<PAGE>
As filed with the Securities and Exchange Commission on
--------------------------------------------------------------------------------
November 14, 2000
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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 September 30, 2000.
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 States (I.R.S. employer identification number)
(State or other jurisdiction of
incorporation or organization)
919 18th Street, N.W., Suite 200, 20006
Washington, D.C. (Zip code)
(Address of principal executive offices)
(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 November 14, 2000, there were 1,030,780 shares of Class A Voting
Common Stock, 500,301 shares of Class B Voting Common Stock and 9,598,489 shares
of Class C Non-Voting Common Stock outstanding.
<PAGE>
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 financial statements reflect all normal and
recurring adjustments that are, in the opinion of management, necessary to 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 at the dates and for the periods
presented. These financial statements should be read in conjunction with the
audited 1999 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 financial statements is
included herein.
Consolidated Balance Sheets at September 30, 2000 and December 31, 1999....3
Consolidated Statements of Income for the three and nine months ended
September 30, 2000 and 1999.............................................4
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2000 and 1999.............................................5
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------------- ------------------
(in thousands)
<S> <C> <C>
Assets:
Cash and cash equivalents $ 460,812 $ 336,282
Investment securities 896,301 847,220
Farmer Mac guaranteed securities 1,599,822 1,306,223
Loans 21,943 38,509
Interest receivable 38,050 42,900
Guarantee fees receivable 3,667 4,358
Prepaid expenses and other assets 14,526 14,918
------------------- ------------------
Total Assets $ 3,035,121 $ 2,590,410
------------------- ------------------
Liabilities and Stockholders' Equity:
Liabilities:
Notes payable
Due within one year $ 2,207,501 $ 1,722,061
Due after one year 701,027 750,337
------------------- ------------------
Total notes payable 2,908,528 2,472,398
Accrued interest payable 11,548 18,549
Accounts payable and accrued expenses 5,396 5,736
Reserve for losses 10,026 6,584
------------------- ------------------
Total Liabilities 2,935,498 2,503,267
<S> <C> <C>
Stockholders' Equity:
Common stock:
Class A Voting, $1 par value, no maximum authorization,
1,030,780 shares issued and outstanding at September 30,
2000 and December 31, 1999. 1,031 1,031
Class B Voting, $1 par value, no maximum authorization,
500,301 shares issued and outstanding at September 30,
2000 and December 31, 1999. 500 500
Class C Non-Voting, $1 par value, no maximum authorization,
9,598,936 and 9,370,961 shares issued and outstanding
at September 30, 2000 and December 31, 1999. 9,599 9,371
Additional paid-in capital 72,837 71,097
Accumulated other comprehensive income (loss) 1,291 (1,657)
Retained earnings 14,365 6,801
------------------- ------------------
Total Stockholders' Equity 99,623 87,143
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 3,035,121 $ 2,590,410
------------------- ------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ -----------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
-------------- -------------- -------------- --------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Interest income:
Investments and cash equivalents $ 23,760 $ 19,202 $ 68,758 $ 50,506
Farmer Mac guaranteed securities 26,671 18,776 71,763 42,365
Loans 586 1,145 2,332 5,818
-------------- -------------- -------------- --------------
Total interest income 51,017 39,123 142,853 98,689
Interest expense 46,685 35,310 129,661 87,349
-------------- -------------- -------------- --------------
Net interest income 4,332 3,813 13,192 11,340
Other income:
Guarantee fees 2,972 1,899 8,309 5,008
Miscellaneous 78 (88) 250 110
-------------- -------------- -------------- --------------
Total other income 3,050 1,811 8,559 5,118
-------------- -------------- -------------- --------------
Total revenues 7,382 5,624 21,751 16,458
<S> <C> <C> <C> <C>
Expenses:
Compensation and employee benefits 1,037 1,127 3,353 3,387
Regulatory fees 150 142 451 352
General and administrative 888 916 2,777 2,660
-------------- -------------- -------------- --------------
Total operating expenses 2,075 2,185 6,581 6,399
Provision for losses 1,068 782 3,442 2,442
-------------- -------------- -------------- --------------
