SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 11, 1997
Federal Agricultural Mortgage Corporation
(Exact Name of Registrant as Specified in its Charter)
Federally chartered instrumentality
of the United States 0-17440 52-1578738
State or Other Jurisdiction of Incorporation (Commission (IRS Employer
File Number) Identification No.)
919 18th Street, N.W., Suite 200, Washington, D.C. 20006
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (202) 872-7700
N/A
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
On February 20, 1997, the Federal Agricultural Mortgage Corporation
issued a press release announcing financial results for the year ended
December 31, 1996, a copy of which is attached hereto.
Item 7. Financial Statements and Exhibits
Exhibit 99(1) - Press Release (including Condensed Consolidated Balance
Sheets at December 31, 1995 and 1996 and at September 30, 1996 and Condensed
Consolidated Statements of Income for the quarters ended December 31, 1995,
September 30, 1996 and December 31, 1996 and for the years ended December 31,
1995 and 1996).
<PAGE>
SIGNATURES
Pursuant to the requirements 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
(Registrant)
By:
Michael T. Bennett
Vice President
Date: March 11, 1997
Exhibit Index
Exhibit 99(1)
<PAGE>
Exhibit 99(1)
Farmer Mac NEWS
Federal Agricultural Mortgage Corporation, 919 18th Street, NW, Suite 200,
Washington,D.C. 20006, www.farmermac.com
FOR IMMEDIATE RELEASE CONTACT
February 20, 1997 Thomas R. Clark
202-872-7700
FARMER MAC REPORTS FIRST ANNUAL PROFIT IN
COMPANY HISTORY
Washington, D.C. -- The Federal Agricultural Mortgage Corporation (Farmer
Mac) today reported earnings for 1996 of $777 thousand, compared with a net
loss of $647 thousand for 1995. Results for 1996 include an extraordinary
gain on early retirement of debt of $384 thousand. For the fourth quarter,
net income totaled $14 thousand, compared with $171 thousand in the third
quarter of 1996 and $80 thousand in the fourth quarter of 1995.
Primary earnings per share for 1996 for Classes A and B common stock
were $0.14 and for Class C common stock were $0.43, compared with a loss per
share of $0.14 for Classes A and B common stock and a loss per share of $0.41
for Class C common stock for 1995, as restated to reflect the Class C common
stock 3-to-1 dividend and liquidation preference compared to Classes A and B
common stock.
Henry D. Edelman, president and chief executive officer of Farmer Mac,
said, "1996 marked a turning point for Farmer Mac. The Corporation secured
critical legislative changes to its charter in February 1996 that provide the
needed authorities for it to conduct its business efficiently and
effectively. The importance of those new authorities was demonstrated in the
profitable issuance of new agricultural mortgage-backed securities (AMBS) and
the opening of its cash window for direct loan purchases at competitive rates
to lenders across the country. Farmer Mac's capital position was increased to
$47.2 million, providing a sound base for business growth. Cumulatively,
those developments permitted the Corporation to post earnings for 1996, a
first since its creation." Mr. Edelman concluded, "although Farmer Mac still
has many challenges ahead before its business development and profitability
goals are reached, 1996 was a good year that positioned the Corporation for
continued success in 1997."
Net Interest Income
Net interest income totaled $2.7 million for 1996, an increase of $1.0
million over 1995's $1.7 million. That 59% increase was due to a 14 basis
point (0.14%) increase in the net interest spread and a $33.2 million
increase in the average balance of Farmer Mac's interest-earning assets from
1995 to 1996.
For the fourth quarter, net interest income totaled $785 thousand,
compared with $636 thousand in the third quarter of 1996 and $670 thousand in
the fourth quarter of 1995.
Other Income
Other income totaled $2.8 million for 1996, up $1.4 million from the
$1.4 million earned in 1995. Guarantee fee income, the principal component
of other income, totaled $1.6 million for 1996, up $360 thousand from $1.3
million in 1995. Farmer Mac recognizes a gain when loans purchased through
its Farmer Mac I cash window are securitized and those securities are sold in
the capital markets. During 1996, Farmer Mac sold approximately $149.4
million of guaranteed securities under its new authorities, from which it
recognized a $1.1 million gain on issuance. No income was earned from this
source in 1995, since Farmer Mac lacked the statutory authority to engage in
such transactions until Congress expanded its authorities in early 1996.
