Form 990 for tax year 2023

Revenue

Part VIII, the statement of revenue.

• 2a · Program service revenue: INTEREST FROM PSA

  total $1,557,480,341 · related or exempt $1,557,480,341

• 2b · Program service revenue: DERIVATIVE CASH SETTLEMENTS

  total $393,244,090 · related or exempt $393,244,090

• 2c · Program service revenue: OTHER INCOME-LOAN FEES

  total $20,626,372 · related or exempt $20,626,372

• 2d · Program service revenue: RECOVERY FOR LOSSES

  total $5,411,171 · related or exempt $5,411,171

• 3 · Investment income

  total $26,591,742 · excluded $26,591,742

• 7a · Gross sales of assets other than inventory

  securities $287,446,279 · other assets $183,899

• 7b · Less cost or other basis and sales expenses

  securities $293,134,787 · other assets $119,847

• 7c · Gain or loss

  securities -$5,688,508 · other assets $64,052

• 7d · Net gain or loss

  total -$5,624,456 · excluded -$5,624,456

• 11a · Other revenue: MANAGEMENT FEES

  total $7,231,000 · related or exempt $7,231,000

• 11b · Other revenue: INTEGRITY FUND COLLECTIONS FROM M

  total $1,377,396 · related or exempt $1,377,396

• 11e · Other revenue, total

  $8,608,396

Functional expenses

Part IX, the statement of functional expenses.

• 1 · Grants to domestic organizations and governments

  total $1,531,683 · program services $1,531,683

• 5 · Compensation of officers, directors and key employees

  total $11,728,688 · management and general $11,728,688

• 7 · Other salaries and wages

  total $40,312,101 · management and general $40,312,101

• 8 · Pension plan contributions

  total $8,431,756 · management and general $8,431,756

• 9 · Other employee benefits

  total $4,633,202 · management and general $4,633,202

• 10 · Payroll taxes

  total $3,618,946 · management and general $3,618,946

• 11a · Fees: management

  total $1,012,321 · management and general $1,012,321

• 11b · Fees: legal

  total $264,667 · management and general $264,667

• 11c · Fees: accounting

  total $1,884,245 · management and general $1,884,245

• 11f · Fees: investment management

  total $556,836 · management and general $556,836

• 11g · Fees: other

  total $9,668,225 · management and general $9,668,225

• 12 · Advertising and promotion

  total $1,568,168 · management and general $1,568,168

• 13 · Office expenses

  total $1,669,821 · management and general $1,669,821

• 14 · Information technology

  total $16,982,024 · management and general $16,982,024

• 16 · Occupancy

  total $2,924,395 · management and general $2,924,395

• 17 · Travel

  total $3,081,231 · management and general $3,081,231

• 19 · Conferences, conventions and meetings

  total $5,292,510 · management and general $5,292,510

• 20 · Interest

  total $1,605,229,401 · program services $1,605,229,401

• 22 · Depreciation, depletion and amortization

  total $7,386,398 · management and general $7,386,398

• 23 · Insurance

  total $818,179 · management and general $818,179

• 24a · Other expenses: EARLY EXTINGUISHMENT OF

  total $1,025,348 · program services $1,025,348

• 24b · Other expenses: COMMITMENT FEE EXPENSE

  total $984,131 · management and general $984,131

• 24c · Other expenses: PROVISION FOR GUARANTEE

  total $832,000 · program services $832,000

• 24d · Other expenses: DUES, SUBSCRIPTIONS & R

  total $790,046 · management and general $790,046

• 24e · All other expenses

  total $967,903 · management and general $967,903

Balance sheet

Part X, book values.

