<PAGE>
As filed with the Securities and Exchange Commission on
--------------------------------------------------------------------------------
August 14, 2000
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------------------------------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
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 twelve months (or 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 August 14, 2000, there were 1,030,780 shares of Class A Voting
Common Stock, 500,301 shares of Class B Voting Common Stock and 9,587,295 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 June 30, 2000 and December 31, 1999...... 3
Consolidated Statements of Operations for the three and six months ended
June 30, 2000 and 1999................................................ 4
Consolidated Statements of Cash Flows for the six months ended June 30,
2000 and 1999........................................................ 5
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
----------------- -----------------
(in thousands)
<S> <C> <C>
Assets:
Cash and cash equivalents $ 372,458 $ 336,282
Investment securities 903,205 847,220
Farmer Mac guaranteed securities 1,347,035 1,306,223
Loans 18,714 38,509
Interest receivable 42,650 42,900
Guarantee fees receivable 3,944 4,358
Prepaid expenses and other assets 15,314 14,918
------------------ -------------------
Total Assets $ 2,703,320 $ 2,590,410
------------------ -------------------
Liabilities and Stockholders' Equity:
Liabilities:
Notes payable
Due within one year $ 1,832,888 $ 1,722,061
Due after one year 741,251 750,337
------------------ -------------------
Total notes payable 2,574,139 2,472,398
Accrued interest payable 19,616 18,549
Accounts payable and accrued expenses 7,138 5,736
Reserve for losses 8,958 6,584
------------------ -------------------
Total Liabilities 2,609,851 2,503,267
Stockholders' Equity:
Common stock:
Class A Voting, $1 par value, no maximum authorization,
1,030,780 shares issued and outstanding at June 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 June 30,
2000 and December 31, 1999. 500 500
Class C Non-Voting, $1 par value, no maximum authorization,
9,587,295 and 9,370,961 shares issued and outstanding
at June 30, 2000 and December 31, 1999. 9,587 9,371
Additional paid-in capital 72,731 71,097
Accumulated other comprehensive loss (2,012) (1,657)
Retained earnings 11,632 6,801
------------------ -------------------
Total Stockholders' Equity 93,469 87,143
------------------ -------------------
Total Liabilities and Stockholders' Equity $ 2,703,320 $ 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 Six Months Ended
------------------------------ -------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- --------------- --------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Interest income:
Investments and cash equivalents $ 23,040 $ 15,888 $ 44,998 $ 31,304
Farmer Mac guaranteed securities 23,398 14,287 45,092 23,589
Loans 506 1,356 1,746 4,673
-------------- -------------- -------------- --------------
Total interest income 46,944 31,531 91,836 59,566
Interest expense 42,700 27,584 82,976 52,039
-------------- -------------- -------------- --------------
Net interest income 4,244 3,947 8,860 7,527
Other income:
Guarantee fees 2,755 1,644 5,337 3,109
Miscellaneous (10) 132 172 198
-------------- -------------- -------------- --------------
Total other income 2,745 1,776 5,509 3,307
-------------- -------------- -------------- --------------
Total revenues 6,989 5,723 14,369 10,834
Expenses:
Compensation and employee benefits 1,065 1,268 2,316 2,260
Regulatory fees 151 142 301 210
General and administrative 882 886 1,889 1,744
-------------- -------------- -------------- --------------
Total operating expenses 2,098 2,296 4,506 4,214
Provision for losses 1,057 862 2,374 1,660
-------------- -------------- -------------- --------------
Total expenses 3,155 3,158 6,880 5,874
-------------- -------------- -------------- --------------
Income before income taxes 3,834 2,565 7,489 4,960
Income tax expense 1,362 873 2,659 1,687
-------------- -------------- -------------- --------------
Net income $ 2,472 $ 1,692 $ 4,830 $ 3,273
-------------- -------------- -------------- --------------
Earnings per share:
Basic earnings per share $ 0.22 $ 0.16 $ 0.44 $ 0.31
Diluted earnings per share $ 0.22 $ 0.15 $ 0.43 $ 0.29
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------------
2000 1999
