UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 2002
Federal Agricultural Mortgage Corporation
----------------------------------------------
(Exact name of registrant as specified in its charter)
Federally chartered
instrumentality of
the United States 0-17440 52-1578738
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1133 21st Street, N.W., Suite 600, Washington, D.C. 20036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (202) 872-7700
No change
--------------------
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99 Press release dated October 22, 2002.
Item 9. Regulation FD Disclosure.
On October 22, 2002, the Registrant issued a press release to announce the
Registrant's financial results for third quarter 2002. The press release is
filed as Exhibit 99 hereto and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
By: /s/ Jerome G. Oslick
---------------------------------
Name: Jerome G. Oslick
Title: Vice President - General Counsel
Dated: October 22, 2002
EXHIBIT INDEX
Exhibit No. Description Page No.
----------- ----------- --------
99 Press Release Dated October 22, 2002 5
Exhibit 99
Farmer Mac
NEWS
FOR IMMEDIATE RELEASE CONTACT
October 22, 2002 Jerome Oslick
202-872-7700
Farmer Mac Achieves Strong Earnings
Confirms Analyst Expectations for the Year
Washington, D.C. -- The Federal Agricultural Mortgage Corporation (Farmer
Mac, NYSE: AGM and AGMA) today announced that net income for third quarter 2002
was $5.0 million or $0.42 per diluted share and $18.5 million, or $1.54 per
diluted share, for the year-to-date. Later in this release, Farmer Mac provides
supplemental information about the impact of Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
("FAS 133"), which reduced earnings per diluted share by $0.07 in third quarter
2002 to the level referenced above.
Farmer Mac President and Chief Executive Officer Henry D. Edelman stated,
"Farmer Mac's strong third quarter performance continues to underscore the
soundness of its business approach and financial strength as it fulfills its
mission to serve America's farmers, ranchers and rural homeowners. This
quarter's volume of new business took our 2002 year-to-date volume above 2001
full-year results, even though - as anticipated - new business volume was less
than in recent quarters. The drop in new business volume was a result of the
normal seasonal slowdown in new agricultural mortgage loans, anticipated in the
third quarter of each year, compounded by the dampening effect of adverse media
coverage on business during the spring and summer months. For the current
quarter, our new business prospects have looked past that media coverage and we
are seeing a resumption of normal interest in our business.
"This quarter's financial results demonstrate the annuity-like revenue
stream of our business model and the benefits of yield maintenance protection in
a declining interest rate environment. These items mitigated the effects on our
financial performance of the increased professional and regulatory fees incurred
during the quarter.
"We are also pleased with the overall performance of our portfolio of loans
underlying our guarantees and Long-Term Standby Purchase Commitments ("LTSPCs").
As we have noted in the past, Farmer Mac anticipates fluctuations in the
delinquencies, both in dollars and as a percentage of the outstanding portfolio,
with higher levels likely at the end of the first and third quarters of each
year due to the semi-annual payment characteristics of most Farmer Mac loans.
Consistent with that pattern, seriously delinquent loans in the third quarter
were slightly higher, in dollars, than they were at the close of the first
quarter 2002 and, in percentage terms, below the levels at the close of the
first quarter 2002 and of the first and third quarters of 2001. These
semi-annual trends are indicative of the positive results of ongoing loan
servicing and loss mitigation efforts, offset by the continued maturation of a
significant segment of Farmer Mac's portfolio of guarantees and commitments into
its peak default years, and a weaker agricultural economy.
"We believe that Farmer Mac is on track to meet or exceed the market
analyst's current projection for its financial performance in 2002."
