bureau (CFPB) and other federal agencies.

Implementation of current expected 

credit losses methodology —In April 2022, 

the FCA board approved a final rule that 

amends certain regulations to address 

changes in U.S. generally accepted accounting principles. 

Young, beginning, and small farmers and 

ranchers —In May 2022, the FCA board 

approved a proposed rule to increase the 

service of the System’s direct-lender associations to young, beginning, and small 

farmers and ranchers and to reinforce the 

supervisory responsibilities of the funding 

banks.

Cyber risk management —In June 2022, the 

FCA board approved a proposed rule that 

would rescind and revise FCA regulations 

in 12 CFR Part 609 governing electronic 

commerce.

Regulatory burden —In July 2022, the FCA 

board issued a notice of intent and request 

for comment to solicit input from the 

public and other interested parties on the 

appropriateness of FCA’s regulatory requirements on the Farm Credit System.

Expected credit losses —In October 2022, 

the FCA board issued a revised bookletter 

that provides guidance on FCA’s expectations for an institution’s processes for 

recognizing expected credit losses.

Resources from the CFPB and other federal agencies —In October 2022, the Office 

of Examination issued an informational 

memorandum that discusses resources 

from the Consumer Financial Protection 

Bureau and other federal agencies.

Accounting standards update —In December 2022, the Office of Regulatory Policy 

issued an informational memorandum 

that provides updates on troubled debt 

restructuring.

Loan syndications and assignment markets study —We continued to study loan 

syndications and assignment markets to 

determine whether our regulations should 

be modified to reflect significant changes 

in the markets.

Corporate activity in 2022

In 2022 and early 2023, we analyzed and 

approved applications for the following 

mergers and other corporate activities. We 

publish information about corporate applications on our website at www.fca.gov.
40 | Farm Credit Administration

Mergers

Several mergers occurred between Jan. 

1, 2022, and Jan. 1, 2023. Table 7 shows 

the date of each merger and the district in 

which the merged institutions are located. 

In every instance, an agricultural credit 

association (ACA) in a given bank district 

merged with another ACA in the same 

bank district. The production credit association (PCA) and federal land credit association (FLCA) subsidiaries of the merging 

ACAs also merged.

The total number of associations as of 

July. 1, 2023, was 59 (58 ACAs and 1 FLCA). 

Other corporate activities

• On April 19, 2022, we granted final 

approval for the voluntary liquidation 

and loan portfolio sale of Delta Agricultural Credit Association (together 

with its PCA and FLCA subsidiaries). 

Delta was affiliated with AgriBank.

• On May 13, 2022, we issued a revised 

charter for the headquarters relocation of River Valley AgCredit, an 

AgFirst-affiliated ACA. The charter was 

effective retroactively to April 1, 2022. 

Funding activity in 2022

As the System’s regulator, we have several 

responsibilities pertaining to System funding activities. The Farm Credit Act requires 

the System to obtain our approval before 

distributing or selling Systemwide debt. 

Because we make it a high priority to 

respond efficiently to the System’s requests 

for debt issuance approvals, we have a 

long-standing program, which we monitor 

on an ongoing basis, that allows the System to issue discount notes. The System 

may issue these short-term debt securities 

at any time, but the outstanding balance 

may not exceed $100 billion. 

In addition, we approve most longerterm debt issuances through a monthly 

“shelf” approval program. For 2022, we approved $188.4 billion in longer-term debt 

issuances through this program. For more 

information about the System’s funding 

and liquidity, see pages 23 through 26.

Table 7

Association mergers, Jan 1, 2022, to Jan. 1, 2023

Date of merger

Bank district in which 

the merger occurred Institutions merging Resulting institution

Jan. 1, 2022 CoBank • Farm Credit East 

• Yankee Farm Credit

Farm Credit East

Jan. 1, 2022 AgriBank • AgCountry Farm Credit Services 

• Farm Credit Services of North Dakota

AgCountry Farm Credit Services

July 1, 2022 AgFirst • MidAtlantic Farm Credit

• AgChoice Farm Credit

Horizon Farm Credit

Nov. 1, 2022 CoBank • Farm Credit of Western Oklahoma 

• Farm Credit of Enid

Farm Credit of Western Oklahoma

Jan. 1, 2023 CoBank • Northwest Farm Credit Services 

• Farm Credit West

AgWest Farm Credit

Jan. 1, 2023 AgFirst • AgCarolina Farm Credit

• Cape Fear Farm Credit

AgCarolina Farm Credit
2022 FCA Annual Report | 41
Farmer Mac offers 

greater liquidity and 

lending capacity to 

agricultural and rural 

lenders, including 

insurance companies, 

credit unions, 

commercial banks, 

other FCS institutions, 

and investors.
2022 FCA Annual Report | 43

Farmer Mac

Created in 1988, the Federal 

Agricultural Mortgage Corporation 

(Farmer Mac) provides a secondary market for agricultural real estate loans, government-guaranteed portions of certain 

loans, rural housing mortgage loans, and 

eligible rural utility cooperative loans. It 

offers greater liquidity and lending capacity to agricultural and rural lenders, including insurance companies, credit unions, 

commercial banks, other FCS institutions, 

and investors.