Total expenses 3,143 2,967 10,023 8,841
-------------- -------------- -------------- --------------
Income before income taxes 4,239 2,657 11,728 7,617
Income tax expense 1,505 901 4,164 2,588
-------------- -------------- -------------- --------------
Net income $ 2,734 $ 1,756 $ 7,564 $ 5,029
-------------- -------------- -------------- --------------
Earnings per share:
Basic earnings per share $ 0.25 $ 0.16 $ 0.69 $ 0.46
Diluted earnings per share $ 0.24 $ 0.16 $ 0.66 $ 0.45
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------
2000 1999
----------------- ------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,564 $ 5,029
Adjustments to reconcile net income to cash provided by
operating activities:
Amortization of investment premiums and discounts 1,313 2,748
Decrease (increase) in interest receivable 4,850 (5,256)
Decrease (increase) in guarantee fees receivable 691 (622)
Increase in prepaid expenses and other assets 132 (7,754)
Amortization of debt premiums, discounts and issuance costs 89,728 62,336
Increase in accrued interest payable (7,001) 2,672
Increase in accounts payable and accrued expenses (340) 508
Provision for losses 3,442 2,442
----------------- ------------------
Net cash provided by operating activities 100,379 62,103
Cash flows from investing activities:
Purchases of available-for-sale investments (199,599) (464,040)
Purchases of investment securities (5,067) (10,399)
Purchases of Farmer Mac guaranteed securities (338,589) (687,912)
Purchases of loans (401,664) (323,200)
Proceeds from repayment of available-for-sale investments 135,961 207,952
Proceeds from repayment of investment securities 16,988 53,922
Proceeds from repayment of Farmer Mac guaranteed securities 390,760 448,555
Proceeds from repayment of loans 709 5,206
Proceeds from sale of loans 76,024 -
----------------- ------------------
Net cash used by investing activities (324,477) (769,916)
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of discount notes 46,613,148 61,620,288
Proceeds from issuance of medium-term notes 65,853 376,315
Payments to redeem discount notes (46,299,039) (61,288,287)
Payments to redeem medium-term notes (33,300) (35,840)
Proceeds from common stock issuance 1,966 928
----------------- ------------------
Net cash provided by financing activities 348,628 673,404
----------------- ------------------
Net increase in cash and cash equivalents 124,530 (34,409)
Cash and cash equivalents at beginning of period 336,282 540,626
----------------- ------------------
Cash and cash equivalents at end of period $ 460,812 $ 506,217
----------------- ------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
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 using the indirect method of presentation. The following table
sets forth information regarding certain cash and non-cash transactions for the
nine months ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------
2000 1999
------------- ------------
(in thousands)
<S> <C> <C>
Cash paid for:
Interest $ 42,333 $ 20,935
Income taxes 3,825 3,787
Non-cash activity:
Real estate owned acquired through foreclosure - 578
Loans securitized and retained as Farmer Mac guaranteed securities 340,619 467,198
Loans acquired in exchange for AMBS - 73,597
</TABLE>
(b) Loans
At September 30, 2000, loans held by Farmer Mac included $16.5 million
held for sale and $5.5 million held for investment. At December 31, 1999, loans
held by Farmer Mac included $21.4 million held for sale and $17.1 million held
for investment.
(c) Interest-Rate Contracts and Hedge Instruments
Interest-rate contracts, including interest-rate swaps and caps, are used
to alter synthetically the interest rate characteristics of specific investments
or debt. As such, the net differential received or paid is recorded as an
adjustment to interest income or expense of the associated assets or
liabilities, on an accrual basis.
Farmer Mac uses hedge instruments, including forward sale contracts
involving debt and mortgage-backed securities of other government-sponsored
enterprises ("GSEs") and futures contracts involving U.S. Treasury securities,
to manage interest-rate risk exposure related to the purchase of loans and the
issuances of debt. Farmer Mac measures correlation using changes in interest
rates for the hedged items against changes in interest rates for the hedge
instruments. Gains and losses on effective hedge instruments that have been
terminated or have matured are deferred as an adjustment to the cost basis of
the hedged item. Gains and losses on ineffective hedge instruments are
marked-to-fair value directly through the consolidated statement of income.
