Federally chartered instrumentality
of the United States
|
52-1578738
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. employer identification number)
|
|
1999 K Street, N.W. 4
th
Floor, Washington, DC
(Address of principal executive offices)
|
20006
(Zip code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
Item 1.
|
Condensed Consolidated Financial Statements
|
Condensed Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010
|
3
|
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and 2010
|
4
|
Condensed Consolidated Statements of Equity for the nine months ended September 30, 2011 and 2010
|
5
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010
|
6
|
Notes to Condensed Consolidated Financial Statements
|
7
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Assets:
|
||||||||
Cash and cash equivalents
|
$ | 825,014 | $ | 729,920 | ||||
Investment securities:
|
||||||||
Available-for-sale, at fair value
|
1,830,155 | 1,677,233 | ||||||
Trading, at fair value
|
82,722 | 86,096 | ||||||
Total investment securities
|
1,912,877 | 1,763,329 | ||||||
Farmer Mac Guaranteed Securities:
|
||||||||
Available-for-sale, at fair value
|
4,300,000 | 2,907,264 | ||||||
USDA Guaranteed Securities:
|
||||||||
Available-for-sale, at fair value
|
1,193,015 | 1,005,679 | ||||||
Trading, at fair value
|
233,383 | 311,765 | ||||||
Total USDA Guaranteed Securities
|
1,426,398 | 1,317,444 | ||||||
Loans:
|
||||||||
Loans held for sale, at lower of cost or fair value
|
479,690 | 1,212,065 | ||||||
Loans held for investment, at amortized cost
|
1,189,224 | 90,674 | ||||||
Loans held for investment in consolidated trusts, at amortized cost
|
1,138,317 | 1,265,663 | ||||||
Allowance for loan losses
|
(10,699 | ) | (9,803 | ) | ||||
Total loans, net of allowance
|
2,796,532 | 2,558,599 | ||||||
Real estate owned, at lower of cost or fair value
|
3,898 | 1,992 | ||||||
Financial derivatives, at fair value
|
46,254 | 41,492 | ||||||
Interest receivable (includes $10,650 and $22,845, respectively, related to consolidated trusts)
|
79,579 | 90,295 | ||||||
Guarantee and commitment fees receivable
|
30,247 | 34,752 | ||||||
Deferred tax asset, net
|
- | 14,530 | ||||||
Prepaid expenses and other assets
|
9,708 | 20,297 | ||||||
Total Assets
|
$ | 11,430,507 | $ | 9,479,914 | ||||
Liabilities and Equity:
|
||||||||
Liabilities:
|
||||||||
Notes payable:
|
||||||||
Due within one year
|
$ | 5,831,259 | $ | 4,509,419 | ||||
Due after one year
|
4,060,382 | 3,430,656 | ||||||
Total notes payable
|
9,891,641 | 7,940,075 | ||||||
Debt securities of consolidated trusts held by third parties
|
713,546 | 827,411 | ||||||
Financial derivatives, at fair value
|
166,633 | 113,687 | ||||||
Accrued interest payable (includes $8,248 and $14,439, respectively, related to consolidated trusts)
|
48,998 | 57,131 | ||||||
Guarantee and commitment obligation
|
26,903 | 30,308 | ||||||
Accounts payable and accrued expenses
|
26,863 | 22,113 | ||||||
Deferred tax liability, net
|
1,871 | - | ||||||
Reserve for losses
|
6,991 | 10,312 | ||||||
Total Liabilities
|
10,883,446 | 9,001,037 | ||||||
Commitments and Contingencies (Note 5)
|
||||||||
Equity:
|
||||||||
Preferred stock:
|
||||||||
Series C, par value $1,000 per share, 100,000 shares authorized, 57,578 shares issued and outstanding
|
57,578 | 57,578 | ||||||
Common stock:
|
||||||||
Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding
|
1,031 | 1,031 | ||||||
Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding
|
500 | 500 | ||||||
Class C Non-Voting, $1 par value, no maximum authorization, 8,825,594 shares outstanding as of September 30, 2011 and 8,752,711 shares outstanding as of December 31, 2010
|
8,826 | 8,753 | ||||||
Additional paid-in capital
|
101,809 | 100,050 | ||||||
Accumulated other comprehensive income
|
85,715 | 18,275 | ||||||
Retained earnings
|
49,749 | 50,837 | ||||||
Total Stockholders' Equity
|
305,208 | 237,024 | ||||||
Non-controlling interest - preferred stock
|
241,853 | 241,853 | ||||||
Total Equity
|
547,061 | 478,877 | ||||||
Total Liabilities and Equity
|
$ | 11,430,507 | $ | 9,479,914 |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||
Interest income:
|
||||||||||||||||
Investments and cash equivalents
|
$ | 6,880 | $ | 6,430 | $ | 21,100 | $ | 19,303 | ||||||||
Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
34,398 | 22,971 | 91,531 | 62,597 | ||||||||||||
Loans
|
29,843 | 29,174 | 89,414 | 94,734 | ||||||||||||
Total interest income
|
71,121 | 58,575 | 202,045 | 176,634 | ||||||||||||
Total interest expense
|
39,412 | 33,526 | 114,105 | 106,360 | ||||||||||||
Net interest income
|
31,709 | 25,049 | 87,940 | 70,274 | ||||||||||||
Release of/(provision for) loan losses
|
349 | (412 | ) | (1,092 | ) | (1,392 | ) | |||||||||
Net interest income after release of/(provision for) loan losses
|
32,058 | 24,637 | 86,848 | 68,882 | ||||||||||||
Non-interest loss:
|
||||||||||||||||
Guarantee and commitment fees
|
6,148 | 5,977 | 18,855 | 17,606 | ||||||||||||
Losses on financial derivatives
|
(68,567 | ) | (6,864 | ) | (82,368 | ) | (28,508 | ) | ||||||||
(Losses)/gains on trading assets
|
(3,633 | ) | (1,722 | ) | (354 | ) | 6,703 | |||||||||
Gains on sale of available-for-sale investment securities
|
74 | 24 | 269 | 264 | ||||||||||||
(Losses)/gains on sale of real estate owned
|
(4 | ) | - | 720 | - | |||||||||||
Lower of cost or fair value adjustment on loans held for sale
|
9,851 | (906 | ) | 8,887 | (3,090 | ) | ||||||||||
Other income
|
726 | 140 | 5,748 | 1,180 | ||||||||||||
Non-interest loss
|
(55,405 | ) | (3,351 | ) | (48,243 | ) | (5,845 | ) | ||||||||
Non-interest expense:
|
||||||||||||||||
Compensation and employee benefits
|
4,805 | 4,501 | 13,968 | 11,919 | ||||||||||||
General and administrative
|
2,505 | 1,775 | 7,417 | 6,329 | ||||||||||||
Regulatory fees
|
550 | 568 | 1,714 | 1,693 | ||||||||||||
Real estate owned operating costs, net
|
142 | 1,189 | 741 | 1,497 | ||||||||||||
(Release of)/provision for losses
|
(452 | ) | 105 | (3,321 | ) | 1,680 | ||||||||||
Other expense
|
- | - | 900 | - | ||||||||||||
Non-interest expense
|
7,550 | 8,138 | 21,419 | 23,118 | ||||||||||||
(Loss)/income before income taxes
|
(30,897 | ) | 13,148 | 17,186 | 39,919 | |||||||||||
Income tax (benefit)/expense
|
(14,131 | ) | 885 | (2,075 | ) | 5,977 | ||||||||||
Net (loss)/income
|
(16,766 | ) | 12,263 | 19,261 | 33,942 | |||||||||||
Less: Net income attributable to non-controlling interest - preferred stock dividends
|
(5,547 | ) | (5,546 | ) | (16,641 | ) | (15,160 | ) | ||||||||
Net (loss)/income attributable to Farmer Mac
|
(22,313 | ) | 6,717 | 2,620 | 18,782 | |||||||||||
Preferred stock dividends
|
(719 | ) | (720 | ) | (2,159 | ) | (3,410 | ) | ||||||||
Loss on retirement of preferred stock
|
- | - | - | (5,784 | ) | |||||||||||
Net (loss)/income attributable to common stockholders
|
$ | (23,032 | ) | $ | 5,997 | $ | 461 | $ | 9,588 | |||||||
(Loss)/earnings per common share and dividends:
|
||||||||||||||||
Basic (loss)/earnings per common share
|
$ | (2.22 | ) | $ | 0.58 | $ | 0.04 | $ | 0.94 | |||||||
Diluted (loss)/earnings per common share
|
$ | (2.22 | ) | $ | 0.56 | $ | 0.04 | $ | 0.91 | |||||||
Common stock dividends per common share
|
$ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 |
For the Nine Months Ended
|
||||||||||||||||
September 30, 2011
|
September 30, 2010
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Preferred stock:
|
||||||||||||||||
Balance, beginning of period
|
58 | $ | 57,578 | 58 | $ | 57,578 | ||||||||||
Issuance of Series C preferred stock
|
- | - | - | - | ||||||||||||
Balance, end of period
|
58 | $ | 57,578 | 58 | $ | 57,578 | ||||||||||
Common stock:
|
||||||||||||||||
Balance, beginning of period
|
10,284 | $ | 10,284 | 10,142 | $ | 10,142 | ||||||||||
Issuance of Class C common stock
|
59 | 59 | 122 | 122 | ||||||||||||
Exercise of stock options and SARs
|
14 | 14 | 13 | 13 | ||||||||||||
Balance, end of period
|
10,357 | $ | 10,357 | 10,277 | $ | 10,277 | ||||||||||
Additional paid-in capital:
|
||||||||||||||||
Balance, beginning of period
|
$ | 100,050 | $ | 97,090 | ||||||||||||
Stock-based compensation expense
|
2,254 | 2,187 | ||||||||||||||
Issuance of Class C common stock
|
19 | 33 | ||||||||||||||
Exercise, vesting and cancellation of stock options,
|
||||||||||||||||
SARs and restricted stock
|
(514 | ) | 158 | |||||||||||||
Balance, end of period
|
$ | 101,809 | $ | 99,468 | ||||||||||||
