As filed with the Securities and Exchange Commission on
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November 13, 2001
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 Commission File Number
September 30, 2001 0-17440
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)
Federally chartered instrumentality
of the United States 52-1578738
(State or other jurisdiction of (I.R.S. employer identification number)
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 [ ]
As of November 1, 2001, there were 1,030,780 shares of Class A Voting
Common Stock, 500,301 shares of Class B Voting Common Stock and 9,863,983 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 September 30, 2001 and December 31, 2000.. 3
Consolidated Statements of Operations for the three and nine months ended
September 30, 2001 and 2000.............................................. 4
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2001 and 2000.............................................. 5
Notes to Consolidated Financial Statements.................................. 6
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, December 31,
2001 2000
------------ ------------
(unaudited) (audited)
Assets:
Cash and cash equivalents $ 478,132 $ 537,871
Investment securities 989,343 836,757
Farmer Mac guaranteed securities 1,705,578 1,679,993
Loans 141,001 30,279
Financial derivatives 864 -
Interest receivable 40,507 55,681
Guarantee fees receivable 4,098 5,494
Prepaid expenses and other assets 17,693 14,824
------------ ------------
Total Assets $ 3,377,216 $ 3,160,899
------------ ------------
Liabilities and Stockholders' Equity:
Liabilities:
Notes payable
Due within one year $ 2,337,765 $ 2,201,691
Due after one year 827,862 767,492
------------ ------------
Total notes payable 3,165,627 2,969,183
Financial derivatives 32,926 -
Accrued interest payable 18,967 20,852
Accounts payable and accrued expenses 15,240 26,880
Reserve for losses 14,744 11,323
------------ ------------
Total Liabilities 3,247,504 3,028,238
Stockholders' Equity:
Common stock:
Class A Voting, $1 par value, no maximum authorization,
1,030,780 shares issued and outstanding as of
September 30, 2001 and December 31, 2000. 1,031 1,031
Class B Voting, $1 par value, no maximum authorization,
500,301 shares issued and outstanding as of
September 30, 2001 and December 31, 2000. 500 500
Class C Non-Voting, $1 par value, no maximum authorization,
9,849,224 and 9,620,112 shares issued and outstanding
as of September 30, 2001 and December 31, 2000. 9,849 9,621
Additional paid-in capital 76,892 72,773
Accumulated other comprehensive income 13,403 31,498
Retained earnings 28,037 17,238
------------ ------------
Total Stockholders' Equity 129,712 132,661
------------ ------------
Total Liabilities and Stockholders' Equity $ 3,377,216 $ 3,160,899
------------ ------------
See accompanying notes to consolidated financial statements.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
------------------------------- ------------------------------
Sept. 30, 2001 Sept. 30, 2000 Sept. 30, 2001 Sept. 30, 2000
-------------- -------------- -------------- --------------
(unaudited)
Interest income:
Investments and cash equivalents $ 15,604 $ 23,760 $ 53,840 $ 68,758
Farmer Mac guaranteed securities 27,714 26,671 84,935 71,763
Loans 1,842 586 3,185 2,332
----------- ------------ ----------- ----------
Total interest income 45,160 51,017 141,960 142,853
Interest expense 37,292 46,685 122,218 129,661
----------- ------------ ----------- ----------
Net interest income 7,868 4,332 19,742 13,192
Gains/(Losses) on financial derivatives
and trading assets (295) - (1,043) -
Other income:
Guarantee fees 4,177 2,972 11,273 8,309
Miscellaneous 137 78 420 250
----------- ------------ ----------- ----------
Total other income 4,314 3,050 11,693 8,559
----------- ------------ ----------- ----------
Total revenues 11,887 7,382 30,392 21,751
Expenses:
Compensation and employee benefits 1,414 1,037 4,147 3,353
Regulatory fees 245 150 712 451
General and administrative 883 888 3,137 2,777
----------- ------------ ----------- ----------
Total operating expenses 2,542 2,075 7,996 6,581
Provision for losses 1,962 1,068 4,739 3,442
----------- ------------ ----------- ----------
Total expenses 4,504 3,143 12,735 10,023
----------- ------------ ----------- ----------
Income before income taxes 7,383 4,239 17,657 11,728
Income tax expense 2,455 1,505 6,132 4,164
----------- ------------ ----------- ----------
Net income before cumulative effect 4,928 2,734 11,525 7,564
of change in accounting principles
Cumulative effect of change in accounting
principles, net of taxes of $400 - - (726) -
----------- ------------ ----------- ----------
Net income $ 4,928 $ 2,734 $ 10,799 $ 7,564
