The report accompanying these financial statements was issued by 

BDO USA, LLP, a Delaware limited liability partnership and the U.S. member 

of BDO International Limited, a UK company limited by guarantee. 

Farm Credit System Insurance 

Corporation

Audited Financial Statements

For the Years Ended December 31, 2022 and 2021
Farm Credit System Insurance Corporation

Contents

Independent Auditor’s Report F1 – F3

Financial Statements

Statements of Financial Condition F4 

Statements of Income and Expenses and Changes in Insurance Fund F5 

Statements of Cash Flows F6 

Notes to the Financial Statements F7 - F14 

Management’s Report on Internal Control Over Financial Reporting F15 
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the 

international BDO network of independent member firms. 

BDO is the brand name for the BDO network and for each of the BDO Member Firms.

F1 

Independent Auditor’s Report 

Board of Directors

Farm Credit System Insurance Corporation

McLean, VA 22102

Report on the Audit of the Financial Statements and Internal Control Over Financials 

Reporting

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the financial statements of the Farm Credit System Insurance Corporation 

(FCSIC), which comprise the statements of financial condition as of December 31, 2022 and 2021, 

and the related statements of income and expenses and changes in insurance fund and cash flows 

for the years then ended, and the related notes to the financial statements. 

In our opinion, the accompanying financial statements present fairly, in all material respects, the 

financial position of FCSIC as of December 31, 2022 and 2021, and the results of its operations 

and its cash flows of the years then ended in accordance with accounting principles generally 

accepted in the United States of America.

We have also audited FCSIC’s internal control over financial reporting as of December 31, 2022, 

based on criteria established in Internal Control – Integrated Framework (2013), issued by the 

Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, 

FCSIC maintained, in all material respects, effective internal control over financial reporting as 

of December 31, 2022, based on the COSO criteria. 

Basis for Opinions

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America (GAAS) and the standards applicable to financial audits contained in 

Government Auditing Standards issued by the Comptroller General of the United States. Our 

responsibilities under those standards are further described in the Auditor’s Responsibilities for 

the Audits of the Financial Statements and Auditor’s Responsibilities for the Audit of Internal 

Control Over Financial Reporting sections of our report. We are required to be independent of 

FCSIC and to meet our other ethical responsibilities, in accordance with the relevant ethical 

requirements relating to our audits. We believe that the audit evidence we have obtained is 

sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements and Internal Control Over 

Financial Reporting

Management is responsible for the preparation and fair presentation of the financial statements 

in accordance with accounting principles generally accepted in the United States of America, and 

for the design, implementation, and maintenance of internal control relevant to the preparation 

and fair presentation of financial statements that are free from material misstatement, whether

due to fraud or error. Management is also responsible for designing, implementing, and 

8401 Greensboro Drive

Suite 800 

McLean, VA 22102 

Tel: 703-893-0600

Fax: 703-893-2766 

www.bdo.com 
F2 

maintaining effective internal control over financial reporting and for its assessment about the 

effectiveness of internal control over financial reporting, included in the accompanying 

Management’s Report on Internal Control Over Financial Reporting. 

In preparing the financial statements, management is required to evaluate whether there are 

conditions or events, considered in the aggregate, that raise substantial doubt about FCSIC’s 

ability to continue as a going concern within one year after the date that the financial statements 

are issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements 

Our objectives are to obtain reasonable assurance about whether the financial statements as a 

whole are free from material misstatement, whether due to fraud or error and to issue an 

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but 

is not absolute assurance, and therefore is not a guarantee that an audit conducted in accordance 

with GAAS and Government Auditing Standards will always detect a material misstatement when 

it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for 

one resulting from error, as fraud may involve collusion, forgery, intentional omissions, 

misrepresentations, or the override of internal control. Misstatements are considered material if 

there is a substantial likelihood that, individually or in the aggregate, they would influence the 

judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards we: 

• Exercise professional judgment and maintain professional skepticism throughout the 

audit.

• Identify and assess the risks of material misstatement of the financial statements, 

whether due to fraud or error, and design and perform audit procedures responsive to 

those risks. Such procedures include examining, on a test basis, evidence regarding the 

amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the financial statement audit in 

order to design audit procedures that are appropriate in the circumstances.