(d) 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 and nine months ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
September 30, 2000 September 30, 1999
----------------------------------- -----------------------------------
Dilutive Dilutive
Stock Diluted Stock Diluted
Basic EPS options EPS Basic EPS options EPS
----------------------------------- -----------------------------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C>
Three months ended:
Net income $ 2,734 $ - $ 2,734 $ 1,756 $ - $ 1,756
Weighted average shares 11,123 291 11,414 10,850 419 11,269
Earnings per share $ 0.25 $ 0.24 $ 0.16 $ 0.16
Nine months ended:
Net income $ 7,564 $ - $ 7,564 $ 5,029 $ - $ 5,029
Weighted average shares 11,039 444 11,483 10,824 404 11,228
Earnings per share $ 0.69 $ 0.66 $ 0.46 $ 0.45
</TABLE>
(e) Reclassifications
Certain reclassifications of prior period information were made to conform
to the current period presentation.
(f) New Accounting Standards
In June 1998 and in June 2000, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 133 and No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities"
("SFAS 133" and "SFAS 138"). The statements establish accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The statements
require that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Accounting for
qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting.
SFAS 133 and SFAS 138 are effective for fiscal years beginning after June
15, 2000 and cannot be applied retroactively. The statements must be applied to
(a) free-standing derivative instruments and (b) certain derivative instruments
embedded in hybrid contracts that were issued, acquired, or substantively
modified after December 31, 1998. Farmer Mac is currently assessing the impact
of adopting SFAS 133 and SFAS 138 on its financial statements. However, the
adoption of the statements could increase volatility in earnings and other
comprehensive income.
In September 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" ("SFAS 140"). Farmer Mac will incorporate
SFAS 140's disclosure requirements relating to securitization transactions in
its Annual Report on Form 10-K for the year 2000 to be filed in March 2001.
Other provisions of SFAS 140 will be applied prospectively beginning April 1,
2001 as required by the standard. Management does not expect the implementation
of SFAS 140 to materially affect Farmer Mac's reported results of operations and
financial position.
Note 2. Off-Balance Sheet Financial Instruments
In the ordinary course of its business, Farmer Mac incurs off-balance
sheet risk in connection with the issuance of commitments to purchase and sell
loans, the issuance of its guarantee and the use of interest-rate contracts and
hedge instruments. At September 30, 2000, outstanding commitments to purchase
Farmer Mac I and II loans totaled $11.7 million. There were $17.6 million of
commitments outstanding to sell loans at September 30, 2000. For information
regarding the off-balance sheet risks associated with off-balance sheet
guarantees, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Risk Management - Credit Risk." For information related
to the use of interest-rate contracts and hedge instruments, see Note 1 (c) and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Management - Interest Rate Risk."
Note 3. Comprehensive Income
Comprehensive income 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
and nine months ended September 30, 2000 and 1999. The change in unrealized
gains on securities available-for-sale is net of the related tax expense of $1.8
million and $1.6 million for the three and nine months ended September 30, 2000,
respectively, and $629 thousand and $283 thousand for the three and nine months
ended September 30, 1999, respectively.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ------------------------
2000 1999 2000 1999
------------ -------------- ----------- -----------
(in thousands)
<S> <C> <C> <C> <C>
Net income $ 2,734 $ 1,756 $ 7,564 $ 5,029
Change in unrealized gain on securities
available-for-sale, net of taxes 3,303 1,221 2,948 550
------------ -------------- ----------- -----------
Comprehensive income $ 6,037 $ 2,977 $10,512 $ 5,579
------------ -------------- ----------- -----------
</TABLE>
<PAGE>
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 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
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 in excess of current 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
Overview.
Net income totaled $2.7 million for third quarter 2000, or $0.24 per share
on a diluted basis, compared to $1.8 million, or $0.16 per share, for third
quarter 1999. Earnings per share for the third quarter increased 50 percent over
third quarter 1999.
Farmer Mac's revenue growth continued in the third quarter of 2000,
reflecting the effect of outstanding guarantee volume 46 percent higher than in
the third quarter of 1999 and 17 percent higher than in the second quarter of
2000.