------------------ ------------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $4,830 $ 3,273
Adjustments to reconcile net income to cash provided by
operating activities:
Amortization of investment premiums and discounts 952 2,407
Decrease (increase) in interest receivable 250 (9,164)
Decrease (increase) in guarantee fees receivable 414 (763)
Increase in prepaid expenses and other assets (480) (2,811)
Amortization of debt premiums, discounts and issuance costs 56,595 37,516
Increase in accrued interest payable 1,067 4,339
Increase in accounts payable and accrued expenses 1,403 37
Provision for losses 2,374 1,660
------------------ ------------------
Net cash provided by operating activities 67,405 36,494
Cash flows from investing activities:
Purchases of available-for-sale investments (127,445) (322,255)
Purchases of investment securities (2,585) (6,267)
Purchases of Farmer Mac guaranteed securities (263,126) (429,509)
Purchases of loans (174,017) (250,259)
Proceeds from repayment of available-for-sale investments 67,352 163,352
Proceeds from repayment of investment securities 4,311 43,248
Proceeds from repayment of Farmer Mac guaranteed securities 292,389 181,393
Proceeds from repayment of loans 243 5,156
Proceeds from sale of loans 124,568 -
------------------ ------------------
Net cash used by investing activities (78,310) (615,141)
Cash flows from financing activities:
Proceeds from issuance of discount notes 31,585,245 41,052,812
Proceeds from issuance of medium-term notes 66,058 147,581
Payments to redeem discount notes (31,583,511) (40,587,985)
Payments to redeem medium-term notes (22,560) (28,800)
Proceeds from common stock issuance 1,849 812
------------------ ------------------
Net cash provided by financing activities 47,081 584,420
------------------ ------------------
Net increase in cash and cash equivalents 36,176 5,773
Cash and cash equivalents at beginning of period 336,282 540,626
------------------ ------------------
Cash and cash equivalents at end of period $ 372,458 $ 546,399
------------------ ------------------
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
six months ended June 30, 2000 and 1999.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
2000 1999
------------- ------------
(in thousands)
<S> <C> <C>
Cash paid for:
Interest $ 25,800 $ 13,143
Income taxes 3,225 $ 2,737
Non-cash activity:
Real estate owned acquired through foreclosure - 578
Loans securitized and retained as Farmer Mac guaranteed securities 68,122 $ 313,801
Loans acquired in exchange for AMBS - $ 73,597
</TABLE>
(b) Loans
At June 30, 2000, loans held by Farmer Mac included $15.8 million held for
sale and $2.9 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 synthetically alter 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.
Hedge instruments, consisting solely of forward sale contracts involving
debt securities of other government-sponsored enterprises (GSEs) and futures
contracts involving U.S. Treasury securities, are used by Farmer Mac 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 six months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
June 30, 2000 June 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 $ 2,472 $ - $ 2,472 $ 1,692 $ - $ 1,692
Weighted average shares 11,073 265 11,338 10,818 419 11,237
Earnings per share $ 0.22 $ 0.22 $ 0.16 $ 0.15
Six months ended:
Net income $ 4,830 $ - $ 4,830 $ 3,273 $ - $ 3,273
Weighted average shares 10,997 339 11,336 10,810 399 11,209
Earnings per share $ 0.44 $ 0.43 $ 0.31 $ 0.29
</TABLE>
(e) Reclassifications
Certain reclassifications of prior period information were made to conform
to the current period presentation.
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 June 30, 2000, outstanding commitments to purchase Farmer
Mac I and II loans totaled $14.4 million. There were $20.0 million of
commitments outstanding to sell loans at June 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."
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Statement establishes 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
Statement requires 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 No. 133 is effective for fiscal years beginning after June 15, 2000. SFAS
No. 133 cannot be applied retroactively. SFAS No.133 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 No. 133 on its financial statements. However, the Statement
could increase volatility in earnings and other comprehensive income.