• Evaluate the appropriateness of accounting policies used and the reasonableness of 

significant accounting estimates made by management, as well as evaluate the overall 

presentation of the financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the 

aggregate, that raise substantial doubt about FCSIC’s ability to continue as a going concern 

for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other 

matters, the planned scope and timing of the audit, significant audit findings, and certain internal 

control-related matters that we identified during the financial statement audit.

Auditor’s Responsibilities for Audit of Internal Control Over Financial Reporting

Our objectives are to obtain reasonable assurance about whether effective internal control over 

financial reporting was maintained in all material respects and to issue an auditor’s report that 

includes our opinion on internal control over financial reporting. Reasonable assurance is a high 
F3 

level of assurance but is not absolute assurance and therefore is not a guarantee that an audit of 

internal control over financial reporting conducted in accordance with GAAS will always detect a 

material weakness when it exists. 

In performing an audit of internal control over financial reporting in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the 

audit.

• Obtain an understanding of internal control over financial reporting relevant to the audit 

of internal control over financial reporting, assess the risks that a material weakness 

exists, and test and evaluate the design and operating effectiveness of internal control 

over financial reporting based on the assessed risk. 

Definition and Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with 

governance, management, and other personnel, designed to provide reasonable assurance 

regarding the preparation of reliable financial statements in accordance with accounting 

principles generally accepted in the United States of America. An entity’s internal control over 

financial reporting includes those policies and procedures that (1) pertain to the maintenance of 

records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions 

of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as 

necessary to permit preparation of financial statements in accordance with accounting principles 

generally accepted in the United States of America, and that receipts and expenditures of the 

entity are being made only in accordance with authorizations of management and those charged 

with governance; and (3) provide reasonable assurance regarding prevention, or timely detection 

and correction of unauthorized acquisition, use, or disposition of the entity’s assets that could 

have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent, or 

detect and correct, misstatements. Also, projections of any assessment of effectiveness to future 

periods are subject to the risk that controls may become inadequate because of changes in 

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Report on Compliance and Other Matters Based on an Audit of Financial Statements

As part of obtaining reasonable assurance about whether FCSIC’s financial statements are free 

from material misstatement, we performed tests of its compliance with certain provisions of laws, 

regulations, contracts, and agreements, noncompliance with which could have a direct and 

material effect on the financial statements. However, providing an opinion on compliance with 

those provisions was not an objective of our audit, and accordingly, we do not express such an 

opinion. The results of our tests disclosed no instances of noncompliance or other matters that 

are required to be reported under Government Auditing Standards. 

McLean, Virginia

February 23, 2023 
December 31, 2022 2021

Assets

 Cash and cash equivalents $ 648 $ 4,940

Investments in U.S. Treasury obligations 5,993,783 5,471,826

Premiums receivable 644,543 460,503

Accrued interest receivable 33,776 23,187

Operating lease right-of-use assets 452 -

General property, plant, equipment, and software, net 1 6

Total Assets $ 6,673,203 $ 5,960,462

Liabilities and Insurance Fund

Liabilities

Operating lease liabilities $ 457 $ -

Accounts payable and accrued expenses 703 694

Total Liabilities 1,160 694

Insurance Fund

Unallocated Insurance Fund 6,672,043 5,959,768

Total Insurance Fund 6,672,043 5,959,768

Total Liabilities and Insurance Fund $ 6,673,203 $ 5,960,462

See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

Statements of Financial Condition

(Dollars in thousands)

F4
Year-ended December 31, 2022 2021

Income

 Premiums $ 644,597 $ 460,770

Interest income 72,057 48,894

Total Income 716,654 509,664

Expenses

Administrative operating expenses 4,379 4,150

Total expenses 4,379 4,150

Net income 712,275 505,514

Insurance Fund - beginning of year 5,959,768 5,454,254

Insurance Fund - end of year $ 6,672,043 $ 5,959,768

See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

Statements of Income and Expenses and Changes in Insurance Fund

(Dollars in thousands)

F5
Year-ended December 31, 2022 2021

Cash flows from operating activities

Net income $ 712,275 $ 505,514

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation 5 19

Noncash lease expense 150 -

Net amortization and accretion of investments 48,230 54,040

Principal reduction in operating lease liabilities (145) -

Increase in premiums receivable (184,040) (205,138)

Increase in accrued interest receivable (10,589) (892)

Increase in accounts payable and accrued

expenses 9 45

Net cash provided by operating activities 565,895 353,588

Cash flows from investing activities

Payments for purchase of U.S. Treasury obligations (2,674,371) (3,740,265)

Proceeds from maturity of U.S. Treasury obligations 2,104,184 2,727,017

Net cash used in investing activities (570,187) (1,013,248)

Net change in cash and cash equivalents (4,292) (659,660)

Cash and cash equivalents, beginning of year 4,940 664,600

Cash and cash equivalents, end of year $ 648 $ 4,940

Supplemental disclosure of cash flow information:

Operating lease assets obtained in exchange for new

operating lease liabilities - Upon adoption (See Note 5) $ 602 $ - See accompanying notes to the financial statements.