Farmer Mac is owned by its investors—it 

is not a member-owned cooperative. 

Investors in voting stock may include 

commercial banks, insurance companies, 

other financial organizations, and other 

FCS institutions. Any investor may own 

nonvoting stock.

Farmer Mac is a federally chartered 

instrumentality and an institution of the 

FCS. However, it has no liability for the 

debt of any other System institution, and 

the other System institutions have no liability for Farmer Mac debt.

Farmer Mac has two major lines of 

business:

• Agricultural Finance, which includes 

mortgage loans secured by first liens 

on agricultural real estate, including 

part-time farms and rural housing, as 

well as agricultural and rural development loans guaranteed by USDA.

• Rural Infrastructure Finance, which 

includes loans by lenders organized 

as cooperatives to finance electrification and telecommunications 

systems, as well as renewable energy 

providers and projects, in rural areas.

Through these lines of business, it performs the following activities:

• Purchases eligible loans directly from 

lenders. 

• Provides advances against eligible 

loans by purchasing obligations secured by those loans or by assets that 

qualify as eligible agricultural real 

estate collateral. 

• Securitizes assets and often guarantees the resulting securities. (Securities guaranteed by Farmer Mac may 

be held either by the originator of the 

underlying assets or by Farmer Mac, 

or they may be sold to third-party 

investors.)

• Issues purchase commitments for 

eligible loans. 

Examining and regulating Farmer Mac

FCA regulates Farmer Mac through the 

Office of Secondary Market Oversight 

(OSMO), which was established by the 

Food, Agriculture, Conservation, and 

Trade Act Amendments of 1991. This office 

provides for the examination and general 

supervision of Farmer Mac’s safe and 

sound performance of its powers, functions, and duties.

The statute requires OSMO to be a separate office within our agency and to report 

directly to the FCA board. The law also 

stipulates that OSMO’s activities must, to 

the extent practicable, be carried out by 

individuals who are not responsible for 

supervising the banks and associations of 

the FCS.
44 | Farm Credit Administration

Through OSMO, we examine Farmer 

Mac at least annually for capital adequacy, 

asset quality, management performance, 

earnings, liquidity, and interest rate sensitivity. We oversee and evaluate Farmer 

Mac’s safety and soundness and its mission achievement. We also supervise and 

issue regulations governing Farmer Mac’s 

operations.

Financial condition of Farmer Mac

OSMO reviews Farmer Mac’s compliance 

with statutory and regulatory minimum 

capital requirements and supervises its 

operations and condition throughout the 

year. Table 8 summarizes Farmer Mac’s 

condensed balance sheets at the end of 

each calendar year from 2017 to 2022. 

From 2021 to 2022, its total assets grew by 

8.7%, its total liabilities by 8.9%, and its 

net worth by 5.6%.

Capital

As of Dec. 31, 2022, Farmer Mac’s net 

worth (that is, equity capital determined 

using generally accepted accounting principles [GAAP]) was $1,272.0 million, compared with $1,204.4 million a year earlier. 

Its net worth was 4.7% of its on-balancesheet assets as of Dec. 31, 2022, compared 

with 4.8% a year earlier. Net worth, in 

terms of dollars, went up primarily because of an increase in retained earnings.

When Farmer Mac’s off-balance-sheet 

program assets (essentially its guarantee 

obligations) are added to its total on-balance-sheet assets, net worth was 4.1% as 

of Dec. 31, 2022, compared with 4.2% in 

2021. Farmer Mac continued to comply 

with all statutory and regulatory minimum 

capital requirements.