----------- ------------ ----------- ----------
Earnings per share:
Basic earnings per share $ 0.43 $ 0.25 $ 0.95 $ 0.69
Diluted earnings per share $ 0.41 $ 0.24 $ 0.91 $ 0.66
Earnings per share before cumulative
effect of change in accounting principles:
Basic earnings per share $ 0.43 $ 0.25 $ 1.02 $ 0.69
Diluted earnings per share $ 0.41 $ 0.24 $ 0.98 $ 0.66
See accompanying notes to consolidated financial statements.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
---------------------------------
Sept. 30, 2001 Sept. 30, 2000
--------------- ---------------
(unaudited)
Cash flows from operating activities:
Net income $ 10,799 $ 7,564
Adjustments to reconcile net income to cash provided by
operating activities:
Net amortization of investment premiums and discounts (680) 1,313
Decrease in interest receivable 15,174 4,850
Decrease in guarantee fees receivable 1,396 691
Decrease (increase) in other assets (2,881) 143
Amortization of debt premiums, discounts and issuance 75,745 89,728
Decrease in accrued interest payable (1,885) (7,001)
Decrease in other liabilities (1,788) (340)
Proceeds from repayment of trading investment securit 18,185 -
Mark to market on trading securities and derivatives 116 -
Settlement of financial derivatives (5,757) -
Amortization of settled financial derivatives contracts 153 -
Provision for losses (net of charge-offs) 3,421 3,442
------------ ------------
Net cash provided by operating activities 111,998 100,390
Cash flows from investing activities:
Purchases of investment securities (434,561) (204,666)
Purchases of Farmer Mac guaranteed securities (217,304) (338,589)
Purchases of loans (212,944) (401,664)
Proceeds from repayment of investment securities 281,400 152,949
Proceeds from repayment of Farmer Mac guaranteed securities 218,307 390,760
Proceeds from repayment of loans 2,360 709
Proceeds from sale of Farmer Mac guaranteed securitie 65,929 76,024
Purchases of office equipment (41) (11)
------------ ------------
Net cash used in investing activities (296,854) (324,488)
Cash flows from financing activities:
Proceeds from issuance of discount notes 76,929,322 46,613,148
Proceeds from issuance of medium-term notes 138,200 65,853
Payments to redeem discount notes (76,777,540) (46,299,039)
Payments to redeem medium-term notes (169,210) (33,300)
Proceeds from common stock issuance 4,345 1,966
------------ ------------
Net cash provided by financing activities 125,117 348,628
------------ ------------
Net increase (decrease) in cash and cash equivalents (59,739) 124,530
Cash and cash equivalents at beginning of period 537,871 336,282
------------ ------------
Cash and cash equivalents at end of period $ 478,132 $ 460,812
------------ ------------
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 nine months ended September 30, 2001 and 2000.
Nine Months Ended
September 30,
-------------------
2001 2000
-------- -------
(in thousands)
Cash paid for:
Interest $62,372 $ 42,333
Income taxes 5,000 3,825
Non-cash activity:
Real estate owned acquired through foreclosure - -
Loans securitized as AMBS 99,862 340,619
(b) Loans
As of September 30, 2001, loans held by Farmer Mac included $17.1 million
held for sale and $123.9 million held for investment. As of December 31, 2000,
loans held by Farmer Mac included $11.6 million held for sale and $18.7 million
held for investment. See "New Accounting Standards" below for a discussion of
SFAS 140.
(c) Earnings Per Share
Basic earnings per share are based on the weighted average number of common
shares outstanding. Diluted earnings per share are based on the weighted average
number of common shares outstanding adjusted to include all potentially dilutive
common stock. The following schedule reconciles basic and diluted earnings per
share for the three and nine months ended September 30, 2001 and 2000:
September 30, 2001 September 30, 2000
-------------------------------------- ----------------------------------
Dilutive Dilutive
stock Diluted stock Diluted
Basic EPS options EPS Basic EPS options EPS
-------------------------------------- ----------------------------------
(in thousands, except per share amounts)
Three months ended:
Net income $ 4,928 $ 4,928 $ 2,734 $ 2,734
Weighted average shares 11,366 524 11,890 11,123 291 11,414
Earnings per share $ 0.43 $ 0.41 $ 0.25 $ 0.24
Nine months ended:
Net income $ 10,799 $ 10,799 $ 7,564 $ 7,564
Weighted average shares 11,276 477 11,753 11,039 444 11,483
Earnings per share $ 0.95 $ 0.91 $ 0.69 $ 0.66
(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. Pursuant to generally accepted accounting practices
prior to SFAS 133, derivatives were accounted for as off-balance sheet items and
disclosed in the consolidated financial statement footnotes.