Retained earnings:
|
||||||||||||||||
Balance, beginning of period
|
$ | 50,837 | $ | 28,127 | ||||||||||||
Net income attributable to Farmer Mac
|
2,620 | 18,782 | ||||||||||||||
Cash dividends:
|
||||||||||||||||
Preferred stock, Series B ($8.33 per share)
|
- | (1,250 | ) | |||||||||||||
Preferred stock, Series C ($37.50 per share)
|
(2,159 | ) | (2,160 | ) | ||||||||||||
Common stock ($0.15 per share)
|
(1,549 | ) | (1,534 | ) | ||||||||||||
Loss on retirement of preferred stock
|
- | (5,784 | ) | |||||||||||||
Cumulative effect of adoption of new accounting standard, net of tax
|
- | 2,679 | ||||||||||||||
Balance, end of period
|
$ | 49,749 | $ | 38,860 | ||||||||||||
Accumulated other comprehensive income:
|
||||||||||||||||
Balance, beginning of period
|
$ | 18,275 | $ | 3,254 | ||||||||||||
Change in unrealized gain on available-for-sale
securities, net of tax and reclassification adjustments
|
67,440 | 44,000 | ||||||||||||||
Change in unrealized gain on financial derivatives,
net of tax and reclassification adjustments
|
- | 78 | ||||||||||||||
Balance, end of period
|
$ | 85,715 | $ | 47,332 | ||||||||||||
Total Stockholders' Equity
|
$ | 305,208 | $ | 253,515 | ||||||||||||
Non-controlling interest:
|
||||||||||||||||
Balance, beginning of period
|
$ | 241,853 | $ | - | ||||||||||||
Preferred stock - Farmer Mac II LLC
|
- | 241,853 | ||||||||||||||
Balance, end of period
|
$ | 241,853 | $ | 241,853 | ||||||||||||
Total Equity
|
$ | 547,061 | $ | 495,368 | ||||||||||||
Comprehensive income:
|
||||||||||||||||
Net income
|
$ | 19,261 | $ | 33,942 | ||||||||||||
Change in accumulated other comprehensive income, net of tax
|
67,440 | 44,078 | ||||||||||||||
Comprehensive income
|
$ | 86,701 | $ | 78,020 | ||||||||||||
Less: Comprehensive income attributable to non-controlling interest
|
16,641 | 15,160 | ||||||||||||||
Total comprehensive income
|
$ | 70,060 | $ | 62,860 |
For the Nine Months Ended
|
||||||||
September 30, 2011
|
September 30, 2010
|
|||||||
(restated)
|
||||||||
(in thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 19,261 | $ | 33,942 | ||||
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
|
||||||||
Net amortization of premiums and discounts on loans, investments,
Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
13,923 | 8,421 | ||||||
Amortization of debt premiums, discounts and issuance costs
|
8,822 | 5,057 | ||||||
Net change in fair value of trading securities, financial derivatives and loans held for sale
|
48,538 | (5,970 | ) | |||||
Amortization of deferred gains on certain Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
(4,216 | ) | - | |||||
Gains on the sale of available-for-sale investment securities
|
(269 | ) | (264 | ) | ||||
Gains on the sale of real estate owned
|
(720 | ) | - | |||||
Total (release of)/provision for losses
|
(2,229 | ) | 3,072 | |||||
Deferred income taxes
|
(20,734 | ) | 809 | |||||
Stock-based compensation expense
|
2,254 | 2,188 | ||||||
Proceeds from repayment and sale of trading investment securities
|
686 | 586 | ||||||
Purchases of loans held for sale
|
(152,117 | ) | (404,072 | ) | ||||
Proceeds from repayment of loans purchased as held for sale
|
83,361 | 32,506 | ||||||
Net change in:
|
||||||||
Interest receivable
|
10,778 | (246 | ) | |||||
Guarantee and commitment fees receivable
|
4,505 | 20,958 | ||||||
Other assets
|
2,269 | 642 | ||||||
Accrued interest payable
|
(8,133 | ) | 5,532 | |||||
Other liabilities
|
2,838 | (17,865 | ) | |||||
Net cash provided by/(used in) operating activities
|
8,817 | (314,704 | ) | |||||
Cash flows from investing activities:
|
||||||||
Purchases of available-for-sale investment securities
|
(1,276,131 | ) | (626,678 | ) | ||||
Purchases of Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
(2,105,473 | ) | (1,151,375 | ) | ||||
Purchases of loans held for investment
|
(398,050 | ) | (26,367 | ) | ||||
Purchases of defaulted loans
|
(21,266 | ) | (5,317 | ) | ||||
Proceeds from repayment of available-for-sale investment securities
|
675,566 | 213,315 | ||||||
Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
699,263 | 372,862 | ||||||
Proceeds from repayment of loans purchased as held for investment
|
251,471 | 246,906 | ||||||
Proceeds from sale of available-for-sale investment securities
|
447,864 | 92,767 | ||||||
Proceeds from sale of trading securities - fair value option
|
- | 5,013 | ||||||
Proceeds from sale of Farmer Mac Guaranteed Securities
|
13,869 | 18,860 | ||||||
Proceeds from sale of real estate owned
|
1,361 | - | ||||||
Net cash used in investing activities
|
(1,711,526 | ) | (860,014 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of discount notes
|
52,174,214 | 50,774,678 | ||||||
Proceeds from issuance of medium-term notes
|
1,981,109 | 1,977,609 | ||||||
Payments to redeem discount notes
|
(51,185,913 | ) | (50,262,407 | ) | ||||
Payments to redeem medium-term notes
|
(1,027,000 | ) | (1,441,590 | ) | ||||
Excess tax benefits related to stock-based awards
|
243 | 747 | ||||||
Payments to third parties on debt securities of consolidated trusts
|
(124,521 | ) | (147,832 | ) | ||||
Proceeds from common stock issuance
|
20 | 180 | ||||||
Issuance costs on retirement of preferred stock
|
- | (5,784 | ) | |||||
Proceeds from preferred stock issuance - Farmer Mac II LLC
|
- | 241,853 | ||||||
Retirement of Series B preferred stock
|
- | (144,216 | ) | |||||
Dividends paid - non-controlling interest - preferred stock
|
(16,641 | ) | (15,097 | ) | ||||
Dividends paid on common and preferred stock
|
(3,708 | ) | (4,944 | ) | ||||
Net cash provided by financing activities
|
1,797,803 | 973,197 | ||||||
Net increase/(decrease) in cash and cash equivalents
|
95,094 | (201,521 | ) | |||||
Cash and cash equivalents at beginning of period
|
729,920 | 654,794 | ||||||
Cash and cash equivalents at end of period
|
$ | 825,014 | $ | 453,273 |
Note 1.
|
Accounting Policies
|
For the Nine Months Ended
|
||||||||
September 30, 2011
|
September 30, 2010
|
|||||||
(in thousands)
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 78,598 | $ | 57,746 | ||||
Income taxes
|
20,568 | 12,500 | ||||||
Non-cash activity:
|
||||||||
Real estate owned acquired through loan liquidation
|
2,723 | 4,643 | ||||||
Loans acquired and securitized as loans held for investment in consolidated trusts
|
10,656 | 2,185 | ||||||
Consolidation of Farmer Mac I Guaranteed Securities from off-balance sheet to
loans held for investment in consolidated trusts
|
10,656 | 1,402,556 | ||||||
Consolidation of Farmer Mac I Guaranteed Securities from off-balance sheet to
debt securities of consolidated trusts held by third parties
|
10,656 | 1,402,556 | ||||||
Transfers of available-for-sale Farmer Mac I Guaranteed Securities to loans held for
investment in consolidated trusts, upon the adoption of new consolidation guidance
|
- | 5,385 | ||||||
Transfers of trading Farmer Mac Guaranteed Securities - Rural Utilities to loans held
for investment in consolidated trusts, upon the adoption of new consolidation guidance
|
- | 451,448 | ||||||
Deconsolidation of loans held for investment in consolidated trusts - transferred to off-
balance sheet Farmer Mac I Guaranteed Securities
|
- | 414,462 | ||||||
Deconsolidation of debt securities of consolidated trusts held by third
parties - transferred to off-balance sheet Farmer Mac I Guaranteed Securities
|
- | 414,462 | ||||||
Transfers of loans held for sale to loans held for investment
|
878,798 | - |
|
·
|
economic conditions;
|
|
·
|
geographic and agricultural commodity/product concentrations in the portfolio;
|
|
·
|
the credit profile of the portfolio;
|
|
·
|
delinquency trends of the portfolio;
|
|
·
|
historical charge-off and recovery activities of the portfolio; and
|
|
·
|
other factors to capture current portfolio trends and characteristics that differ from historical experience.
|
|
·
|
non-performing assets (loans 90 days or more past due, in foreclosure, restructured, in bankruptcy – including loans performing under either their original loan terms or a court-approved bankruptcy plan);
|
|
·
|
loans for which Farmer Mac has adjusted the timing of borrowers’ payment schedules, but still expects to collect all amounts due and has not made economic concessions; and
|
|
·
|
additional performing loans that have previously been delinquent or are secured by real estate that produces agricultural commodities or products currently under stress.
