FARM CREDIT SYSTEM INSURANCE 

CORPORATION 

McLean, VA 

FINANCIAL STATEMENTS 

Including Independent Auditors' Report 

As of and for the Years Ended December 31, 2015 and 2014 
TABLE OF CONTENTS 

Independent Auditors' Report F1 – F2 

Independent Auditors’ Report on Internal Control over Financial Reporting 

and on Compliance And Other Matters Based on an Audit of Financial 

Statements Performed in Accordance with U.S. Government Auditing 

Standards F3 – F4 

Financial Statements 

Statements of Financial Condition F5 

Statements of Income and Expenses and Changes in Insurance Fund F6 

Statements of Cash Flows F7 

Notes to Financial Statements F8 – F15 
Baker Tilly Virchow Krause, LLP 

777 E Wisconsin Ave, 32nd Floor 

Milwaukee, WI 53202-5313 

United States of America 

T: +1 414 777 5500 

F: +1 414 777 5555 

bakertilly.com 

Independent Auditors’ Report 

To the Board of Directors 

Farm Credit System Insurance Corporation 

McLean, Virginia 

Report on the Financial Statements

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

("FCSIC"), which comprise the statement of financial condition as of December 31, 2015 and 2014, and the 

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

ended, and related notes to the financial statements. 

Management’s Responsibility for the Financial Statements

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

accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"); this 

includes 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. 

Auditors’ Responsibility 

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our 

audits in accordance with auditing standards generally accepted in the United States of America; the standards 

applicable to financial audits contained in U.S. Government Auditing Standards issued by the Comptroller 

General of the United States; and Office of Management and Budget Bulletin No. 15-02, Audit Requirements for 

Federal Financial Statements. Those standards require that we plan and perform the audits to obtain 

reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 

financial statements. The procedures selected depend on the auditors' judgment, including the assessment of 

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those 

risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation 

of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not 

for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we 

express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used 

and the reasonableness of significant estimates made by management, as well as evaluating the overall 

presentation of the financial statements. 

 
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 

audit opinion. 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial 

position of the Farm Credit System Insurance Corporation as of December 31, 2015 and 2014, and the results 

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

accepted in the United States of America. 

Other Reporting Required by U.S. Government Auditing Standards 

In accordance with U.S. Government Auditing Standards, we have also issued our report dated February 8, 

2016 on our consideration of FCSIC’s internal control over financial reporting and on our tests of its compliance 

with certain provisions of laws, regulations and contracts and other matters. The purpose of that report is to 

describe the scope of our testing of internal control over financial reporting and compliance and the results of 

that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That 

report is an integral part of an audit performed in accordance with U.S. Government Auditing Standards in 

considering FCSIC’s internal control over financial reporting and compliance. 

Milwaukee, Wisconsin 

February 8, 2016 
F3

Baker Tilly Virchow Krause, LLP 

777 E Wisconsin Ave, 32nd Floor 

Milwaukee, WI 53202-5313 

United States of America 

T: +1 414 777 5500 

F: +1 414 777 5555 

bakertilly.com 

Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance 

And Other Matters Based on an Audit of Financial Statements Performed in Accordance with U.S. 

Government Auditing Standards 

To the Board of Directors 

Farm Credit System Insurance Corporation 

McLean, Virginia 

We have audited, in accordance with auditing standards generally accepted in the United States of America 

and the standards applicable to financial audits contained in U.S. Government Auditing Standards issued by the 

Comptroller General of the United States, the financial statements of the Farm Credit System Insurance 

Corporation ("FCSIC"), which comprise the statement of financial condition as of December 31, 2015, and the 

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

ended, and related notes to the financial statements, and have issued our report thereon dated February 8, 

2016. 

Internal Control Over Financial Reporting 

In planning and performing our audit of the financial statements we considered FCSIC's internal control over 

financial reporting ("internal control") to determine the audit procedures that are appropriate in the 

circumstances for the purpose of expressing an opinion on the financial statements, but not for the purpose of 

expressing an opinion on the effectiveness of FCSIC's internal control. Accordingly, we do not express an 

opinion on the effectiveness of FCSIC's internal control. 

A deficiency in internal control exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, 

misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial 

statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a 

deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 

Our consideration of internal control was for the limited purpose described in the first paragraph of this section 

and was not designed to identify all deficiencies in internal control that might be material weaknesses or 

significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal 

control that we consider to be material weaknesses. However, material weaknesses may exist that have not 

been identified. 
F4

Compliance and Other Matters 

As part of obtaining reasonable assurance about whether FCSIC's financial statements are free from material 

misstatement, we also performed tests of its compliance with certain provisions of laws, regulations, and 

contracts, noncompliance with which could have a direct and material effect on the determination of financial 

statement amounts. 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 herein under U.S. Government Auditing 

Standards. 