At year-end 2022, Farmer Mac’s core 

capital (the sum of the par value of 

Table 8

Farmer Mac condensed balance sheets

As of Dec. 31

Dollars in millions

It1em 2022 2021 2020 2019 2018 2017

Total assets $27,333.1 $25,145.5 $24,355.5 $21,709.4 $18,694.3 $17,792.3

Total liabilities $26,061.2 $23,941.1 $23,363.0 $20,910.1 $17,941.8 $17,084.1

Net worth or equity 

capital $1,272.0 $1,204.4 $992.5 $799.3 $752.6 $708.1

Sources: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.
2022 FCA Annual Report | 45

outstanding common stock, the par value 

of outstanding preferred stock, paid-in 

capital, and retained earnings) remained 

above the statutory minimum requirement. It totaled $1,322.8 million, exceeding the statutory minimum capital requirement of $805.9 million by $516.9 million or 

64.1%.

Its regulatory capital (core capital plus 

allowance for credit losses) exceeded the 

required amount as determined by the 

Risk-Based Capital Stress Test. Farmer 

Mac’s regulatory capital totaled $1,340.0 

million as of Dec. 31, 2022, exceeding the 

regulatory risk-based capital requirement 

of $204.2 million by $1,135.8 million.

Risk exposure on USDA guaranteed 

loans is very low due to USDA backing. 

Table 9 offers a historical perspective on 

capital and capital requirements for 2017 

through 2022.

Program activity

Farmer Mac’s total program activity 

increased to $25.8 billion by year-end 

2022, up from $23.6 billion a year earlier. 

(See figure 11.) Farmer Mac experienced 

steady growth in its Agricultural Finance 

loan purchases, as well as in the purchase 

or guarantee of AgVantage securities. 

These bonds are general obligations of 

the issuing financial institution that are 

purchased or guaranteed by Farmer Mac. 

Each AgVantage security is secured by 

eligible loans under one of Farmer Mac’s 

programs in an amount at least equal to 

the outstanding principal amount of the 

security.

Off-balance-sheet program activity consists of purchase commitments, certain 

AgVantage securities, and agricultural 

mortgage-backed securities (AMBS) sold to 

investors. At the end of December 2022, 

Table 9

Farmer Mac capital positions

As of Dec. 31

Dollars in millions

Item 2022 2021 2020 2019 2018 2017

GAAP equity $1,272.0 $1,204.4 $992.5 $799.3 $752.6 $708.1

Core capital $1,322.8 $1,200.6 $1,006.4 $815.4 $727.6 $657.1

Regulatory capital $1,340.0 $1,217.0 $1,024.0 $828.1 $736.8 $665.9

Statutory requirement $805.9 $713.8 $680.9 $618.8 $545.0 $520.3

Regulatory requirement $204.2 $218.7 $197.4 $122.1 $119.0 $235.4

Surplus core capital over statutory 

requirement* $516.9 $486.8 $325.5 $196.7 $182.6 $136.8

Capital margin excess over the minimum 64.1% 68.2% 47.8% 31.8% 33.5% 26.3%

Sources: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.

* Farmer Mac is required to hold capital at or above the statutory minimum capital requirement or the amount required by FCA regulations as determined by the 

Risk-Based Capital Stress Test, whichever is higher.
46 | Farm Credit Administration

15.2% of program activity consisted of offbalance-sheet obligations, as compared 

with 16.1% a year earlier.

Farmer Mac’s purchase commitments 

include arrangements to purchase new 

volume in lenders’ revolving line of credit 

products and their long-term standby 

purchase commitments (standbys). The 

standby product is similar to a guarantee 

of eligible pools of program loans. Under 

the standbys, a financial institution pays 

a fee in return for Farmer Mac’s commitment to stand ready (that is, “stand by”) to 

purchase loans at face value even under 

adverse conditions. As shown in figure 12, 

purchase commitments represented 13.2% 

of Farmer Mac’s total program activity in 

2022.

Asset quality

Figure 13 shows Farmer Mac’s allowance 

for credit losses, its levels of substandard 

Agricultural Finance (formerly Farm & 

Ranch) assets, and its 90-day delinquencies relative to outstanding program volume, excluding AgVantage loan volume.

As of Dec. 31, 2022, Farmer Mac’s allowance for credit losses totaled $17.2 

million, compared with $16.4 million the 

year before. Of its Agricultural Finance 

portfolio, $209.4 million was substandard, 

representing 2.0% of the principal balance 

of Agricultural Finance loans purchased, 

guaranteed, or committed to be purchased. This compares with $246.7 million 

on Dec. 31, 2021. Assets are considered to 

be substandard when they have a well-defined weakness or weaknesses that, if not 

corrected, are likely to lead to some losses.

As of Dec. 31, 2022, Farmer Mac’s 90-

day delinquencies decreased in volume to 

$43.5 million, or 0.42% of Agricultural Finance loans, from $47.3 million, or 0.48%, 

as of Dec. 31, 2021.