Net Interest Income
Net interest income reached $10.0 million for third quarter 2002 and $26.3
million year-to-date, compared to $7.9 million and $19.7 million for the same
periods in 2001. The net interest yield, which does not include guarantee fees
for loans purchased prior to April 1, 2001 (the effective date of Statement of
Financial Accounting Standards No. 140, Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities ("FAS 140")), was 103
basis points for third quarter 2002, compared to 93 basis points for second
quarter 2002 and 98 basis points for third quarter 2001. The net interest yields
for third quarter 2002, second quarter 2002 and third quarter 2001 included the
benefits of yield maintenance payments of 15 basis points, 7 basis points and 9
basis points, respectively. The effect of the adoption of FAS 140 for the third
quarter 2002 was a reclassification of approximately $0.6 million (6 basis
points) of guarantee fee income as interest income. Adjusted to eliminate the
effects of both yield maintenance and the effects of FAS 140, the net interest
yields for third quarter 2002, second quarter 2002 and third quarter 2001 were
82 basis points, 79 basis points and 89 basis points, respectively.
Guarantee Fees
Guarantee fees, which include commitment fees, were $4.9 million for third
quarter 2002, compared to $4.7 million for second quarter 2002 and $4.2 million
for third quarter 2001. The relative increase in guarantee fees reflects an
increase in the average balance of outstanding guarantees and commitments.
Excluding the effects of the adoption of FAS 140 that reclassified $0.6 million
of guarantee fee income as interest income, guarantee fees for third quarter
2002 would have been $5.5 million.
Operating Expenses
Operating expenses totaled $3.9 million for third quarter 2002, compared to
$3.0 million for second quarter 2002 and $2.5 million for third quarter 2001.
The increase in operating expenses in third quarter 2002 primarily reflects
higher legal, consulting and regulatory fees. The Farm Credit Administration
("FCA"), the federal agency with direct regulatory authority over Farmer Mac,
has advised Farmer Mac that its regulatory assessment for October 1, 2002
through September 30, 2003 will be an estimated $1.4 million, an increase from
the estimated $0.7 million for October 1, 2001 through September 30, 2002.
Operating expenses as a percentage of operating revenues were 25 percent for
third quarter 2002, compared to 22 percent for second quarter 2002 and 21
percent for third quarter 2001.
Credit
As of September 30, 2002, Farmer Mac I loans purchased, guaranteed or
committed to be purchased under its LTSPC Program since the enactment in 1996 of
changes to Farmer Mac's statutory charter ("post-1996 Act loans"), both on- and
off-balance sheet, that were 90 days or more past due, in foreclosure, in
bankruptcy and REO ("real estate owned") totaled $91.3 million and represented
2.03 percent of the principal balance of all post-1996 Act loans. This compares
to $65.2 million (1.45 percent) as of June 30, 2002, $87.1 million (2.32
percent) as of March 31, 2002, and $71.7 million (2.16 percent) as of September
30, 2001. (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 Farmer Mac's credit exposure.) The year-over-year
increase in dollars is reflective of the continued maturation of a significant
segment of Farmer Mac's portfolio of guarantees and commitments into its peak
default years. The year-over-year decline in the ratio of delinquencies to
outstanding guarantees and commitments is reflective of the growth of the
portfolio.
Farmer Mac conducts loan-by-loan analyses of its delinquencies to assess
the value of the collateral supporting each individual loan relative to the
total amount due, including principal, interest and expenses. In the event that
the updated or discounted collateral value does not support the total amount
due, Farmer Mac specifically allocates reserves to the loan. Farmer Mac charges
off losses against the reserve for losses when management believes a loss has
occurred, but no later than when the Corporation takes possession of the
property. As of September 30, 2002, Farmer Mac's loan-by-loan analysis of the
updated or discounted collateral values for its $91.3 million of delinquent
loans indicated that $79.2 million of the delinquent loans were adequately
collateralized, while $12.1 million had insufficient collateral to cover
principal, interest and expenses. Farmer Mac has specifically allocated $2.2
million of reserves to those under-collateralized loans. As of September 30,
2002, after the allocation of specific reserves to those under-collateralized
loans, Farmer Mac had additional non-specific or general reserves of $16.9
million, bringing total reserves to $19.1 million.