The cumulative effect of this change in accounting principles recognized on
January 1, 2001 was a reduction to net income of $726,000 and a negative
adjustment to other comprehensive income within stockholders' equity of $8.6
million. As part of the implementation of SFAS 133, Farmer Mac reclassified
certain investments from held to maturity and available for sale securities to
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 issued
Statement of Financial Accounting Standards No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS
140"). SFAS 140 was applied as of April 1, 2001 as required by the standard.
SFAS 140 does not materially affect the Corporation's results of operations or
financial position, but does result in the Corporation classifying as loans
certain AMBS that were previously classified as Farmer Mac guaranteed
securities.
(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 match more closely the characteristics of the Corporation's assets or to
provide better returns on its investments. Farmer Mac enters into forward sale
contracts of GSE debt and mortgage-backed securities and U.S. Treasury based
futures contracts 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 third quarter 2001 totaled
$190,000, and the net after-tax decrease to other comprehensive income totaled
$14.1 million. Substantially all of this amount represents the estimated present
value of the cost of settled forward sale contracts and the net interest
payments on interest-rate swap contracts, using fair values as of September 30,
2001, and assuming no change in interest rates. Farmer Mac estimates that $2.6
million of the amount currently reported in accumulated other comprehensive
income will be reclassified into earnings within the next twelve months. The
Corporation entered into those interest-rate swap contracts 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 conventional debt
market. For the quarter ended September 30, 2001, the ineffectiveness of
designated hedges included in Farmer Mac's 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 (loss) for the
three and nine months ended September 30, 2001 and 2000. The changes in
unrealized gains on securities available-for-sale are net of the related
deferred tax expense of $15.1 million and $2.7 million for the three and nine
months ended September 30, 2001, respectively, and deferred tax expense of $1.8
million and $1.6 million for the three and nine months ended September 30, 2000,
respectively. The change in the fair value of financial derivatives classified
as cash flow hedges for the three and nine months ended September 30, 2001 is
net of the related deferred tax benefit of $7.8 million and $7.9 million,
respectively.
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2001 2000 2001 2000
-------- --------- -------- --------
(in thousands)
Net income $ 4,928 $ 2,734 $ 10,799 $ 7,564
Change in unrealized gain on securities
available-for-sale, net of taxes 27,445 3,303 4,966 2,948
Cumulative effect of change in accounting principles - (8,632) -
Change in the fair value of financial derivatives
classified as cash flow hedges (14,148) - (14,429) -
-------- --------- -------- -------
Comprehensive income (loss) $ 18,225 $ 6,037 $ (7,296) $10,512
-------- --------- -------- -------
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 that
reflect management's current expectations for 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," "estimates," "expects," "intends," "plans," "should" and similar
expressions. 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; 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; uncertainties as to the intended
operation of the new risk-based capital standard promulgated by the Farm Credit
Administration, which Farmer Mac is required to comply with by May 23, 2002; the
implementation of additional statutory or regulatory restrictions applicable to
Farmer Mac or restrictions on Farmer Mac's investment authority; 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 affect 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 effects 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 or
other comprehensive income. Management believes that reporting results by
reference to operating income and operating revenues, 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 periods, provides
meaningful operating measures of Farmer Mac's financial performance. Such
information is presented to supplement, not replace, net income, revenues, cash
from operations, or any other operating or liquidity performance measures
prescribed by generally accepted accounting principles.
Overview. Net income for third quarter 2001, including the cumulative and
ongoing effects of SFAS 133 during the quarter, was $4.9 million or $0.41 per
share. Net income for third quarter 2000 was $2.7 million or $0.24 per share.
Net income for the nine months ended September 30, 2001 was $10.8 million
compared to $7.6 million for the nine months ended September 30, 2000. This
represents a 71 percent increase in net income per share. Operating income
totaled $5.0 million for third quarter 2001, or $0.42 per share, compared to
$2.7 million, or $0.24 per share, for third quarter 2000. Operating income for
the nine months ended September 30, 2001 was $12.3 million, or $1.01 per share,
compared to $7.6 million, or $0.66 per share, for the nine months ended
September 30, 2000.
Farmer Mac's revenue growth continued in third quarter 2001, reflecting the
effects of outstanding guarantee volume as of September 30, 2001 that was more
than $1 billion higher than at the close of third quarter 2000 and net interest
income earned on higher average interest-earning asset balances that were 82
percent higher than during third quarter 2000. During third quarter 2001, Farmer
Mac (1) purchased $42.4 million of guaranteed portions of loans guaranteed by
the United States Department of Agriculture ("USDA"), (2) purchased $69.6
million of Farmer Mac I loans and (3) added $246.5 million in long-term standby
purchase commitments.