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 six months ended June 30, 2000 and 1999. Comprehensive income is net of the
related tax benefit/(expense) of $(1.4) million and $253 thousand for the three
and six months ended June 30, 2000, respectively, and $577 thousand and $346
thousand for the three and six months ended June 30, 1999, respectively.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- ------------------------
2000 1999 2000 1999
----------- -------------- ------------ -----------
(in thousands)
<S> <C> <C> <C> <C>
Net income $ 2,472 $ 1,692 $ 4,830 $ 3,273
Change in unrealized gain (loss) on securities
available-for-sale, net of taxes 2,529 (1,121) (355) (671)
----------- -------------- ------------ -----------
Comprehensive income $ 5,001 $ 571 $ 4,475 $ 2,602
----------- -------------- ------------ -----------
</TABLE>
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 publicly release 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 $2.5 million for second quarter 2000, or
$0.22 per share on a diluted basis, compared to $1.7 million, or $0.15 per
share, for second quarter 1999. Earnings per share for the second quarter
increased 45 percent over second quarter 1999.
Farmer Mac's revenue growth continued in the second quarter of 2000,
reflecting the effect of outstanding guarantee volume 34 percent higher than one
year ago, and the annuity-like flow of guarantee income generated by program
assets. Qualified loan purchases and guarantees increased from depressed first
quarter levels, with combined volume in the second quarter up 116 percent over
the prior quarter. New guarantee and loan purchase volume during the quarter
increased but a modest 5 percent above the 1999 second quarter level, largely
due to the continuation of unfavorable economic conditions in the agricultural
sector during the past fall and winter, as well as higher interest rates. The
combination of continuing low agricultural commodity prices and substantial
government payments to farmers has slowed demand for new mortgages across all
sectors of the agricultural lending industry. In addition to slowing down the
demand for mortgage lending in general, rising interest rates have also caused a
shift in borrower demand from fixed rate to variable rate mortgages that many
agricultural lenders have traditionally chosen to hold in portfolio, further
reducing the supply of mortgages for sale into the secondary market.
During the first half of 2000, Farmer Mac focused its marketing resources
on laying the groundwork for portfolio transactions, in an effort to stimulate
interest in the use by portfolio lenders of sale, swap and standby transactions
to more efficiently leverage their capital and diversify the credit risks in
their portfolios. These types of transactions tend to cluster toward year-end,
and Faremr Mac anticipates that guarantee and loan purchase volume will pick up
during the second half of this year.
Set forth below is a more detailed discussion of Farmer Mac's results of
operations.
Net Interest Income. Net interest income was $4.2 million for second
quarter 2000, and $8.9 million year-to-date 2000, compared to $3.9 million and
$7.5 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 AMBS. The following table provides information
regarding the average balances and rates of interest-earning assets and funding
for the six months ended June 30, 2000 and 1999. The decrease in net interest
yield from the first six months of 1999 to the first six months of 2000, as
reflected in the table below, was due to a combination of generally higher debt
spreads, a greater proportion of higher-rate long-term debt, as well as tighter
spreads on short-term and variable rate investments and on Farmer Mac
guaranteed securities.