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
Allowance
|
Total
|
Allowance
|
Total
|
|||||||||||||||||||||
for Loan
|
Reserve
|
Allowance
|
for Loan
|
Reserve
|
Allowance
|
|||||||||||||||||||
Losses
|
for Losses
|
for Losses
|
Losses
|
for Losses
|
for Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
For the Three Months Ended:
|
||||||||||||||||||||||||
Beginning Balance
|
$ | 11,053 | $ | 7,443 | $ | 18,496 | $ | 9,495 | $ | 9,470 | $ | 18,965 | ||||||||||||
(Release of)/provision for losses
|
(349 | ) | (452 | ) | (801 | ) | 412 | 105 | 517 | |||||||||||||||
Charge-offs
|
(5 | ) | - | (5 | ) | (465 | ) | - | (465 | ) | ||||||||||||||
Recoveries
|
- | - | - | - | - | - | ||||||||||||||||||
Ending Balance
|
$ | 10,699 | $ | 6,991 | $ | 17,690 | $ | 9,442 | $ | 9,575 | $ | 19,017 | ||||||||||||
For the Nine Months Ended:
|
||||||||||||||||||||||||
Beginning Balance
|
$ | 9,803 | $ | 10,312 | $ | 20,115 | $ | 6,292 | $ | 7,895 | $ | 14,187 | ||||||||||||
Provision for/(release of) losses
|
1,092 | (3,321 | ) | (2,229 | ) | 1,392 | 1,680 | 3,072 | ||||||||||||||||
Charge-offs
|
(196 | ) | - | (196 | ) | (465 | ) | - | (465 | ) | ||||||||||||||
Recoveries
|
- | - | - | 2,223 | - | 2,223 | ||||||||||||||||||
Ending Balance
|
$ | 10,699 | $ | 6,991 | $ | 17,690 | $ | 9,442 | $ | 9,575 | $ | 19,017 |
As of September 30, 2011
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Ending Balance:
|
||||||||||||||||||||||||||||
Evaluated collectively for impairment
|
$ | 1,781,013 | $ | 809,383 | $ | 1,246,359 | $ | 244,587 | $ | 187,144 | $ | 20,318 | $ | 4,288,804 | ||||||||||||||
Evaluated individually for impairment
|
29,991 | 32,029 | 11,904 | 11,398 | 6,000 | 1,138 | 92,460 | |||||||||||||||||||||
$ | 1,811,004 | $ | 841,412 | $ | 1,258,263 | $ | 255,985 | $ | 193,144 | $ | 21,456 | $ | 4,381,264 | |||||||||||||||
Allowance for Losses:
|
||||||||||||||||||||||||||||
Evaluated collectively for impairment
|
$ | 1,818 | $ | 1,178 | $ | 164 | $ | 781 | $ | 6,252 | $ | 7 | $ | 10,200 | ||||||||||||||
Evaluated individually for impairment
|
2,041 | 2,610 | 695 | 293 | 1,850 | 1 | 7,490 | |||||||||||||||||||||
$ | 3,859 | $ | 3,788 | $ | 859 | $ | 1,074 | $ | 8,102 | $ | 8 | $ | 17,690 | |||||||||||||||
For the Three Months Ended:
|
||||||||||||||||||||||||||||
Beginning balance
|
$ | 3,715 | $ | 3,803 | $ | 1,774 | $ | 1,095 | $ | 8,100 | $ | 9 | $ | 18,496 | ||||||||||||||
Provision for/(release of) losses
|
144 | (15 | ) | (915 | ) | (16 | ) | 2 | (1 | ) | (801 | ) | ||||||||||||||||
Charge-offs
|
- | - | - | (5 | ) | - | - | (5 | ) | |||||||||||||||||||
Ending balance
|
$ | 3,859 | $ | 3,788 | $ | 859 | $ | 1,074 | $ | 8,102 | $ | 8 | $ | 17,690 | ||||||||||||||
For the Nine Months Ended:
|
||||||||||||||||||||||||||||
Beginning balance
|
$ | 3,572 | $ | 3,537 | $ | 2,749 | $ | 445 | $ | 9,797 | $ | 15 | $ | 20,115 | ||||||||||||||
Provision for/(release of) losses
|
463 | 258 | (1,882 | ) | 634 | (1,695 | ) | (7 | ) | (2,229 | ) | |||||||||||||||||
Charge-offs
|
(176 | ) | (7 | ) | (8 | ) | (5 | ) | - | - | (196 | ) | ||||||||||||||||
Ending balance
|
$ | 3,859 | $ | 3,788 | $ | 859 | $ | 1,074 | $ | 8,102 | $ | 8 | $ | 17,690 |
As of December 31, 2010
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Ending Balance:
|
||||||||||||||||||||||||||||
Evaluated collectively for impairment
|
$ | 1,699,477 | $ | 835,254 | $ | 1,130,466 | $ | 282,400 | $ | 239,933 | $ | 22,514 | $ | 4,210,044 | ||||||||||||||
Evaluated individually for impairment
|
31,903 | 30,221 | 15,992 | 8,745 | 6,790 | 425 | 94,076 | |||||||||||||||||||||
$ | 1,731,380 | $ | 865,475 | $ | 1,146,458 | $ | 291,145 | $ | 246,723 | $ | 22,939 | $ | 4,304,120 | |||||||||||||||
Allowance for Losses:
|
||||||||||||||||||||||||||||
Evaluated collectively for impairment
|
$ | 1,499 | $ | 783 | $ | 2,236 | $ | 222 | $ | 7,947 | $ | 13 | $ | 12,700 | ||||||||||||||
Evaluated individually for impairment
|
2,073 | 2,754 | 513 | 223 | 1,850 | 2 | 7,415 | |||||||||||||||||||||
$ | 3,572 | $ | 3,537 | $ | 2,749 | $ | 445 | $ | 9,797 | $ | 15 | $ | 20,115 |
As of September 30, 2011
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Impaired Loans:
|
||||||||||||||||||||||||||||
With no specific allowance:
|
||||||||||||||||||||||||||||
Recorded investment
|
$ | 13,274 | $ | 12,046 | $ | 4,460 | $ | 3,635 | $ | - | $ | 970 | $ | 34,385 | ||||||||||||||
Unpaid principal balance
|
13,893 | 11,936 | 5,186 | 3,734 | - | 902 | 35,651 | |||||||||||||||||||||
With a specific allowance:
|
||||||||||||||||||||||||||||
Recorded investment
|
17,401 | 19,675 | 7,013 | 7,755 | 6,000 | 239 | 58,083 | |||||||||||||||||||||
Unpaid principal balance
|
16,098 | 20,093 | 6,718 | 7,664 | 6,000 | 236 | 56,809 | |||||||||||||||||||||
Associated allowance
|
2,041 | 2,610 | 695 | 293 | 1,850 | 1 | 7,490 | |||||||||||||||||||||
Total:
|
||||||||||||||||||||||||||||
Recorded investment
|
30,675 | 31,721 | 11,473 | 11,390 | 6,000 | 1,209 | 92,468 | |||||||||||||||||||||
Unpaid principal balance
|
29,991 | 32,029 | 11,904 | 11,398 | 6,000 | 1,138 | 92,460 | |||||||||||||||||||||
Associated allowance
|
2,041 | 2,610 | 695 | 293 | 1,850 | 1 | 7,490 | |||||||||||||||||||||
For the Three Months Ended September 30, 2011:
|
||||||||||||||||||||||||||||
Average recorded investment in impaired loans
|
31,639 | 31,299 | 12,371 | 11,511 | 6,158 | 1,207 | 94,185 | |||||||||||||||||||||
Income recognized on impaired loans
|
120 | 480 | 42 | 63 | - | - | 705 | |||||||||||||||||||||
For the Nine Months Ended September 30, 2011:
|
||||||||||||||||||||||||||||
Average recorded investment in impaired loans
|
30,546 | 30,070 | 13,344 | 9,753 | 6,439 | 771 | 90,923 | |||||||||||||||||||||
Income recognized on impaired loans
|
432 | 857 | 343 | 125 | 382 | - | 2,139 | |||||||||||||||||||||
Recorded investment of loans on nonaccrual status:
|
8,389 | 25,475 | 4,532 | 7,464 | - | - | 45,860 |
As of December 31, 2010
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Impaired Loans:
|
||||||||||||||||||||||||||||
With no specific allowance:
|
||||||||||||||||||||||||||||
Recorded investment
|
$ | 16,015 | $ | 10,549 | $ | 6,873 | $ | 1,050 | $ | - | $ | - | $ | 34,487 | ||||||||||||||
Unpaid principal balance
|
17,274 | 10,895 | 7,087 | 1,072 | - | - | 36,328 | |||||||||||||||||||||
With a specific allowance:
|
||||||||||||||||||||||||||||
Recorded investment
|
15,414 | 18,949 | 9,052 | 7,788 | 6,839 | 430 | 58,472 | |||||||||||||||||||||
Unpaid principal balance
|
14,630 | 19,326 | 8,905 | 7,672 | 6,790 | 425 | 57,748 | |||||||||||||||||||||
Associated allowance
|
2,073 | 2,754 | 513 | 223 | 1,850 | 2 | 7,415 | |||||||||||||||||||||
Total:
|
||||||||||||||||||||||||||||
Recorded investment
|
31,429 | 29,498 | 15,925 | 8,838 | 6,839 | 430 | 92,959 | |||||||||||||||||||||
Unpaid principal balance
|
31,904 | 30,221 | 15,992 | 8,744 | 6,790 | 425 | 94,076 | |||||||||||||||||||||
Associated allowance
|
2,073 | 2,754 | 513 | 223 | 1,850 | 2 | 7,415 | |||||||||||||||||||||
Recorded investment of loans on nonaccrual status:
|
13,828 | 8,793 | 3,267 | 4,380 | 8,796 | - | 39,064 |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Defaulted loans purchased underlying Farmer Mac I Guaranteed Securities
|
$ | 2,921 | $ | 1,133 | $ | 7,292 | $ | 3,456 | ||||||||
Defaulted loans purchased underlying LTSPCs
|
- | 781 | 13,974 | 1,861 | ||||||||||||
Total defaulted loan purchases
|