By focusing its marketing resources during the first half of 2000 on
promoting portfolio transactions, in an effort to stimulate interest in the use
by portfolio lenders of sale, swap and standby transactions, Farmer Mac
established a basis for higher business activity during the last six months of
the year. Consequently, several significant transactions increased third quarter
loan purchase and guarantee volume to $451 million -- several times the levels
of third quarter 1999. Total year-to-date volume for 2000 continues to be below
the 1999 levels for the same period, largely due to the continuation of
unfavorable economic conditions in the agricultural sector during the past year,
as well as higher interest rates. Weak market opportunities for agricultural
commodities and products and low commodity prices have persisted throughout
2000. These conditions led to the enactment of legislation providing substantial
government financial support for farmers earlier this year -- higher than the
level of support provided in 1999. While these actions have maintained farm
sector income at a level above the 1990-99 average and contributed to strong
farmland values in most regions of the nation, government payments and
persistent economic uncertainty in the agricultural sector have muted farmers'
demand for new agricultural mortgage loans. Farmer Mac responded to these market
conditions by re-emphasizing to agricultural lenders their ability to use Farmer
Mac's programs to reduce their concentrated exposures to agricultural credit
risks. The Corporation believes that the increase in portfolio sales, swaps and
long-term standby commitments during the third quarter of 2000 is a good
indication that Farmer Mac has positioned itself for growth in the coming months
and anticipates additional transactions during the fourth quarter of 2000 and
into 2001; although the total volume of those transactions is uncertain at this
time, the Corporation's current estimates for fourth quarter 2000 are for at
least $200 million. Farmer Mac also expects two established agricultural lending
networks to begin originating new mortgage loans for sale into Farmer Mac's cash
window during the fourth quarter.
Set forth below is a more detailed discussion of Farmer Mac's results of
operations.
Net Interest Income.
Net interest income was $4.3 million for third quarter 2000, and $13.2
million for year-to-date 2000, compared to $3.8 million and $11.3 million for
the same periods in 1999. 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 nine months
ended September 30, 2000 and 1999. The decrease in net interest yield from the
first nine months of 1999 to the first nine months of 2000, as reflected in the
table below, was due to a combination of generally higher debt spreads, as well
as tighter spreads on short-term and variable rate investments and on Farmer Mac
guaranteed securities.
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------------------------------------------------------
2000 1999
--------------------------------- --------------------------------
Average Income/ Average Average Income/ Average
Balance Expense Rate Balance Expense Rate
--------- --------- --------- --------- --------- ---------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 511,150 $ 24,400 6.37% $ 587,847 $ 22,158 5.03%
Investments 888,745 44,358 6.66% 695,068 28,348 5.44%
Farmer Mac guaranteed securities 1,397,364 71,763 6.85% 862,645 42,365 6.55%
Loans 38,756 2,332 8.02% 115,609 5,818 6.71%
--------- --------- --------- --------- --------- ---------
Total interest earning assets 2,836,015 142,853 6.72% 2,261,169 98,689 5.82%
--------- --------- --------- --------- --------- ---------
Liabilities and Stockholders' Equity
Notes and bonds, net 2,797,990 129,661 6.18% 2,202,154 87,349 5.29%
--------- ---------
Total interest bearing liabilities 2,797,990 2,202,154
Net non-interest bearing funding 38,025 - 0.00% 59,015 - 0.00%
--------- --------- --------- --------- --------- ---------
Total liabilities and stockholders' equity 2,836,015 129,661 6.10% 2,261,169 87,349 5.15%
--------- --------- --------- --------- --------- ---------
Net interest income/spread 13,192 0.62% 11,340 0.67%
--------- --------- --------- ---------
</TABLE>
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, a third element
of the calculation, are allocated based on their relative size.
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000
Compared to Nine Months Ended
September 30, 1999
---------------------------------------
Increase/(Decrease) Due to
---------------------------------------
Rate Volume Total
------------- ------------- ---------
(in thousands)
<S> <C> <C> <C>
Income from interest-earning assets
Cash and cash equivalents 5,386 (3,144) 2,242
Investments 7,131 8,879 16,010
Farmer Mac guaranteed securities 2,020 27,378 29,398
Loans 965 (4,451) (3,486)
------------ ------------- ---------
Total 15,502 28,662 44,164
Expense from interest-bearing liabilities 16,227 26,085 42,312
------------ ------------- ---------
Change in net interest income (725) 2,577 1,852
------------ ------------- ---------
</TABLE>
<PAGE>
Other Income.