Based on Farmer Mac's loan-by-loan analyses, loan collection experience,
and continuing provisions for the reserve for losses, Farmer Mac believes that
ongoing losses will be covered adequately by the reserve for losses. During
third quarter 2002, Farmer Mac charged off $1.5 million in losses against the
reserve for losses. In certain collateral liquidation scenarios, Farmer Mac may
recover amounts previously charged off or incur additional losses, if
liquidation proceeds vary from previous estimates. During third quarter 2002,
Farmer Mac recovered $317,000 of previously charged off losses. As of September
30, 2002, the weighted-average original loan-to-value ratio for all post-1996
Act loans was 49 percent, and the weighted-average original loan-to-value ratio
for delinquent loans was 56 percent. Farmer Mac's provision for losses was $2.0
million for third quarter 2002, compared to $2.0 million for second quarter 2002
and $2.0 million for third quarter 2001. As of September 30, 2002, Farmer Mac's
reserve for losses totaled $19.1 million, or 42 basis points of the outstanding
post-1996 Act loans and AMBS, compared to $18.3 million (41 basis points) as of
June 30, 2002 and $14.7 million (44 basis points) as of September 30, 2001.
Provision for Income Taxes
The provision for income taxes totaled $2.3 million for third quarter 2002
and $7.5 million year-to-date, compared to $2.5 million and $6.1 million for the
same periods in 2001. Farmer Mac's effective tax rate for third quarter 2002 was
29.5 percent compared to 30.1 percent for second quarter 2002 and 33.1 percent
for 2001. The reduction in the rate from the prior year reflects the effects of
certain tax-advantaged investment securities.
Capital
Farmer Mac's core capital totaled $181.1 million as of September 30, 2002,
compared to $126.0 million as of December 31, 2001 and $176.2 million as of June
30, 2002. The regulatory methodology for calculating core capital excludes the
effects of Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities ("FAS 115") and FAS 133, which
are reported on Farmer Mac's balance sheet as accumulated other comprehensive
income. Farmer Mac's core capital as of September 30, 2002 exceeded the
statutory minimum capital requirement of $129.7 million by approximately $51.4
million.
The FCA issued its final risk-based capital regulation for Farmer Mac on
April 12, 2001 and the Corporation was required to meet the risk-based capital
standards beginning on May 23, 2002. The risk-based capital stress test
promulgated by the FCA ("RBC test"), determines the amount of regulatory capital
(core capital plus loss reserves) Farmer Mac would need to maintain positive
capital during a ten-year period while incurring credit losses equivalent to the
highest historical two-year agricultural mortgage loss rates and an interest
rate shock at the lesser of 600 basis points or 50 percent of the ten-year U.S.
Treasury rate. The RBC test then adds an additional 30 percent to the resulting
capital requirement for management and operational risk. Farmer Mac is in
compliance with the risk-based capital standards under the regulation and is
confident that Farmer Mac will continue to be in compliance.
As of September 30, 2002, the RBC test generated a regulatory capital
requirement of $59.4 million. Farmer Mac's regulatory capital of $200.2 million
exceeded that amount by approximately $140.8 million. The decrease in the
risk-based capital requirement from June 30, 2002 ($80.1 million) to September
30, 2002 ($59.4 million) was a result of changes in interest rates, and the
seasoning of Farmer Mac's portfolio. The Corporation is required to hold capital
at the higher of the statutory minimum capital requirement or the amount
required by the RBC test.
Average return on common equity excluding any extraordinary items was 12.9
percent for third quarter 2002, as compared to 16.4 percent for third quarter
2001 and 17.6 percent for second quarter 2002. The effects of FAS 133 and FAS
115 reduced the average return on common equity by 3.4 percent for third quarter
2002 and 1.3 percent for third quarter 2001, and increased the average return on
common equity by 0.8 percent for second quarter 2002.
Interest Rate Risk
The most comprehensive measure of Farmer Mac's interest rate risk is the
sensitivity of Market Value of Equity ("MVE") to uniform or "parallel" yield
curve shocks. As of September 30, 2002, a parallel increase of 100 basis points
across the entire U.S. Treasury yield curve would increase MVE by 7.9 percent,
while a parallel decrease of 100 basis points would decrease MVE by 7.5 percent.