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and 

the result of that testing, and not to provide an opinion on the effectiveness of FCSIC's internal control or on 

compliance. This report is an integral part of an audit performed in accordance with U.S. Government Auditing 

Standards in considering FCSIC's internal control and compliance. Accordingly, this report is not suitable for 

any other purpose. 

Milwaukee, Wisconsin 

February 8, 2016 
FARM CREDIT SYSTEM INSURANCE CORPORATION 

STATEMENTS OF FINANCIAL CONDITION 

As of December 31, 2015 and 2014 

(Dollars in thousands) 

 2015 2014 

Assets 

Cash and cash equivalents $ 148,788 $ 135,176

Investments in U.S. Treasury obligations 3,615,305 3,378,139

Premiums receivable 260,634 223,258

Accrued interest receivable 14,045 13,524

Total Assets $ 4,038,772 $ 3,750,097

 

Liabilities and Insurance Fund 

 Accounts payable and accrued expenses $ 531 $ 348

Total Liabilities 531 348

 

Farm Credit Insurance Fund 

Allocated Insurance Reserves Accounts - -

Unallocated Insurance Fund 4,038,241 3,749,749

Total Insurance Fund 4,038,241 3,749,749

Total Liabilities and Insurance Fund $ 4,038,772 $ 3,750,097
FARM CREDIT SYSTEM INSURANCE CORPORATION 

STATEMENTS OF INCOME AND EXPENSES AND CHANGES IN INSURANCE FUND 

For the Years Ended December 31, 2015 and 2014 

(Dollars in thousands) 

 2015 2014 

Income 

 Premiums $ 260,617 $ 223,145

 Interest income 31,295 34,090

Total Income 291,912 257,235

 

Expenses 

 Administrative operating expenses 3,420 3,135

Total Expenses 3,420 3,135

Net Income 288,492 254,100

Farm Credit Insurance Fund — Beginning of Year 3,749,749 3,495,649

Payments to AIRAs - -

Farm Credit Insurance Fund — End of Year $ 4,038,241 $ 3,749,749
FARM CREDIT SYSTEM INSURANCE CORPORATION 

STATEMENTS OF CASH FLOWS 

For the Years Ended December 31, 2015 and 2014 

(Dollars in thousands) 

2015 2014 

Cash Flows from Operating Activities 

Net income $ 288,492 $ 254,100

 

Adjustments to reconcile net income to net cash 

provided by operating activities: 

(Increase) decrease in premiums receivable (37,376) (49,619)

(Increase) decrease in accrued interest receivable (521) (923)

Net amortization and accretion of investments 34,034 37,941

Increase (decrease) in accounts payable and accrued expenses 183 7

 Net Cash Provided by Operating Activities 284,812 241,506

Cash Flows from Investing Activities 

Payments for purchase of U.S. Treasury obligations (1,067,862) (1,076,820)

Proceeds from maturity of U.S. Treasury obligations 796,662 721,205

 Net Cash Provided by Investing Activities (271,200) (355,615)

Cash Flows from Financing Activities 

Payment to AIRAs Accountholders - -

 Net Cash Used in Financing Activities - -

Net change in cash and cash equivalents 13,612 (114,109)

Cash and cash equivalents, beginning of year 135,176 249,285

Cash and Cash Equivalents, End of Year $ 148,788 $ 135,176
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F8 

NOTE 1 – 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 ensuring 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), (insured obligations). Each bank in the Farm Credit 

System (System) participating in insured obligations is an insured System bank. At December 31, 2015, 

there were four insured System banks and 75 direct lender associations. 

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 the amounts necessary to: 

1. Ensure the timely payment of interest and principal on insured obligations in the event of default 

by an insured System bank; and 

2. Ensure the retirement of eligible borrower stock at par value under section 4.9A of the Farm 

Credit Act. 

The Corporation, in its sole discretion, is authorized to expend amounts to provide financial assistance to 

certain insured institutions. 

As of December 31, 2015, there were $243.8 billion of insured obligations and $1 million of eligible 

borrower stock outstanding. 

If the Corporation does not have sufficient funds to ensure payment on 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. 

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. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F9 

NOTE 2 – Summary of Significant Accounting Policies 

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. 

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, 2015, the Corporation held $148.7 

million in overnight Treasury Certificates maturing on January 4, 2016, with an investment rate of 0.08 

percent, and $100,084 in cash. At December 31, 2014, the Corporation held $135.1 million in overnight 

Treasury Certificates maturing on January 2, 2015, with an investment rate of 0.03 percent, and $100,196 

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 Financial Accounting Standards Board Accounting 

Standards Codification 320, Investments - Debt and Equity Securities (formerly Statement of Financial 

Accounting Standard No. 115) and carries them at amortized cost. Amortization of premium and accretion 

of discount on investments has been computed under the interest method since 2002. Fair value of 

investments is estimated based on quoted market prices for those or similar instruments. 