Farm Credit System Insurance Corporation

 Statements of Cash Flows

(Dollars in thousands)

F6
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F7 

Note 1: Organization and Summary of Significant Accounting Policies

Farm Credit Insurance Fund (Insurance Fund)

Statutory Framework: 

The Agricultural Credit Act of 1987 established the Farm Credit System Insurance Corporation (the 

Corporation or FCSIC) for the purpose of insuring the timely payment of principal and interest on 

notes, bonds, debentures, and other obligations issued under subsection (c) or (d) of section 4.2 of 

the Farm Credit Act of 1971, as amended (the Farm Credit Act). Each bank in the Farm Credit System 

(System) participating in insured obligations is an insured System bank. At December 31, 2022 there 

were four insured System banks and 63 direct lender associations, down from four insured System 

banks and 67 direct lender associations at December 31, 2021. 

The Corporation is managed by a board of directors consisting of the same individuals as the Farm 

Credit Administration (FCA) board except that the chairman of the FCA board may not serve as the 

chairman of the Corporation's board of directors. 

The Corporation must spend amounts in the Insurance Fund necessary to insure the timely payment 

of interest and principal on insured obligations. The Corporation, in its sole discretion, is authorized 

to expend amounts to provide financial assistance to System banks and direct lender associations. 

The Corporation may also act as receiver or conservator of a System bank or association. In addition,

FCSIC has the authority to create, and the Farm Credit Administration to charter, a System bridge 

bank, to assist with resolving a failed bank.

As of December 31, 2022, the System banks reported amounts totaling $392 billion of insured 

obligations compared to $353 billion as of December 31, 2021. 

If the Corporation does not have sufficient funds to pay all insured obligations, System banks will 

be required to make payments under joint and several liability, as required by section 4.4 (a)(2) of 

the Farm Credit Act. The insurance provided by the Insurance Fund is limited to the resources in 

the Insurance Fund. System obligations are not guaranteed by the U.S. government.

Under section 5.63 of the Farm Credit Act, the Corporation is exempt from all Federal, state, and 

local taxes with the exception of real property taxes.

Accounting Framework: 

The Corporation applies accounting and reporting standards issued by the Financial Accounting 

Standards Board (FASB). 

Note 2: Basis of Accounting 

The accounting and reporting policies of the Corporation conform to accounting principles generally 

accepted in the United States of America (GAAP) and, as such, the financial statements have been 

prepared using the accrual basis of accounting.
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F8 

Cash and Cash Equivalents

Cash and cash equivalents include investments in U.S. Treasury obligations with original maturities 

of 90 days or less. At December 31, 2022, the Corporation held $405.1 thousand in overnight 

Treasury certificates maturing on January 3, 2023, with an interest rate of 3.95 percent, and 

approximately $242.4 thousand in cash. At December 31, 2021, the Corporation held $1.9 million in 

overnight Treasury certificates maturing on January 3, 2022, with an interest rate of 0.06 percent, 

and $3.0 million in cash.

Investments in U.S. Treasury Obligations

Section 5.62 of the Farm Credit Act requires that funds of the Corporation, not otherwise employed, 

shall be invested in obligations of the United States or in obligations guaranteed as to principal and 

interest by the United States. The Corporation has classified its investments as held-to-maturity in 

accordance with FASB Accounting Standards Codification (ASC) 320, Investments - Debt and Equity 

Securities and carries them at amortized cost. Amortization of premium and accretion of discount 

on investments has been computed under the interest method since 2002. 

Premium Receivable – Concentration of Credit Risk 

The Farm Credit Act requires that the System banks pay premiums to FCSIC. The premium receivable 

balance consists of amounts due from the four System banks and as such is exposed to risks due to 

concentration. Historically, FCSIC has not experienced any losses related to the premium receivable 

balance. FCSIC performs a quarterly analysis related to estimating an allowance for premium 

receivable which continues to indicate that no allowance is warranted.