Farmer Mac held $0.64 million in 

real estate owned at the end of 2022, 

Figure 11

Farmer Mac program activity and nonprogram investment 

trends

As of Dec. 31

Dollars in billions

$0

$5

$10

$15

$20

$25

$30

Nonprogram 

investments

Off-balance-sheet 

program activity

On-balance-sheet 

program assets

Total program activity

2017 2018 2019 2020 2021 2022

Sources: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.

Figure 12

Farmer Mac total program activity

As of Dec. 31

Figure 12 -- 2022

Farmer Mac total program activity

Loans held — 29.1%

AgVantage — 34.8%

AMBS sold — 1.9%

Rural infrastructure

— 11.7%

AMBS held — 9.3%

Purchase commitments 

— 13.2%

Source: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.

AMBS = agricultural mortgage-backed securities
2022 FCA Annual Report | 47

unchanged from the amount it held at 

the end of 2021. Farmer Mac reported no 

delinquencies in its pools of rural utility 

cooperative loans.

Earnings

Farmer Mac reported net income available to common stockholders of $151.0 

million (in accordance with GAAP) for the 

year ended Dec. 31, 2022, up 40.3% from 

$107.6 million reported at year-end 2021. 

Total revenue went up by 14.7%, and total 

expenses went down by 6.2%. Core earnings for 2022 were $124.3 million, up 9.4% 

from $113.6 million in 2021. Net interest 

income, which excludes guarantee fee 

income, was reported at $269.6 million 

in 2022, up from $221.6 million in 2021. 

Before taxes, guarantee fee income was 

$13.0 million in 2022, compared with $12.7 

million in 2021. Table 10 shows a six-year 

trend for the basic components of income.

Table 10

Farmer Mac condensed statements of operations

As of Dec. 31

Dollars in millions

Item 2022 2021 2020 2019 2018 2017

Total revenues $275.4 $240.2 $206.7 $194.1 $186.1 $175.1

Total expenses $124.4 $132.6 $117.5 $100.4 $91.2 $103.8

Net income available to common stockholders $151.0 $107.6 $89.2 $93.7 $94.9 $71.3

Core earnings $124.3 $113.6 $100.6 $93.7 $84.0 $65.6

Sources: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.

Figure 13

Asset quality, allowance, and delinquency trends, 2017–2022

$0

$50

$100

$150

$200

$250

$300

$350

90-day delinquencies as 

percentage of Agricultural Finance*

Substandard assets as 

percentage of Agricultural Finance*

90-day delinquencies (left scale)

Substandard assets (left scale)

Allowance for losses (left scale)

2017 2018 2019 2020 2021 2022

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

Dollars in millions

Percentage of Agricultural Finance

Source: Farmer Mac’s Annual Reports on Securities and Exchange Commission Form 10-K.

Note: Before 2021, Farmer Mac referred to its Agricultural Finance line of business as Farm & 

Ranch.
48 | Farm Credit Administration

Figure 14

FCA organizational chart as of October 2023

For an accessible version of this chart, visit 

www.fca.gov/about/fca-organizational-chart

FCA Board

Vincent G. Logan 

Chairman

Jeffery S. Hall 

Member

Glen R. Smith 

Member

—Office of the Board 

Chairman and Chief 

Executive Officer 

Vincent G. Logan

—Office of the Chief of Staff 

Maribel Duran —Chief Risk Officer

S. Robert Coleman

—Office of Agency Services 

Vonda Bell

—Office of the Chief Financial 

Officer 

Sandi Walters

—Office of Congressional and 

Public Affairs 

Trevor Reuschel

—Office of Data Analytics and 

Economics 

Jeremy D’Antoni

—Office of Examination 

Michael J. Duffy

—Office of Information 

Technology 

Jerald Golley

—Office of Regulatory Policy 

Kevin Kramp

—Office of Equal Employment 

Opportunity and Inclusion 

Thais Burlew

—Office of General Counsel 

David Grahn*

—Office of Secondary Market 

Oversight †

Thomas R. Fay

—Designated Agency Ethics Official 

Jane Virga

—Secretary to the Board 

Ashley Waldron

—Office of Inspector 

General 

Wendy R. Laguarda

* Maintains a confidential advisory 

relationship with each of the board 

members.

† Reports to the board for policy and 

to the CEO for administration.
2022 FCA Annual Report | 49

FCA’s organization and leadership

Organization of FCA

FCA’s headquarters is in McLean, Virginia. 

We also have field offices in Bloomington, 

Minnesota; Dallas, Texas; Denver, Colorado; and Sacramento, California. As of July 

1, 2023, we had 341 employees.