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 position 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, 2015 or 2014. 

Premiums — Annual premiums are recorded as revenue during the period on which the premiums are 

based. All premiums are due 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. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F10 

NOTE 3 – Investments in U.S. Treasury Obligations 

In addition to the amounts referenced in Note 2, Cash and Cash Equivalents, at December 31, 2015 and 

2014, investments in U.S. Treasury obligations which are carried at amortized cost consisted of the 

following: 

 Gross Gross Estimated 

Amortized Unrealized Unrealized Fair 

(Dollars in thousands) Cost Gains Losses Value 

December 31, 2015 

U.S. Treasury obligations $ 3,615,305 $ 5,107 $ (12,764) $ 3,607,648 

December 31, 2014 

U.S. Treasury obligations $ 3,378,139 $ 7,577 $ (10,129) $ 3,375,587 

The amortized cost and estimated fair value of U.S. Treasury obligations at December 31, 2015, by 

contractual maturity, are shown below. 

(Dollars in thousands) Amortized Cost Estimated Fair Value 

 

Due in one year or less $ 975,537 $ 975,040 

Due after one year through five years 2,432,151 2,430,217 

 

Due after five years through ten years 207,617 202,391 

 

$ 3,615,305 $ 3,607,648 

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. 

As defined in the accounting standards, fair value is the price that would be received to sell an asset or 

paid to transfer a liability in an orderly transaction between market participants at the measurement date. 

The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. 

Assets and liabilities measured, reported and/or disclosed at fair value will be classified and disclosed in 

one of the following three categories: 

Level 1 - Inputs to the valuation methodology are unadjusted quoted market prices for identical 

assets in active markets that the plan has the ability to access. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F11 

NOTE 3 – Investments in U.S. Treasury Obligations (cont.)

Level 2 - Observable market based inputs or unobservable inputs that are corroborated by 

market data. Inputs to the valuation methodology include 

 quoted prices for similar assets or liabilities in active markets; 

 quoted prices for identical or similar assets or liabilities in inactive markets; 

 inputs other than quoted prices that are observable for the asset or liability; 

 inputs that are derived principally from or corroborated by observable market data by 

correlation or other means. 

Level 3 - Unobservable inputs that are unobservable and not corroborated by market data. 

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest 

level of any input that is significant to the fair value measurement. Valuation techniques used need to 

maximize the use of observable inputs and minimize the use of unobservable inputs. 

The fair values of FCSIC's investments in U.S. Treasury obligations are estimated based on quoted 

market prices for those instruments; accordingly these are classified as Level 1 assets. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F12 

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 may be required to pay premiums to the Corporation. 

The Food, Conservation, and Energy Act of 2008 amended the Farm Credit Act of 1971 (12 U.S.C. § 

2001 et seq.) to generally assess premiums based on each bank's pro rata share of insured debt (rather 

than on loans), aligning premiums with what FCSIC insures. The changes were implemented beginning 

July 1, 2008. Now FCSIC may collect from 0 to 20 basis points annually on adjusted insured debt 

outstanding. The amendments also authorize a risk surcharge of up to 10 basis points on non-accrual 

loans and on other-than-temporarily impaired investments. The amendments reduce 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 deduct similar 

percentages of such guaranteed loans and investments when calculating the secure base amount (SBA). 

The amendments clarify that FCSIC may collect premiums more frequently than annually. 

In addition, the Farm Credit Act no longer specifies how the System banks pass premiums to associations 

and other financing institutions, although it requires that the banks do so in an equitable manner. This 

change allows the banks flexibility in allocating premium costs to associations. The amendments clarify 

that, in addition to FCSIC's regulatory authority under Title V of the Farm Credit Act, FCSIC has the 

authority to adopt rules and regulations concerning provisions in Title I of the Farm Credit Act related to 

banks passing along the cost of insurance premiums. Finally, the amendments change the Farm Credit 

Act provisions regarding certified statements and simplify the formula for payments from the Farm Credit 

Insurance Fund Allocated Insurance Reserves Accounts (AIRAs) to allow more immediate distribution of 

excess Insurance Fund balances to insured banks and the System Financial Assistance Corporation (the 

FAC) stockholders. 

The Farm Credit Act sets a base amount for the Insurance Fund to achieve. The statutory SBA is 

equivalent to 2.0 percent of the aggregate outstanding insured obligations of all insured System banks 

(adjusted downward by a percentage of the guaranteed portions of principal 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. When the assets in the Insurance Fund for 

which no specific use has been designated exceed the SBA, the Corporation is required to reduce the 

premiums, but it still must ensure that reduced premiums are sufficient to maintain at the SBA the assets 

in the Insurance Fund for which no specific use has been designated (the unallocated Insurance Fund). 