Leases 

Leases arise from contractual obligations that convey the right to control the use of identified 

property, plant or equipment for a period of time in exchange for consideration. At the inception 

of the contract, FCSIC determines if an arrangement contains a lease based on whether there is an 

identified asset and whether FCSIC controls the use of the identified asset. FCSIC also determines 

whether the lease classification is an operating or financing lease at the commencement date. 

A right-of-use asset represents FCSIC’s right to use an underlying asset and a lease liability 

represents FCSIC’s obligation to make payments during the lease term. Right-of-use assets are 

recorded and recognized at commencement for the lease liability amount, adjusted for initial direct 

costs incurred and lease incentives received. Lease liabilities are recorded at the present value of 

the future lease payments over the lease term at commencement. 

FCSIC uses a risk-free discount rate at the lease commencement date for all new leases and at 

January 1, 2022 (the “Adoption date”) (See “Accounting pronouncement adopted” paragraph below) 

to determine the present value of lease payments. 

FCSIC’s operating lease typically includes non-lease components such as common-area maintenance 

costs, utilities, and other maintenance costs. FCSIC has elected to include non-lease components 

with lease payments for the purpose of calculating lease right-of-use assets and liabilities. 

FCSIC’s lease terms may include options to extend or terminate the lease. FCSIC uses the base, noncancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F9 

certain that FCSIC will exercise those options. FCSIC’s lease agreements do not contain any material 

residual value guarantees or material restrictive covenants. 

FCSIC does not have any short-term lease agreements. 

Liability for Estimated Insurance Obligations

The liability for estimated insurance obligations is the present value of estimated probable insurance 

payments to be made in the future based on the Corporation's analysis of economic conditions of 

insured System banks.

The insured System banks' primary lending markets are borrowers engaged in farming, ranching, and 

producing or harvesting of aquatic products, and their cooperatives. Financial weaknesses in these 

market segments and the effect of general market conditions on the System's borrowers could 

adversely affect the banks' financial condition and profitability. Insured System banks also face risks 

from changing interest rate environments and the need to maintain ongoing access to financial 

markets. Adverse changes in the financial condition and profitability of insured System banks 

resulting from increased levels of credit, financial, or other risks could occur in the future which 

would require a liability for estimated insurance obligations to be recorded.

The Corporation actively monitors the creditworthiness and financial condition of the insured 

System banks. Management is not aware of any events or circumstances at this time which would 

require a liability for estimated insurance obligations to be recorded at December 31, 2022. 

Premiums

Annual premiums are recorded as revenue during the 12-month calendar year period on which the 

premiums are based. All premiums are required to be paid to FCSIC on or before January 31st of the 

year subsequent to the year in which they are earned.

Use of Estimates

The preparation of financial statements, in conformity with GAAP, requires management to make 

estimates and assumptions that affect the reported amount of assets and liabilities and disclosure 

of contingent assets and liabilities at the date of the financial statements and the reported amount 

of revenues and expenses during the reporting period. Actual results could differ from those 

estimates.

Accounting Pronouncement Adopted

In 2022, management adopted FASB Accounting Standards Updates (“ASU”) No. 2016-02, Leases

(Topic 842) (“ASU 2016-02”), and the additional ASUs issued to clarify and update the guidance in 

ASU 2016-02 (collectively, “ASC Topic 842”). ASC Topic 842 modifies lease accounting for lessees to 

increase transparency and comparability by recording lease assets and liabilities for operating leases 

and disclosing key information about leasing arrangements. 

As of January 1, 2022, the adoption date for ASC Topic 842, FCSIC elected the package of practical 

expedients offered by the new standard including to (1) not reassess whether any expired or existing 

contracts are considered or contain leases; (2) not reassess the lease classification for any expired 

or existing leases; and (3) not reassess the initial direct costs for any existing leases. FCSIC does not 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F10

have leases that contain land easements; therefore, this optional practical expedient was not 

elected. The adoption of ASC Topic 842 resulted in the recognition of total right-of-use assets and 

total lease liabilities of approximately $602 thousand as of January 1, 2022, related to FCSIC’s 

existing office space lease.