FCA’s leadership

FCA has the following three board 

members. 

Vincent G. Logan, FCA Board Chairman 

and CEO 

Vincent G. Logan was appointed to the 

FCA board by President Joseph Biden on 

Oct. 3, 2022. He was designated board 

chairman and CEO on Oct. 21. The agency’s first openly LGBT person and Native 

American board member, he is serving a 

term that expires on May 21, 2026.

Chairman Logan is also a member of 

the board of directors of the Farm Credit 

System Insurance Corporation, an independent U.S. government-controlled corporation that insures the timely payment 

of principal and interest on obligations issued jointly by Farm Credit System banks.

Prior to joining FCA, Chairman Logan 

was chief financial officer and chief investment officer for the Native American 

Agriculture Fund, which is the largest philanthropic organization dedicated solely to 

serving the Native American farming and 

ranching community.

Nominated by President Barack Obama 

and confirmed by the U.S. Senate in 2014, 

Chairman Logan served as the Special 

Trustee for American Indians at the U.S. 

Department of the Interior. During his 

tenure, he was appointed to the Department of the Treasury’s Financial Literacy 

Education Commission, which seeks to 

develop a national strategy on financial 

education.

Chairman Logan has worked in New 

York both as a lawyer, practicing in aircraft, shipping, and equipment finance, 

and as an investment advisor, focusing on 

institutional asset management and permanent fund development.

Chairman Logan previously served as a 

director to the Federal Reserve Bank of St. 

Louis, Little Rock Branch, and as an Oklahoma State University Foundation governor. He was educated at Oklahoma State 

University; the University of Oklahoma 

College of Law; Queen’s College, Oxford 

University; and the School of International 

and Public Affairs at Columbia University. 

Jeffery S. Hall, FCA Board Member

Jeffery S. Hall was appointed to the FCA 

board by President Barack Obama on March 

17, 2015. Mr. Hall is serving a term that expired on Oct. 13, 2018. He will continue to 

serve until his successor has been named.

Mr. Hall also serves as chairman of 

the board of directors of the Farm Credit 

System Insurance Corporation, an independent U.S. government-controlled corporation that insures the timely payment 

of principal and interest on obligations issued jointly by Farm Credit System banks.

Mr. Hall was president of The Capstone 

Group, an association management and 

consulting firm that he cofounded in 2009. 

He was the state executive director for the 

U.S. Department of Agriculture’s Farm 

Service Agency in Kentucky from 2001 to 

2009. In that role, he had responsibility 

for farm program and farm loan program 

delivery and compliance.

From 1994 to 2001, Mr. Hall served as assistant to the dean of the University of KenVincent G. Logan 

Board Chairman and 

CEO

Jeffery S. Hall
50 | Farm Credit Administration

tucky, College of Agriculture, advising the 

dean on state and federal legislative activities and managing a statewide economic development initiative called Ag-Project 2000.

Mr. Hall also served as a senior staff 

member in the office of U.S. Senator Mitch 

McConnell from 1988 until 1994. During 

that time, he was the legislative assistant 

for agriculture, accountable for internal 

and external issue management.

Before joining Senator McConnell’s 

staff, Mr. Hall served on the staff of the 

Kentucky Farm Bureau Federation. Over 

his 30-year career in agriculture, he has 

held leadership positions in the following 

nonprofits: the Kentucky Agricultural 

Council, the Agribusiness Industry Network, the Louisville Agricultural Club, 

the Kentucky Agricultural Water Quality 

Authority, and the Governor’s Commission 

on Family Farms.

Mr. Hall was raised on a family farm in 

southern Indiana, which has been in his 

family for over 200 years. He is currently 

a partner in the farm with his mother and 

sister. Mr. Hall received a Bachelor of Science from Purdue University.

Glen R. Smith, Board Member

Glen R. Smith was designated FCA board 

chairman and CEO of the Farm Credit Administration by President Donald Trump 

on July 17, 2019. He served in this position 

until Oct. 21, 2022. Mr. Smith has been a 

member of the FCA board since December 

2017. Although his board term expired on 

May 21, 2022, he will continue to serve on 

the board until his successor has been 

named.

He also serves as a member of the board 

of directors of the Farm Credit System Insurance Corporation, an independent U.S. 

government-controlled corporation that 

insures the timely payment of principal 

and interest on obligations issued jointly 

by Farm Credit System banks.

Mr. Smith is a native of Atlantic, Iowa, 

where he was raised on a diversified crop 

and livestock farm. His farm experience 

started at a very early age, after his father 

was involved in a disabling farm accident. 