As of September 30, 2002, a parallel increase of 100 basis points would increase
Farmer Mac's Net Interest Income ("NII"), a shorter-term measure of interest
rate risk, by 5.5 percent, while a parallel decrease of 100 basis points would
decrease NII by 3.9 percent. Farmer Mac also measures the sensitivity of both
MVE and NII to a variety of non-parallel interest rate shocks. Farmer Mac's MVE
and NII are less sensitive to those non-parallel shocks than to parallel shocks.
Finally, Farmer Mac's duration gap, a static measure of interest rate risk, was
minus 4.4 months as of September 30, 2002.
The economic effects of derivatives, including interest rate swaps, are
included in the MVE, NII and duration gap analyses. Farmer Mac enters into
contracts in which the Corporation pays fixed rates of interest and receives
floating rates of interest from counterparties. These "floating-to-fixed
interest rate swaps" are used to adjust the characteristics of short-term debt
to match more closely the cash flow and duration characteristics of longer-term
mortgages, thereby reducing interest rate risk, and also to derive an overall
lower effective fixed-rate cost of borrowing than would otherwise be available
in the conventional debt market. As of September 30, 2002, Farmer Mac had $741.5
million notional amount of floating-to-fixed interest rate swaps for terms
ranging from 2 to 15 years.
Farmer Mac uses derivatives as an end-user for hedging purposes, not for
speculative purposes. All of Farmer Mac's derivative transactions are conducted
through standard, collateralized agreements that limit Farmer Mac's potential
credit exposure to any counterparty. As of September 30, 2002, Farmer Mac had no
uncollateralized net exposure to any counterparty.
Derivatives and Financial Statement Effects of FAS 133
Farmer Mac accounts for its derivatives under FAS 133, which became
effective January 1, 2001. The implementation of FAS 133 resulted in significant
accounting changes to both the Corporation's income statement and balance sheet.
During third quarter 2002, the reduction in net after-tax income resulting from
FAS 133 was $943,000, and the net after-tax decrease in accumulated other
comprehensive income was $19.0 million. For second quarter 2002, the increase in
net after-tax income and the net after-tax increase in accumulated other
comprehensive income resulting from FAS 133 were $149,500 and $14.6 million,
respectively. For third quarter 2001, the reductions in net after-tax income and
accumulated other comprehensive income resulting from FAS 133 were $190,000, and
$14.1 million, respectively. Accumulated other comprehensive income is not a
component of Farmer Mac's regulatory core capital.
Net income for third quarter 2002 included the effects of FAS 133, which
were a net reduction of $0.07 per diluted share. Accordingly, diluted operating
earnings per share were a record $0.49, a 17 percent increase over third quarter
2001 diluted operating earnings per share of $0.42. Operating income reached a
record $5.9 million for the third quarter 2002 and $17.0 million for the
year-to-date, compared to $5.0 million and $12.3 million for the same periods in
2001.
Forward-Looking Statements
In addition to historical information, this release includes
forward-looking statements that reflect management's current expectations for
Farmer Mac's future financial results, business prospects and business
developments. Management's expectations for Farmer Mac's future necessarily
involve assumptions, estimates and the evaluation of risks and uncertainties.
Various factors could cause actual events or results to differ materially from
those expectations. Some of the important factors that could cause Farmer Mac's
actual results to differ materially from management's expectations include
uncertainties regarding: (1) the rate and direction of the development of the
secondary market for agricultural mortgage loans; (2) the effect on the
agricultural economy resulting from low commodity prices, weak demand for U.S.
agricultural products and crop damage from natural disasters; (3) the effect on
the agricultural economy of federal assistance for agriculture provided for in
the farm bill enacted last Spring; (4) the possible effect of the risk-based
capital requirement which could, under certain circumstances, be in excess of
the statutory minimum capital level; (5) the possible establishment of
additional legislative or regulatory restrictions on Farmer Mac; (6) the outcome
of the pending analysis of Farmer Mac by the General Accounting Office; and (7)
Farmer Mac's continuing access to the debt markets at favorable rates and terms.