<TABLE>
<CAPTION>
Six Months Ended June 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 525,180 15,967 6.08% $ 577,965 $ 14,222 4.92%
Investments 895,793 29,031 6.48% 640,837 17,082 5.33%
Farmer Mac guaranteed securities 1,304,552 45,092 6.91% 723,232 23,589 6.52%
Loans 44,121 1,746 7.92% 143,941 4,673 6.49%
----------- ------------ ---------- ------------- ----------- -----------
Total interest earning assets 2,769,646 91,836 6.63% 2,085,975 59,566 5.71%
-------------
Liabilities and Stockholders' Equity:
Notes and bonds, net 2,713,254 82,976 6.12% 2,018,545 52,039 5.16%
------------ -------------
Total liabilities 2,713,254 2,018,545
Non-interest bearing funding 56,392 - 0.00% 67,430 - 0.00%
------------ ----------- ----------- ------------- ----------- -----------
Total liabilities and stockholders'
equity 2,769,646 82,976 5.99% 2,085,975 52,039 4.99%
------------ ----------- ----------- ------------- ----------- -----------
Net interest income/spread 8,860 0.64% 7,527 0.72%
----------- ----------- ----------- -----------
Net yield on interest-earning assets 0.64% 0.72%
----------- -----------
</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>
Six Months Ended June 30, 2000
Compared to Six Months Ended
June 30, 1999
-----------------------------------------
Increase/(Decrease) Due to
-----------------------------------------
Rate Volume Total
------------ -------------- ------------
(in thousands)
<S> <C> <C> <C>
Income from interest-earning assets
Cash and cash equivalents 3,130 (1,384) 1,746
Investments 4,202 7,747 11,949
Farmer Mac guaranteed securities 1,488 20,015 21,503
Loans 854 (3,781) (2,927)
------------ ------------- ------------
Total 9,674 22,597 32,271
Expense from interest-bearing liabilities 10,864 20,074 30,938
------------ ------------- ------------
Change in net interest income (1,190) 2,523 1,333
------------ ------------- ------------
</TABLE>
Other Income. Other income, which is comprised of guarantee fee income and
miscellaneous income, totaled $2.7 million for second quarter 2000 and $5.5
million for year-to-date 2000, compared to $1.8 million and $3.3 million,
respectively, in 1999. Guarantee fee income, the largest component of other
income, was $2.8 million for second quarter 2000, as compared to $1.6 million
for second quarter 1999. The relative increases in guarantee fees reflect an
increase in the average balance of outstanding guarantees. Miscellaneous income
showed a loss of $10 thousand for second quarter 2000, compared to income of
$132 thousand for second quarter 1999.
Expenses. During the second quarter 2000, operating expenses totaled $2.1
million compared to $2.3 million for second quarter 1999. Operating expenses
also declined as a percentage of total revenues for the same quarters to 30
percent from 40 percent, respectively.
Farmer Mac's provision for principal and interest losses was $1.1 million
for second quarter 2000, and $2.4 million for year-to-date 2000, compared to
$862 thousand and $1.7 million, respectively, for 1999. At June 30, 2000, Farmer
Mac's reserve for losses totaled $8.96 million, or 0.46 percent of outstanding
post-1996 Act loans, compared to $4.9 million (0.34 percent) at June 30, 1999.
Income Tax Expense. The provision for income taxes totaled $1.4 million
for second quarter 2000, and $2.7 million year-to-date, compared to $873
thousand and $1.7 million for the same periods in 1999. Farmer Mac's effective
tax rate for the six months ended June 2000 and 1999 was 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 June 30, Six Months Ended June 30,
---------------------------------- -------------------------------------
2000 1999 2000 1999
------------------ -------------- ----------------- -----------------
(in thousands)
<S> <C> <C> <C> <C>
Purchase and guarantee volume:
Farmer Mac I
Cash window $ 45,578 $ 127,625 $ 103,861 $ 248,875
Swap transactions - - - 73,597
LTSPC 34,409 - 34,409 407,701
Farmer Mac II 94,870 39,433 117,440 69,399
------------------ -------------- ----------------- -----------------
Total loans purchased or
guaranteed $ 174,857 $ 167,058 $ 255,710 $ 799,572
------------------ -------------- ----------------- -----------------
AMBS issuances:
Retained $ 21,655 $ 45,415 $ 68,122 $ 313,801
Sold 103,956 - 124,568 -
Swap transactions - - - 73,597
------------------ -------------- ----------------- -----------------
Total AMBS issuances $ 125,612 $ 45,415 $ 192,690 $ 387,398
------------------ -------------- ----------------- -----------------
----------------- -----------------
Total loans held or guaranteed $ 2,516,041 $ 2,029,357
----------------- -----------------
</TABLE>
See "Overview" 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 June 30,
2000, outstanding commitments to purchase Farmer Mac I loans totaled $8.6
million, compared to $12.1 million at June 30, 1999. Of the total commitments
outstanding at June 30, 2000 and 1999, $4.8 million and $1.2 million,
respectively, were optional commitments. Loans submitted for approval or
approved but not yet committed to purchase totaled $117.3 million at June 30,
2000, compared to $208.5 million at June 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 $112.9 million over the first half of 2000, due to a
$92.2 million increase in non-program assets (cash and cash equivalents and
investments), and a $21.0 million 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."