For the fourth quarter, other income totaled $657 thousand, compared
with $482 thousand in the third quarter of 1996 and $338 thousand in the
fourth quarter of 1995. Guarantee fee income totaled $492 thousand in the
fourth quarter of 1996, compared with $478 thousand in the third quarter of
1996 and $302 thousand in the fourth quarter of 1995. While no gains were
recognized from the issuance of guaranteed securities in the third quarter of
1996, Farmer Mac recognized $156 thousand from that source in the fourth
quarter of 1996.
Other Expenses
Other expenses totaled $5.1 million for 1996, an increase of $1.3
million from the $3.8 million in 1995. Compensation and employee benefits,
the principal component of other expenses, totaled $2.4 million in 1996, an
increase of $433 thousand from the $1.9 million in 1995.
For the fourth quarter, other expenses totaled $1.4 million, compared
with $1.3 million in the third quarter of 1996 and $928 thousand in the
fourth quarter of 1995. Compensation and employee benefits totaled $640
thousand, compared to $543 thousand in the third quarter of 1996 and $497
thousand in the fourth quarter of 1995.
As a result of the utilization of net operating losses, Farmer Mac
incurred tax expense of $12 thousand for 1996.
Credit
Farmer Mac's provision for losses totaled $262 thousand for 1996, an
increase of $166 thousand from the $96 thousand in 1995. For the fourth
quarter, the provision for losses totaled $61 thousand, compared to $60
thousand in the third quarter of 1996 and $23 thousand in the fourth quarter
of 1995. Farmer Mac's allowances for losses on guaranteed securities held in
portfolio and those sold to investors totaled $655 thousand at December 31,
1996, compared to $594 thousand at September 30, 1996 and $392 thousand at
December 31, 1995.
At December 31, 1996, loans that were 90 days or more past due, loans
that were in foreclosure or bankruptcy and loans that had been acquired by
the trust represented 0.7% of the principal amount of all loans underlying
Farmer Mac guaranteed securities.
Capital
Farmer Mac's capital was $47.2 million at December 31, 1996, compared
with $15.2 million at September 30, 1996 and $11.7 million at December 31,
1995. Farmer Mac issued 1.4 million shares of Class C Non-Voting Common
Stock on December 20, 1996 in an underwritten public offering, which
generated approximately $31.9 million in new equity capital and enabled
Farmer Mac to significantly exceed the minimum capitalization level
established by Congress as a condition to the continuation of Farmer Mac's
authorities past February 1998.
Farmer Mac is a federally-chartered instrumentality of the United States
created by Congress to establish a secondary market for agricultural real
estate and rural housing mortgage loans, and to facilitate capital market
funding for U.S. Department of Agriculture guaranteed farm program and rural
development loans. Farmer Mac's Class A and Class C common stocks are traded
on NASDAQ under the symbols FAMCA and FAMCK.