Other factors are discussed in Farmer Mac's Annual Report on Form 10-K for the
year ended December 31, 2001, as filed with the Securities and Exchange
Commission ("SEC") on March 27, 2002, and Farmer Mac's Quarterly Report on Form
10-Q for the quarter ended June 30, 2002, as filed with the SEC on August 14,
2002. The forward-looking statements contained herein represent management's
expectations as of the date of this release. Farmer Mac undertakes no obligation
to release publicly the results of any revisions to the forward-looking
statements included herein to reflect events or circumstances after today, or to
reflect the occurrence of unanticipated events, except as otherwise mandated by
the SEC.
Farmer Mac is a stockholder-owned instrumentality of the United States
chartered by Congress to establish a secondary market for agricultural real
estate and rural housing mortgage loans, and to facilitate capital market
funding for USDA guaranteed farm program and rural development loans. Farmer
Mac's Class C and Class A common stocks are listed on the New York Stock
Exchange under the symbols AGM and AGMA, respectively. Additional information
about Farmer Mac (as well as the Form 10-K and Form 10-Q referenced above) is
available on Farmer Mac's website at www.farmermac.com. The conference call to
discuss Farmer Mac's third quarter 2002 earnings and this press release will be
webcast on Farmer Mac's website beginning at 11:00 a.m. eastern time, Wednesday,
October 23, 2002, and an audio recording of that call will be available for two
weeks on Farmer Mac's website after the call is concluded.
* * * *
Federal Agricultural Mortgage Corporation
Consolidated Balance Sheets
(in thousands)
September 30, December 31, September 30,
2002 2001 2001
------------------- ------------------ ------------------
(unaudited) (audited) (unaudited)
Assets:
Cash and cash equivalents $ 493,202 $ 437,831 $ 478,132
Investment securities 942,827 1,007,954 989,343
Farmer Mac guaranteed securities 1,636,639 1,690,376 1,705,578
Loans 878,845 199,355 141,001
Real estate owned 4,814 2,457 -
Financial derivatives 3,660 15 864
Interest receivable 47,854 56,253 40,507
Guarantee fees receivable 4,368 6,004 4,098
Prepaid expenses and other assets 24,779 16,963 17,693
------------------- ------------------ ------------------
Total assets $ 4,036,988 $ 3,417,208 $ 3,377,216
------------------- ------------------ ------------------
Liabilities and stockholders' equity:
Notes payable:
Due within one year $ 2,589,382 $ 2,233,267 $ 2,337,765
Due after one year 1,118,338 968,463 827,862
------------------- ------------------ ------------------
Total notes payable 3,707,720 3,201,730 3,165,627
Financial derivatives 67,688 20,762 32,926
Accrued interest payable 31,803 26,358 18,967
Accounts payable and accrued expenses 15,125 18,037 15,240
Reserve for losses 19,136 15,884 14,744
------------------- ------------------ ------------------
Total liabilities 3,841,472 3,282,771 3,247,504
Preferred stock 35,000 - -
Common stock at par 11,629 11,564 11,380
Additional paid-in capital 82,445 80,960 76,892
Accumulated other comprehensive income 14,407 8,395 13,403
Retained earnings 52,035 33,518 28,037
------------------- ------------------ ------------------
Stockholders' equity 195,516 134,437 129,712
------------------- ------------------ ------------------