$ | 2,921 | $ | 1,914 | $ | 21,266 | $ | 5,317 |
As of September 30, 2011
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Credit risk profile by internally assigned grade (1)
|
||||||||||||||||||||||||||||
Grade:
|
||||||||||||||||||||||||||||
Acceptable
|
$ | 1,719,924 | $ | 757,635 | $ | 1,127,206 | $ | 226,887 | $ | 120,857 | $ | 19,043 | $ | 3,971,552 | ||||||||||||||
Other assets especially mentioned ("OAEM") (2)
|
49,594 | 27,808 | 74,443 | 10,143 | 45,229 | 1,054 | 208,271 | |||||||||||||||||||||
Substandard (2)
|
41,486 | 55,969 | 56,614 | 18,955 | 27,058 | 1,359 | 201,441 | |||||||||||||||||||||
Total
|
$ | 1,811,004 | $ | 841,412 | $ | 1,258,263 | $ | 255,985 | $ | 193,144 | $ | 21,456 | $ | 4,381,264 | ||||||||||||||
Commodity analysis of past due loans (1)
|
||||||||||||||||||||||||||||
Greater than 90 days
|
$ | 13,265 | $ | 19,992 | $ | 4,057 | $ | 6,883 | $ | - | $ | 651 | $ | 44,848 | ||||||||||||||
In bankruptcy and REO
|
10,057 | 5,224 | 2,432 | 1,576 | - | - | 19,289 | |||||||||||||||||||||
Total non-performing
|
$ | 23,322 | $ | 25,216 | $ | 6,489 | $ | 8,459 | $ | - | $ | 651 | $ | 64,137 |
(1)
|
Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its Farmer Mac I portfolio, and recorded investment of past due loans. Amounts include real estate owned, at lower of cost or fair value less estimated selling costs, of $3.9 million.
|
(2)
|
Assets in the OAEM category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
|
As of December 31, 2010
|
||||||||||||||||||||||||||||
AgStorage and
|
||||||||||||||||||||||||||||
Processing
|
||||||||||||||||||||||||||||
Permanent
|
Part-time
|
(including ethanol
|
||||||||||||||||||||||||||
Crops
|
Plantings
|
Livestock
|
Farm
|
facilities)
|
Other
|
Total
|
||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Credit risk profile by internally assigned grade (1)
|
||||||||||||||||||||||||||||
Grade:
|
||||||||||||||||||||||||||||
Acceptable
|
$ | 1,625,995 | $ | 792,061 | $ | 993,542 | $ | 268,111 | $ | 116,248 | $ | 20,321 | $ | 3,816,278 | ||||||||||||||
Other assets especially mentioned ("OAEM") (2)
|
59,768 | 17,112 | 86,500 | 9,652 | 76,947 | 639 | 250,618 | |||||||||||||||||||||
Substandard (2)
|
45,617 | 56,302 | 66,416 | 13,382 | 53,528 | 1,979 | 237,224 | |||||||||||||||||||||
Total
|
$ | 1,731,380 | $ | 865,475 | $ | 1,146,458 | $ | 291,145 | $ | 246,723 | $ | 22,939 | $ | 4,304,120 | ||||||||||||||
Commodity analysis of past due loans (1)
|
||||||||||||||||||||||||||||
Greater than 90 days
|
$ | 21,423 | $ | 26,312 | $ | 7,177 | $ | 3,803 | $ | 10,892 | $ | 641 | $ | 70,248 | ||||||||||||||
In bankruptcy and REO
|
4,886 | 3,712 | 1,395 | 1,537 | - | - | 11,530 | |||||||||||||||||||||
Total non-performing
|
$ | 26,309 | $ | 30,024 | $ | 8,572 | $ | 5,340 | $ | 10,892 | $ | 641 | $ | 81,778 |
(1)
|
Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its Farmer Mac I portfolio, and recorded investment of past due loans. Amounts include real estate owned, at lower of cost or fair value less estimated selling costs, of $2.0 million.
|
(2)
|
Assets in the OAEM category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
By commodity/collateral type:
|
||||||||
Crops
|
$ | 1,811,004 | $ | 1,731,380 | ||||
Permanent plantings
|
841,412 | 865,475 | ||||||
Livestock
|
1,258,263 | 1,146,458 | ||||||
Part-time farm
|
255,985 | 291,145 | ||||||
AgStorage and processing (including ethanol facilities)
|
193,144 | 246,723 | ||||||
Other
|
21,456 | 22,939 | ||||||
Total
|
$ | 4,381,264 | $ | 4,304,120 | ||||
By geographic region (1):
|
||||||||
Northwest
|
$ | 772,640 | $ | 660,845 | ||||
Southwest
|
1,581,303 | 1,626,398 | ||||||
Mid-North
|
865,731 | 934,879 | ||||||
Mid-South
|
488,703 | 521,294 | ||||||
Northeast
|
293,047 | 317,715 | ||||||
Southeast
|
379,840 | 242,989 | ||||||
Total
|
$ | 4,381,264 | $ | 4,304,120 | ||||
By original loan-to-value ratio:
|
||||||||
0.00% to 40.00%
|
$ | 1,151,801 | $ | 1,030,580 | ||||
40.01% to 50.00%
|
775,705 | 770,744 | ||||||
50.01% to 60.00%
|
1,229,912 | 1,246,675 | ||||||
60.01% to 70.00%
|
1,033,696 | 1,056,132 | ||||||
70.01% to 80.00%
|
137,745 | 155,363 | ||||||
80.01% to 90.00%
|
52,405 | 44,626 | ||||||
Total
|
$ | 4,381,264 | $ | 4,304,120 |
|
(1)
|
Geographic regions: Northwest (AK, ID, MT, ND, NE, OR, SD, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); 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); Southeast (AL, AR, FL, GA, LA, MS, SC).
|
December 31, 2010
|
||||||||||||||||||||||||||||
Weighted-
|
||||||||||||||||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
Average
|
|||||||||||||||||||||||||
Average
|
Average
|
Average
|
Remaining
|
|||||||||||||||||||||||||
Notional
|
Fair Value
|
Pay
|
Receive
|
Forward
|
Life
|
|||||||||||||||||||||||
Amount
|
Asset
|
(Liability)
|
Rate
|
Rate
|
Price
|
(in years)
|
||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||||||
Pay fixed callable
|
$ | 13,144 | $ | - | $ | (69 | ) | 5.11 | % | 0.29 | % | 7.12 | ||||||||||||||||
Pay fixed non-callable
|
1,275,108 | 2,814 | (108,503 | ) | 4.69 | % | 0.30 | % | 3.93 | |||||||||||||||||||
Receive fixed non-callable
|
2,874,534 | 39,551 | (1,828 | ) | 0.44 | % | 1.40 | % | 1.70 | |||||||||||||||||||
Basis swaps
|
254,991 | 52 | (3,411 | ) | 1.34 | % | 0.38 | % | 1.71 | |||||||||||||||||||
Credit default swaps
|
30,000 | - | (216 | ) | 1.00 | % | 0.00 | % | 1.05 | |||||||||||||||||||
Agency forwards
|
37,336 | - | (174 | ) | 101.03 | |||||||||||||||||||||||
Treasury futures
|
1,300 | - | (6 | ) | 119.95 | |||||||||||||||||||||||
Credit valuation adjustment
|
- | (925 | ) | 520 | ||||||||||||||||||||||||
Total financial derivatives
|
$ | 4,486,413 | $ | 41,492 | $ | (113,687 | ) |
Losses on Financial Derivatives
|
||||||||||||||||
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Interest rate swaps
|
$ | (65,136 | ) | $ | (5,243 | ) | $ | (76,857 | ) | $ | (24,634 | ) | ||||
Agency forwards
|
(3,052 | ) | (1,089 | ) | (5,053 | ) | (3,026 | ) | ||||||||
Treasury futures
|
(512 | ) | (96 | ) | (538 | ) | (737 | ) | ||||||||
Credit default swaps
|
133 | (396 | ) | 80 | 9 | |||||||||||
(68,567 | ) | (6,824 | ) | (82,368 | ) | (28,388 | ) | |||||||||
Amortization of derivatives transition adjustment
|
- | (40 | ) | - | (120 | ) | ||||||||||
Total
|
$ | (68,567 | ) | $ | (6,864 | ) | $ | (82,368 | ) | $ | (28,508 | ) |
For the Three Months Ended
|
||||||||||||||||||||||||
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
Net
|
$ per
|
Net
|
$ per
|
|||||||||||||||||||||
Loss
|
Shares
|
Share
|
Income
|
Shares
|
Share
|
|||||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Basic EPS
|
||||||||||||||||||||||||
Net (loss)/income attributable to common stockholders
|
$ | (23,032 | ) | 10,354 | $ | (2.22 | ) | $ | 5,997 | 10,277 | $ | 0.58 | ||||||||||||
Effect of dilutive securities(1):
|
||||||||||||||||||||||||
Stock options, SARs and restricted stock
|
- | - | 388 | (0.02 | ) | |||||||||||||||||||
Diluted EPS
|
$ | (23,032 | ) | 10,354 | $ | (2.22 | ) | $ | 5,997 | 10,665 | $ | 0.56 |
(1)
|
For the three months ended September 30, 2011 and 2010, stock options and SARs of 1,294,066 and 1,354,800, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended September 30, 2011 and 2010, contingent shares of non-vested restricted stock of 196,076 and 126,000, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive or the performance conditions were not met.
