As filed with the Securities and Exchange Commission on
May 15, 2001
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001. Commission File Number 0-17440
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
(Exact name of registrant as specified in its
charter)
Federally chartered
instrumentality 52-1578738
of the United (I.R.S. employer identification number)
States
(State or other jurisdiction of
incorporation or organization)
919 18th Street, N.W., Suite 200,
Washington, D.C. 20006
(Address of principal executive offices) (Zip code)
(202) 872-7700
(Registrant's telephone number, including
area code)
-----------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
As of May 4, 2001, there were 1,030,780 shares of Class A Voting Common
Stock, 500,301 shares of Class B Voting Common Stock and 9,707,278 shares of
Class C Non-Voting Common Stock outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
The following interim consolidated financial statements of the Federal
Agricultural Mortgage Corporation ("Farmer Mac" or the "Corporation") have been
prepared, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. These consolidated financial statements reflect all
normal and recurring adjustments that are, in the opinion of management,
necessary to present a fair statement of the results for the interim periods
presented. Certain information and footnote disclosures normally included in
annual consolidated financial statements have been condensed or omitted as
permitted by such rules and regulations. Management believes that the
disclosures are adequate to present fairly the consolidated financial position,
consolidated results of operations and consolidated cash flows as of the dates
and for the periods presented. These consolidated financial statements should be
read in conjunction with the audited 2000 consolidated financial statements of
Farmer Mac. Results for interim periods are not necessarily indicative of those
to be expected for the fiscal year.
The following information concerning Farmer Mac's consolidated financial
statements is included herein:
Consolidated Balance Sheets as of March 31, 2001 and
December 31, 2000.............................................. 3
Consolidated Statements of Income for the three months ended
March 31, 2001 and 2000........................................ 4
Consolidated Statements of Cash Flows for the three months
ended March 31, 2001 and 2000.................................. 5
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, 2001 December 31, 2000
------------------- ------------------
(in thousands)
Assets:
Cash and cash equivalents $ 320,437 $ 537,871
Investment securities 819,957 836,757
Farmer Mac guaranteed securities 1,711,183 1,679,993
Loans 12,407 30,279
Financial derivatives 593 -
Interest receivable 33,570 55,681
Guarantee fees receivable 3,055 5,494
Prepaid expenses and other assets 14,856 14,824
------------------- ------------------
Total Assets $ 2,916,058 $ 3,160,899
------------------- ------------------
Liabilities and Stockholders' Equity:
Liabilities:
Notes payable
Due within one year $ 2,024,233 $ 2,201,691
Due after one year 715,901 767,492
------------------- ------------------
Total notes payable 2,740,134 2,969,183
Financial derivatives 19,610 -
Accrued interest payable 15,706 20,852
Accounts payable and accrued expenses 12,417 26,880
Reserve for losses 12,386 11,323
------------------- ------------------
Total Liabilities 2,800,253 3,028,238
Stockholders' Equity:
Common stock:
Class A Voting, $1 par value, no maximum authorization,
1,030,780 shares issued and outstanding at March 31,
2001 and December 31, 2000. 1,031 1,031
Class B Voting, $1 par value, no maximum authorization,
500,301 shares issued and outstanding at March 31,
2001 and December 31, 2000. 500 500
Class C Non-Voting, $1 par value, no maximum authorization,
9,705,255 and 9,620,112 shares issued and outstanding
at March 31, 2001 and December 31, 2000. 9,705 9,621
Additional paid-in capital 74,177 72,773
Accumulated other comprehensive income 10,998 31,498
Retained earnings 19,394 17,238
------------------- ------------------
Total Stockholders' Equity 115,805 132,661
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 2,916,058 $ 3,160,899
------------------- ------------------
See accompanying notes to consolidated financial statements.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
--------------------------------------
March 31, 2001 March 31, 2000
---------------- -----------------
(in thousands, except per share amounts)
Interest income:
Investments and cash equivalents $ 21,088 $ 21,958
Farmer Mac guaranteed securities 28,740 21,694
Loans 603 1,240
---------------- -----------------
Total interest income 50,431 44,892
Interest expense 44,978 40,276
---------------- -----------------
Net interest income 5,453 4,616
Gains/(Losses) on financial derivatives
and trading assets (589) -
Other income:
Guarantee fees 3,428 2,582
Miscellaneous 166 182
---------------- -----------------
Total other income 3,594 2,764
---------------- -----------------
Total revenues 8,458 7,380
Expenses:
Compensation and employee benefits 1,237 1,251
Regulatory fees 223 150
General and administrative 1,145 1,007
---------------- -----------------
Total operating expenses 2,605 2,408
Provision for losses 1,383 1,317
---------------- -----------------
Total expenses 3,988 3,725
---------------- -----------------
Income before income taxes 4,470 3,655
Income tax expense 1,588 1,297
---------------- -----------------
Net income before cumulative effect 2,882 2,358
of change in accounting principles
Cumulative effect of change in accounting
principles, net of taxes of $400 (726) -
---------------- -----------------
Net income $ 2,156 $ 2,358
---------------- -----------------
Earnings per share:
Basic earnings per share $ 0.19 $ 0.22
Diluted earnings per share $ 0.18 $ 0.21
Earnings per share before cumulative
effect of change in accounting principles:
Basic earnings per share $ 0.26 $ 0.22
Diluted earnings per share $ 0.25 $ 0.21
See accompanying notes to consolidated financial statements.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
---------------------------------------
March 31, 2001 March 31, 2000
------------------- -------------------
(in thousands)
Cash flows from operating activities:
Net income $2,156 $2,358
Adjustments to reconcile net income to cash provided by
operating activities:
Amortization of investment premiums and discounts (350) 635
Decrease in interest receivable 22,111 13,592
Decrease in guarantee fees receivable 2,439 1,740
Increase in prepaid expenses and other assets (2,159) (1,929)
Amortization of debt premiums, discounts and issuance costs 31,019 27,360
Decrease in accrued interest payable (5,146) (6,645)
Decrease in accounts payable and accrued expenses (2,803) (338)
Proceeds from repayment of trading investment securities 5,680 -
Mark to market on trading securities and derivatives 1,715 -
Settlement of financial derivatives (1,349) -
Provision for losses (net of charge-offs) 1,063 1,317
----------------- ------------------
Net cash provided by operating activities $54,376 $38,090
Cash flows from investing activities:
Purchases of investment securities (82,450) (107,941)
Purchases of Farmer Mac guaranteed securities (112,645) (147,343)
Purchases of loans (48,636) (58,451)
Proceeds from repayment of investment securities 95,848 25,083
Proceeds from repayment of Farmer Mac guaranteed securities 102,001 210,623
Proceeds from repayment of loans 42 105
Proceeds from sale of AMBS 32,534 20,611
Purchases of office equipment (6) (48)
----------------- ------------------
Net cash used in investing activities (13,312) (57,361)
Cash flows from financing activities:
Proceeds from issuance of discount notes 22,619,870 18,817,569
Proceeds from issuance of medium-term notes - 15,020
Payments to redeem discount notes (22,780,186) (18,794,172)
Payments to redeem medium-term notes (99,670) (11,060)
Proceeds from common stock issuance 1,488 454
----------------- ------------------
Net cash provided by (used in) financing activities (258,498) 27,811
----------------- ------------------
Net increase (decrease) in cash and cash equivalents (217,434) 8,540
Cash and cash equivalents at beginning of period 537,871 336,282
----------------- ------------------
Cash and cash equivalents at end of period $ 320,437 $ 344,822
----------------- ------------------
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Accounting Policies
(a) Cash and Cash Equivalents
Farmer Mac considers highly liquid investment securities with original
maturities of three months or less to be cash equivalents. Changes in the
balance of cash and cash equivalents are reported in the Consolidated Statements
of Cash Flows. The following table sets forth information regarding certain cash
and non-cash transactions for the three months ended March 31, 2001 and 2000.