Farmer Mac's outstanding guarantee volume increased during third 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 2001. Total direct governmental
payments to the agricultural sector for 2000 as reported by the USDA were a
record $22.9 billion. Although the USDA forecast for 2001 reflects slightly
lower government payments of $20.0 billion, the decline is primarily due to a
$2.5 billion reduction in deficiency payments resulting from higher crop prices.
Overall, USDA is forecasting net cash income on farms at $60.8 billion, or 6
percent above the 2000 level and substantially above the 1990-2000 average of
$55.0 billion. Nationwide, USDA currently forecasts farm real estate values to
rise during 2001 to $932.9 billion, up slightly over 2000. Regionally, farm real
estate values may vary with differing rates of increase, or even decreases,
depending on commodities grown and regional economic factors. As unfavorable
economic conditions in the agricultural sector persist, Farmer Mac has focused
its marketing efforts on increasing awareness of the significance of its brand
name and building relationships among agricultural lenders. Although Farmer Mac
believes it is positioned well in the marketplace and that its planned marketing
strategies for the remainder of 2001 and the first half of 2002 will produce
portfolio transactions in the coming quarters, the timing and total volume of
those transactions is uncertain at this time.
During second quarter 2001, Farmer Mac, at the request of the Agriculture
Committees in both the Senate and House of Representatives, presented testimony
in connection with Congress' consideration of the reauthorization of the farm
bill. In that testimony and in discussions with Committee staff and others who
expressed interest in Farmer Mac's suggestion, the Corporation suggested that
Congress consider adding the authority to establish a secondary market for rural
development loans to the Corporation's authorities. At this time, there is no
legislation being considered by Congress that includes a rural development
secondary market proposal.
Set forth below is a more detailed discussion of Farmer Mac's results of
operations.
Net Interest Income. Net interest income was $7.9 million for third quarter
2001 and $19.7 million year-to-date, compared to $4.3 million and $13.2 million
for the same periods in 2000. The strength in the net interest yield is a result
of continued emphasis on sound interest rate risk management and debt issuance
strategies and a $781,000 increase from the income recognition due to yield
maintenance payments received in conjunction with borrower prepayments during
year-to-date 2001. The income realized from yield maintenance payments is, in
effect, the accelerated present value of an expected future income stream which,
in turn, leads to slightly reduced net interest income in future reporting
periods. The timing and size of these payments varies greatly and, as such,
variations should not be considered indicative of positive or negative trends to
gauge future financial results. The following table provides information
regarding the average balances and rates of interest-earning assets and funding
for the nine months ended September 30, 2001 and 2000.
Nine Months Ended September 30,
-------------------------------------------------------------------------------------------
2001 2000
--------------------------------------------- -------------------------------------------
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
--------------- -------------- ------------- --------------- -------------- ------------
(dollars in thousands)
Interest-earning assets:
Cash and cash equivalents $ 541,659 $ 18,720 4.61% $ 511,150 $ 24,400 6.37%
Investments 893,184 35,116 5.24% 888,745 44,358 6.66%
Farmer Mac guaranteed securities 1,705,561 84,938 6.64% 1,397,364 71,763 6.85%
Loans 65,279 3,186 6.51% 38,756 2,332 8.02%
--------------- -------------- ------------- --------------- -------------- ------------
Total interest earning assets 3,205,683 141,960 5.90% 2,836,015 142,853 6.72%
--------------- -------------- --------------- --------------
Funding:
Discount notes 2,174,237 79,034 4.85% 1,986,821 89,844 5.96%
Medium-term notes 905,744 43,184 6.36% 811,169 39,817 6.47%
---------------- -------------- -------------- --------------- -------------- ------------
Total interest-bearing liabilities 3,079,981 122,218 5.29% 2,797,990 129,661 6.18%
Net non-interest bearing funding 125,702 - - 38,025 - -
---------------- -------------- -------------- --------------- -------------- ------------
Total funding $ 3,205,683 122,218 5.08% $2,836,015 129,661 6.10%
---------------- -------------- -------------- --------------- -------------- ------------
Net interest income/yield $ 19,742 0.82% $ 13,192 0.62%
-------------- -------------- -------------- ------------
The following table 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.
