Exhibit 99
FOR IMMEDIATE RELEASE CONTACT
August 9, 2004 Jerome Oslick
202-872-7700
Farmer Mac Announces Dividend Policy
and Share Repurchase Authorization
Intends to Obtain a Rating
Washington, D.C. -- The Board of Directors of the Federal Agricultural
Mortgage Corporation (NYSE: AGM and AGM.A) (Farmer Mac), the Congressionally
chartered secondary market for agricultural real estate and rural housing
mortgage loans, today announced that it had adopted a policy to pay a quarterly
dividend of $0.10 per share on all three classes of its common stock beginning
in the fourth quarter of 2004, and authorized a program to repurchase up to 10
percent of its outstanding Class C non-voting common stock. Details of those
actions are included in Farmer Mac's Quarterly Report on Form 10-Q for the
second quarter of 2004, to be filed later today with the Securities and Exchange
Commission.
Farmer Mac President and Chief Executive Officer Henry D. Edelman stated,
"The Board looked at the Corporation's forward capital requirements to support
fulfillment of its mission of providing greater liquidity and lending capacity
to agricultural lenders and increasing the availability of capital markets-based
funding for mortgage loans to the Nation's farmers, ranchers and rural
homeowners. They concluded that Farmer Mac's level of excess capital above both
statutory minimum and risk-based capital requirements, 66 percent and 391
percent, respectively, and the annuity-like nature of our income streams,
provide more than sufficient support for strong growth in our guarantee and
commitment programs.
"The Board is confident of Farmer Mac's long-term earnings outlook and
recognizes the importance of underscoring that confidence by returning to its
stockholders, through a combination of dividends and share repurchases, capital
not currently required in the business. Considering recent market price levels
of our Class C common stock, the repurchase program will enable Farmer Mac to
reacquire shares at prices inconsistent with the Board's and management's
positive view of the Corporation's long-term business outlook, not to mention
below book value. Under the program, Farmer Mac will acquire shares from time to
time over the next two years. The timing of purchases and the number of shares
to be purchased will depend on market conditions.
"Based upon our firm belief in the Corporation's financial strength, we
have decided to proceed to obtain a rating of Farmer Mac from a nationally
recognized statistical rating organization (NRSRO). We believe that Farmer Mac's
financial condition and solid outlook, as well as its status as a
government-sponsored enterprise, make it worthy of a very high rating."
Forward-Looking Statements
In addition to historical information, this release includes
forward-looking statements that reflect management's current expectations for
Farmer Mac's future financial results, business prospects and business
developments. 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 could cause Farmer Mac's actual results or events
to differ materially from the expectations as expressed or implied by the
forward-looking statements, including uncertainties regarding: (1) the rate and
direction of development of the secondary market for agricultural mortgage
loans; (2) the possible establishment of additional statutory or regulatory
restrictions or constraints on Farmer Mac that could hamper its growth or
diminish its profitability; (3) legislative or regulatory developments or
interpretations of Farmer Mac's statutory charter that could adversely affect
Farmer Mac or the ability or motivation of certain lenders to participate in its
programs or the terms of any such participation, or increase the cost of
regulation and related corporate activities; (4) possible reaction in the
financial markets to events involving government-sponsored enterprises other
than Farmer Mac; (5) Farmer Mac's access to the debt markets at favorable rates
and terms; (6) the possible effect of the risk-based capital requirement, which
could, under certain circumstances, be in excess of the statutory minimum
capital requirement; (7) the rate of growth in agricultural mortgage
indebtedness; (8) lender interest in Farmer Mac credit products and the Farmer
Mac secondary market; (9) borrower preferences for fixed-rate agricultural
mortgage indebtedness; (10) competitive pressures in the purchase of
agricultural mortgage loans and the sale of agricultural mortgage backed and
debt securities; (11) substantial changes in interest rates, agricultural land
values, commodity prices, export demand for U.S. agricultural products and the
general economy; (12) protracted adverse weather, market or other conditions
affecting particular geographic regions or particular commodities related to
agricultural mortgage loans backing Farmer Mac I Guaranteed Securities or under
LTSPCs; (13) the willingness of investors to invest in agricultural
mortgage-backed securities; or (14) the effects on the agricultural economy or
the value of agricultural real estate of any changes in federal assistance for
agriculture. Other factors are discussed in Farmer Mac's Annual Report on Form
10-K for the year ended December 31, 2003, as filed with the SEC on March 15,
2004 and Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended March
31, 2004, as filed with the SEC on May 10, 2004. The forward-looking statements
contained in this release represent management's expectations as of the date of
this release. Farmer Mac undertakes no obligation to release publicly the
results of revisions to any forward-looking statements included in this release
to reflect any future events or circumstances, except as otherwise mandated by
the SEC.
Farmer Mac is a stockholder-owned instrumentality of the United States
chartered by Congress to establish a secondary market for agricultural real
estate and rural housing mortgage loans and to facilitate capital market funding
for USDA-guaranteed farm program and rural development loans. Farmer Mac's Class
C non-voting and Class A voting common stocks are listed on the New York Stock
Exchange under the symbols AGM and AGM.A, respectively. Farmer Mac's Class B
voting common stock is held by a limited group of Farm Credit System
institutions, there is no active market for that class of stock, and it is not
listed on any exchange. Additional information about Farmer Mac (as well as the
Forms 10-K and 10-Q referenced above) is available on Farmer Mac's website at
www.farmermac.com.
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