Exhbibit 99
FARMER MAC NEWS
FOR IMMEDIATE RELEASE CONTACT
November 9, 2005 Mary Waters
202-872-5542
Farmer Mac Reports Third Quarter Results
Washington, D.C. -- The Federal Agricultural Mortgage Corporation (Farmer
Mac, NYSE: AGM and AGM.A) today reported U.S. GAAP net income for third quarter
2005 of $7.6 million or $0.67 per diluted share, compared to $8.2 million or
$0.72 per diluted share for second quarter 2005 and $8.6 million or $0.70 per
diluted share for third quarter 2004. For the nine months ended September 30,
2005, net income was $20.8 million or $1.80 per diluted share, compared to $18.4
million or $1.50 per diluted share for the nine months ended September 30, 2004.
More complete information on Farmer Mac's performance for the quarter ended
September 30, 2005 is set forth in the Form 10-Q filed with the SEC today by
Farmer Mac.
Core earnings were $9.3 million or $0.82 per diluted share for third
quarter 2005, compared to $6.0 million or $0.52 per diluted share for second
quarter 2005 and $5.4 million or $0.44 per diluted share for third quarter 2004.
For the nine months ended September 30, 2005, core earnings were $21.5 million
or $1.87 per diluted share, compared to $17.5 million or $1.43 per diluted share
for the corresponding period in the prior year.
Farmer Mac reports its "core earnings," a non-GAAP measure, in addition to
GAAP earnings. Farmer Mac uses the core earnings measure to present net income
available to common stockholders less the after-tax effects of unrealized gains
and losses on financial derivatives resulting from the application of the
derivative accounting standards.
Non-GAAP Performance Measures
Farmer Mac reports its financial results in accordance with GAAP. In
addition to GAAP measures, Farmer Mac presents certain non-GAAP performance
measures. Farmer Mac uses the latter measures to develop financial plans, to
gauge corporate performance and to set incentive compensation because, in
management's view, the non-GAAP measures more accurately represent Farmer Mac's
economic performance, transaction economics and business trends. Investors and
the investment analyst community have previously relied upon similar measures to
evaluate Farmer Mac's historical and future performance. Farmer Mac's disclosure
of non-GAAP measures is not intended to replace GAAP information but, rather, to
supplement it.
Farmer Mac developed the non-GAAP measure "core earnings" to present net
income available to common stockholders less the after-tax effects of unrealized
gains and losses on financial derivatives resulting from Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("FAS 133"). The GAAP measure most comparable to core earnings is net
income available to common stockholders. Unlike core earnings, however, the GAAP
measure is heavily influenced by unrealized gains or losses in the value of
financial derivatives used to hedge interest rate risk in Farmer Mac's mortgage
portfolio.
The reconciliation of GAAP net income available to common stockholders to
core earnings is presented in the following table:
Reconciliation of GAAP Net Income Available to Common Stockholders to Core Earnings
- -----------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------------------- -----------------------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
----------------- ----------------- ------------------- ---------------------
(in thousands, except per share amounts)
Per Per Per Per
Diluted Diluted Diluted Diluted
Share Share Share Share
-------- -------- -------- ----------
GAAP net income available
to common stockholders $ 7,633 $ 0.67 $ 8,604 $ 0.70 $ 20,756 $ 1.80 $ 18,391 $ 1.50
Less the effects of FAS 133:
Unrealized gains/(losses)
on financial derivatives and
trading assets, net of tax (1,668) (0.15) 3,144 0.25 (770) (0.07) 633 0.05
Benefit from non-amortization
of premium payments
on financial derivatives,
net of tax - - 76 0.01 - - 228 0.02
-------- -------- -------- -------- ---------- ------------------- ----------
Core earnings $ 9,301 $ 0.82 $ 5,384 $ 0.44 $ 21,526 $ 1.87 $ 17,530 $ 1.43
-------- -------- -------- -------- ---------- ------------------- ----------
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. Additional information
about Farmer Mac (as well as the Form 10-Q referenced above) is available on
Farmer Mac's website at www.farmermac.com. The conference call to discuss Farmer
Mac's third quarter 2005 earnings and the Corporation's Form 10-Q for third
quarter 2005 will be webcast on Farmer Mac's website beginning at 11:00 a.m.
eastern time, Thursday, November 10, 2005, and an audio recording of that call
will be available for two weeks on Farmer Mac's website after the call is
concluded.
* * * *