|
For the Nine Months Ended
|
||||||||||||||||||||||||
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
Net
|
$ per
|
Net
|
$ per
|
|||||||||||||||||||||
Income
|
Shares
|
Share
|
Income
|
Shares
|
Share
|
|||||||||||||||||||
(in thousands, except per share amounts)
|
||||||||||||||||||||||||
Basic EPS
|
||||||||||||||||||||||||
Net income attributable to common stockholders
|
$ | 461 | 10,328 | $ | 0.04 | $ | 9,588 | 10,211 | $ | 0.94 | ||||||||||||||
Effect of dilutive securities(1):
|
||||||||||||||||||||||||
Stock options, SARs and restricted stock
|
387 | - | 365 | (0.03 | ) | |||||||||||||||||||
Diluted EPS
|
$ | 461 | 10,715 | $ | 0.04 | $ | 9,588 | 10,576 | $ | 0.91 |
(1)
|
For the nine months ended September 30, 2011 and 2010, stock options and SARs of 685,921 and 1,528,938, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the nine months ended September 30, 2011 and 2010, contingent shares of non-vested restricted stock of 150,353 and 111,500, respectively, were outstanding but not included in the computation of diluted earnings per share because the performance conditions were not met.
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||||
Stock
|
Weighted-
|
Stock
|
Weighted-
|
|||||||||||||
Options
|
Average
|
Options
|
Average
|
|||||||||||||
and
|
Exercise
|
and
|
Exercise
|
|||||||||||||
SARs
|
Price
|
SARs
|
Price
|
|||||||||||||
For the Three Months Ended:
|
||||||||||||||||
Outstanding, beginning of period
|
1,328,900 | $ | 18.57 | 1,923,050 | $ | 21.53 | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Exercised
|
(26,334 | ) | 6.88 | - | - | |||||||||||
Canceled
|
(8,500 | ) | 28.81 | (48,250 | ) | 25.43 | ||||||||||
Outstanding, end of period
|
1,294,066 | $ | 18.74 | 1,874,800 | $ | 21.43 | ||||||||||
For the Nine Months Ended:
|
||||||||||||||||
Outstanding, beginning of period
|
1,924,133 | $ | 21.16 | 1,799,465 | $ | 22.68 | ||||||||||
Granted
|
113,000 | 18.77 | 247,000 | 12.20 | ||||||||||||
Exercised
|
(32,001 | ) | 6.99 | (21,331 | ) | 13.15 | ||||||||||
Canceled
|
(711,066 | ) | 25.83 | (150,334 | ) | 22.34 | ||||||||||
Outstanding, end of period
|
1,294,066 | $ | 18.74 | 1,874,800 | $ | 21.43 | ||||||||||
Options and SARs exercisable at end of period
|
914,743 | $ | 21.12 | 1,440,211 | $ | 24.53 |
September 30, 2011
|
September 30, 2010
|
|||||||||||||||
Weighted-
|
Weighted-
|
|||||||||||||||
Non-vested
|
Average
|
Non-vested
|
Average
|
|||||||||||||
Restricted
|
Grant-date
|
Restricted
|
Grant-date
|
|||||||||||||
Stock
|
Fair Value
|
Stock
|
Fair Value
|
|||||||||||||
For the Three Months Ended:
|
||||||||||||||||
Outstanding, beginning of period
|
199,060 | $ | 12.25 | 181,986 | $ | 9.66 | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Canceled
|
(2,003 | ) | 18.77 | - | - | |||||||||||
Vested and issued
|
(981 | ) | 18.77 | - | - | |||||||||||
Outstanding, end of period
|
196,076 | $ | 12.15 | 181,986 | $ | 9.66 | ||||||||||
For the Nine Months Ended:
|
||||||||||||||||
Outstanding, beginning of period
|
182,609 | $ | 9.63 | 200,548 | $ | 5.93 | ||||||||||
Granted
|
73,060 | 18.77 | 111,085 | 12.28 | ||||||||||||
Canceled
|
(2,003 | ) | 18.77 | (11,599 | ) | 8.15 | ||||||||||
Vested and issued
|
(57,590 | ) | 12.33 | (118,048 | ) | 5.93 | ||||||||||
Outstanding, end of period
|
196,076 | $ | 12.15 | 181,986 | $ | 9.66 |
Outstanding
|
Exercisable
|
Vested or Expected to Vest
|
|||||||||||||||
Weighted-
|
Weighted-
|
Weighted-
|
|||||||||||||||
Stock
|
Average
|
Stock
|
Average
|
Stock
|
Average
|
||||||||||||
Range of
|
Options
|
Remaining
|
Options
|
Remaining
|
Options
|
Remaining
|
|||||||||||
Exercise
|
and
|
Contractual
|
and
|
Contractual
|
and
|
Contractual
|
|||||||||||
Prices
|
SARs
|
Life
|
SARs
|
Life
|
SARs
|
Life
|
|||||||||||
$ | 5.00 - $ 9.99 | 236,999 |
7.5 years
|
172,004 |
7.5 years
|
227,500 |
7.5 years
|
||||||||||
10.00 - 14.99 | 300,333 |
8.6 years
|
99,005 |
8.6 years
|
272,863 |
8.6 years
|
|||||||||||
15.00 - 19.99 | 163,786 |
7.5 years
|
50,786 |
2.9 years
|
155,876 |
7.4 years
|
|||||||||||
20.00 - 24.99 | 168,789 |
3.5 years
|
168,789 |
3.5 years
|
168,789 |
3.5 years
|
|||||||||||
25.00 - 29.99 | 400,159 |
4.0 years
|
400,159 |
4.0 years
|
400,159 |
4.0 years
|
|||||||||||
30.00 - 34.99 | 24,000 |
6.0 years
|
24,000 |
6.0 years
|
24,000 |
6.0 years
|
|||||||||||
1,294,066 | 914,743 | 1,249,187 |
Outstanding
|
Expected to Vest
|
|||||||||||||||||
Weighted-
|
Weighted-
|
|||||||||||||||||
Weighted-
|
Average
|
Average
|
||||||||||||||||
Average
|
Nonvested
|
Remaining
|
Nonvested
|
Remaining
|
||||||||||||||
Grant-Date
|
Restricted
|
Contractual
|
Restricted
|
Contractual
|
||||||||||||||
Fair Value
|
Stock
|
Life
|
Stock
|
Life
|
||||||||||||||
$ | 5.00 - $ 9.99 | 75,000 |
0.5 years
|
67,500 |
0.5 years
|
|||||||||||||
10.00 - 14.99 | 51,000 |
1.5 years
|
45,900 |
1.5 years
|
||||||||||||||
15.00 - 19.99 | 70,076 |
1.3 years
|
60,577 |
1.4 years
|
||||||||||||||
196,076 | 173,977 |
2011
|
2010
|
|||||||
Risk-free interest rate
|
2.6 | % | 3.3 | % | ||||
Expected years until exercise
|
6 years
|
7 years
|
||||||
Expected stock volatility
|
97.8 | % | 88.3 | % | ||||
Dividend yield
|
1.0 | % | 1.8 | % |
Note 2.