Three Months Ended March 31,
----------------------------
2001 2000
------------- --------------
(in thousands)
Cash paid for:
Interest $ 17,083 $ 16,420
Income taxes 350 -
Non-cash activity:
Real estate owned acquired through foreclosure - -
Loans acquired and securitized as AMBS 66,466 46,467
(b) Loans
As of March 31, 2001, loans held by Farmer Mac included $2.0 million held
for sale and $10.4 million held for investment. As of December 31, 2000, loans
held by Farmer Mac included $11.6 million held for sale and $18.6 million held
for investment.
(c) Earnings Per Share
Basic earnings per share are based on the weighted average common shares
outstanding. Diluted earnings per share are based on the weighted average number
of common shares outstanding adjusted to include all dilutive potential common
stock. The following schedule reconciles basic and diluted earnings per share
for the three months ended March 31, 2001 and 2000:
March 31, 2001 March 31, 2000
------------------------------------ -----------------------------------
Dilutive Dilutive
Basic stock Diluted Basic stock Diluted
EPS options EPS EPS options EPS
------------------------------------- -----------------------------------
(in thousands, except per share amounts)
Three months ended:
Net income $ 2,156 $ 2,156 $ 2,358 $ 2,358
Weighted average shares 11,210 459 11,669 10,921 345 11,266
Earnings per share $ 0.19 $ 0.18 $ 0.22 $ 0.21
(d) Reclassifications
Certain reclassifications of prior period information were made to conform
to the current period presentation.
(e) New Accounting Standards
As amended, Statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities ("SFAS 133") became effective
as of January 1, 2001. SFAS 133 requires financial derivatives to be measured
and recorded at fair value. Such derivatives, which Farmer Mac uses to hedge
interest-rate risk, were previously accounted for as off-balance sheet items and
disclosed in the financial statement footnotes.
The cumulative effect of this change in accounting principles, was a charge
of $726,000 and a negative adjustment of $8.6 million to other comprehensive
income within stockholders' equity recognized on January 1, 2001. As part of the
implementation of SFAS 133, Farmer Mac reclassified certain investment
securities classified as held to maturity and available for sale as trading
securities. The Corporation expects that SFAS 133 will increase volatility in
earnings and accumulated other comprehensive income.
In September 2000, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS
140"). SFAS 140 will be applied prospectively beginning April 1, 2001 as
required by the standard. Management does not expect the implementation of this
standard to materially affect the Corporation's reported results of operations
or financial position.
(f) Financial Derivatives
Farmer Mac enters into derivative instruments as an end-user, not for
speculative purposes. Farmer Mac enters into interest-rate contracts, including
interest-rate swaps and caps, to adjust the characteristics of Farmer Mac's debt
to more closely match the characteristics of the Corporation's mortgage assets
or to provide better returns on its investments. Derivative instruments, such as
forward sale contracts of GSE debt and mortgage-backed securities and U.S.
Treasury based futures contracts, are entered into by Farmer Mac to manage
interest-rate risk exposure related to loan purchases and anticipated debt
issuances.
Interest-rate swaps used to hedge corporate debt investments, and forward
sale contracts used to hedge Farmer Mac's loan portfolio, are classified and
accounted for as fair value hedges. Interest-rate swaps and forward sale
contracts used to hedge anticipated debt issuances are classified and accounted
for as cash flow hedges. Other financial derivatives, such as futures and
interest-rate caps, are not assigned an accounting hedge designation. Farmer
Mac's financial derivatives are carried at their fair values. For fair value
hedges, the changes in the fair values of the derivatives, along with the
changes in fair values of the hedged items, are recorded in earnings. For cash
flow hedges, the changes in the fair values of the derivatives are recorded in
other comprehensive income and any hedge ineffectiveness is recorded in
earnings. For derivative instruments not assigned an accounting hedge
designation, the changes in fair value are recorded in earnings. Net after tax
charges against earnings under SFAS 133 during first quarter 2001 totaled
$380,000, and net after tax reductions to other comprehensive income totaled
$3.6 million. Farmer Mac estimates that $1.2 million of the total amount
currently reported in accumulated other comprehensive income will be
reclassified into earnings during the next twelve months. Substantially all of
this amount represents the estimated present value of the net interest payments
on interest-rate swap contracts, using fair values as of March 31, 2001 and
assuming no change in interest rates. The interest-rate swap contracts were
entered into to derive a lower effective fixed rate cost of borrowing for
periods of up to 15 years than would otherwise have been available to the
Corporation in the market. For the period ended March 31, 2001, the
ineffectiveness of designated hedges recognized as part of net income was
immaterial.
Note 2. Off-Balance Sheet Guaranteed Securities
For information regarding the off-balance sheet risks associated with
Farmer Mac's guarantees of AMBS, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Risk Management - Credit Risk."
Note 3. Comprehensive Income
Comprehensive income (loss) is comprised of net income plus other changes
in stockholders' equity not resulting from investments by or distributions to
stockholders. The following table sets forth comprehensive income for the three
months ended March 31, 2001 and 2000. The changes in unrealized gains on
available-for-sale securities are net of the related deferred tax benefit of
$4.6 million and $1.6 million for the three months ended March 31, 2001 and
2000, respectively. The change in the fair values of financial derivatives for
the three months ended March 31, 2001 is net of the related deferred tax benefit
of $6.7 million.