Nine Months Ended September 30, 2001
Compared to Nine Months Ended
September 30, 2000
--------------------------------------
Increase/(Decrease) Due to
--------------------------------------
Rate Volume Total
--------------------------------------
(in thousands)
Income from interest-earning assets
Cash and cash equivalents $ (7,243) $ 1,563 $(5,680)
Investments (9,472) 230 (9,242)
Farmer Mac guaranteed securities (2,097) 15,272 13,175
Loans (326) 1,180 854
----------- --------- ---------
Total (19,138) 18,245 (893)
Expense from interest-bearing liabilities (22,431) 14,988 (7,443)
----------- --------- ---------
Change in net interest income $ 3,293 $ 3,257 $ 6,550
----------- --------- ---------
Other Income. Other income, which is comprised of guarantee fee income and
miscellaneous income, totaled $4.3 million for third quarter 2001 and $11.7
million for year-to-date 2001, compared to $3.1 million and $8.6 million,
respectively, in 2000. Guarantee fee income, the largest component of other
income, was $4.2 million for third quarter 2001, compared to $3.0 million for
third quarter 2000. The relative increase in guarantee fee income reflects an
increase in the average balance of outstanding guarantees. Miscellaneous income
was $137,000 for third quarter 2001, compared to $78,000 for third quarter 2000.
Expenses. During third quarter 2001, operating expenses totaled $2.5
million, compared to $2.1 million for third quarter 2000. Operating expenses as
a percentage of operating revenues were 21 percent for third quarter 2001,
compared to 28 percent for third quarter 2000.
Farmer Mac's provision for principal and interest losses was $2.0 million
for third quarter 2001 and $4.7 million for year-to-date 2001, compared to $1.1
million and $3.4 million for the same periods in 2000. As of September 30, 2001,
Farmer Mac's reserve for losses totaled $14.7 million, or 0.44 percent of
outstanding post-1996 Act loans and AMBS, compared to $10.0 million, or 0.43
percent, as of September 30, 2000.
The provision for income taxes totaled $2.5 million for second quarter 2001
and $6.1 million year-to-date, compared to $1.5 million and $4.2 million for the
same periods in 2000. Farmer Mac's effective tax rate for third quarter 2001 was
33.3 percent compared to 35.5 percent for third quarter 2000. The reduction in
the effective rate for reflects the effects of certain tax-advantaged investment
securities.
Business Volume. The following table sets forth the amount of loans
purchased or guaranteed, and AMBS issued during the periods indicated:
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -----------------------
2001 2000 2001 2000
------------ ------------ ---------- -----------
(in thousands)
Purchase and guarantee volume:
Farmer Mac I
Loans & AMBS $ 69,561 $ 292,658 $ 203,600 $ 396,519
LTSPC 246,472 158,291 795,675 192,700
Farmer Mac II 42,396 40,036 147,115 157,476
------------ ------------ ---------- -----------
Total loans purchased or
guaranteed $ 358,429 $ 490,985 $1,146,390 $ 746,695
------------ ------------ ---------- -----------
AMBS issuances:
Retained $ - $ 272,497 $ 33,392 $ 340,619
Sold 26,609 20,247 65,930 144,815
------------ ------------ ---------- -----------
Total AMBS issuances $ 26,609 $ 292,744 $ 99,322 $ 485,434
------------ ------------ ---------- -----------
See "Overview" above for a discussion regarding loans purchased and
guaranteed by Farmer Mac.
Indicators of future loan purchase volume in the immediately succeeding
reporting period include outstanding commitments to purchase loans and the total
balance of loans submitted for approval or approved but not yet purchased. Many
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 as required thereunder, Farmer Mac requires the seller to pay a fee to
modify, extend or cancel the commitment. As of September 30, 2001, outstanding
commitments to purchase or guarantee Farmer Mac I loans totaled $19.0 million,
compared to $11.0 million as of September 30, 2000. Of the total Farmer Mac I
commitments outstanding as of September 30, 2001 and 2000, $15.8 million and
$5.2 million, respectively, were mandatory commitments. Loans submitted for
approval or approved but not yet committed to purchase totaled $137.1 million as
of September 30, 2001, compared to $109.1 million as of September 30, 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 market where none previously existed. Use 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 maximize its business development and profitability 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 the nine month period ended September 30, 2001, total assets
increased by $216 million, primarily due to an increase in on-balance sheet
program assets (Farmer Mac guaranteed securities and loans). For further
information regarding both on- and off-balance sheet guaranteed securities, see
"Supplemental Information" below. Total liabilities increased by $219 million
from December 31, 2000 to September 30, 2001 primarily due to an increase in
notes payable.
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, reached 17.7 percent for third quarter 2001,
compared to 11.3 percent for third quarter 2000.
As of September 30, 2001, Farmer Mac's statutory core capital totaled
$116.3 million, compared to $101.2 million as of December 31, 2000. As of
September 30, 2001, the statutory core capital balance exceeded Farmer Mac's
statutory minimum capital requirement by approximately $8.2 million.