Note 3: Investments in U.S. Treasury Obligations

In addition to the amounts referenced in Note 2, Cash and Cash Equivalents, at December 31, 2022 

and 2021, investments in U.S. Treasury obligations, which are carried at amortized cost, consisted 

of the following:

Amortized

Gross 

Unrealized 

Gross 

Unrealized Estimated 

(Dollars in thousands) Cost Gains Losses Fair Value

December 31, 2022 

U.S. Treasury obligations $ 5,993,783 $ 1,722 $ (209,240) $ 5,786,265 

December 31, 2021

U.S. Treasury obligations $ 5,471,826 $ 27,397 $ (14,336) $ 5,484,887

The fair value of FCSIC’s investments in U.S. Treasury obligations have been included below for 

disclosure purposes only and are estimated based on quoted market prices for those instruments.

The estimated fair value of U.S. Treasury obligations is measured using the Level 1 hierarchy, which 

is defined in the accounting standards as unadjusted quoted prices in active markets for identical 

assets that are available at the measurement date. 

The amortized cost and estimated fair value of U.S. Treasury obligations at December 31, 2022, by 

contractual maturity, are shown below:

(Dollars in thousands)

Amortized 

Cost

Estimated 

Fair Value

Due in one year or less $ 2,036,165 $ 1,995,403

Due after one year through five years 3,957,618 3,790,862

$ 5,993,783 $ 5,786,265 

The Corporation follows GAAP for measuring, reporting, and disclosing fair value. These standards 

apply to all assets and liabilities that are measured, reported, and/or disclosed on a fair value basis. 

Note 4: Premiums, the Secure Base Amount and Excess Insurance Fund Balances 

Each System bank which issues insured obligations under subsection (c) or (d) of section 4.2 of the 

Farm Credit Act is an insured System bank and is required to pay premiums to the Corporation.

The Farm Credit Act sets a secure base amount (SBA) for the Insurance Fund to achieve. The 

statutory SBA is equivalent to 2 percent of the aggregate outstanding insured obligations of all 

insured System banks (adjusted downward by a percentage of the guaranteed portions of principal 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F11

outstanding on certain government-guaranteed loans and investments) or such other percentage as 

determined by the Corporation in its sole discretion to be actuarially sound to maintain in the 

Insurance Fund taking into account the risk of insuring outstanding insured obligations. 

The Farm Credit Act requires FCSIC to assess premiums based on each bank's pro rata share of 

insured debt (rather than on individual loans). FCSIC may collect from 0 to 20 basis points annually 

on adjusted insured debt outstanding. The Farm Credit Act also authorizes a risk surcharge of up to 

10 basis points on nonaccrual loans and on other-than-temporarily impaired investments. The Farm 

Credit Act reduces the total insured debt on which premiums are assessed by 90 percent of Federal 

government-guaranteed loans and investments and 80 percent of state government-guaranteed 

loans and investments and deducts similar percentages of such guaranteed loans and investments 

when calculating the secure base amount (SBA). 

Insurance premium rates are reviewed at least semiannually. For 2022, the board of directors set 

premium accrual rates at its January 27, 2022 meeting at 16 basis points on average adjusted insured 

debt and continued the assessment of the 10 basis point surcharge on the average principal balance 

outstanding for nonaccrual loans and other-than-temporarily impaired investments. The board of 

directors again reviewed premiums at its June 8, 2022 meeting and voted to exercise its discretion 

to increase the premium rate on adjusted insured debt obligations to 20 basis points for 2022 and 

apply the rate retroactively for the entire 2022 premium billing cycle and continued the assessment 

of the 10 basis point surcharge on the average principal balance outstanding for nonaccrual loans 

and other-than-temporarily impaired investments for the remainder of 2022. In 2022, outstanding 

insured obligations increased by $38.9 billion (11.0 percent). At December 31, 2022, the total 

Insurance Fund was 1.97 percent of adjusted insured obligations.

For 2021, the board of directors set premium accrual rates at its January 28, 2021 meeting at 16

basis points on average adjusted insured debt and continued the assessment of the 10 basis point 

surcharge on the average principal balance outstanding for nonaccrual loans and other-thantemporarily impaired investments. The board of directors again reviewed premiums at its June 17, 

2021 meeting and voted to maintain the premium accrual rate on average adjusted insured debt at 

16 basis points and continued the assessment of the 10 basis point surcharge on the average principal 

balance outstanding for nonaccrual loans and other-than-temporarily impaired investments for the 

remainder of 2021. In 2021, outstanding insured obligations increased by $30.4 billion (9.4 percent). 

At December 31, 2021, the total Insurance Fund was 1.98 percent of adjusted insured obligations.