Three Months Ended March 31,
----------------------------
2001 2000
------------- --------------
(in thousands)
Net income $ 2,156 $ 2,358
Change in unrealized gain on securities
available-for-sale, net of taxes (8,317) (2,884)
Cumulative effect of change in accounting principles (8,632) -
Change in the fair value of financial derivatives
classified as cash flow hedges (3,552) -
------------- -------------
Comprehensive income (loss) $(18,345) $ (526)
------------- -------------
Item 2. Management's Discussion and Analysis of Financial Condition and
----------------------------------------------------------------
Results of Operations
---------------------
Special Note Regarding Forward-Looking Statements
Certain statements made in this Form 10-Q are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
pertaining to management's current expectations as to Farmer Mac's future
financial results, business prospects and business developments. Forward-looking
statements include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or achievements, and
typically are accompanied by, and identified with, such terms as "anticipates,"
"believes," "expects," "intends," "should" and similar phrases. The following
management's discussion and analysis includes forward-looking statements
addressing Farmer Mac's prospects for earnings and growth in loan purchase,
guarantee and securitization volume; trends in net interest income,
delinquencies and provision for losses; changes in capital position; and other
business and financial matters. Management's expectations for Farmer Mac's
future necessarily involve a number of assumptions and estimates and the
evaluation of risks and uncertainties. Various factors or events could cause
Farmer Mac's actual results to differ materially from the expectations as
expressed or implied by the forward-looking statements, including: uncertainties
regarding the rate and direction of development of the secondary market for
agricultural mortgage loans; the possible establishment of additional statutory
or regulatory restrictions applicable to Farmer Mac, such as the imposition of
regulatory risk-based capital requirements with an aggregate effect in excess of
the statutory minimum and critical capital levels or restrictions on Farmer
Mac's investment authority; substantial changes in interest rates, the
agricultural economy (including agricultural land values, commodity prices,
export demand for U.S. agricultural products and federal assistance to farmers)
or the general economy; protracted adverse weather, market or other conditions
affecting particular geographic regions or particular commodities related to
agricultural mortgage loans backing Farmer Mac guaranteed securities;
legislative or regulatory developments or interpretations of Farmer Mac's
statutory charter that could adversely affect Farmer Mac or the ability of
certain lenders to participate in its programs or the terms of any such
participation; the availability of debt funding in sufficient quantities and at
favorable rates to support continued growth; the rate of growth in agricultural
mortgage indebtedness; the size of the agricultural mortgage market; borrower
preferences for fixed-rate agricultural mortgage indebtedness; the willingness
of lenders to sell agricultural mortgage loans into the Farmer Mac secondary
market; the willingness of investors to invest in agricultural mortgage-backed
securities; competition in the origination or purchase of agricultural mortgage
loans and the sale of agricultural mortgage-backed and debt securities; or
changes in Farmer Mac's status as a government-sponsored enterprise.
The foregoing factors are not exhaustive. Other sections of this report may
include additional factors that could adversely impact Farmer Mac's business and
its financial performance. Furthermore, new risk factors emerge from time to
time and it is not possible for management to predict all such risk factors, nor
assess the impact of such factors on Farmer Mac's business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from the expectations expressed or implied by the forward-looking
statements. Given these potential risks and uncertainties, no undue reliance
should be placed on any forward-looking statements expressed in this report.
Furthermore, Farmer Mac undertakes no obligation to release publicly the results
of revisions to any forward-looking statements that may be made to reflect any
future events or circumstances.
Results of Operations
Operating Results. SFAS 133 requires the change in the fair values of
certain financial derivatives to be reflected in the Corporation's net income
and other comprehensive income. Management believes that reporting results by
reference to operating income excluding the cumulative effect of the change in
accounting principles recognized on January 1, 2001 under SFAS 133, and its
ongoing effects during the reporting period, provides a meaningful operating
measure of Farmer Mac's financial performance and position. Such information is
presented to supplement, not replace, net income, cash from operations or any
other operating or liquidity performance measure prescribed by generally
accepted accounting principles.
Overview. Net income for first quarter 2001, including the cumulative and
ongoing effects of SFAS 133 during the quarter, was $2.2 million or $0.18 per
share. Net income for first quarter 2000 was $2.4 million or $0.21 per share.
Operating income totaled $3.2 million for first quarter 2001, or $0.27 per share
on a diluted basis, compared to $2.4 million, or $0.21 per share, for first
quarter 2000. This represents a 29% increase in operating earnings per share.
Farmer Mac's revenue growth continued in the first quarter 2001, reflecting
the effects of outstanding guarantee volume 35 percent higher than in the first
quarter 2000 and the net interest income earned on a higher average balance of
outstanding interest-earning assets, which was 19 percent higher than during the
first quarter 2000. Purchases and guarantees under the Farmer Mac I and II
programs were 81% higher in the first quarter 2001 than in the first quarter
2000. During first quarter 2001, Farmer Mac purchased $47.7 million of portions
of loans guaranteed by the United Sates Department of Agriculture, establishing
a record quarter for the Farmer Mac II program, purchased $48.6 million of
Farmer Mac I loans and recorded $49.7 million in long-term standby commitments.
In addition, Farmer Mac entered into agreements to provide Farmer Mac I
long-term standby commitments for an additional $150 million that go into effect
in the second quarter of 2001.
Guarantee volume growth was achieved during first quarter 2001 despite
continued unfavorable economic conditions in the agricultural sector. Weak
market opportunities for agricultural commodities and products and low commodity
prices have persisted throughout 2000 and into 2001. Total direct governmental
payments to the agricultural sector for 2000 are estimated by the U.S.
Department of Agriculture (USDA) to have been a record $22.1 billion, resulting
in farm income levels during 2000 significantly above the decade (1991-2000)
average. The federal income support is not allocated equally to producers of all
agricultural commodities, however, and farmers and ranchers producing
agricultural commodities that receive significant federal income support should
demonstrate greater liquidity than those who do not receive payments. It is
expected that additional federal support will be provided to the agricultural
sector in 2001; although the specific amount has not yet been determined, the
federal budget agreement includes an additional $5.5 billion for this purpose,
subject to action by Congress to make such funds available. Farmer Mac responded
to these conditions by re-emphasizing to agricultural lenders their ability to
use Farmer Mac's programs to reduce their concentrated exposures to agricultural
credit risks. Although the Corporation believes that the increased interest in
portfolio sales, swaps and long-term standby commitments during the first
quarter of 2001 is a good indication that Farmer Mac has positioned itself for
growth in the coming months and anticipates additional portfolio transactions
during the remainder of 2001, the total volume of those transactions is
uncertain at this time.
Set forth below is a more detailed discussion of Farmer Mac's results of
operations.