Total liabilities increased by $106.6 million from December 31, 1999 to
June 30, 2000 due to growth in notes payable, which corresponded to the net
increase in program and non-program assets. Medium-term notes, including
discount notes converted to long-term debt through interest-rate swap contracts,
totaled $841.7 million at June 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 two quarters.
During the first six months of 2000, stockholders' equity increased by
$6.3 million as a result of net income earned during that time, and the
reduction of an unrealized loss on available-for-sale securities, which are
marked-to-fair value through equity. Farmer Mac's regulatory core capital, which
excludes unrealized gains and losses on available-for-sale securities, totaled
$95.5 million at June 30, 2000 compared to $88.8 million at December 31, 1999.
The capital balance at June 30, 2000 exceeded Farmer Mac's regulatory minimum
capital requirements by $12.0 million. Farmer Mac's current surplus capital
would support additional asset growth in amounts ranging from $438 million of
on-balance sheet assets to $1.6 billion of off-balance sheet assets based on
existing minimum capital requirements. Furthermore, Farmer Mac has an even
greater ability to replace on-balance sheet non-program assets with on- and
off-balance sheet program assets and, ultimately, to sell on-balance sheet
program assets in order to support increases in off-balance sheet program
activities.
Return on average equity increased to 11.0 percent during second quarter
2000, compared to 8.7 percent during fourth quarter 1999.
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 securities and futures contracts involving U.S. Treasury
securities. Interest-rate contracts are used to synthetically alter the interest
rate characteristics of specific investments or debt such that the interest rate
characteristics of Farmer Mac's investments and debt are better matched. At June
30, 2000, the notional amount of interest-rate contracts was $864.1 million
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 $3.8 million at June 30, 2000 and $19.7 million at December 31, 1999. At
June 30, 2000, the notional amount of outstanding forward sale and futures
contracts totaled $3.7 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 June 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 June 30,
2000 as compared to December 31, 1999 (see "Balance Sheet Review").
<TABLE>
<CAPTION>
Percentage Change in MVE from
Base Case
--------------------------------
Interest Rate June 30, December 31,
Scenario 2000 1999
--------------- ------------- -----------------
<S> <C> <C> <C>
+ 300 bp -18.8% -9.4%
+ 200 bp -12.3% -5.6%
+ 100 bp -5.7% -2.1%
- 100 bp 3.3% -1.1%
- 200 bp 3.5% -6.5%
- 300 bp 1.2% -15.0%
</TABLE>
Credit Risk. The outstanding principal balance of those loans held or
guaranteed by Farmer Mac as of June 30, 2000 and December 31, 1999 is summarized
in the table below.
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------------ -----------------
(in thousands)
<S> <C> <C>
Farmer Mac I:
Post-1996 Act $1,948,275 $ 1,879,978
Pre-1996 Act 100,414 118,214
Farmer Mac II 467,352 383,266
------------------ -----------------
Total $2,516,041 $ 2,381,458
------------------ -----------------
</TABLE>
Farmer Mac believes it has little or no credit risk exposure to pre-1996
Act Farmer Mac I loans because of the subordinated interests related to the
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 subordinated interests that mitigate
credit exposure.
At June 30, 2000, post-1996 Act loans that were 90 days or more past due
represented 1.16 percent of the principal amount of all post-1996 Act loans,
compared to 1.03 percent at June 30, 1999 and 0.94 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 June 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. For the remainder of 2000 and into
2001, preliminary steps already taken by Congress to provide additional income
support to the agricultural sector, by providing for the authorization of
approximately $7 billion in new farm assistance in the federal budget, should
help to moderate delinquencies.
The following table segregates the post-1996 Act delinquencies at June 30,
2000 by year of origination, geographic region and commodity.