He graduated from Iowa State University in 

1979 with a Bachelor of Science in agricultural business and accepted a position with 

Doane Agricultural Services as state manager of the company’s farm real estate division.

In 1982, Mr. Smith and his wife, Fauzan, 

moved back to his hometown and started 

farming and developing his ag service 

business. Today, their family farm, Smith 

Generation Farms Inc., has grown to encompass about 2,000 acres devoted to corn, 

soybeans, hay, and a small beef cow herd.

Mr. Smith is founder and co-owner of 

Smith Land Service Co., an ag service 

company that specializes in farm management, land appraisal, and farmland 

brokerage, serving about 30 Iowa counties. 

From 2001 to 2016, he was also co-owner 

and manager of S&K Land Co., an entity 

involved in the acquisition, improvement, 

and exchange of Iowa farmland. Mr. Smith 

has served on numerous community, 

church, and professional boards. He was 

elected to the Atlantic Community School 

Board of Education on which he served for 

nine years.

In 1990, he earned the title of Accredited Rural Appraiser from the American Society of Farm Managers and Rural Appraisers. In 2000, he served as president of the 

Iowa chapter of that organization. He is a 

lifelong member of the Farm Bureau, Iowa 

Corn Growers Association, Iowa Soybean 

Association, and Iowa Cattlemen’s 

Association.

The Smiths have four grown children 

and six grandchildren. Three of their children are directly involved in production 

agriculture. Their son Peter has assumed 

managerial responsibilities for both the 

family farm and business.

Glen R. Smith
2022 FCA Annual Report | 51

Appendix

Glossary

Agricultural credit association (ACA) —An 

ACA results from the merger of a federal 

land bank association (or a federal land 

credit association) and a production credit 

association (PCA) and has the combined 

authority of the two institutions. An ACA 

borrows funds from a farm credit bank 

or an agricultural credit bank to provide 

short-, intermediate-, and long-term credit 

to farmers, ranchers, and producers and 

harvesters of aquatic products. It also 

makes loans to these borrowers for certain 

processing and marketing activities, to 

rural residents for housing, and to certain 

farm-related businesses.

Agricultural credit bank (ACB) —An ACB 

results from the merger of a farm credit 

bank and a bank for cooperatives and has 

the combined authorities of those two 

institutions. An ACB is also authorized 

to finance U.S. agricultural exports and 

provide international banking services for 

farmer-owned cooperatives. CoBank is the 

only ACB in the FCS.

Bank for cooperatives (BC) —A BC provided 

lending and other financial services to 

farmer-owned cooperatives, rural utilities 

(electric and telephone), and rural sewer 

and water systems. It was also authorized 

to finance U.S. agricultural exports and 

provide international banking services 

for farmer-owned cooperatives. The last 

remaining BC in the FCS, the St. Paul Bank 

for Cooperatives, merged with CoBank on 

July 1, 1999.

Farm Credit Act —The Farm Credit Act 

of 1971, as amended, (12 U.S.C. §§ 2001–

2279cc) is the statute under which the FCS 

operates. The Farm Credit Act recodified 

all previous acts governing the FCS.

Farm credit bank (FCB) —FCBs provide 

services and funds to local associations 

that, in turn, lend those funds to farmers, 

ranchers, producers and harvesters of 

aquatic products, rural residents for housing, and some agriculture-related businesses. On July 6, 1988, the federal land 

bank and the federal intermediate credit 

bank in 11 of the 12 then-existing Farm 

Credit System districts merged to become 

FCBs. The mergers were required by the 

Agricultural Credit Act of 1987.

Farm Credit Leasing Services Corporation —The Leasing Corporation is a service 

entity owned by CoBank, ACB. It provides 

equipment leasing and related services 

to eligible borrowers, including agricultural producers, cooperatives, and rural 

utilities.

Farm Credit System Insurance Corporation (FCSIC) —FCSIC was established by 

the Agricultural Credit Act of 1987 as an 

independent U.S. government-controlled 

corporation. Its purpose is to ensure the 

timely payment of principal and interest 

on insured notes, bonds, and other obligations issued on behalf of FCS banks and 

to act as conservator or receiver of FCS 

institutions. The FCA board serves ex officio as the board of directors for FCSIC. The 

chairman of the FCSIC board of directors 

must be an FCA board member other than 

the current chairman of the FCA board.
52 | Farm Credit Administration

Federal Agricultural Mortgage Corporation —Farmer Mac was created with the 

enactment of the Agricultural Credit Act 

of 1987 to provide a secondary market for 

agricultural real estate and rural housing 

mortgage loans.