On April 12, 2001, the Farm Credit Administration ("FCA") issued its final
risk-based capital regulation for Farmer Mac. The regulation became effective on
May 23, 2001, and Farmer Mac will be required to meet the risk-based capital
standards by May 23, 2002. 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. We have maintained a dialogue with FCA regarding the application of the
regulation and the complex underlying economic model - particularly the
provisions that suggest to us that the FCA went outside the authorizing statute.
If no change is made to the regulation before compliance is required, it could
lead to an increase in the capital requirement for certain newly guaranteed
program assets and so alter Farmer Mac's strategic plan for future growth. While
we are at this time uncertain whether the regulation, as issued, would alter
that strategic plan, we continue to 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.
Risk Management
Interest-Rate Risk. Farmer Mac's asset and liability management objective
is to limit the effects 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
enable Farmer Mac better to match the interest-rate characteristics of its
investments and debt. As of September 30, 2001 and December 31, 2000, the
notional amount of interest-rate contracts totaled $1.0 billion and $1.1
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 September 30, 2001, the
notional amount of outstanding forward sale and futures contracts totaled $111.8
million, compared to $8.6 million as of December 31, 2000.
One method Farmer Mac uses to monitor its exposure to interest-rate risk is
to measure the sensitivity of its market value of equity ("MVE") to an immediate
and permanent parallel shift of the U.S. Treasury yield curve. The following
schedule summarizes the results of Farmer Mac's MVE sensitivity analysis as of
September 30, 2001 and December 31, 2000.
Percentage Change in MVE from Base Case
---------------------------------------
Interest Rate September 30, December 31,
Scenario 2001 2000
-------------- ------------------ ------------------
+ 300 bp -5.3% -10.2%
+ 200 bp -1.8% -5.9%
+ 100 bp 0.4% -2.0%
- 100 bp -2.6% -0.5%
- 200 bp -5.8% -3.2%
- 300 bp -13.8% -6.5%
Credit Risk. The outstanding principal balance of loans held and securities
guaranteed by Farmer Mac as of September 30, 2001 and December 31, 2000 is
summarized in the table below.
September 30, December 31,
2001 2000
---------------- -----------------
(in thousands)
Farmer Mac I:
Post-1996 Act $ 3,337,021 $ 2,508,997
Pre-1996 Act 58,813 83,513
Farmer Mac II 608,944 517,703
---------------- -----------------
Total $ 4,004,778 $ 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 back securities that are supported
by mandatory 10 percent first loss subordinated interests that mitigate credit
exposure; 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 pools of those loans, or to
Farmer Mac II loans because of the USDA guarantee.
As of September 30, 2001, post-1996 Act Farmer Mac I loans that were 90
days or more past due, in foreclosure or in bankruptcy represented 2.16 percent
of the outstanding principal balance of all post-1996 Act Farmer Mac I loans,
compared to 1.80 percent as of September 30, 2000 and 1.72 percent as of June
30, 2001. Farmer Mac anticipates fluctuations in the delinquency rate from
quarter to quarter, with higher levels likely as of March 31 and September 30 of
each year due to the semiannual payment characteristics of most Farmer Mac
loans.
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
--------------- -------------- -------
September 30, 2001 2.16% 4.66% 2.21%
June 30, 2001 1.72% 3.69% 1.77%
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%
(1) Includes loans 90 days or more past due, in foreclosure or in bankruptcy.
(2) Farmer Mac assumes 100 percent of the credit risk on post-1996 Act loans.
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 maintains a reserve to cover losses incurred on post-1996 Act
Farmer Mac I loans. Management believes that existing post-1996 Act delinquent
loans have current loan-to-value ratios that adequately protect against losses
at liquidation, with the exception of certain loans that are secured in whole or
in part by depreciable assets or by real estate planted with commodities that do
not benefit from direct governmental payments. Farmer Mac expects to incur
losses upon the liquidation of some of those delinquent loans, such as the
$750,000 in losses recognized during third quarter 2001. Management believes
further potential losses are adequately covered by the reserve for losses, based
on the value of the collateral securing the loans and Farmer Mac's loan
collection experience. In certain collateral liquidation scenarios Farmer Mac
may recover amounts previously written off if liquidation proceeds exceed
previous estimates. During third quarter 2001, Farmer Mac recovered
approximately $352,000 of previously written off assets. As of September 30,
2001, the weighted-average original loan-to-value ratio for all post-1996 Act
loans was 49.4 percent. Farmer Mac's provision for principal and interest losses
was $2.0 million for third quarter 2001, compared to $1.1 million for third
quarter 2000 and $1.4 million for second quarter 2001. As of September 30, 2001,
Farmer Mac's net reserve for losses totaled $14.7 million, or 0.44 percent of
outstanding post-1996 Act loans and AMBS, compared to $10.0 million (0.43
percent) as of September 30, 2000.