Net Interest Income. Net interest income was $5.5 million for first quarter
2001, compared to $4.6 million for first quarter 2000. The increase in net
interest income was primarily attributable to increases in the balance of
program assets, driven by Farmer Mac's retention of its guaranteed agricultural
mortgage-backed securities ("AMBS"). The following table provides information
regarding the average balances and rates of interest-earning assets and funding
for the three months ended March 31, 2001 and 2000.
Three Months Ended March 31,
--------------------------------------------------------------------
2001 2000
---------------------------------- --------------------------------
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
----------- ------------ --------- --------- ---------- ---------
(dollars in thousands)
Interest-earning assets:
Cash and cash equivalents $ 537,448 $ 7,691 5.72% $ 540,967 $ 7,919 5.86%
Investments 896,226 13,397 5.98% 887,845 14,039 6.32%
Farmer Mac guaranteed securities 1,784,342 28,740 6.44% 1,272,145 21,694 6.82%
Loans 34,690 603 6.95% 63,579 1,240 7.80%
----------- ----------- -------- ----------- ---------- ---------
Total interest earning assets 3,252,706 50,431 6.20% 2,764,536 44,892 6.50%
----------- -----------
Funding:
Discount notes 2,181,045 30,564 5.61% 1,926,731 27,296 5.67%
Medium-term notes 915,348 14,414 6.30% 781,482 12,980 6.64%
----------- ----------- -------- ----------- ---------- ---------
Total interest-bearing liabilities 3,096,393 44,978 5.81% 2,708,213 40,276 5.95%
Net non-interest bearing funding 156,313 - 0.00% 56,323 - 0.00%
----------- ----------- -------- ----------- ---------- ---------
Total funding 3,252,706 44,978 5.53% 2,764,536 40,276 5.83%
----------- ----------- -------- ----------- ---------- ---------
Net interest income/yield 5,453 0.67% 4,616 0.67%
----------- -------- ---------- ---------
The table below sets forth certain information regarding the changes in the
components of Farmer Mac's net interest income for the periods indicated. For
each category, information is provided on changes attributable to changes in
volume (change in volume multiplied by old rate) and changes in rate (change in
rate multiplied by old volume). Combined rate/volume variances, the third
element of the calculation, are allocated based on their relative size.
Three Months Ended March 31, 2001
Compared to Three Months Ended
March 31, 2000
---------------------------------------------
Increase/(Decrease) Due to
---------------------------------------------
Rate Volume Total
-------------- -------------- -------------
(in thousands)
Income from interest-earning assets
Cash and cash equivalents $ (177) $ (51) $ (228)
Investments (776) (134) (642)
Farmer Mac guaranteed securities (1,126) 8,172 7,046
Loans (123) (514) (637)
-------------- -------------- -----------
Total (2,202) 7,741 5,539
Expense from interest-bearing liabilities (911) 5,613 4,702
-------------- -------------- -----------
Change in net interest income $(1,291) $ 2,128 $ 837
Other Income. Other income, which is comprised of guarantee fee income and
miscellaneous income, totaled $3.6 million for first quarter 2001 compared to
$2.8 million for the first quarter 2000. Guarantee fee income, the largest
component of other income, was $3.4 million for first quarter 2001, compared to
$2.6 million for first quarter 2000. The relative increase in guarantee fees
reflects an increase in the average balance of outstanding guarantees.
Miscellaneous income was $166,000 for first quarter 2001 compared to a gain of
$182,000 for first quarter 2000.
Expenses. During first quarter 2001, operating expenses totaled $2.6
million compared to $2.4 million for first quarter 2000. Operating expenses as a
percentage of operating revenues for first quarter 2001 and 2000 were 29 percent
and 33 percent, respectively.
Farmer Mac's provision for principal and interest losses was $1.4 million
for first quarter 2001 compared to $1.3 million for first quarter 2000. As of
March 31, 2001, Farmer Mac's reserve for losses totaled $12.4 million, or 0.49
percent of outstanding post-1996 Act loans, compared to $7.9 million, or 0.42
percent, as of March 31, 2000.
Income Tax Expense. The provision for income taxes totaled $1.6 million for
first quarter 2001 compared to $1.3 million for first quarter 2000. Farmer Mac's
effective tax rate for each quarter was 35.5 percent.
Business Volume. The following table sets forth the amount of loans
purchased or guaranteed, and AMBS issued during the periods indicated:
Three Months Ended
March 31,
--------------------------------
2001 2000
--------------------------------
(in thousands)
Purchase and guarantee volume:
Farmer Mac I
Cash window $ 48,600 $ 58,283
LTSPC 49,695 -
Farmer Mac II 47,707 22,570
------------- ---------------
Total loans purchased or
guaranteed $ 146,002 $ 80,853
------------- ---------------
AMBS issuances:
Retained $ 33,932 $ 46,467
Sold 32,440 20,611
------------- ---------------
Total AMBS issuances $ 66,372 $ 67,078
------------- ---------------
Total loans held or guaranteed $3,184,027 $2,386,211
------------- ---------------
See "Overview" above for a discussion regarding changes in the amount of
loans purchased and guaranteed by Farmer Mac.
Indicators of future purchase and guarantee volume, particularly cash
purchase activity, include outstanding commitments to purchase loans and the
total balance of loans submitted for approval or approved but not yet purchased.
Most purchase commitments entered into by Farmer Mac are mandatory delivery
commitments. If a seller obtains a mandatory commitment and is unable to deliver
the loans required thereunder within the specified time period, Farmer Mac
requires the seller to pay a fee to extend or cancel the commitment. As of March
31, 2001, outstanding commitments to purchase or guarantee Farmer Mac I loans
totaled $18.4 million, compared to $10.7 million as of March 31, 2000. Of the
total commitments outstanding at March 31, 2001 and 2000, $10.5 million and $2.9
million, respectively, were optional commitments. Loans submitted for approval
or approved but not yet committed to purchase totaled $133.7 million as of March
31, 2001, compared to $108.1 million as of March 31, 2000. Not all of these
loans are purchased, as some are denied for credit reasons or withdrawn by the
seller.
While significant progress has been made in developing the secondary market
for agricultural mortgages, Farmer Mac continues to face the challenges of
establishing a new market where none previously existed. Acceptance of Farmer
Mac's programs is increasing among lenders, reflecting the competitive rates,
terms and products offered and the advantages Farmer Mac's programs provide. For
Farmer Mac to succeed in realizing its business development and profitability
goals over the long term, the use of Farmer Mac's programs and products by
agricultural mortgage lenders, whether traditional or non-traditional, must
continue to expand.