<TABLE>
<CAPTION>
Distribution of Delinquency
Post-1996 Rate
-------------------- -----------------
<S> <C> <C>
By year of origination:
Before 1996 38% 0.41%
1996 9% 6.28%
1997 11% 2.22%
1998 19% 0.99%
1999 19% 0.00%
2000 4% 0.00%
----------------
Total 100% 1.16%
----------------
<S> <C> <C>
By geographic region: (1)
Mid-north 18% 0.26%
Mid-south 3% 0.00%
Northeast 2% 1.57%
Northwest 42% 1.77%
Southeast 1% 9.72%
Southwest 34% 0.69%
----------------
Total 100% 1.16%
----------------
<S> <C> <C>
By commodity:
Crops 53% 1.41%
Livestock 20% 1.38%
Permanent plantings 25% 0.54%
Other 2% 0.00%
----------------
Total 100% 1.16%
----------------
(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, NM, NV, UT).
</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 months ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -------------------------
2000 1999 2000 1999
------------ ------------- ------------ ------------
(in thousands)
<S> <C> <C> <C> <C>
Beginning balance $7,901 $4,016 $6,584 $3,259
Provision for losses 1,057 862 2,374 1,660
Net recoveries (charge-offs) - 37 - (4)
------------ ------------- ------------ ------------
Ending balance $8,958 $4,915 $8,958 $4,915
------------ ------------- ------------ ------------
</TABLE>
Although 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
----------------
<S> <C>
By loan-to-value ratio:
0.00% to 40.00% 8%
40.01% to 50.00% 16%
50.01% to 60.00% 46%
60.01% to 70.00% 29%
70.01% to 80.00% 1%
----------------
Total 100%
----------------
</TABLE>
As of June 30, 2000, the weighted average loan-to-value ratio of post-1996
Act loans was approximately 56 percent.
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.
<TABLE>
<CAPTION>
Commitments to Purchase or Guarantee Farmer Mac I Loans (1) (2)
-------------------------------------------------------------------------------------------------------
Long-Term 5 and 7 Year
Fixed Rate Balloons ARMs Total Outstanding
------------- ---------------- -------- --------- --------------
(in thousands)
<S> <C> <C> <C> <C> <C>
For the quarter ended:
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
June 30, 1999 56,010 17,025 48,791 121,826 12,069
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 5 and 7 Year
Fixed Rate Balloon ARMs Total
----------------- ---------------- ----------- --------------
(in thousands)
<S> <C> <C> <C> <C>
For the quarter ended:
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
June 30, 1999 58,406 16,975 52,244 127,625
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 5 and 7 Year
Fixed Rate Balloon ARMs Total
----------------- ---------------- ----------- --------------
(in thousands)
<S> <C> <C> <C> <C>
For the quarter ended:
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
June 30, 1999 1,018 - 44,397 45,415
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>
<TABLE>
<CAPTION>
Farmer Mac I Delinquencies (4) (5)
-------------------------------------------------------------------------
Post-1996 Act Pre-1996 Act Total
--------------- -------------- -------------
<S> <C> <C> <C>
As of:
June 30, 2000 1.16% 4.03% 1.30%
March 31, 2000 1.36% 4.90% 1.55%
December 31, 1999 0.94% 3.06% 1.06%
September 30, 1999 1.56% 3.48% 1.72%
June 30, 1999 1.03% 1.44% 1.07%
</TABLE>
<TABLE>
<CAPTION>
Outstanding Guarantees (5)
----------------------------------------------------------------------------------------------------------------------
Farmer Mac I
---------------------------------------------
Post-1996 Act
------------------------------ Pre-1996 Farmer Held in
AMBS LTSPC Act Mac II Total Portfolio (6)
-------------- --------------- -------------- -------------- --------------- --------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
As of:
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
June 30, 1999 984,538 375,915 142,842 367,250 1,870,545 1,046,303
(1)Includes loans guaranteed 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 guarantee transactions of $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. The transactions, referred to as long-term
standby purchase commitments (LTSPC), obligate Farmer Mac to purchase loans
within 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
$21.7 million in second quarter 2000, $46.5 million in first quarter 2000,
$50.6 million in fourth quarter 1999, $153.4 million in third quarter 1999,
and $45.4 million in second quarter 1999.