The Farm Credit Act requires if, at the end of any calendar year, the aggregate of the amounts in 

the Insurance Fund exceed the SBA, the Corporation is required to allocate to the Allocated 

Insurance Reserves Accounts (AIRAs) any excess balances less the amount that the Corporation, in 

its sole discretion, determines to be the sum of the estimated operating expenses and estimated 

insurance obligations of the Corporation for the immediately succeeding calendar year.

The total Insurance Fund did not exceed the 2 percent SBA at December 31, 2022 or 2021, and there 

were no allocations to the AIRAs for the Farm Credit System banks.

The AIRAs' balances are recorded as part of the Insurance Fund until approved for payment by the 

Corporation's board of directors. AIRAs’ balances may be used to absorb any insurance losses and 

claims. Furthermore, the board of directors has discretion to limit or restrict the AIRAs’ payments. 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F12

Note 5: Operating Lease 

The Corporation is committed under a ten-year lease with the FCS Building Association for office 

space expiring on November 30, 2025. The Corporation recognizes the right-of-use asset, and 

liability, initially measured at the present value of the lease payments. Additionally, the Corporation

recognizes a single lease expense, which is allocated over the lease term, generally on a straightline basis. 

As permitted under ASC Topic 842, the Corporation has elected not to recast/restate comparative 

periods and to set the initial adoption application date to January 1, 2022, the beginning of the 

period of adoption; additionally, the Corporation has not separated lease and non-lease components 

under its office space lease. 

Office space payments are due on the first day of every month and the Corporation paid lease 

payments of approximately $155 thousand for the year ended December 31, 2022. 

During 2022, the Corporation recorded lease expense of approximately $159 thousand reported in 

the accompanying Statements of Income and Expenses and Changes in Insurance Fund. The lease 

contains fixed payments which increase by 2% annually and does not include a current option to 

extend or renew beyond the current terms. 

As of December 31, 2022, remaining maturities of lease liabilities approximated were as follows: 

Years ending December 31,

(Dollars in thousands)

2023 $ 158

2024 161

2025 150

Total operating lease payments 469

Less: imputed interest (12) 

Total operating lease liabilities $ 457

Since the Corporation has only one lease as of December 31, 2022, the weighted-average lease term 

remaining is approximately 3 years. Because the Corporation does not have access to the rate 

implicit in the lease, the Corporation utilized the risk-free rate of 1.8% (the borrowing rate as of 

adoption date) as the discount rate. Likewise, the weighted average discount rate as of December 

31, 2022 was 1.8%.

As of December 31, 2022, the Corporation recorded a right-of-use asset of approximately $452

thousand and related lease liability of approximately $457 thousand in the accompanying 

Statements of Financial Condition. 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F13

Previous lease standard (FASB ASC 840) – Fiscal year 2021

The Corporation is committed under a ten-year lease with the FCS Building Association for office 

space expiring on November 30, 2025. The Corporation recorded lease expense (including operating 

cost assessments) of $154 thousand for 2021. The following is a schedule by year of the future 

minimum lease payments required under this lease as of December 31, 2021: 

Years ending December 31,

(Dollars in thousands)

2022 $ 155

2023 158

2024 161

2025 150

$ 624

Note 6: Line of Credit

On September 24, 2013, the Corporation entered into an agreement with the Federal Financing Bank 

(the FFB), a United States government corporation subject to the supervision and direction of the 

U.S. Treasury. Pursuant to this agreement, the FFB would advance funds to the Corporation under 

certain limited circumstances. The Corporation would use these funds to increase its capacity to 

provide assistance to the System banks in exigent market circumstances that threaten the banks' 

ability to pay maturing debt obligations. The agreement provides for a short-term revolving credit 

facility of up to $10 billion, renewable annually and terminating on September 30, 2023, unless 

otherwise further extended.

Under the agreement, each provision of funds by the FFB is subject to certain terms and conditions. 

The interest rate for each advance will be established by the FFB at the time the respective advance 

is made. Each advance cannot have a maturity date longer than twelve months and the maturity 

date cannot be later than the final termination date of the agreement.

The Corporation paid no commitment fee to secure this line of credit. There were no amounts drawn 

on this line of credit during 2022 and 2021 and no outstanding balance due as of December 31, 2022 

and 2021. 