* * * * *
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<TABLE>
<CAPTION>
Federal Agricultural Mortgage Corporation
Condensed Consolidated Balance Sheets
Dec. 31 Sept. 30 Dec. 31
1996 1996 1995
-------------- -------------- ---------------
Assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 68,912 $ 37,613 $ 8,336
Investment securities 81,280 72,477 63,281
Farmer Mac I & II securities, net 416,501 407,412 417,169
Loans held for securitization 12,999 5,331 -
Interest and guarantee fees receivable 15,566 11,945 16,145
Farmer Mac I & II payments receivable 2,421 11,663 4,939
Other investments 4,519 5,711 2,340
Prepaid expenses and other assets 568 592 254
-------------- -------------- ---------------
Total Assets $ 602,766 $ 552,744 $ 512,464
============== ============== ===============
Liabilities and Stockholders' Equity:
Debentures, notes and bonds, net:
Due within one year $ 261,054 $ 260,819 $ 207,422
Due after one year 285,238 268,868 284,084
Accrued interest payable and other liabilities 8,952 7,623 9,134
Allowance for losses on guaranteed
securities 317 269 112
-------------- -------------- ---------------
Total Liabilities 555,561 537,579 500,752
Stockholders' Equity 47,205 15,165 11,712
-------------- -------------- ---------------
Total Liabilities and Stockholders' Equity $ 602,766 $ 552,744 $ 512,464
============== ============== ===============
Other Data:
Outstanding guaranteed securities, not held in
portfolio $ 226,030 $ 202,435 $ 99,573
Outstanding commitments to purchase loans 6,650 17,072 -
Outstanding commitments to sell securities 19,652 22,403 -
</TABLE>
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<TABLE>
Federal Agricultural Mortgage Corporation
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
<CAPTION>
Quarter ended Year ended
----------------------------- --------------------
Dec. 31 Sept. 30 Dec. 31 Dec. 31 Dec. 31
1996 1996 1995 1996 1995
--------- -------- -------- --------- ---------
Interest income:
<S> <C> <C> <C> <C> <C>
Farmer Mac I and II Securities $ 7,461 $ 7,398 $ 7,733 $ 29,672 $ 29,097
Investments and cash equivalents 2,151 1,348 2,148 6,964 7,327
Loans held for securitization 249 15 - 717 -
--------- -------- -------- --------- ---------
Total interest income 9,861 8,761 9,881 37,353 36,424
Interest expense 9,076 8,125 9,211 34,623 34,709
Net interest income 785 636 670 2,730 1,715
Other income:
Guarantee fees 492 478 302 1,623 1,263
Gain on issuance of guaranteed securities 156 - - 1,070 -
Miscellaneous 9 4 36 63 171
--------- -------- -------- --------- ---------
Total other income 657 482 338 2,756 1,434
Other expenses:
Compensation & employee benefits 640 543 497 2,361 1,928
Professional fees 136 277 69 828 412
Board of Directors fees and expenses 84 68 93 320 328
Regulatory fees 35 71 72 250 289
General and administrative 460 312 174 1,060 743
Provision for losses 61 60 23 262 96
--------- -------- -------- --------- ---------
Total other expenses 1,416 1,331 928 5,081 3,796
Income/(loss) before income taxes and
extraordinary item 26 (213) 80 405 (647)
Provision for income taxes 12 - - 12 -
--------- -------- -------- --------- ---------
Income/(loss) before extraordinary item 14 (213) 80 393 (647)
Extraordinary gain on early retirement
of debt - 384 - 384 -
--------- -------- -------- --------- ---------
Net Income/(Loss) $ 14 $ 171 $ 80 $ 777 ($647)
========= ======== ======== ========= =========
Earnings/(loss) per share*
Primary earnings/(loss) per share before
extraordinary item
<S> <C> <C> <C> <C> <C>
- Class A and B Voting Common Stock $ 0.00 $ (0.04) $ 0.02 $ 0.07 $ (0.14)
- Class C Non-Voting Common Stock $ 0.01 $ (0.12) $ 0.05 $ 0.22 $ (0.41)
Primary earnings/(loss) per share
- Class A and B Voting Common Stock $ 0.00 $ 0.03 $ 0.02 $ 0.14 $ (0.14)
- Class C Non-Voting Common Stock $ 0.01 $ 0.10 $ 0.05 $ 0.43 $ (0.41)
Fully diluted earnings/(loss) per share before
extraordinary item
- Class A and B Voting Common Stock $ 0.00 $ (0.04) $ 0.02 $ 0.07 $ (0.14)
- Class C Non-Voting Common Stock $ 0.01 $ (0.11) $ 0.05 $ 0.20 $ (0.41)
Fully diluted earnings/(loss) per share
- Class A and B Voting Common Stock $ 0.00 $ 0.03 $ 0.02 $ 0.13 $ (0.14)
- Class C Non-Voting Common Stock $ 0.01 $ 0.09 $ 0.05 $ 0.40 $ (0.41)
* 1995 and third quarter 1996 earnings per share data have been restated for the Class C non-voting common stock 3-to-1 dividend
and liquidation preference compared to Classes A and B voting common stock.
</TABLE>