Other income, which is comprised of guarantee fee income and miscellaneous
income, totaled $3.1 million for third quarter 2000 and $8.6 million for
year-to-date 2000, compared to $1.8 million and $5.1 million, respectively, in
1999. Guarantee fee income, the largest component of other income, was $3.0
million for third quarter 2000, as compared to $1.9 million for third quarter
1999 and $2.8 million for second quarter 2000. The relative increases in
guarantee fees reflect an increase in the average balance of outstanding
guarantees. Miscellaneous income was $78 thousand for third quarter 2000,
compared to losses of $88 thousand and $10 thousand for third quarter 1999 and
second quarter 2000, respectively.
Expenses.
During the third quarter 2000, operating expenses totaled $2.1 million
compared to $2.2 million for third quarter 1999 and $2.1 million for second
quarter 2000. Operating expenses also declined as a percentage of total revenues
for the same quarters to 28 percent from 39 percent and 30 percent,
respectively. For year-to-date 2000, operating expenses totaled $6.6 million
compared to $6.4 million for the same period in 1999.
Farmer Mac's provision for principal and interest losses was $1.1 million
for third quarter 2000, and $3.4 million for year-to-date 2000, compared to $782
thousand and $2.4 million, respectively, for 1999. At September 30, 2000, Farmer
Mac's reserve for losses totaled $10.0 million, or 0.43 percent of outstanding
post-1996 Act loans, compared to $5.7 million 0.38 percent, at September 30,
1999.
Income Tax Expense.
The provision for income taxes totaled $1.5 million for third quarter 2000,
and $4.2 million for year-to-date 2000, compared to $901 thousand and $2.6
million for the same periods in 1999. Farmer Mac's effective tax rates for the
nine months ended September 30, 2000 and 1999 were 35.5 percent and 34.0
percent, respectively.
Business Volume.
The following table sets forth the amount of loans purchased or guaranteed,
and AMBS issued during the periods indicated:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2000 1999 2000 1999
------------- ------------- ------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Purchase and guarantee volume:
Farmer Mac I
Cash window $ 292,658 $ 70,561 $ 396,519 $ 319,436
Swap transactions - - 73,597
LTSPC 158,291 - 192,700 407,701
Farmer Mac II 40,036 28,239 157,476 97,635
------------- ------------- ------------- ------------
Total loans purchased or
guaranteed $ 490,985 $ 98,800 $ 746,695 $ 898,369
------------- ------------- ------------- ------------
AMBS issuances:
Retained $ 272,497 $ 153,397 $ 340,619 $ 467,198
Sold $ 20,247 - 144,815 -
Swap transactions - - - 73,597
------------- ------------- ------------- ------------
Total AMBS issuances $ 292,744 $ 153,397 $ 485,434 $ 540,795
------------- ------------- ------------- ------------
</TABLE>
<PAGE>
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
window 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. At
September 30, 2000, outstanding commitments to purchase or guarantee Farmer Mac
I loans totaled $11.0 million, compared to $17.0 million at September 30, 1999.
Of the total commitments outstanding at September 30, 2000 and 1999, $5.8
million and $850 thousand, respectively, were optional commitments. Loans
submitted for approval or approved but not yet committed to purchase totaled
$109.1 million at September 30, 2000, compared to $181.6 million at September
30, 1999. Not all of these loans are expected to be purchased, as Farmer Mac
expects to deny some for credit reasons and to have others 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. Management believes that acceptance of Farmer
Mac's programs is increasing among lenders, reflecting the competitive rates,
terms and products offered and the advantages we believe Farmer Mac's programs
provide. For Farmer Mac to succeed in realizing its business development and
profitability goals over the long term, however, agricultural mortgage lenders,
whether traditional or non-traditional, must value the benefits of selling loans
to Farmer Mac or otherwise obtaining the benefits of the Farmer Mac guarantee
and must be persuaded to modify their business practices accordingly.