Total liabilities and stockholders' equity $ 4,036,988 $ 3,417,208 $ 3,377,216
------------------- ------------------ ------------------
Federal Agricultural Mortgage Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
----------------------------------- ----------------------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
----------------- ----------------- ---------------- -----------------
(unaudited) (unaudited) (unaudited) (unaudited)
Interest income:
Investments and cash equivalents $ 10,234 $ 15,604 $ 31,117 $ 53,840
Farmer Mac guaranteed securities 22,793 27,714 68,353 84,935
Loans 12,734 1,842 26,926 3,185
----------------- ----------------- ---------------- -----------------
Total interest income 45,761 45,160 126,396 141,960
Interest expense 35,784 37,292 100,099 122,218
----------------- ----------------- ---------------- -----------------
Net interest income 9,977 7,868 26,297 19,742
Gains/(Losses) on financial derivatives
and trading assets (1,451) (295) (1,457) (1,043)
Other income:
Guarantee fees 4,874 4,177 14,164 11,273
Miscellaneous 458 137 1,218 420
----------------- ----------------- ---------------- -----------------
Total other income 5,332 4,314 15,382 11,693
----------------- ----------------- ---------------- -----------------
Total revenues 13,858 11,887 40,222 30,392
Expenses
Compensation and employee benefits 1,325 1,414 3,904 4,147
Regulatory fees 397 245 790 712
General and administrative 2,168 883 4,765 3,137
----------------- ----------------- ---------------- -----------------
Total operating expenses 3,890 2,542 9,459 7,996
Provision for losses 2,037 1,962 6,075 4,739
----------------- ----------------- ---------------- -----------------
Total expenses 5,927 4,504 15,534 12,735
----------------- ----------------- ---------------- -----------------
Income before income taxes 7,931 7,383 24,688 17,657
Income tax provision 2,341 2,455 7,477 6,132
----------------- ----------------- ---------------- -----------------
Net income before cumulative effect 5,590 4,928 17,211 11,525
of change in accounting principles and
extraordinary item
Cumulative effect of change
in accounting principles, net of tax - - - (726)
Extraordinary gain, net of tax - - 2,203 -
----------------- ----------------- ---------------- -----------------
Net income 5,590 4,928 19,414 10,799
Preferred stock dividends 560 - 896 -
----------------- ----------------- ---------------- -----------------
Net income available to common stockholders $ 5,030 $ 4,928 $ 18,518 $ 10,799
----------------- ----------------- ---------------- -----------------
Earnings per share:
Basic earnings per share $ 0.43 $ 0.43 $ 1.60 $ 0.95
Diluted earnings per share $ 0.42 $ 0.41 $ 1.54 $ 0.91
Earnings per share before cumulative
effect of change in accounting principles
and extraordinary item:
Basic earnings per share $ 0.43 $ 0.43 $ 1.41 $ 1.02
Diluted earnings per share $ 0.42 $ 0.41 $ 1.35 $ 0.98
Operating earnings per share:*
Basic earnings per share $ 0.51 $ 0.44 $ 1.46 $ 1.05
Diluted earnings per share $ 0.49 $ 0.42 $ 1.41 $ 1.01
* operating earnings per share excludes the effects of FAS 133 and extraordinary item
Federal Agricultural Mortgage Corporation
Supplemental Information
The following tables present quarterly and annual information regarding
loan purchases, guarantees and commitments to purchase, outstanding guarantees
and LTSPCs and delinquencies.