Balance Sheet Review
During first quarter 2001, total assets decreased by $244.8 million. The
decrease in assets was due to a decrease in on-balance sheet non-program assets
(cash and cash equivalents and investments). Program assets, Farmer Mac
guaranteed securities and loans, were at a consistent level as of March 31, 2001
and December 31, 2000. For further information regarding both on- and
off-balance sheet guaranteed securities, see "Supplemental Information" below.
Total liabilities decreased by $228.0 million from December 31, 2000 to
March 31, 2001 due to a reduction in notes payable, which corresponded to the
net decrease in total assets.
Farmer Mac's regulatory core capital totaled $104.8 million as of March 31,
2001, compared with $101.2 million as of December 31, 2000 and $91.6 million as
of March 31, 2000. The capital balance as of March 31, 2001 exceeded Farmer
Mac's regulatory minimum capital requirements by approximately $14.1 million.
On April 12, 2001, the Farm Credit Administration ("FCA") issued its final
risk-based capital regulation for Farmer Mac. The regulation is scheduled to
become effective in less than one month, and Farmer Mac will be required to meet
the risk-based capital standards one year after the effective date. As noted in
our June 12, 2000 comment letter to the FCA on the proposed regulation, Farmer
Mac believes that certain significant aspects of the risk-based capital
regulation do not comply with the authorizing statute. The economic model
incorporated in the regulation is extremely complex, and we are still analyzing
its potential effects. Farmer Mac has requested that FCA assist us in
understanding the operation of the regulation and the model; however, if
unchanged, the regulation - particularly those provisions that suggest to us
that the FCA went outside the authorizing statute - could lead to an increase in
the capital requirement for certain newly guaranteed off-balance sheet program
assets and so alter Farmer Mac's strategic plan for future growth. While the
Corporation is at this time uncertain whether the regulation, as issued, would
alter that strategic plan, we expect that any issues raised by the regulation
will be resolved in accordance with the authorizing statute before Farmer Mac is
required to meet the risk-based capital standards.
Average return on equity, excluding the effects of Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities, and SFAS 133, was 12.3 percent for first quarter 2001,
compared to 10.5 percent for first quarter 2000 and 11.5 percent for fourth
quarter 2000.
Risk Management
Interest-Rate Risk. Farmer Mac's asset and liability management objective
is to limit the effect of changes in interest rates on its equity and earnings
to within acceptable risk tolerance levels. In doing so, Farmer Mac uses
callable debt and derivative financial instruments, including interest-rate
swaps and caps (collectively "interest-rate contracts"), forward sale contracts
involving GSE debt and mortgage-backed securities and futures contracts
involving U.S. Treasury securities. Farmer Mac uses interest-rate contracts to
alter the interest rate characteristics of specific investments or debt, which
enables Farmer Mac to achieve a better matching of the interest-rate
characteristics of its investments and debt. As of March 31, 2001 and December
31, 2001 the notional amount of interest-rate contracts totaled $1.03 billion
and $1.11 billion, respectively. Farmer Mac uses forward sale and futures
contracts to reduce its interest-rate risk exposure to loans committed or
purchased and not yet sold or funded as retained investments. As of March 31,
2001, the notional amount of outstanding forward sale and futures contracts
totaled $54.6 million, compared to $8.6 million as of December 31, 2000.
Farmer Mac monitors its exposure to interest-rate risk by measuring the
sensitivity of its market value of equity (MVE) to an immediate and permanent
parallel shift in the Treasury yield curve. The following schedule summarizes
the results of Farmer Mac's MVE sensitivity analysis as of March 31, 2001 and
December 31, 2000. The increase in MVE sensitivity in the falling interest rate
scenarios reflects the lower level of interest rates at March 31, 2001 compared
to December 31, 2000 and the lengthening of the Corporation's debt maturities.
See "Balance Sheet Review" above.
Percentage Change in MVE from Base Case
---------------------------------------
Interest Rate March 31, December 31,
Scenario 2001 2000
- ---------------- --------------- ----------------
+ 300 bp -11.7% -10.2%
+ 200 bp -5.6% -5.9%
+ 100 bp -0.9% -2.0%
- 100 bp -2.3% -0.5%
- 200 bp -6.0% -3.2%
- 300 bp -10.6% -6.5%
Credit Risk. The outstanding principal balance of those loans held or
guaranteed by Farmer Mac as of March 31, 2001 and December 31, 2000 is
summarized in the table below.
March 31, 2001 December 31, 2000
------------------ -------------------
(in thousands)
Farmer Mac I:
Post-1996 Act $ 2,562,374 $ 2,509,007
Pre-1996 Act 72,646 83,503
Farmer Mac II 549,003 517,703
------------------ ------------------
Total $ 3,184,023 $ 3,110,213
------------------ -----------------
Farmer Mac assumes 100 percent of the credit risk on post-1996 Act Farmer
Mac I loans; pre-1996 Act Farmer Mac I loans are supported by mandatory 10
percent first loss subordinated interests that mitigate credit exposure; and
Farmer Mac II loans are guaranteed by the USDA. Farmer Mac believes it has
little or no credit risk exposure to pre-1996 Act Farmer Mac I loans because of
the first loss subordinated interests related to the pools of those loans, or to
Farmer Mac II loans because of the USDA guarantee.
As of March 31, 2001, post-1996 Act Farmer Mac I loans that were 90 days or
more past due represented 2.62 percent of the principal amount of all post-1996
Act Farmer Mac I loans, compared to 1.45 percent as of March 31, 2000 and 1.25
percent at December 31, 2000. Farmer Mac anticipates fluctuations in the
delinquency rate from quarter to quarter with higher levels likely to be
reported during the first and third quarters of each year due to the semiannual
payment characteristics of most Farmer Mac loans. While the year-over-year
increase is not insignificant, it is more reflective of liquidity issues in the
agricultural sector than a decline in land values or other potentially serious
drivers of loan losses.
Total direct governmental payments to the agricultural sector for 2000 are
estimated by the U.S. Department of Agriculture (USDA) to have been a record
$22.1 billion, resulting in farm income levels during 2000 significantly above
the decade (1991-2000) average. The federal income support is not allocated
equally to producers of all agricultural commodities, however, and farmers and
ranchers producing agricultural commodities that receive significant federal
income support should demonstrate greater liquidity than those who do not
receive payments. It is expected that additional federal support will be
provided to the agricultural sector in 2001; although the specific amount has
not yet been determined, the federal budget agreement includes an additional
$5.5 billion for this purpose, subject to action by Congress to make such funds
available.
The following table shows Farmer Mac I delinquencies distributed by
post-1996 Act loans and pre-1996 Act loans.