Balance Sheet Review
Total assets grew by $444.7 million over the nine months of 2000, due to a
$277.0 million increase in on-balance sheet program assets (Farmer Mac
guaranteed securities and loans), and a $173.6 million increase in non-program
assets (cash and cash equivalents and investments). For further information
regarding both on- and off-balance sheet guaranteed securities, see
"Supplemental Information" below.
Total liabilities increased by $432.2 million from December 31, 1999 to
September 30, 2000 due to growth in notes payable, which corresponded to the net
increase in program and non-program assets. Medium-term notes, including $340.1
million of discount notes synthetically altered to long-term debt through
interest-rate swap contracts, totaled $1.17 billion at September 30, 2000,
compared to $797.5 million at December 31, 1999. The increase in medium-term
notes corresponds to AMBS issued and retained by Farmer Mac during the first
three quarters.
Farmer Mac's regulatory core capital totaled $98.3 million at September
30, 2000, compared with $88.8 million at December 31, 1999 and $95.5 million at
June 30, 2000. The capital balance at September 30, 2000 exceeded Farmer Mac's
regulatory minimum capital requirements by approximately $4.7 million. Farmer
Mac's current surplus capital would support additional guarantee growth in
amounts ranging from $171 million of on-balance sheet guarantees to $627 million
of off-balance sheet guarantees, based on existing minimum capital requirements.
Furthermore, should Farmer Mac deem it appropriate, on-balance sheet non-program
investment assets (cash and cash equivalents and investment securities) of $1.4
billion could be sold, resulting in the ability to carry total additional
guarantees (including the aforementioned $171 million and $627 million) ranging
from approximately $1.5 billion of on-balance sheet guarantees to over $5
billion of off-balance sheet guarantees. Ultimately, Farmer Mac could sell
on-balance sheet program assets of $1.6 billion in order to support further
increases in on- and off-balance sheet program guarantees, resulting in the
cumulative ability to carry over $10 billion of off-balance sheet guarantees.
Any of these transactions would, of course, be evaluated for optimization of
Farmer Mac's return on equity and capital flexibility.
Return on average equity increased to 11.3 percent during third quarter
2000, compared to 8.0 percent during third quarter 1999 and 11.0 percent during
second 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 enters into
off-balance sheet 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 synthetically 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. At September 30, 2000, the notional
amount of interest-rate contracts was $1.2 billion compared to $769.5 million at
December 31, 1999. 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, which totaled $10.2 million at September 30,
2000 and $19.7 million at December 31, 1999. At September 30, 2000, the notional
amount of outstanding forward sale and futures contracts totaled $8.5 million,
compared to $16.7 million at December 31, 1999.
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 at September 30, 2000 and
December 31, 1999. The increase in MVE sensitivity in the increasing interest
rate scenarios reflects an increase in the amount of short-term debt at
September 30, 2000 as compared to December 31, 1999 (see "Balance Sheet Review"
above).
<TABLE>
<CAPTION>
Percentage Change in MVE
from Base Case
---------------------------
Interest Rate September 30, December 31,
Scenario 2000 1999
------------- ------------- ------------
<S> <C> <C> <C>
+ 300 bp -19.2% -9.4%
+ 200 bp -12.5% -5.6%
+ 100 bp -5.6% -2.1%
- 100 bp 2.7% -1.1%
- 200 bp 3.1% -6.5%
- 300 bp 1.9% -15.0%
</TABLE>
<PAGE>
Credit Risk.
The outstanding principal balance of those loans held or guaranteed by
Farmer Mac as of September 30, 2000 and December 31, 1999 is summarized in the
table below.
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------ -----------------
(in thousands)
<S> <C> <C>
Farmer Mac I:
Pre-1996 Act $ 104,755 $ 132,047
Post-1996 Act 2,349,781 1,878,749
Farmer Mac II 491,820 383,266
------------------ -----------------
Total $ 2,946,356 $ 2,394,062
------------------ -----------------
</TABLE>
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 they are
guaranteed by the USDA. Farmer Mac assumes 100 percent of the credit risk on
post-1996 Act loans; pre-1996 Act loans are supported by mandatory 10 percent
first loss subordinated interests that mitigate credit exposure.