|
Investment Securities
|
September 30, 2011
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$ | 74,100 | $ | - | $ | (11,857 | ) | $ | 62,243 | |||||||
Floating rate asset-backed securities
|
174,881 | 312 | (66 | ) | 175,127 | |||||||||||
Floating rate corporate debt securities
|
52,127 | 89 | (218 | ) | 51,998 | |||||||||||
Fixed rate corporate debt securities
|
33,927 | 6 | (13 | ) | 33,920 | |||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
609,543 | 5,183 | (180 | ) | 614,546 | |||||||||||
Fixed rate GSE guaranteed mortgage-backed securities
|
3,567 | 300 | - | 3,867 | ||||||||||||
Floating rate GSE subordinated debt
|
70,000 | - | (7,251 | ) | 62,749 | |||||||||||
Fixed rate GSE preferred stock
|
79,751 | 3,558 | - | 83,309 | ||||||||||||
Fixed rate senior agency debt
|
162,959 | 15 | (2 | ) | 162,972 | |||||||||||
Fixed rate U.S. Treasuries
|
578,997 | 433 | (6 | ) | 579,424 | |||||||||||
Total available-for-sale
|
1,839,852 | 9,896 | (19,593 | ) | 1,830,155 | |||||||||||
Trading:
|
||||||||||||||||
Floating rate asset-backed securities
|
5,275 | - | (3,512 | ) | 1,763 | |||||||||||
Fixed rate GSE preferred stock
|
83,179 | - | (2,220 | ) | 80,959 | |||||||||||
Total trading
|
88,454 | - | (5,732 | ) | 82,722 | |||||||||||
Total investment securities
|
$ | 1,928,306 | $ | 9,896 | $ | (25,325 | ) | $ | 1,912,877 |
December 31, 2010
|
||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$ | 74,100 | $ | - | $ | (9,765 | ) | $ | 64,335 | |||||||
Floating rate asset-backed securities
|
29,437 | 24 | (3 | ) | 29,458 | |||||||||||
Floating rate corporate debt securities
|
162,891 | 422 | (125 | ) | 163,188 | |||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
573,288 | 4,173 | (681 | ) | 576,780 | |||||||||||
Fixed rate GSE guaranteed mortgage-backed securities
|
4,525 | 296 | - | 4,821 | ||||||||||||
Floating rate GSE subordinated debt
|
70,000 | - | (14,671 | ) | 55,329 | |||||||||||
Fixed rate GSE preferred stock
|
80,001 | 4,827 | - | 84,828 | ||||||||||||
Fixed rate senior agency debt
|
5,500 | - | - | 5,500 | ||||||||||||
Fixed rate U.S. Treasuries
|
692,808 | 232 | (46 | ) | 692,994 | |||||||||||
Total available-for-sale
|
1,692,550 | 9,974 | (25,291 | ) | 1,677,233 | |||||||||||
Trading:
|
||||||||||||||||
Floating rate asset-backed securities
|
5,961 | - | (4,561 | ) | 1,400 | |||||||||||
Fixed rate GSE preferred stock
|
83,813 | 883 | - | 84,696 | ||||||||||||
Total trading
|
89,774 | 883 | (4,561 | ) | 86,096 | |||||||||||
Total investment securities
|
$ | 1,782,324 | $ | 10,857 | $ | (29,852 | ) | $ | 1,763,329 |
September 30, 2011
|
||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||
Unrealized loss position for
|
Unrealized loss position for
|
|||||||||||||||
less than 12 months
|
more than 12 months
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
Fair Value
|
Loss
|
Fair Value
|
Loss
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Floating rate corporate debt securities
|
$ | 24,013 | $ | (218 | ) | $ | - | $ | - | |||||||
Fixed rate corporate debt securities
|
18,616 | (13 | ) | - | - | |||||||||||
Floating rate asset-backed securities
|
57,100 | (66 | ) | - | - | |||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
- | - | 62,243 | (11,857 | ) | |||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
88,524 | (137 | ) | 15,734 | (43 | ) | ||||||||||
Floating rate GSE subordinated debt
|
- | - | 62,749 | (7,251 | ) | |||||||||||
Fixed rate senior agency debt
|
12,998 | (2 | ) | - | - | |||||||||||
Fixed rate U.S. Treasuries
|
50,192 | (6 | ) | - | - | |||||||||||
Total
|
$ | 251,443 | $ | ( 442 | ) | $ | 140,726 | $ | ( 19,151 | ) |
December 31, 2010
|
||||||||||||||||
Available-for-Sale Securities
|
||||||||||||||||
Unrealized loss position for
|
Unrealized loss position for
|
|||||||||||||||
less than 12 months
|
more than 12 months
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
Fair Value
|
Loss
|
Fair Value
|
Loss
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Floating rate corporate debt securities
|
$ | - | $ | - | $ | 99,874 | $ | (125 | ) | |||||||
Floating rate asset-backed securities
|
- | - | 2,779 | (3 | ) | |||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
- | - | 64,335 | (9,765 | ) | |||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
159,294 | (587 | ) | 4,138 | (94 | ) | ||||||||||
Floating rate GSE subordinated debt
|
- | - | 55,329 | (14,671 | ) | |||||||||||
Fixed rate U.S. Treasuries
|
163,026 | (46 | ) | - | - | |||||||||||
Total
|
$ | 322,320 | $ | ( 633 | ) | $ | 226,455 | $ | ( 24,658 | ) |
Investment Securities Available-for-Sale
|
||||||||||||
as of September 30, 2011
|
||||||||||||
Amortized
|
Weighted-
|
|||||||||||
Cost
|
Fair Value
|
Average Yield
|
||||||||||
(dollars in thousands)
|
||||||||||||
Due within one year
|
$ | 785,729 | $ | 786,226 | 0.99 | % | ||||||
Due after one year through five years
|
47,236 | 47,046 | 0.81 | % | ||||||||
Due after five years through ten years
|
413,848 | 416,191 | 1.15 | % | ||||||||
Due after ten years
|
593,039 | 580,692 | 2.66 | % | ||||||||
Total
|
$ | 1,839,852 | $ | 1,830,155 | 1.56 | % |
Note 3.
|
Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
September 30, 2011
|
||||||||||||
Available-
|
||||||||||||
for-Sale
|
Trading
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Farmer Mac I
|
$ | 2,815,467 | $ | - | $ | 2,815,467 | ||||||
Farmer Mac II
|
36,599 | - | 36,599 | |||||||||
Rural Utilities
|
1,447,934 | - | 1,447,934 | |||||||||
Farmer Mac Guaranteed Securities
|
4,300,000 | - | 4,300,000 | |||||||||
USDA Guaranteed Securities
|
1,193,015 | 233,383 | 1,426,398 | |||||||||
Total
|
$ | 5,493,015 | $ | 233,383 | $ | 5,726,398 | ||||||
Amortized cost
|
$ | 5,357,804 | $ | 235,572 | $ | 5,593,376 | ||||||
Unrealized gains
|
135,418 | 1,483 | 136,901 | |||||||||
Unrealized losses
|
(207 | ) | (3,672 | ) | (3,879 | ) | ||||||
Fair value
|
$ | 5,493,015 | $ | 233,383 | $ | 5,726,398 |
December 31, 2010
|
||||||||||||
Available-
|
||||||||||||
for-Sale
|
Trading
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Farmer Mac I
|
$ | 942,809 | $ | - | $ | 942,809 | ||||||
Farmer Mac II
|
37,637 | - | 37,637 | |||||||||
Rural Utilities
|
1,926,818 | - | 1,926,818 | |||||||||
Farmer Mac Guaranteed Securities
|
2,907,264 | - | 2,907,264 | |||||||||
USDA Guaranteed Securities
|
1,005,679 | 311,765 | 1,317,444 | |||||||||
Total
|
$ | 3,912,943 | $ | 311,765 | $ | 4,224,708 | ||||||
Amortized cost
|
$ | 3,880,418 | $ | 315,655 | $ | 4,196,073 | ||||||
Unrealized gains
|
50,583 | 106 | 50,689 | |||||||||
Unrealized losses
|
(18,058 | ) | (3,996 | ) | (22,054 | ) | ||||||
Fair value
|
$ | 3,912,943 | $ | 311,765 | $ | 4,224,708 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(dollars in thousands)
|
||||||||
Fair value of beneficial interests retained in
|
||||||||
Farmer Mac Guaranteed Securities and
|
||||||||
USDA Guaranteed Securities
|
$ | 5,726,398 | $ | 4,224,708 | ||||
Weighted-average remaining life (in years)
|
3.7 | 3.5 | ||||||
Weighted-average prepayment speed (annual rate)
|
3.2 | % | 3.5 | % | ||||
Effect on fair value of a 10% adverse change
|
$ | (1,112 | ) | $ | (18 | ) | ||
Effect on fair value of a 20% adverse change
|
$ | (2,135 | ) | $ | (17 | ) | ||
Weighted-average discount rate
|
2.3 | % | 2.3 | % | ||||
Effect on fair value of a 10% adverse change
|
$ | (36,114 | ) | $ | (20,257 | ) | ||
Effect on fair value of a 20% adverse change
|
$ | (72,098 | ) | $ | (40,315 | ) |
Guaranteed Securities and LTSPCs, and USDA Guaranteed Securities
|
||||||||
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
On-balance sheet:
|
||||||||
Farmer Mac I:
|
||||||||
Loans
|
$ | 1,192,486 | $ | 972,206 | ||||
Loans held in trusts:
|
||||||||
Beneficial interests owned by Farmer Mac
|
236 | 3,697 | ||||||
Beneficial interests owned by third party investors
|
712,690 | 821,411 | ||||||
Farmer Mac Guaranteed Securities - AgVantage
|
2,741,000 | 941,500 | ||||||
Farmer Mac II:
|
||||||||
USDA Guaranteed Securities
|
1,380,836 | 1,297,439 | ||||||
Farmer Mac Guaranteed Securities
|
36,316 | 39,856 | ||||||
Rural Utilities:
|
||||||||
Loans
|
474,220 | 339,963 | ||||||
Loans held in trusts:
|
||||||||
Beneficial interests owned by Farmer Mac
|
386,800 | 400,228 | ||||||
Farmer Mac Guaranteed Securities - AgVantage
|
1,410,800 | 1,887,200 | ||||||
Total on-balance sheet
|
$ | 8,335,384 | $ | 6,703,500 | ||||
Off-balance sheet:
|
||||||||
Farmer Mac I:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
$ | 970,000 | $ | 2,945,000 | ||||
LTSPCs
|
1,811,280 | 1,754,597 | ||||||
Farmer Mac Guaranteed Securities
|
660,673 | 750,217 | ||||||
Farmer Mac II:
|
||||||||
Farmer Mac Guaranteed Securities
|
45,977 | 48,103 | ||||||
Rural Utilities:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
18,079 | 15,292 | ||||||
Total off-balance sheet
|
$ | 3,506,009 | $ | 5,513,209 | ||||
Total
|
$ | 11,841,393 | $ | 12,216,709 |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Unpaid principal balance at acquisition date
|
$ | 2,921 | $ | 1,914 | $ | 21,266 | $ | 5,317 | ||||||||
Contractually required payments receivable
|
2,922 | 1,965 | 21,314 | 5,435 | ||||||||||||
Impairment recognized subsequent to acquisition
|
42 | 376 | 3,812 | 2,116 | ||||||||||||
Recovery/release of allowance for defaulted loans
|
5 | 10 | 19 | 2,934 | ||||||||||||
September 30,
|
December 31,
|
|||||||||||||||
2011
|
2010
|
|||||||||||||||
(in thousands)
|
||||||||||||||||
Outstanding balance
|
$ | 38,641 | $ | 34,473 | ||||||||||||
Carrying amount
|
30,816 | 30,365 |
90-Day
|
Net Credit
|
|||||||||||||||||||
Delinquencies
(1)
|
Losses/(Recoveries)
|
|||||||||||||||||||
As of
|
As of
|
As of
|
For the Nine Months Ended
|
|||||||||||||||||
September 30,
|
December 31,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||
2011
|
2010
|
2010
|
2011
|
2010
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
On-balance sheet assets:
|
||||||||||||||||||||
Farmer Mac I:
|
||||||||||||||||||||
Loans
|
$ | 35,860 | $ | 37,665 | $ | 40,846 | $ | 334 | $ | (275 | ) | |||||||||
Total on-balance sheet
|
$ | 35,860 | $ | 37,665 | $ | 40,846 | $ | 334 | $ | (275 | ) | |||||||||
Off-balance sheet assets:
|
||||||||||||||||||||
Farmer Mac I:
|
||||||||||||||||||||
LTSPCs
|
$ | 8,988 | $ | 32,583 | $ | 23,954 | $ | - | $ | - | ||||||||||
Total off-balance sheet
|
$ | 8,988 | $ | 32,583 | $ | 23,954 | $ | - | $ | - | ||||||||||
Total
|
$ | 44,848 | $ | 70,248 | $ | 64,800 | $ | 334 | $ | (275 | ) |
(1)
|
Includes Farmer Mac I loans held and loans underlying Farmer Mac I Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, restructured after delinquency, and in bankruptcy, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.