Farmer Mac Purchases, Guarantees and LTSPCs
-------------------------------------------------------------------------------------------
Farmer Mac I
------------------------------
Loans & AMBS LTSPC Farmer Mac II Total
------------------ ----------- ------------------ ------------
(in thousands)
For the quarter ended:
September 30, 2002 $ 58,475 $ 140,157 $ 37,374 $ 236,006
June 30, 2002 551,690 280,904 57,769 890,363
March 31, 2002 74,875 338,821 39,154 452,850
December 31, 2001 62,953 237,292 51,056 351,301
September 30, 2001 69,561 246,472 42,396 358,429
June 30, 2001 85,439 499,508 57,012 641,959
March 31, 2001 48,600 49,695 47,707 146,002
For the year ended:
December 31, 2001 266,553 1,032,967 198,171 1,497,691
December 31, 2000 442,246 373,202 193,505 1,008,953
Farmer Mac Outstanding Guarantees and LTSPCs(1)
-------------------------------------------------------------------------------------------------------------------------------
Farmer Mac I
---------------------------------------------
Post-1996 Act
------------------------------
Loans & AMBS(2) LTSPC Pre-1996 Act Farmer Mac II Total Held in Portfolio(3)
------------------------------ -------------- ---------------- ------------ ---------------------
(in thousands)
As of:
September 30, 2002 $2,127,460 $2,407,469 $ 35,297 $ 630,452 $5,200,678 $2,433,768
June 30, 2002 2,180,948 2,336,886 37,873 617,503 5,173,210 2,426,626
March 31, 2002 1,655,485 2,126,485 41,414 592,836 4,416,220 1,899,484
December 31, 2001 1,658,716 1,884,260 48,979 595,156 4,187,111 1,857,232
September 30, 2001 1,605,160 1,731,861 58,813 608,944 4,004,778 1,804,391
June 30, 2001 1,572,800 1,537,061 65,709 579,251 3,754,821 1,763,676
March 31, 2001 1,466,443 1,083,528 72,646 549,003 3,171,620 1,648,896
Outstanding Balance of Loans Held in Portfolio and Loans Underlying AMBS Held in Portfolio
---------------------------------------------------------------------------------------------------------------------------
Total
5-to-10-Year 1-Month-to-3-Year Held in
Fixed Rate ARMs & Resets ARMs Portfolio
-------------------- ------------------ ---------------------- --------------------
(in thousands)
As of:
September 30, 2002 $ 1,000,518 $ 934,435 $ 498,815 $ 2,433,768
June 30, 2002 1,016,997 892,737 516,892 2,426,626
March 31, 2002 751,222 797,780 350,482 1,899,484
December 31, 2001 764,115 790,948 302,169 1,857,232
Post-1996 Act Loan Delinquencies (4)
------------------------------------------------------------------------------
----------------- ---------------- ---------------
Outstanding
Guarantees and
Delinquencies LTSPCs Percentage
----------------- ---------------- ----------------
(dollars in thousands)
As of:
September 30, 2002 $ 91,286 $ 4,506,330 2.03%
June 30, 2002 65,196 4,489,735 1.45%
March 31, 2002 87,097 3,754,171 2.32%
December 31, 2001 58,279 3,428,176 1.70%
September 30, 2001 71,686 3,318,796 2.16%
June 30, 2001 53,139 3,089,460 1.72%
March 31, 2001 67,134 2,562,374 2.62%
Distribution of Post-1996 Act Loan Delinquencies
by Original LTV Ratio
As of September 30, 2002
-------------------------------------------------------------
(dollars in thousands)
Original LTV Ratio Delinquencies Percentage
----------------------- ----------------- ----------------
0.00% to 40.00% $ 8,485 9%
40.01% to 50.00% 16,161 18%
50.01% to 60.00% 27,853 31%
60.01% to 70.00% 36,890 40%
70.01% to 80.00% 1,790 2%
80.01% + 107 0%
----------------- ----------------
Total $ 91,286 100%
----------------- ----------------
Distribution of Post-1996 Act Loan Delinquencies
by Loan Origination Date
As of September 30, 2002
------------------------------------------------------------------------
(dollars in thousands)
Loan Outstanding
Origination Guarantees Delinquency
Date Delinquencies and LTSPCs Rate
---------------- ----------------- ---------------- ----------------
Before 1994 $ 3,871 $ 699,653 0.55%
1994 532 168,906 0.31%
1995 1,704 152,651 1.12%
1996 15,527 359,691 4.32%
1997 20,366 387,700 5.25%
1998 18,821 686,476 2.74%
1999 13,426 743,989 1.80%
2000 9,853 422,464 2.33%
2001 7,186 582,509 1.23%
2002 - 302,291 0.00%
----------------- ---------------- ----------------
Total $ 91,286 $4,506,330 2.03%
----------------- ---------------- ----------------
(1) 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.
(2) Periods prior to June 30, 2001 include only AMBS.
(3) Included in total outstanding guarantees and LTSPCs.
(4) Includes Farmer Mac I loans 90 days or more past due, in foreclosure, in
bankruptcy (including loans performing under the original terms of the loan
or an approved bankruptcy plan) and REO.