• 1 · Cash, non-interest-bearing

  beginning of year $196,999,533 · end of year $273,894,609

• 2 · Savings and temporary cash investments

  beginning of year $8,916,183 · end of year $10,580,694

• 4 · Accounts receivable

  beginning of year $196,203,267 · end of year $215,717,541

• 7 · Other notes and loans receivable

  beginning of year $32,463,216,503 · end of year $34,481,863,115

• 9 · Prepaid expenses and deferred charges

  beginning of year $12,301,131 · end of year $14,653,766

• 10a · Land, buildings and equipment: cost or other basis

  $168,825,098

• 10b · Land, buildings and equipment: accumulated depreciation

  $83,706,523

• 10c · Land, buildings and equipment, net

  beginning of year $86,011,492 · end of year $85,118,575

• 11 · Investments: publicly traded securities

  beginning of year $484,618,734 · end of year $293,107,779

• 12 · Investments: other securities

  beginning of year $25,750,000 · end of year $25,130,000

• 15 · Other assets

  beginning of year $509,656,128 · end of year $753,352,109

• 17 · Accounts payable and accrued expenses

  beginning of year $4,779,243,609 · end of year $4,636,149,324

• 19 · Deferred revenue

  beginning of year $36,007,598 · end of year $30,725,609

• 23 · Secured mortgages and notes payable

  beginning of year $17,449,610,085 · end of year $16,595,245,110

• 24 · Unsecured notes and loans payable

  beginning of year $9,003,499,413 · end of year $11,790,431,934

• 25 · Other liabilities

  beginning of year $147,117,472 · end of year $103,267,958

• 29 · Capital stock, trust principal or current funds

  beginning of year $969,400 · end of year $968,400

• 30 · Paid-in or capital surplus, or land, building or equipment fund

  beginning of year $0 · end of year $0

• 31 · Retained earnings, endowment or other funds

  beginning of year $2,567,225,394 · end of year $2,996,629,853

The filer's explanations (Part III)

PART I, LINE 1A

THE PERQUISITES PROVIDED TO THE CEO ARE LIMITED TO AN ANNUAL AUTOMOBILE ALLOWANCE AS WELL AS AN ANNUAL SPOUSAL AIR TRAVEL ALLOWANCE. ADDITIONALLY, MR. DON MAY RECEIVE AN ANNUAL EXECUTIVE PHYSICAL PAID FOR BY CFC. BECAUSE THE CEO IS FREQUENTLY REQUIRED TO TRAVEL TO MEMBER SITES IN RURAL PARTS OF THE COUNTRY, THE BOARD OF DIRECTORS HAS AUTHORIZED HIM TO OCCASIONALLY UTILIZE A PRIVATE PLANE SERVICE TO FACILITATE EXTENSIVE BUSINESS TRAVEL. THIS SERVICE HAS BEEN USED INFREQUENTLY AND IS SOLELY FOR BUSINESS PURPOSES.

PART I, LINE 1B

TO PROVIDE THE ANNUAL AUTOMOBILE AND SPOUSAL AIR TRAVEL PERQUISITES IN AN EFFICIENT FASHION, THE BOARD AUTHORIZED AN ANNUAL ALLOWANCE RATHER THAN PROVIDING UNLIMITED REIMBURSEMENT OR USE OF A COMPANY-OWNED VEHICLE. THE AMOUNT OF EACH ALLOWANCE IS AUTHORIZED ANNUALLY BY THE BOARD AND IS DETERMINED BASED ON THE ESTIMATED COST FOR OPERATION AND MAINTENANCE OF AN AUTOMOBILE AND THE ANTICIPATED COST OF AIR TRAVEL BY MR. DON'S SPOUSE. THESE PAYMENTS WERE TREATED AS TAXABLE COMPENSATION. CFC DOES NOT HAVE A FORMAL POLICY REGARDING THESE PAYMENTS OR REIMBURSEMENT OF THESE EXPENSES. ALL OTHER APPROPRIATE BUSINESS EXPENSES INCURRED ARE SUBJECT TO AND REIMBURSED BY A FORMAL WRITTEN PLAN.