At September 30, 2000, post-1996 Act loans that were 90 days or more past
due represented 1.80 percent of the principal amount of all post-1996 Act loans,
compared to 1.56 percent at September 30, 1999 and 1.05 percent at December 31,
1999. Farmer Mac anticipates fluctuations in the delinquency rate from quarter
to quarter as demonstrated by the increase in such rate at September 30, 2000 as
compared to December 31, 1999. Higher levels are likely to be reported during
the first and third quarters of each year due to the semiannual payment
characteristics of most Farmer Mac loans. Congress has provided significant
income support to the agricultural sector for 2000, which, based on forecast
reports issued by the U.S. Department of Agriculture, should result in farm
income in 2000 being at levels greater than in 1999. This increase in farm
income should help to moderate delinquencies during the remainder of 2000 and
into 2001. The federal income support is not allocated equally to producers of
all agricultural commodities, and is paid to the owners of agricultural land and
may not be received by farmers and ranchers who rent part or all of the land on
which they operate. Farmers and ranchers that do not receive significant federal
income support may be more likely to become delinquent on their agricultural
mortgage loans than are those who receive such support.
<PAGE>
The following table shows Farmer Mac I delinquencies distributed by
Post-1996 Act loans and Pre-1996 Act loans.
<TABLE>
<CAPTION>
Farmer Mac I Delinquencies (1) (2)
--------------------------------------------------------------------
Post-1996 Act Pre-1996 Act Total
------------- ------------ -----------
<S> <C> <C> <C>
As of:
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%
September 30, 1999 1.56% 3.53% 1.74%
(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
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.
</TABLE>
Farmer Mac maintains a reserve to cover credit losses incurred on
post-1996 Act loans. The following schedule summarizes the change in the reserve
for loan losses for the three and nine months ended September 30, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------------------------
2000 1999 2000 1999
-------------- ------------ -------------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Beginning balance $ 8,958 $4,915 $ 6,584 $3,259
Provision for losses 1,068 782 3,442 2,442
Net charge-offs - (4)
-------------- ------------ -------------- ------------
Ending balance $10,026 $5,697 $10,026 $5,697
-------------- ------------ -------------- ------------
</TABLE>
<PAGE>
Although some credit losses are expected to be incurred on the existing
post-1996 Act Farmer Mac I delinquencies, Farmer Mac expects those losses to be
within current reserve levels based on the collateral values 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):
<TABLE>
<CAPTION>
Distribution of
Post- 1996 Act
Delinquencies as of
September 30, 2000
-----------------------
<S> <C>
By loan-to-value ratio:
0.00% to 40.00% 13%
40.01% to 50.00% 22%
50.01% to 60.00% 29%
60.01% to 70.00% 33%
70.01% to 80.00% 3%
-----------------------
Total 100%
-----------------------
</TABLE>
As of September 30, 2000, the weighted average loan-to-value ratio of
post-1996 Act loans was 51 percent and the weighted average loan-to-value ratio
for all post-1996 Act delinquent loans that were 90 days or more past due, in
foreclosure or in bankruptcy was 58 percent.
<PAGE>
The following table segregates the post-1996 Act delinquencies at
September 30, 2000 by year of origination, geographic region and commodity.
<TABLE>
<CAPTION>
Distribution of
Post-1996 Delinquency
Loans Rate
----------------- -------------
<S> <C> <C>
By year of origination:
Before 1996 23% 0.12%
1996 8% 0.00%
1997 28% 0.45%
1998 9% 6.43%
1999 11% 3.23%
2000 20% 3.51%
----------------
Total 100% 1.80%
----------------
By geographic region: (1)
Mid-north 17% 0.69%
Mid-south 5% 0.00%
Northeast 2% 3.85%
Northwest 35% 2.89%
Southeast 3% 3.41%
Southwest 38% 1.25%
----------------
Total 100% 1.80%
----------------
By commodity:
Crops 49% 2.57%
Livestock 18% 0.96%
Other 1% 0.00%
Permanent plantings 27% 1.31%
Part-Time Farm 5% 0.31%
----------------
Total 100% 1.80%
----------------
(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, NM, NV, UT).