Federal Farm Credit Banks Funding Corporation —The Funding Corporation, based 

in Jersey City, New Jersey, manages the 

sale of Systemwide debt securities to finance the loans made by FCS institutions. 

It uses a network of bond dealers to market its securities.

Federal intermediate credit bank 

(FICB) —The Agricultural Credits Act of 

1923 provided for the creation of 12 FICBs 

to discount farmers’ short- and intermediate-term notes made by commercial 

banks, livestock loan companies, and 

thrift institutions. The Farm Credit Act 

of 1933 authorized farmers to organize 

PCAs, which could discount notes with 

FICBs. As a result, PCAs became the primary entities for delivery of short- and 

intermediate-term credit to farmers and 

ranchers. The FICBs and the federal land 

banks merged to become FCBs or part of 

the ACB. Thus, no FICBs remain within the 

FCS.

Federal land bank —The Federal Farm Loan 

Act of 1916 provided for the establishment of 12 federal land banks to provide 

long-term mortgage credit to farmers and 

ranchers, and later to rural home buyers. 

All federal land banks and FICBs have 

merged to become FCBs or part of the 

ACB. Thus, no federal land banks remain.

Federal land bank association —These 

associations were lending agents for 

FCBs before they received their affiliated 

banks’ direct-lending authority to make 

long-term mortgage loans to farmers, 

ranchers, and rural residents for housing. 

As lending agents, the associations did not 

own loan assets but made loans only on 

behalf of the FCBs with which they were 

affiliated. As of Oct. 1, 2000, all active federal land bank associations had received 

direct-lending authority and did not serve 

as lending agents for FCBs.

Federal land credit association (FLCA) —An 

FLCA is the regulatory term FCA uses for a 

federal land bank association that owns its 

loan assets. An FLCA borrows funds from 

an FCB to make and service long-term 

loans to farmers, ranchers, and producers 

and harvesters of aquatic products. It also 

makes and services housing loans for rural 

residents.

Financial Institution Rating System 

(FIRS) —The FIRS is similar to the Uniform Financial Institutions Rating System 

used by other federal banking regulators. 

However, unlike the Uniform Financial 

Institutions Rating System, the FIRS was 

designed to reflect the nondepository nature of FCS institutions. The FIRS provides 

a general framework for assimilating and 

evaluating all significant financial, asset 

quality, and management factors to assign 

a composite rating to each System institution. The ratings are described below.

Rating 1 —Institutions in this group are 

basically sound in every respect; any 

negative findings or comments are of 

a minor nature and are anticipated to 

be resolved in the normal course of 

business. Such institutions are well 

managed, resistant to external economic and financial disturbances, and more 

capable of withstanding the uncertainties of business conditions than those 

with lower ratings. Each institution in 

this category exhibits the best performance and risk management practices 

for its size, complexity, and risk profile. 

These institutions give no cause for regulatory concern.
2022 FCA Annual Report | 53

Rating 2 —Institutions in this group are 

fundamentally sound but may reflect 

modest weaknesses correctable in the 

normal course of business. Since the 

nature and severity of deficiencies are 

not material, such institutions are stable 

and able to withstand business fluctuations. Overall risk management practices are satisfactory for the size, complexity, and risk profile of each institution 

in this group. While areas of weakness 

could develop into conditions of greater 

concern, regulatory response is limited 

to the extent that minor adjustments 

are resolved in the normal course of 

business and operations continue in a 

satisfactory manner.

Rating 3 —Institutions in this category 

exhibit a combination of financial, management, operational, or compliance 

weaknesses ranging from moderately 

severe to unsatisfactory. When weaknesses relate to asset quality or financial 

condition, such institutions may be vulnerable to the onset of adverse business 

conditions and could easily deteriorate 

if concerted action is not effective in 

correcting the areas of weakness. Institutions that are in significant noncompliance with laws and regulations may 

also be accorded this rating. Risk management practices are less than satisfactory for the size, complexity, and risk 

profile of each institution in this group. 

Institutions in this category generally 

give cause for regulatory concern and 

require more than normal supervision 

to address deficiencies. Overall strength 

and financial capacity, however, still 

make failure only a remote possibility if 

corrective actions are implemented.

Rating 4 —Institutions in this group 

have an immoderate number of serious 

financial or operating weaknesses. Serious problems or unsafe and unsound 

conditions exist that are not being satisfactorily addressed or resolved. Unless 

effective actions are taken to correct 

these conditions, they are likely to develop into a situation that will impair 

future viability or constitute a threat to 

the interests of investors, borrowers, 

and stockholders. Risk management 

practices are generally unacceptable for 

the size, complexity, and risk profile of 

each institution in this group. A potential for failure is present but is not yet 

imminent or pronounced. Institutions 

in this category require close regulatory 

attention, financial surveillance, and a 

definitive plan for corrective action.