PART I, LINE 3

CFC'S COMPENSATION COMMITTEE (THE "COMMITTEE"), WHICH IS COMPRISED OF CFC EXECUTIVE COMMITTEE BOARD MEMBERS, DETERMINES AND APPROVES THE COMPENSATION OF CFC'S CEO. THE COMMITTEE ANNUALLY REVIEWS AND APPROVES APPROPRIATE CORPORATE GOALS AND OBJECTIVES RELATED TO THE CEO'S COMPENSATION AND EVALUATES PERFORMANCE IN LIGHT OF THOSE GOALS AND OBJECTIVES. THE CEO'S COMPENSATION IS COMPRISED OF BASE PAY, SHORT AND LONG TERM INCENTIVE COMPENSATION AND PERQUISITES. IN FISCAL YEAR 2024, AN INDEPENDENT CONSULTANT WAS ENGAGED BY THE COMMITTEE TO CONDUCT A COMPENSATION SURVEY AND PROVIDE COMPENSATION DATA FOR THE CEO POSITION USING PEER ORGANIZATIONS IDENTIFIED BY THE INDEPENDENT CONSULTANT THROUGH DISCUSSIONS WITH THE COMMITTEE. THE INDEPENDENT CONSULTANT INCLUDED COMPANIES IN THE COMPENSATION COMPARISON GROUP THAT WERE SIMILAR TO CFC IN ASSET SIZE, INDUSTRY AND BUSINESS DESCRIPTION. THE GROUP INCLUDED FINANCIAL INSTITUTIONS THAT ARE PRIVATE MARKET, COMMERCIAL AND/OR MISSION-DRIVEN LENDERS, OFFERING FULL SERVICE FINANCING, INVESTMENT AND RELATED SERVICES. THE COMPANIES TARGETED AS PEER COMPANIES INCLUDED TWO MEMBERS OF THE FARM CREDIT SYSTEM AND 11 REGIONAL BANKS OR FINANCIAL SERVICES COMPANIES. THE INDEPENDENT CONSULTANT LED THE COMMITTEE THROUGH AN ASSESSMENT OF CEO COMPENSATION DATA AT THE COMPARISON GROUP COMPANIES. THE INDEPENDENT CONSULTANT'S DATA INCLUDED BOTH ACTUAL COMPENSATION AND TARGET COMPENSATION BASED ON INFORMATION OBTAINED FROM EACH COMPARATOR GROUP COMPANY'S MOST RECENT ANNUAL REPORT OR PROXY STATEMENT. THE ELEMENTS OF COMPENSATION REVIEWED INCLUDE CURRENT BASE SALARY AS WELL AS ANY ADDITIONAL BONUS, INCENTIVES OR SPECIAL AWARDS. THE COMMITTEE REVIEWED TOTAL COMPENSATION DATA FOR THE COMPARATOR GROUP FOR INFORMATIONAL PURPOSES AND USED THIS DATA SOLELY TO DETERMINE THE COMPETITIVENESS OF OUR CEO COMPENSATION.

PART I, LINE 4B

LINE 4B: CFC OFFERS AN EXECUTIVE BENEFIT RESTORATION PLAN WHICH IS A SUPPLEMENT TO THE RETIREMENT SECURITY PLAN TO ELIGIBLE EXECUTIVE OFFICERS OF THE COMPANY. THE 457(F) PLAN RESTORES THE VALUE OF THE RETIREMENT SECURITY PLAN FOR EACH OFFICER TO THE LEVEL IT WOULD BE IF THE IRS LIMITS ON ANNUAL PAY AND ANNUAL ANNUITY BENEFITS WERE NOT IN PLACE. THE BENEFIT AND PAYOUT FORMULA UNDER THE RESTORATION COMPONENT IS SIMILAR TO THAT UNDER THE QUALIFIED PLAN COMPONENT. WHEN ANY OF THE EXECUTIVE OFFICERS PARTICIPATING IN THE EXECUTIVE BENEFIT RESTORATION PLAN HAVE SATISFIED THE PROVISIONS ESTABLISHED TO RECEIVE THE BENEFIT FROM THE PLAN AND THE OFFICER NO LONGER HAS A RISK OF FORFEITURE OF THE BENEFITS, DISTRIBUTIONS ARE THEN MADE ANNUALLY FROM THE PLAN TO EACH EXECUTIVE OFFICER SHOULD THEY HAVE AN ACCRUED BENEFIT. FOR CALENDAR YEAR 2023, ONE OFFICER HAD ACCRUED VESTED BENEFITS AND RECEIVED THE FOLLOWING DISTRIBUTION FROM THE PLAN DISCUSSED ABOVE: - JONATHAN ANDREW DON $765,680