</TABLE>
Supplemental Information
The following tables set forth quarterly activity regarding commitments to
purchase loans, purchases and guarantees of loans, AMBS issuances, delinquencies
and outstanding guarantees.
<PAGE>
<TABLE>
<CAPTION>
Commitments to Purchase or Guarantee Farmer Mac I Loans (1) (2)
-------------------------------------------------------------------------------------------------------
Long-Term
Fixed Rate Resets ARMs Total Outstanding
------------- ----------- ---------- ---------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C>
For the quarter ended:
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, 1999 537,190 58,065 203,536 798,791 12,470
December 31, 1998 302,227 48,412 502,283 852,922 431,544
</TABLE>
<TABLE>
<CAPTION>
Purchases and Guarantees of Farmer Mac I Loans (1) (2)
----------------------------------------------------------------------------------------
Long-Term
Fixed Rate Resets ARMs Total
------------- ----------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C>
For the quarter ended:
September 30, 2000 $ 286,303 $ 126,845 $ 37,801 $ 450,949
June 30, 2000 43,508 5,702 30,777 79,987
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, 1999 662,186 57,176 483,402 1,202,764
December 31, 1998 164,436 48,086 211,737 424,259
</TABLE>
<TABLE>
<CAPTION>
Farmer Mac I AMBS Issuances (1) (3)
----------------------------------------------------------------------------------------
Long-Term
Fixed Rate Resets ARMs Total
------------- ----------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C>
For the quarter ended:
September 30, 2000 $ 126,639 $ 130,188 $ 35,916 $ 292,743
June 30, 2000 15,122 4,950 36,748 56,820
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, 1999 359,185 57,887 277,517 694,589
December 31, 1998 165,383 51,941 84,322 301,646
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Outstanding Guarantees (4)
------------------------------------------------------------------------------------------------------------
Farmer Mac I
---------------------------------------------
Post-1996 Act
------------------------------ Pre-1996 Farmer Held in
AMBS LTSPC Act Mac II Total Portfolio (5)
-------------- --------------- -------------- --------------- -------------- --------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
As of:
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 guarantees issued by Farmer Mac through swap transactions. Such
transactions totaled $103.2 million in fourth quarter 1999 and $73.6
million in first quarter 1999.
(2) Includes long-term standby purchase commitments (LTSPC) of $158.3 million
committed to and executed in the third quarter of 2000, $34.4 million and
$226.8 million committed to and executed in second quarter 2000 and fourth
quarter 1999, respectively, and $407.7 million committed to in fourth
quarter 1998 and executed in first quarter 1999. Such transactions
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.
(3) Includes AMBS issued and retained by Farmer Mac. Such transactions totaled
$272.5 million in the third quarter of 2000, $21.7 million in second
quarter 2000, $46.5 million in first quarter 2000, $50.6 million in fourth
quarter 1999, and $153.4 million in third quarter 1999.
(4) 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 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.
(5) Included in total outstanding guarantees.
</TABLE>
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.
<PAGE>
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 which 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 12, 2000, Farmer Mac issued an
aggregate of 943 shares of its Class C Non-Voting Common Stock at an
issue price of $14.56 per share to the 10 Directors who elected to
receive such stock in lieu of their cash retainers.
On August 14, 2000, Farmer Mac granted options under its 1997 Stock
Option Plan to purchase an aggregate of 2,000 shares of Class C
Non-Voting Common Stock, at an exercise price of $15.625 per share to
a non-officer employee in connection with such employee's commencement
of employment.
On September 8, 2000, Farmer Mac granted options under its 1997 Stock
Option Plan to purchase an aggregate of 59,227 shares of Class C
Non-Voting Common Stock, at an exercise price of $16.375 per share to
non-officer employees as incentive compensation.
(d) Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
<PAGE>
Item 4. Submission of Matters to a Vote of Securityholders.
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.
+* 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 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).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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).
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
+* 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 September 30, 2000.
_______________________
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
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 14, 2000
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)
<PAGE>
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 14, 2000
By:
__________________________________________
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
__________________________________________
Nancy E. Corsiglia
Vice President - Finance
(Principal Financial Officer)