(4)Includes loans 90 days or more past due, in foreclosure or in bankruptcy.
(5)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.
(6)Included in total outstanding guarantees.
</TABLE>
<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.
----------------------
(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 April 11, 2000, Farmer Mac issued
an aggregate of 590 shares of its Class C Non-Voting Common Stock at
an issue price of $15.50 per share to the 9 Directors who elected to
receive such stock in lieu of their cash retainers.
On June 1, 2000, Farmer Mac issued an aggregate 44,159 shares of its
Class C Non-Voting Common Stock at an issue price of $15.125 per share
to the officers of Farmer Mac as incentive compensation.
On June 30, 2000, Farmer Mac cancelled 1,800 restricted shares of its
Class C Non-Voting Common Stock due to the resignation of the employee
to whom such shares were granted prior to the vesting of such shares.
During the second quarter of 2000, Farmer Mac granted options under
its 1997 Stock Option Plan to purchase an aggregate of 407,286 shares
of Class C Non-Voting Common Stock, at an exercise price of $15.125
per share to employees, officers and directors.
(d) Not applicable.
Item 3. Defaults upon Senior Securities.
Not applicable.
<PAGE>
Item 4. Submission of Matters to a Vote of Stockholders.
------------------------------------------------
(a) Farmer Mac's Annual Meeting of Stockholders was held on June 1, 2000.
(b) See paragraph (c)(1) below.
(c) (1) Election of Directors - Class A Nominees
<TABLE>
<CAPTION>
Number of Shares
For Withheld
------------------------
<S> <C> <C>
Hemingway 699,588 11,400
Johnson 701,388 9,600
Mulder 701,788 9,200
Nolan 700,988 10,000
Paul 701,188 9,800
Class B Nominees
Number of Shares
For Withheld
----------------------
<S> <C> <C>
DeBriyn 462,765 300
Graff 462,765 300
McCarthy 462,865 200
Nelson 462,765 300
Raines 462,765 300
(2) Selection of Independent Auditors (Arthur Andersen LLP)
Class A Stockholders:
Number of Shares
----------------
<S> <C>
For 702,388
Against 5,800
Abstain 2,800
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Class B Stockholders:
Number of Shares
----------------
<S> <C>
For 462,965
Against 0
Abstain 100
</TABLE>
(d) 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).
* Incorporated by reference to the indicated prior filing.
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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 September 3, 1999 to Employment
Contract between Henry D. Edelman and the Registrant (Form 10-Q
filed August 12, 1999).
+* 10.2.8 - Amendment No. 8 dated as of September 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.
+* 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).
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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 September 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 .
* Incorporated by reference to the indicated prior filing.
** Filed herewith
+ Management contract or compensatory plan.
<PAGE>
+* 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).
+* 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).
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+** 10.4.11- Amendment No. 11 dated as of June 1, 2000 to Employment Contract
between Thomas R. Clark and the Registrant.
+* 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).
+* 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 June 1, 2000 to Employment Contract
between Tom D. Stenson and the Registrant.
+* 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.
* 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 - Subsidiaries.
21.1 - 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 June 30, 2000.
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ 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
August 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-Treasurer and Chief Financial Officer
(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
August 14, 2000
By:
--------------------------------------------------
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
--------------------------------------------------
Nancy E. Corsiglia
Vice President-Treasurer and Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Exhibit Index
10.2.9 - Amendment No. 9 dated as of June 1, 2000 to Employment Contract
between Henry D. Edelman and the Registrant.
10.3.12 - Amendment No. 12 dated as of June 1, 2000 to Employment Contract
between Nancy E. Corsiglia and the Registrant .
10.4.11 - Amendment No. 11 dated as of June 1, 2000 to Employment Contract
between Thomas R. Clark and the Registrant.
10.5.3 - Amendment No. 3 dated as of June 1, 2000 to Employment Contract
between Tom D. Stenson and the Registrant.
10.6.1 - Amendment No. 1 dated as of June 1, 2000 to Employment Contract
between Jerome G. Oslick and the Registrant.