PART I, LINE 7

OUR ANNUAL CASH INCENTIVE PROGRAM FOR FISCAL YEAR 2024 IS A ONE-YEAR CASH INCENTIVE THAT IS TIED TO THE ANNUAL PERFORMANCE OF THE ORGANIZATION AS WELL AS INDIVIDUAL PERFORMANCE. WE BELIEVE THAT BY PAYING AN INCENTIVE TIED TO THE ACHIEVEMENT OF ANNUAL OPERATING GOALS AS WELL AS INDIVIDUAL PERFORMANCE, ALL EMPLOYEES, INCLUDING NAMED EXECUTIVE OFFICERS, WILL FOCUS THEIR EFFORTS ON THE MOST IMPORTANT STRATEGIC OBJECTIVES THAT WILL HELP US FULFILL OUR MISSION TO OUR MEMBERS AND OUR OBLIGATIONS TO THE FINANCIAL MARKETS WHILE ALSO EXHIBITING HIGH LEVELS OF PERFORMANCE. ADDITIONALLY, THE ANNUAL INCENTIVE PAY ENHANCES OUR ABILITY TO PROVIDE COMPETITIVE COMPENSATION WHILE AT THE SAME TIME TYING TOTAL COMPENSATION PAID TO THE ACHIEVEMENT OF CORPORATE GOALS. EVERY EMPLOYEE PARTICIPATES IN THE ANNUAL INCENTIVE PROGRAM, AND THE CORPORATE STRATEGIC GOALS ARE THE SAME FOR ALL EMPLOYEES, INCLUDING THE NAMED EXECUTIVE OFFICERS. THE ANNUAL INCENTIVE PROGRAM PROVIDES MAXIMUM ANNUAL CASH INCENTIVE OPPORTUNITIES BASED UPON THE LEVEL OF THE POSITION WITHIN OUR BASE PAY STRUCTURE, RANGING FROM 26% TO 40% OF BASE PAY. EXECUTIVE OFFICERS ARE ELIGIBLE TO RECEIVE ANNUAL CASH INCENTIVE COMPENSATION UP TO 40% OF THEIR BASE PAY AND ARE SUBJECT TO A TWO-YEAR VESTING SCHEDULE FOR 20% OF THEIR ACHIEVEMENT. THE LEGACY LONG-TERM INCENTIVE PROGRAM IS A THREE-YEAR PLAN THAT IS TIED TO CFC'S LONG-TERM STRATEGIC OBJECTIVES. THE LONG-TERM INCENTIVE PROGRAM WAS IMPLEMENTED TO CREATE DYNAMIC TENSION BETWEEN SHORT-TERM OBJECTIVES AND LONG-TERM GOALS. EXECUTIVE OFFICERS, KEY EMPLOYEES AND HIGHLY COMPENSATED EMPLOYEES EMPLOYED AS OF MAY 31, 2021, WERE ELIGIBLE TO PARTICIPATE IN THE PLAN AND RECEIVED PERFORMANCE UNITS THAT WERE CALCULATED AT 20% - 25% OF BASE PAY. THE VALUE OF THE PERFORMANCE UNITS WAS FROZEN AT $20 PER PERFORMANCE UNIT ACCORDING TO THE LEVEL OF NATIONAL RURAL'S ISSUER CREDIT RATINGS BY THE RATING AGENCIES ON MAY 31, 2022. THE LONG-TERM INCENTIVE PLAN PROGRAM ENDED EFFECTIVE MAY 31, 2022 AND FINAL PAYMENTS WERE PROCESSED MAY 31, 2024. THE PROGRAM WAS REPLACED BY THE VESTING COMPONENT OF THE ANNUAL INCENTIVE PLAN.