Insurance premium rates are reviewed semiannually. For 2015, the Board of Directors set premium rates 

at its January 22, 2015 meeting at 13 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 11, 2015 meeting. The Board of Directors voted to maintain the premium accrual rate on 

average adjusted insured debt at 13 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 2015. In 2015, outstanding insured obligations increased by 

$18 billion (8 percent). At December 31, 2015, both the unallocated Insurance Fund and the total 

Insurance Fund were 1.87 percent of adjusted insured obligations. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F13 

NOTE 4 – Premiums, the Secure Base Amount and Excess Insurance Fund Balances (cont.)

For 2014, the Board of Directors set premium rates at its January 23, 2014 meeting at 12 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 12, 2014 meeting. The Board 

of Directors voted to maintain the premium accrual rate on average adjusted insured debt at 12 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 

2014. In 2014, outstanding insured obligations increased by $18 billion (9 percent). At December 31, 

2014, both the unallocated Insurance Fund and the total Insurance Fund were 1.90 percent of adjusted 

insured obligations 

A 1996 amendment to the Farm Credit Act requires the Corporation to establish AIRAs for each System 

bank and an account for the stockholders of the FAC. If at the end of any calendar year the unallocated 

Insurance Fund is at the SBA, the Corporation is to segregate any excess balances into these AIRAs. In 

2011, the Corporation's Board of Directors revised the Policy Statement on the Secure Base Amount and 

Allocated Insurance Reserves Accounts which provides guidelines for implementing this statutory 

authority. If at the end of any calendar year, the aggregate of the amounts in the Insurance Fund exceeds 

the SBA, the Corporation shall allocate to the AIRAs the excess amount 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 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. In 

accordance with the Corporation's policy statement, any AIRAs' balances do not count in measuring the 

Insurance Fund's compliance with the SBA. 

At year-end 2015, the Insurance Fund was below the SBA by $290 million. Consequently no funds were 

available to transfer to the AIRAs. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F14 

NOTE 5 – Operating Lease 

On October 8, 2015, the Corporation executed a ten-year lease with the FCS Building Association for 

office space. The terms of the lease provide for an annual minimum base rent for office space of 

$137,411 for 2016. The Corporation recorded lease expense (including operating cost assessments) of 

$155,049 and $152,408 for 2015 and 2014, respectively. 

NOTE 6 – Line of Credit 

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

FFB), a federal instrumentality subject to the supervision and direction of the U.S. Treasury. Pursuant to 

this agreement, the FFB may advance funds to the Corporation when exigent market circumstances 

threaten an insured System Bank’s ability to pay maturing debt obligations. The Corporation will in turn 

use the funds advanced by the FFB to provide assistance to the System banks until market conditions 

improve. The agreement provides for a short-term revolving credit facility of up to $10 billion, is renewable 

annually and terminates on September 30, 2016, 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 2015 and 2014. 

NOTE 7 – Retirement Plan 

All permanent Corporation employees are covered by the Civil Service Retirement System (CSRS) or the 

Federal Employees Retirement System (FERS). The Corporation's contribution to the CSRS plan during 

2015 and 2014 was 7 percent of base pay. For those employees covered by FERS, the Corporation's 

contribution was 13.2 percent of base pay from October 1, 2014 through September 30, 2015. The rate 

increased on October 1, 2015 to 13.7 percent, and prior to October 1, 2014 was 11.9 percent. In addition, 

for FERS-covered employees, 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 both CSRS and FERS 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 $349,772 in 2015 and $257,717 in 2014. 
FARM CREDIT SYSTEM INSURANCE CORPORATION

NOTES TO FINANCIAL STATEMENTS 

As of and for the Years Ended December 31, 2015 and 2014 

F15 

NOTE 8 – Related Parties 

The Corporation purchases services from the FCA under an Interagency Agreement. These include 

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 had $89,308 and $0 due to the FCA at 

December 31, 2015 and 2014, respectively. The Corporation purchased services for 2015 which totaled 

$422,020, which include above mentioned payables, compared with $319,336 for 2014. 

The Corporation may also provide assistance to the FCA under the same Interagency Agreement; 

however, the Corporation provided no services and recognized no revenue for 2015 and 2014. At 

December 31, 2015, and 2014, the Corporation did not have any receivables from the FCA. 

NOTE 9 – Subsequent Events 

Management evaluated subsequent events through February 8, 2016, the date the financial statements 

were available to be issued. Events or transactions occurring after the balance sheet date but prior to the 

date the financial statements were available to be issued, that provide additional evidence about 

conditions that existed at the balance sheet date, are recognized in the financial statements. Events or 

transactions that provide evidence about conditions that did not exist at the balance sheet date but arose 

before the financial statements were available to be issued are not recognized in the financial statements. 

The financial statements for the year ended December 31, 2015 have not been adjusted for any events or 

transactions occurring after the balance sheet date.