Farmer Mac I Delinquencies (1) (2)
- -----------------------------------------------------------------
As of: Post-1996 Act Pre-1996 Act Total
------------- ------------ -------
March 31, 2001 2.62% 5.83% 2.72%
December 31, 2000 1.25% 6.49% 1.44%
September 30, 2000 1.80% 5.55% 1.96%
June 30, 2000 1.25% 4.12% 1.41%
March 31, 2000 1.45% 4.89% 1.65%
December 31, 1999 1.05% 3.04% 1.18%
(1) Includes loans 90 days or more past due, in foreclosure or in bankruptcy.
(2) Pre-1996 Act loans back securities that are supported by unguaranteed first
loss subordinated interests representing approximately 10 percent of the
balance of the loans backing each security. Farmer Mac assumes 100 percent
of the credit risk on post-1996 Act loans. Farmer Mac II loans are
guaranteed by the U.S. Department of Agriculture.
Farmer Mac maintains a reserve to cover credit losses incurred on post-1996
Act Farmer Mac I loans. The following schedule summarizes the change in the
reserve for loan losses for the three months ended March 31, 2001 and 2000:
Three Months Ended March 31,
----------------------------
2001 2000
----------- --------------
(in thousands)
Beginning balance $ 11,323 $ 6,584
Provision for losses 1,383 1,317
Net charge-offs (320) -
----------- -------------
Ending balance $ 12,386 $ 7,901
----------- -------------
Although credit losses are expected to be incurred on the existing
post-1996 Act Farmer Mac I delinquencies, Farmer Mac believes that those losses
are adequately covered by the reserve for loan losses, based on the value of the
collateral supporting the loans. The following table summarizes the post-1996
Act delinquencies by loan-to-value ratio (calculated by dividing the current
loan principal balance by the original appraised value):
Distribution of
Post-1996 Act
Delinquencies as of
March 31, 2001
-----------------------
By loan-to-value ratio:
0.00% to 40.00% 13%
40.01% to 50.00% 15%
50.01% to 60.00% 31%
60.01% to 70.00% 38%
70.01% to 80.00% 3%
-----------------------
Total 100%
As of March 31, 2001, the weighted average loan-to-value ratio of post-1996
Act Farmer Mac I loans was 51 percent and the weighted average loan-to-value
ratio for all post-1996 Act delinquent Farmer Mac I loans that were 90 days or
more past due, in foreclosure or in bankruptcy was 58 percent.
The following table segregates the post-1996 Act Farmer Mac I loan
portfolio and delinquencies as of March 31, 2001 by year of origination,
geographic region and commodity.
Distribution of
Post-1996 Act Delinquency
Loans Rate
----------------- --------------
By year of origination:
Before 1996 27% 0.82%
1996 8% 8.35%
1997 11% 5.80%
1998 19% 4.00%
1999 22% 0.96%
2000 11% 0.99%
2001 2% 0.00%
----------- --------------
Total 100% 2.62%
----------- ---------------
By geographic region: (1)
Mid-north 16% 0.52%
Mid-south 4% 0.57%
Northeast 4% 0.62%
Northwest 32% 4.58%
Southeast 3% 1.30%
Southwest 41% 2.38%
----------- ---------------
Total 100% 2.62%
----------- ---------------
By commodity:
Crops 49% 2.42%
Livestock 18% 1.62%
Other 1% 0.01%
Permanent plantings 28% 4.06%
Part-Time Farm 4% 0.46%
----------- ---------------
Total 100% 2.62%
----------- ---------------
(1) Geographic regions - Mid-North (IA, IL, IN, MI, MN, MO, WI); Mid-South (KS,
OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NC, NH, NJ, NY, OH, PA, RI, TN,
VA, VT, WV); Northwest (ID, MT, ND, NE, OR, SD, WA, WY); Southeast (AL, AR,
FL, GA, LA, MS, SC); and Southwest (AZ, CA, CO, HI, NM, NV, UT).
Supplemental Information
The following tables set forth quarterly and annual activity regarding
commitments to purchase loans, purchases and guarantees of loans, AMBS
issuances, and outstanding guarantees.
Commitments to Purchase or Guarantee Farmer Mac I Loans (1)
- -------------------------------------------------------------------------------------------------------
Long-Term Fixed
Rate Resets ARMs Total Outstanding
------------------- ---------- --------------- ------------ -------------
(in thousands)
For the quarter ended:
March 31, 2001 $ 40,463 $ 11,447 $ 59,494 $ 111,404 $ 18,398
December 31, 2000 159,039 2,261 70,454 231,754 13,223
September 30, 2000 288,274 126,909 40,097 455,280 10,983
June 30, 2000 45,838 2,822 32,361 81,021 8,641
March 31, 2000 10,369 16,835 32,438 59,642 10,707
December 31,1999 317,357 6,882 75,326 399,565 12,470
September 30, 1999 26,623 19,384 34,170 80,177 17,010
For the year ended:
December 31, 2000 503,520 148,827 175,350 827,697 13,223
December 31, 1999 537,190 58,065 203,536 798,791 12,470
Purchases and Guarantees of Farmer Mac I Loans (1)
- ----------------------------------------------------------------------------------------
Long-Term
Fixed Rate Resets ARMs Total
-------------- ---------- -------- -----------
(in thousands)
For the quarter ended:
March 31, 2001 $ 39,742 $ 4,902 $ 53,651 $ 98,295
December 31, 2000 160,706 1,176 64,344 226,226
September 30, 2000 286,303 126,845 37,801 450,949
June 30, 2000 43,508 5,702 30,778 79,988
March 31, 2000 11,917 13,185 33,181 58,283
December 31, 1999 319,478 9,522 73,030 402,030
September 30, 1999 26,670 14,862 29,029 70,561
For the year ended:
December 31, 2000 502,434 146,908 166,104 815,446
December 31, 1999 662,186 57,176 483,402 1,202,764
Farmer Mac I AMBS Issuances (2)
- ----------------------------------------------------------------------------------------
Long-Term
Fixed Rate Resets ARMs Total
-------------- ---------- -------- ----------
(in thousands)
For the quarter ended:
March 31, 2001 $ 14,425 $ 4,900 $ 47,047 $ 66,372
December 31, 2000 6,777 1,176 27,824 35,777
September 30, 2000 5,589 3,790 35,916 45,295
June 30, 2000 15,122 4,950 36,749 56,821
March 31, 2000 6,582 14,616 45,880 67,078
December 31, 1999 128,641 8,084 17,069 153,794
September 30, 1999 95,121 33,532 24,744 153,397
For the year ended:
December 31, 2000 34,070 24,532 146,369 204,971
December 31, 1999 359,185 57,887 277,517 694,589
Outstanding Guarantees (3)
- -----------------------------------------------------------------------------------------------------------------
Farmer Mac I
---------------------------------------------
Post-1996 Act
------------------------------ Pre-1996 Farmer Held in
AMBS LTSPC Act Mac II Total Portfolio (4)
-------------- -------------- ------------ ------------ ------------ --------------
(in thousands)
As of:
March 31, 2001 $1,466,443 $1,083,528 $ 72,646 $ 549,003 $3,171,620 $1,648,896
December 31, 2000 1,615,914 862,804 83,513 517,703 3,079,934 1,581,905
September 30, 2000 1,621,516 707,850 92,536 491,820 2,913,722 1,571,315
June 30, 2000 1,354,623 575,143 100,414 467,352 2,497,532 1,292,359
March 31, 2000 1,310,710 551,423 107,403 387,992 2,357,528 1,268,889
December 31,1999 1,266,522 575,097 118,214 383,266 2,343,099 1,237,623
September 30, 1999 1,118,266 367,934 130,452 377,663 1,994,315 1,190,741
(1) Includes long-term standby purchase commitments ("LTSPCs"), which obligate
Farmer Mac to purchase loans in the pool at par when they become four or
more months delinquent. In exchange, Farmer Mac receives an annual
commitment fee on the outstanding balance of the pool over the life of the
loans.