Note 7: Retirement Plan

All permanent Corporation employees are covered by the Federal Employees Retirement System 

(FERS). The Corporation's contribution was 18.4 percent of base pay for 2022. The Corporation's 

contribution was 17.3 percent of base pay for the first nine months of 2021 and 18.4 percent for the 

last three months of 2021. In addition, the Corporation automatically contributes 1 percent of base 

pay to the employee's Thrift Savings Plan account, matches the first 3 percent contributed by the 

employee, and matches one-half of the next 2 percent contributed by the employee. In 2015, the 

Corporation began a 401K plan for employees. The Corporation automatically contributes 1 percent 

of base pay to the employee's 401K account and matches the first 2 percent contributed by the 

employee. Retirement plan expenses amounted to $585 thousand in 2022 and $507 thousand in 

2021. 
Farm Credit System Insurance Corporation

Notes to the Financial Statements

F14

Note 8: Related Parties

The Corporation purchases services from FCA under an Interagency Agreement, including 

examination and administrative support services. The intention of the parties as stated in the 

agreement is that specified rates and fees will reimburse the party providing services for all 

reasonable costs associated with provision of the services. The Corporation purchased services for 

2022 which totaled $340 thousand, compared with $358 thousand for 2021. At December 31, 2022 

and 2021, included in the accompanying Statements of Financial Condition are the amounts of $29

thousand and $19 thousand respectively which were due to FCA from the Corporation. 

The Corporation may also provide services to FCA under an Interagency Agreement; however, the 

Corporation provided no services and recognized no revenue for 2022 and 2021. At December 31, 

2022 and 2021, the Corporation did not have any receivables from FCA.

Note 9: Subsequent Events

FCSIC evaluated subsequent events from the date of the statement of financial condition through 

February 23, 2023, the date at which FCSIC’s financial statements were issued. No material 

subsequent events were identified for either recognition or disclosure.
 F15 

Management's Report on Internal Control Over Financial Reporting 

The Farm Credit System Insurance Corporation's (FCSIC) internal control over financial reporting is 

a process effected by those charged with governance, management, and other personnel, designed 

to provide reasonable assurance regarding the preparation of reliable financial statements in 

accordance with generally accepted accounting principles in the United States of America. Our 

internal control over financial reporting includes those policies and procedures that (1) pertain to 

the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions 

and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as 

necessary to permit preparation of financial statements in accordance with generally accepted 

accounting principles in the United States of America and that receipts and expenditures of FCSIC 

are being made only in accordance with authorizations of FCSIC management and those charged 

with governance; and (3) provide reasonable assurance regarding prevention, or timely detection 

and correction, of unauthorized acquisition, use, or disposition of FCSIC's assets that could have a 

material effect on our financial statements. 

Management of FCSIC is responsible for designing, implementing, and maintaining effective internal 

control over financial reporting. Management assessed the effectiveness of FCSIC's internal control 

over financial reporting as of December 31, 2022, using the criteria established in the Internal 

Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the 

Treadway Commission (COSO). Based on that assessment, management concluded that, as of 

December 31, 2022, FCSIC's internal control over financial reporting is effective, based on the COSO 

criteria. 

Internal control over financial reporting has inherent limitations. Internal control over financial 

reporting is a process that involves human diligence and compliance and is subject to lapses in 

judgment and breakdowns resulting from human failures. Internal control over financial reporting 

also can be circumvented by collusion or improper management override. Because of its inherent 

limitations, internal control over financial reporting may not prevent, or detect and correct, 

misstatements. Also, projections of any assessment of effectiveness to future periods are subject 

to the risk that controls may become inadequate because of changes in conditions, or that the 

degree of compliance with the policies or procedures may deteriorate. 

_____________________________________ 

Andrew J. Grimaldi 

Chief Financial Officer 

_____________________________________ 

John F. Simonson 

Chief Risk Officer 

_____________________________________ 

Howard I. Rubin 

Chief Operating Officer 

_____________________________________ 

Lynn M. Powalski 

General Counsel 

February 23, 2023 

HOWARD

RUBIN

Digitally signed by 

HOWARD RUBIN 

Date: 2023.02.23 

16:12:52 -05'00'

ANDREW

GRIMALDI

Digitally signed by 

ANDREW GRIMALDI 

Date: 2023.02.23 

12:10:59 -05'00'

LYNN

POWALSKI

Digitally signed by LYNN 

POWALSKI

Date: 2023.02.23 

13:06:41 -05'00'

SIMONSONJ

Digitally signed by 

SIMONSONJ

Date: 2023.02.23 

12:22:44 -05'00'