|
Note 4.
|
Comprehensive Income
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net (loss)/income
|
$ | (16,766 | ) | $ | 12,263 | $ | 19,261 | $ | 33,942 | |||||||
Available-for-sale securities, net of tax:
|
||||||||||||||||
Net unrealized holding gains
|
49,661 | 15,852 | 70,573 | 44,206 | ||||||||||||
Reclassification adjustment for realized gains
(1)
|
(383 | ) | (15 | ) | (3,133 | ) | (206 | ) | ||||||||
Net change from available-for-sale securities
(2)
|
49,278 | 15,837 | 67,440 | 44,000 | ||||||||||||
Financial derivatives, net of tax:
|
||||||||||||||||
Reclassification for amortization of financial derivatives
transition adjustment
(3)
|
- | 26 | - | 78 | ||||||||||||
Other comprehensive income, net of tax
|
49,278 | 15,863 | 67,440 | 44,078 | ||||||||||||
Comprehensive income
|
32,512 | 28,126 | 86,701 | 78,020 | ||||||||||||
Less: Comprehensive income attributable to non-
controlling interest
|
5,547 | 5,546 | 16,641 | 15,160 | ||||||||||||
Total comprehensive income
|
$ | 26,965 | $ | 22,580 | $ | 70,060 | $ | 62,860 |
(1)
|
Includes the reclassification of deferred gains recognized on certain Farmer Mac II Guaranteed Securities and USDA Guaranteed Securities of $0.3 million and $3.0 million, after tax, for the three and nine months ended September 30, 2011, respectively.
|
(2)
|
Unrealized gains on available for sale securities are shown net of income tax expense of $26.5 million and $8.5 million for the three months ended September 30, 2011 and 2010, respectively, and $36.3 million and $23.7 million for the nine months ended September 30, 2011 and 2010, respectively.
|
(3)
|
Amortization of the financial derivatives transition adjustment is shown net of income tax expense of $14,000 and $42,000 for the three and nine months ended September 30, 2010, respectively.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Available-for-sale securities:
|
||||||||
Beginning balance
|
$ | 18,275 | $ | 3,300 | ||||
Net unrealized gains, net of tax
|
67,440 | 14,975 | ||||||
Ending balance
|
$ | 85,715 | $ | 18,275 | ||||
Financial derivatives:
|
||||||||
Beginning balance
|
$ | - | $ | (46 | ) | |||
Amortization of financial derivatives transition
adjustment, net of tax
|
- | 46 | ||||||
Ending balance
|
$ | - | $ | - | ||||
Accumulated other comprehensive income, net of tax
|
$ | 85,715 | $ | 18,275 |
Note 5.
|
Off-Balance Sheet Guarantees and Long Term Standby Purchase Commitments
|
For the Nine Months Ended
|
||||||||
September 30, 2011
|
September 30, 2010
|
|||||||
(in thousands)
|
||||||||
Proceeds from new securitizations
|
$ | 13,869 | $ | 18,860 | ||||
Guarantee fees received
|
6,042 | 5,610 | ||||||
Purchases of assets from the trusts
|
(7,292 | ) | (3,456 | ) | ||||
Servicing advances
|
(28 | ) | (14 | ) | ||||
Repayments of servicing advances
|
24 | 22 |
Farmer Mac Guaranteed Securities
|
||||||||
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Farmer Mac I:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
$ | 970,000 | $ | 2,945,000 | ||||
Farmer Mac Guaranteed Securities
|
660,673 | 750,217 | ||||||
Farmer Mac II:
|
||||||||
Farmer Mac Guaranteed Securities
|
45,977 | 48,103 | ||||||
Rural Utilities:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
18,079 | 15,292 | ||||||
Total off-balance sheet Farmer Mac Guaranteed Securities
|
$ | 1,694,729 | $ | 3,758,612 |
Note 6.
|
Equity
|
|
·
|
Class A voting common stock, which may be held only by banks, insurance companies and other financial institutions or similar entities that are not institutions of the Farm Credit System. By federal statute, no holder of Class A voting common stock may directly or indirectly be a beneficial owner of more than 33 percent of the outstanding shares of that class of stock;
|
|
·
|
Class B voting common stock, which may be held only by institutions of the Farm Credit System. There are no restrictions on the maximum holdings of Class B voting common stock; and
|
|
·
|
Class C non-voting common stock, which has no ownership restrictions.
|
|
·
|
Minimum capital – Farmer Mac’s minimum capital level is equal to the sum of 2.75 percent of Farmer Mac’s aggregate on-balance sheet assets, as calculated for regulatory purposes, plus 0.75 percent of the aggregate off-balance sheet obligations of Farmer Mac, including Farmer Mac Guaranteed Securities and LTSPCs;
|
|
·
|
Critical capital – Farmer Mac’s critical capital level is equal to 50 percent of the minimum capital requirement at that time; and
|
|
·
|
Risk-based capital – the Farm Credit Administration (“FCA”) has established a risk-based capital stress test for Farmer Mac.
|
Note 7.
|
Fair Value Disclosure
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
|
Level 2
|
Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
|
|
Level 3
|
Prices or valuations that require unobservable inputs that are significant to the fair value measurement.