Rating 5 —This category is reserved for 

institutions with an extremely high, 

immediate or near-term probability 

of failure. The number and severity 

of weaknesses or unsafe and unsound 

conditions are so critical as to require 

urgent external financial assistance. 

Risk management practices are inadequate for the size, complexity, and risk 

profile of each institution in this group. 

In the absence of decisive corrective 

measures, these institutions will likely require liquidation or some form 

of emergency assistance, merger, or 

acquisition.

Government-sponsored enterprise 

(GSE) —A GSE is typically a federally chartered corporation that is privately owned, 

designed to provide a source of credit 

nationwide, and limited to servicing one 

economic sector. Each GSE has a public 

or social purpose. GSEs are usually created because the private markets did not 

satisfy a purpose that Congress deems 

worthy—either to fill a credit gap or to 

enhance competitive behavior in the loan 

market. Each is given certain features or 

benefits (called GSE attributes) to allow it 

to overcome the barriers that prevented 
54 | Farm Credit Administration

purely private markets from developing. 

The FCS is the oldest financial GSE.

Participation —A loan participation is 

usually a large loan in which two or more 

lenders share in providing loan funds 

to a borrower to manage credit risk or 

overcome a legal lending limit for a single 

credit. One of the participating lenders 

originates, services, and documents the 

loan. Generally, the borrower deals with 

the institution originating the loan and 

is not aware of the other participating 

institutions.

Production credit association (PCA) —PCAs 

are FCS entities that deliver only shortand intermediate-term loans to farmers 

and ranchers. A PCA borrows money from 

its FCB to lend to farmers. PCAs also own 

their loan assets. As of Jan. 1, 2003, all 

PCAs were eliminated as independent, 

stand-alone, direct-lender associations. All 

PCAs are now subsidiaries of ACAs.

Service corporation —Sections 4.25 and 

4.28 of the Farm Credit Act authorize FCS 

banks and associations to organize service 

corporations for performing functions 

and services that banks and associations 

are authorized to perform under the Farm 

Credit Act, except that the corporations 

may not provide credit or insurance services to borrowers.

Syndication —A loan syndication (or “syndicated bank facility”) is a large loan in 

which a group of banks work together to 

provide funds for a borrower. Usually one 

bank takes the lead, acting as an agent for 

all syndicate members and serving as the 

focal point between them and the borrower. All syndicate members are known at 

the outset to the borrower and they each 

have a contractual interest in the loan.

Abbreviations 

ACA —agricultural credit association

ACB —agricultural credit bank

CAMELS —capital, assets, management, earnings, liquidity, 

and sensitivity

CEO —chief executive officer

Farm Credit Act —Farm Credit Act of 1971, as amended

Farmer Mac —Federal Agricultural Mortgage Corporation

FCA —Farm Credit Administration

FCB —farm credit bank

FCS —Farm Credit System

FCSIC —Farm Credit System Insurance Corporation

FIRS —Financial Institution Rating System

FLCA —federal land credit association

GAAP —generally accepted accounting principles

OFIs —other financing institutions

PCA —production credit association

USDA —U.S. Department of Agriculture

YBS —young, beginning, and small (farmers and ranchers)
2022 FCA Annual Report | 55

Additional information

The 2022 Annual Report of the Farm Credit Administration is available on FCA’s website at www.fca.gov. 

For questions about this publication, contact FCA:

Office of Congressional and Public Affairs

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102-5090

Telephone: 703-883-4056

Fax: 703-790-3260

Email: info-line@fca.gov

With support from the Farm Credit System banks, 

the Federal Farm Credit Banks Funding Corporation 

prepares the financial press releases, the System’s 

Annual and Quarterly Information Statements, and 

the System’s combined financial statements. These 

documents are available on the Funding Corporation’s website at www.farmcreditfunding.com. For 

copies of these documents, contact the Funding 

Corporation:

Federal Farm Credit Banks Funding Corporation

101 Hudson Street, Suite 3505

Jersey City, NJ 07302

Telephone: 201-200-8131

The Farm Credit System Insurance Corporation’s annual report is available on its website at 

www.fcsic.gov. To receive copies of this report, 

contact FCSIC:

Farm Credit System Insurance Corporation

1501 Farm Credit Drive

McLean, VA 22102

Telephone: 703-883-4380
Copies available from

Office of Congressional and Public Affairs 

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102

703-883-4056

www.fca.gov

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