(2) Includes AMBS issued and retained by Farmer Mac. Such transactions totaled
$33.9 million in first quarter 2001, $20.7 million in fourth quarter 2000,
$25.0 million in the third quarter of 2000, $21.7 million in second quarter
2000, $46.5 million in first quarter 2000 and $50.6 million in fourth
quarter 1999
(3) Pre-1996 Act loans back securities that are supported by unguaranteed first
loss subordinated interests representing approximately 10 percent of the
balance of the loans backing each security. Farmer Mac assumes 100 percent
of the credit risk on post-1996 Act loans. Farmer Mac II loans are
guaranteed by the U.S. Department of Agriculture. Figures exclude Farmer
Mac I loans held in portfolio that are not yet securitized.
(4) Included in total outstanding guarantees.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
Farmer Mac is exposed to market risk from changes in interest rates. Farmer
Mac manages this market risk by entering into various financial transactions,
including off-balance sheet derivative financial instruments, and by monitoring
its exposure to changes in interest rates. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Risk Management -
Interest-Rate Risk" for further information regarding Farmer Mac's exposure to
interest-rate risk and strategies to manage such risk. For information regarding
Farmer Mac's use of off-balance sheet derivative financial instruments,
including Farmer Mac's accounting policies for such instruments, see Notes 1(c)
and 2 to the Consolidated Financial Statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant is not a party to any material pending legal proceedings.
Item 2. Changes in Securities and Use of Proceeds
(a) Not applicable
(b) Not applicable.
(c) Farmer Mac is a federally chartered instrumentality of the United
States and its Common Stock is exempt from registration pursuant to
Section 3(a)(2) of the Securities Act of 1933.
Pursuant to Farmer Mac's policy that permits Directors of Farmer Mac
to elect to receive shares of Class C Non-Voting Common Stock in lieu
of their annual cash retainers, on January 11, 2001, Farmer Mac issued
an aggregate of 603 shares of its Class C Non-Voting Common Stock at
an issue price of $23.38 per share to the 10 Directors who elected to
receive such stock in lieu of their cash retainers.
On January 16, 2001, Farmer Mac granted options under its 1997 Stock
Option Plan to purchase an aggregate of 3,000 shares of Class C
Non-Voting Common Stock, at an exercise price of $27.75 per share, to
a non-officer employee in connection with such employee's commencement
of employment. On February 20, 2001, Farmer Mac granted options under
its 1997 Stock Option Plan to purchase an aggregate of 3,000 shares of
Class C Non-Voting Common Stock, at an exercise price of $26.20 per
share, to two non-officer employees in connection with such employees'
commencement of employment.
(d) Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security holders
Not Applicable.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
* 3.1 - Title VIII of the Farm Credit Act of 1971, as most recently amended
by the Farm Credit System Reform Act of 1996, P.L. 104-105 (Form
10-K filed March 29, 1996).
* 3.2 - Amended and restated Bylaws of the Registrant (Form 10-Q filed
August 12, 1999).
+* 10.1 - Stock Option Plan (Previously filed as Exhibit 19.1 to Form 10-Q
filed November 10, 1992).
+* 10.1.1 - Amendment No. 1 to Stock Option Plan (Previously filed as Exhibit
10.2 to Form 10-Q filed August 16, 1993).
+* 10.1.2 - 1996 Stock Option Plan (Form 10-Q filed November 10, 1996).
+* 10.1.3 - Amended and Restated 1997 Stock Option Plan. (Form 10-Q filed
August 14, 1997).
+* 10.2 - Employment Agreement dated May 5, 1989 between Henry D. Edelman and
the Registrant (Previously filed as Exhibit 10.4 to Form 10-K filed
February 14, 1990).
+* 10.2.1 - Amendment No. 1 dated as of January 10, 1991 to Employment
Contract between Henry D. Edelman and the Registrant (Previously
filed as Exhibit 10.4 to Form 10-K filed April 1, 1991).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 10.2.2 - Amendment to Employment Contract dated as of September 1, 1993
between Henry D. Edelman and the Registrant (Previously filed as
Exhibit 10.5 to Form 10-Q filed November 15, 1993).
+* 10.2.3 - Amendment No. 3 dated as of September 1, 1994 to Employment
Contract between Henry D. Edelman and the Registrant (Previously
filed as Exhibit 10.5 to Form 10-Q filed November 15, 1994).
+* 10.2.4 - Amendment No. 4 dated as of February 8, 1996 to Employment Contract
between Henry D. Edelman and the Registrant (Form 10-K filed March
29, 1996).
+* 10.2.5 - Amendment No. 5 dated as of September 13, 1996 to Employment
Contract between Henry D. Edelman and the Registrant (Form 10-Q
filed November 10, 1996).
+* 10.2.6 - Amendment No. 6 dated as of August 7, 1997 to Employment Contract
between Henry D. Edelman and the Registrant (Form 10-Q filed
November 14, 1997).
+* 10.2.7 - Amendment No. 7 dated as of September 4, 1998 to Employment
Contract between Henry D. Edelman and the Registrant (Form 10-Q
filed August 14, 1998).
+* 10.2.8 - Amendment No. 8 dated as of June 3, 1999 to Employment Contract
between Henry D. Edelman and the Registrant (Form 10-Q filed August
12, 1999).