The following schedule summarizes the changes in the reserve for losses for
the three and nine months ended September 30, 2001 and 2000:
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -------------------
2001 2000 2001 2000
-------- ------- -------- ----------
(in thousands)
Beginning balance $13,180 $ 8,958 $11,323 $ 6,584
Provision for losses 1,962 1,068 4,739 3,442
Net charge-offs (398) - (1,318) -
-------- ------- -------- --------
Ending balance $14,744 $10,026 $14,744 $10,026
-------- ------- -------- --------
The following table summarizes the post-1996 Act delinquencies by original
loan-to-value ratio (calculated by dividing the original loan principal balance
by the original appraised value):
Distribution of Post-1996
Act Delinquencies by
UPB as of Sept. 30, 2001
------------------------------------------------
(original loan-to-value ratio)
0.00% to 40.00% 3%
40.01% to 50.00% 10%
50.01% to 60.00% 41%
60.01% to 70.00% 43%
70.01% to 80.00% 3%
---------
Total 100%
---------
As of September 30, 2001, the weighted average original loan-to-value ratio
for post-1996 Act Farmer Mac I loans that were 90 days or more past due, in
foreclosure or in bankruptcy was 59.1 percent.
The following table segregates the post-1996 Act Farmer Mac I loan
portfolio and delinquencies as of September 30, 2001 by year of origination,
geographic region and commodity.
Distribution of
Post-1996 Act Delinquency
Loans Rate
---------------- ------------------
By year of origination:
Before 1996 27% 0.50%
1996 8% 5.88%
1997 10% 4.83%
1998 18% 3.92%
1999 20% 1.33%
2000 10% 0.90%
2001 7% 0.00%
---------------- ------------------
Total 100% 2.16%
---------------- ------------------
By geographic region: (1)
Northwest 34% 3.76%
Southwest 42% 1.46%
Mid-North 12% 1.05%
Mid-South 4% 1.38%
Northeast 4% 0.96%
Southeast 4% 1.64%
--------------- ------------------
Total 100% 2.16%
--------------- ------------------
By commodity:
Crops 46% 2.17%
Permanent plantings 30% 2.89%
Livestock 19% 1.27%
Part-Time Farm 3% 1.65%
Other 2% 0.00%
--------------- ------------------
Total 100% 2.16%
--------------- ------------------
(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 present quarterly and annual information regarding
loan purchases and guarantees and outstanding guarantees.
Farmer Mac Purchases and Guarantees
- --------------------------------------------------------------------------------------
Farmer Mac I
----------------------------
Loans & AMBS LTSPC Farmer Mac II Total
---------------------------------------------------
(in thousands)
For the quarter ended:
September 30, 2001 $ 69,561 $ 246,472 $ 42,396 $ 358,429
June 30, 2001 85,439 499,508 57,012 641,959
March 31, 2001 48,600 49,695 47,707 146,002
December 31, 2000 45,727 180,502 36,029 262,258
September 30, 2000 292,658 158,291 40,036 490,985
June 30, 2000 45,578 34,409 94,870 174,857
March 31, 2000 58,283 - 22,570 80,853
December 31, 1999 168,828 229,984 18,511 417,323
For the year ended:
December 31, 2000 442,246 373,202 193,505 1,008,953
December 31, 1999 568,236 637,685 116,148 1,322,069
Outstanding Guarantees (1)
- ---------------------------------------------------------------------------------------------------------------------
Farmer Mac I
-----------------------------------------------
Post-1996 Act
-------------------------------
Loans & AMBS (2) LTSPC Pre-1996 Act Farmer Mac II Total Held in Portfolio (3)
-------------------- ---------- --------------- -----------------
(in thousands)
As of:
September 30, 2001 $1,605,160 $1,731,861 $ 58,813 $ 608,944 $4,004,778 $1,804,391
June 30, 2001 1,572,800 1,537,061 65,709 579,251 3,754,821 1,763,676
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
(1) Farmer Mac assumes 100 percent of the credit risk on post-1996 Act loans.
Pre-1996 Act loans back securities that are supported by unguaranteed
subordinated interests representing approximately 10 percent of the balance
of the loans. Farmer Mac II loans are guaranteed by the USDA.
(2) Periods prior to June 30, 2001 include only AMBS.