+* 10.2.9 - Amendment No. 9 dated as of June 1, 2000 to Employment Contract
between Henry D. Edelman and the Registrant (Form 10-Q filed August
14, 2000).
+* 10.3 - Employment Agreement dated May 11, 1989 between Nancy E. Corsiglia
and the Registrant (Previously filed as Exhibit 10.5 to Form 10-K
filed February 14, 1990).
+* 10.3.1 - Amendment dated December 14, 1989 to Employment Agreement between
Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit
10.5 to Form 10-K filed February 14, 1990).
+* 10.3.2 - Amendment No. 2 dated February 14, 1991 to Employment Agreement
between Nancy E. Corsiglia and the Registrant (Previously filed as
Exhibit 10.7 to Form 10-K filed April 1, 1991).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 10.3.3 - Amendment to Employment Contract dated as of September 1, 1993
between Nancy E. Corsiglia and the Registrant (Previously filed as
Exhibit 10.9 to Form 10-Q filed November 15, 1993).
+* 10.3.4 - Amendment No. 4 dated September 1, 1993 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Previously filed as
Exhibit 10.11 to Form 10-K filed March 30, 1994).
+* 10.3.5 - Amendment No.5 dated as of September 1, 1994 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Previously filed as
Exhibit 10.12 to Form 10-Q filed August 15, 1994).
+* 10.3.6 - Amendment No.6 dated as of September 1, 1995 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed
November 10, 1995).
+* 10.3.7 - Amendment No. 7 dated as of February 8, 1996 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-K filed
March 29, 1996).
+* 10.3.8 - Amendment No. 8 dated as of September 13, 1996 to Employment
Contract between Nancy E. Corsiglia and the Registrant (Form 10-Q
filed November 10, 1996).
+* 10.3.9 - Amendment No. 9 dated as of August 7, 1997 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed
November 14, 1997).
+* 10.3.10 - Amendment No. 10 dated as of September 4, 1998 to Employment
Contract between Nancy E. Corsiglia and the Registrant (Form 10-Q
filed August 14, 1998).
+* 10.3.11 - Amendment No. 11 dated as of June 3, 1999 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed
August 12, 1999).
+* 10.3.12 - Amendment No. 12 dated as of June 1, 2000 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed
August 14, 2000).
+* 10.4 - Employment Agreement dated September 13, 1989 between Thomas R.
Clark and the Registrant (Previously filed as Exhibit 10.6 to Form
10-K filed April 1, 1990).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 10.4.1 - Amendment No. 1 dated February 14, 1991 to Employment Agreement
between Thomas R. Clark and the Registrant (Previously filed as
Exhibit 10.9 to Form 10-K filed April 1, 1991).
+* 10.4.2 - Amendment to Employment Contract dated as of September 1, 1993
between Thomas R. Clark and the Registrant (Previously filed as
Exhibit 10.12 to Form 10-Q filed November 15, 1993).
+* 10.4.3 - Amendment No. 3 dated September 1, 1993 to Employment Contract
between Thomas R. Clark and the Registrant (Previously filed as
Exhibit 10.16 to Form 10-K filed March 30, 1994).
+* 10.4.4 - Amendment No. 4 dated as of September 1, 1994 to Employment
Contract between Thomas R. Clark and the Registrant (Previously
filed as Exhibit 10.17 to Form 10-Q filed August 15, 1994).
+* 10.4.5 - Amendment No.5 dated as of September 1, 1995 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-Q filed
November 10, 1995).
+* 10.4.6 - Amendment No. 6 dated as of February 8, 1996 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-K filed March
29, 1996).
+* 10.4.7 - Amendment No. 7 dated as of September 13, 1996 to Employment
Contract between Thomas R. Clark and the Registrant (Form 10-Q
filed November 10, 1996).
+* 10.4.8 - Amendment No. 8 dated as of August 7, 1997 to Employment Contract
between Thomas R. Clark and the Registrant(Form 10-Q filed November
14, 1997).
+* 10.4.9 - Amendment No.9 dated as of September 4, 1998 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-Q filed August
14, 1998).
+* 10.4.10 - Amendment No. 10 dated as of September 3, 1999 to Employment
Contract between Thomas R. Clark and the Registrant(Form 10-Q filed
August 12, 1999).
+* 10.4.11 - Amendment No. 11 dated as of June 1, 2000 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-Q filed August
14, 2000).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 10.4.12 - Employment Contract Novation dated as of January 1, 2001 between
Thomas R. Clark and the Registrant(Form 10-K filed
March 26, 2001).
+* 10.5 - Employment Contract dated as of September 1, 1997 between Tom D.
Stenson and the Registrant(Previously filed as Exhibit 10.8 to Form
10-Q filed November 14, 1997).
+* 10.5.1 - Amendment No.1 dated as of September 4, 1998 to Employment Contract
between Tom D. Stenson and the Registrant (Previously filed as
Exhibit 10.8.1 to Form 10-Q filed August 14, 1998).
+* 10.5.2 - Amendment No.2 dated as of September 3, 1999 to Employment Contract
between Tom D. Stenson and the Registrant (Form 10-Q filed August
12, 1999).
+* 10.5.3 - Amendment No.3 dated as of September 1, 2000 to Employment Contract
between Tom D. Stenson and the Registrant (Form 10-Q filed August
14, 2000).
+* 10.6 - Employment Agreement dated February 1, 2000 between Jerome G.
Oslick and the Registrant (Form 10-Q filed May 11, 2000).
+* 10.6.1 - Amendment No. 1 dated as of June 1, 2000 to Employment Contract
between Jerome G. Oslick and the Registrant (Form 10-Q filed August
14, 2000).
* 10.9 - Lease Agreement, dated September 30, 1991 between 919 Eighteenth
Street, N. W. Associates Limited Partnership and the Registrant
(Previously filed as Exhibit 10.20 to Form 10-K filed March 30,
1992).
21 - Farmer Mac Mortgage Securities Corporation, a Delaware Corporation.
* 99.1 - Map of U.S. Department of Agriculture (Secretary of Agriculture's)
Regions (Previously filed as Exhibit 1.1 to Form 10-K filed April
1, 1991).
(b) Reports on Form 8-K.
The Registrant did not file any reports on Form 8-K during the
quarter ended March 31, 2001.
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
May 11, 2001
By: /s/ Henry D. Edelman
--------------------------------------------------
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Nancy E. Corsiglia
--------------------------------------------------
Nancy E. Corsiglia
Vice President - Finance
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
May 11, 2001
By:
--------------------------------------------------
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
--------------------------------------------------
Nancy E. Corsiglia
Vice President - Finance
(Principal Financial Officer)