(3) Included in total outstanding guarantees.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Farmer Mac is exposed to market risk attributable to changes in interest
rates. Farmer Mac manages this market risk by entering into various financial
transactions, including 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 derivative financial instruments, including Farmer Mac's
accounting policies for such instruments, see Note 1(f) to the Consolidated
Financial Statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Farmer Mac 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 July 9, 2001, Farmer
Mac issued an aggregate of 623 shares of its Class C Non-Voting
Common Stock, at an issue price of $31.98 per share, to the
twelve Directors who elected to receive such stock in lieu of
their cash retainers.
On August 27, 2001, Farmer Mac granted options under its 1997
Stock Option Plan to purchase 1,000 shares of Class C Non-Voting
Common Stock, at an exercise price of $34.90 per share, to a
non-officer employee in connection with such employee's
commencement of employment. On September 4, 2001, Farmer Mac
granted options under its 1997 Stock Option Plan to purchase 200
shares of Class C Non-Voting Common Stock, at an exercise price
of $34.91 per share, to a non-officer employee in connection with
such employee's commencement of employment.
On September 25, 2001, Farmer Mac granted options under its 1997
Stock Option Plan to purchase an aggregate of 9,750 shares of
Class C Non-Voting Common Stock, at an exercise price of $31.20
per share, to eight non-officer employees as incentive
compensation. On September 27, 2001, Farmer Mac awarded an
aggregate of 5,250 restricted shares of its Class C Non-Voting
Common Stock to sixteen non-officer employees of Farmer Mac as
incentive compensation. 50% of the restricted stock granted as
incentive compensation vests on August 31, 2002, and the
remaining 50% vests on August 31, 2003.
(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 By-Laws 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 August 14, 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 August 14, 1996).
+* 10.1.3- Amended and Restated 1997 Incentive 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).
+* 10.2.2 - Amendment to Employment Contract dated as of June 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 June 1, 1994 to Employment Contract
between Henry D. Edelman and the Registrant (Previously filed as Exhibit
10.6 to Form 10-Q filed August 15, 1994).
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 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 June 13, 1996 to Employment Contract
between Henry D. Edelman and the Registrant (Form 10-Q filed August 14,
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 June 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).
+* 10.2.10- Amendment No. 10 dated as of June 7, 2001 to Employment Contract
between Henry D. Edelman and the Registrant.(Form 10-Q filed August 14,
2001).
+* 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 June 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 June 1, 1993 to Employment Contract between
Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.10 to
Form 10-K filed March 31, 1994).
+* 10.3.5 - Amendment No. 5 dated as of June 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 June 1, 1995 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed August 14,
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 June 13, 1996 to Employment Contract
between Nancy E. Corsiglia and the Registrant (Form 10-Q filed August 14,
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 June 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).
+* 10.3.13- Amendment No. 13 dated as of June 7, 2001 to Employment Contract
between Nancy E. Corsiglia and the Registrant. (Form 10-Q filed August 14,
2001).
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 10.4 - Employment Agreement dated June 13, 1989 between Thomas R. Clark and
the Registrant (Previously filed as Exhibit 10.6 to Form 10-K filed
February 14, 1990).
+* 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 June 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 June 1, 1993 to Employment Contract between
Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.14 to
Form 10-K filed March 31, 1994).
+* 10.4.4 - Amendment No. 4 dated as of June 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 June 1, 1995 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-Q filed August 14,
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 June 13, 1996 to Employment Contract
between Thomas R. Clark and the Registrant(Form 10-Q filed August 14,
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 June 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 June 3, 1999 to Employment Contract
between Thomas R. Clark and the Registrant (Form 10-Q filed August 12,
1999).
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
+* 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).
+* 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 June 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 June 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 June 1, 2000 to Employment Contract
between Tom D. Stenson and the Registrant (Form 10-Q filed August 14,
2000).
+* 10.5.4 - Amendment No. 4 dated as of June 7, 2001 to Employment Contract
between Tom D. Stenson and the Registrant. (Form 10-Q August 14,2001).
+* 10.6 - Employment Contract 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).
+* 10.6.2 - Amendment No. 2 dated as of June 7, 2001 to Employment Contract
between Jerome G. Oslick and the Registrant. (Form 10-Q filed August 14,
2001).
* 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.
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
* 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.
On July 20, 2001, the Registrant filed a report on Form 8-K that attached
a press release announcing the Registrant's financial results for second quarter
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
November 13, 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
November 13, 2001
By:
--------------------------------------------------
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
--------------------------------------------------
Nancy E. Corsiglia
Vice President - Finance
(Principal Financial Officer)