|
Assets and Liabilities Measured at Fair Value as of September 30, 2011
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
(in thousands)
|
|||||||||||||||
Recurring:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Investment Securities:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$ | - | $ | - | $ | 62,243 | $ | 62,243 | ||||||||
Floating rate asset-backed securities
|
- | 175,127 | - | 175,127 | ||||||||||||
Floating rate corporate debt securities
|
- | 51,998 | - | 51,998 | ||||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
- | 614,546 | - | 614,546 | ||||||||||||
Fixed rate GSE guaranteed mortgage-backed securities
|
- | 3,867 | - | 3,867 | ||||||||||||
Floating rate GSE subordinated debt
|
- | 62,749 | - | 62,749 | ||||||||||||
Fixed rate GSE preferred stock
|
- | 83,309 | - | 83,309 | ||||||||||||
Fixed rate corporate debt
|
- | 33,920 | - | 33,920 | ||||||||||||
Fixed rate U.S. Treasuries
|
579,424 | - | - | 579,424 | ||||||||||||
Fixed rate Senior agency debt
|
- | 162,972 | - | 162,972 | ||||||||||||
Total available-for-sale
|
579,424 | 1,188,488 | 62,243 | 1,830,155 | ||||||||||||
Trading:
|
||||||||||||||||
Floating rate asset-backed securities
|
- | - | 1,763 | 1,763 | ||||||||||||
Fixed rate GSE preferred stock
|
- | 80,959 | - | 80,959 | ||||||||||||
Total trading
|
- | 80,959 | 1,763 | 82,722 | ||||||||||||
Total Investment Securities
|
579,424 | 1,269,447 | 64,006 | 1,912,877 | ||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Farmer Mac I
|
- | - | 2,815,467 | 2,815,467 | ||||||||||||
Farmer Mac II
|
- | - | 36,599 | 36,599 | ||||||||||||
Rural Utilities
|
- | - | 1,447,934 | 1,447,934 | ||||||||||||
Total Farmer Mac Guaranteed Securities
|
- | - | 4,300,000 | 4,300,000 | ||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||
Available-for-sale
|
- | - | 1,193,015 | 1,193,015 | ||||||||||||
Trading
|
- | - | 233,383 | 233,383 | ||||||||||||
Total USDA Guaranteed Securities
|
- | - | 1,426,398 | 1,426,398 | ||||||||||||
Financial derivatives
|
- | 46,254 | - | 46,254 | ||||||||||||
Total Assets at fair value
|
$ | 579,424 | $ | 1,315,701 | $ | 5,790,404 | $ | 7,685,529 | ||||||||
Liabilities:
|
||||||||||||||||
Financial derivatives
|
$ | 10 | $ | 164,636 | $ | 1,987 | $ | 166,633 | ||||||||
Total Liabilities at fair value
|
$ | 10 | $ | 164,636 | $ | 1,987 | $ | 166,633 | ||||||||
Nonrecurring:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Loans held for sale
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Loans held for investment
|
- | - | 11,190 | 11,190 | ||||||||||||
REO
|
- | - | 1,540 | 1,540 | ||||||||||||
Total Nonrecurring Assets at fair value
|
$ | - | $ | - | $ | 12,730 | $ | 12,730 |
Assets and Liabilities Measured at Fair Value as of December 31, 2010
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
(in thousands)
|
|||||||||||||||
Recurring:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Investment Securities:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$ | - | $ | - | $ | 64,335 | $ | 64,335 | ||||||||
Floating rate asset-backed securities
|
- | 29,458 | - | 29,458 | ||||||||||||
Floating rate corporate debt securities
|
- | 163,188 | - | 163,188 | ||||||||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
- | 576,780 | - | 576,780 | ||||||||||||
Fixed rate GSE guaranteed mortgage-backed securities
|
- | 4,821 | - | 4,821 | ||||||||||||
Floating rate GSE subordinated debt
|
- | 55,329 | - | 55,329 | ||||||||||||
Fixed rate GSE preferred stock
|
- | 84,828 | - | 84,828 | ||||||||||||
Fixed rate U.S. Treasuries
|
692,994 | - | - | 692,994 | ||||||||||||
Fixed rate Senior agency debt
|
- | 5,500 | - | 5,500 | ||||||||||||
Total available-for-sale
|
692,994 | 919,904 | 64,335 | 1,677,233 | ||||||||||||
Trading:
|
||||||||||||||||
Floating rate asset-backed securities
|
- | - | 1,400 | 1,400 | ||||||||||||
Fixed rate GSE preferred stock
|
- | 84,696 | - | 84,696 | ||||||||||||
Total trading
|
- | 84,696 | 1,400 | 86,096 | ||||||||||||
Total Investment Securities
|
692,994 | 1,004,600 | 65,735 | 1,763,329 | ||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||
Available-for-sale:
|
||||||||||||||||
Farmer Mac I
|
- | - | 942,809 | 942,809 | ||||||||||||
Farmer Mac II
|
- | - | 37,637 | 37,637 | ||||||||||||
Rural Utilities
|
- | - | 1,926,818 | 1,926,818 | ||||||||||||
Total available-for-sale
|
- | - | 2,907,264 | 2,907,264 | ||||||||||||
Total Farmer Mac Guaranteed Securities
|
- | - | 2,907,264 | 2,907,264 | ||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||
Available-for-sale
|
- | - | 1,005,679 | 1,005,679 | ||||||||||||
Trading
|
- | - | 311,765 | 311,765 | ||||||||||||
Total USDA Guaranteed Securities
|
- | - | 1,317,444 | 1,317,444 | ||||||||||||
Financial derivatives
|
- | 41,492 | - | 41,492 | ||||||||||||
Total Assets at fair value
|
$ | 692,994 | $ | 1,046,092 | $ | 4,290,443 | $ | 6,029,529 | ||||||||
Liabilities:
|
||||||||||||||||
Financial derivatives
|
$ | 6 | $ | 110,291 | $ | 3,390 | $ | 113,687 | ||||||||
Total Liabilities at fair value
|
$ | 6 | $ | 110,291 | $ | 3,390 | $ | 113,687 | ||||||||
Nonrecurring:
|
||||||||||||||||
Assets:
|
||||||||||||||||
Loans held for sale
|
$ | - | $ | - | $ | 331,076 | $ | 331,076 | ||||||||
Loans held for investment
|
- | - | 11,971 | 11,971 | ||||||||||||
REO
|
- | - | 1,925 | 1,925 | ||||||||||||
Total Nonrecurring Assets at fair value
|
$ | - | $ | - | $ | 344,972 | $ | 344,972 |
Realized and
|
Unrealized
|
|||||||||||||||||||||||||||||||||||
Unrealized
|
Gains/(Losses)
|
|||||||||||||||||||||||||||||||||||
Gains/(Losses)
|
included in Other
|
|||||||||||||||||||||||||||||||||||
Beginning
|
included in
|
Comprehensive
|
Transfers
|
Transfers
|
Ending
|
|||||||||||||||||||||||||||||||
Balance
|
Purchases
|
Sales
|
Settlements
|
Income
|
Income
|
In
|
Out
|
Balance
|
||||||||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||
Recurring: | ||||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Investment Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||||||||||
Floating rate auction-rate certificates backed
by Government guaranteed student loans
|
$ | 64,682 | $ | - | $ | - | $ | - | $ | - | $ | (2,439 | ) | $ | - | $ | - | $ | 62,243 | |||||||||||||||||
Trading:
|
||||||||||||||||||||||||||||||||||||
Floating rate asset-backed securities(1)
|
2,209 | - | - | (136 | ) | (310 | ) | - | - | - | 1,763 | |||||||||||||||||||||||||
Total Investment Securities
|
66,891 | - | - | (136 | ) | (310 | ) | (2,439 | ) | - | - | 64,006 | ||||||||||||||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||||||||||
Farmer Mac I
|
1,759,205 | 1,001,500 | - | (2,009 | ) | - | 56,771 | - | - | 2,815,467 | ||||||||||||||||||||||||||
Farmer Mac II
|
36,530 | 1,264 | (1,208 | ) | (990 | ) | - | 1,003 | - | - | 36,599 | |||||||||||||||||||||||||
Rural Utilities
|
1,448,230 | - | - | - | - | (296 | ) | - | - | 1,447,934 | ||||||||||||||||||||||||||
Total Farmer Mac Guaranteed Securities
|
3,243,965 | 1,002,764 | (1,208 | ) | (2,999 | ) | - | 57,478 | - | - | 4,300,000 | |||||||||||||||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale
|
1,120,397 | 85,894 | - | (33,179 | ) | - | 19,903 | - | - | 1,193,015 | ||||||||||||||||||||||||||
Trading(2)
|
249,074 | - | - | (17,124 | ) | 1,433 | - | - | - | 233,383 | ||||||||||||||||||||||||||
Total USDA Guaranteed Securities
|
1,369,471 | 85,894 | - | (50,303 | ) | 1,433 | 19,903 | - | - | 1,426,398 | ||||||||||||||||||||||||||
Total Assets at fair value
|
$ | 4,680,327 | $ | 1,088,658 | $ | (1,208 | ) | $ | (53,438 | ) | $ | 1,123 | $ | 74,942 | $ | - | $ | - | $ | 5,790,404 | ||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||
Financial derivatives(3)
|
$ | (1,755 | ) | $ | - | $ | - | $ | - | $ | (232 | ) | $ | - | $ | - | $ | - | $ | (1,987 | ) | |||||||||||||||
Total Liabilities at fair value
|
$ | (1,755 | ) | $ | - | $ | - | $ | - | $ | (232 | ) | $ | - | $ | - | $ | - | $ | (1,987 | ) | |||||||||||||||
Nonrecurring:
|
||||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Loans held for sale
|
$ | 441,890 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (441,890 | ) | $ | - | |||||||||||||||||
Loans held for investment
|
12,246 | - | - | - | (113 | ) | - | 179 | (1,122 | ) | 11,190 | |||||||||||||||||||||||||
REO
|
705 | - | (82 | ) | - | (165 | ) | - | 1,082 | - | 1,540 | |||||||||||||||||||||||||
Total Nonrecurring Assets at fair value
|
$ | 454,841 | $ | - | $ | (82 | ) | $ | - | $ | (278 | ) | $ | - | $ | 1,261 | $ | (443,012 | ) | $ | 12,730 |
(1)
|
Unrealized losses are attributable to assets still held as of September 30, 2011 and are recorded in (losses)/gains on trading assets.
|
(2)
|
Includes unrealized gains of $0.6 million attributable to assets still held as of September 30, 2011 that are recorded in (losses)/gains on trading assets.
|
(3)
|
Unrealized losses are attributable to liabilities still held as of September 30, 2011 and are recorded in losses on financial derivatives.
|
Beginning
Balance
|
Purchases,
Sales,
Issuances and
Settlements,
net
|
Realized and
Unrealized
Gains/(Losses)
included in
Income
|
Unrealized
Gains/(Losses)
included in Other
Comprehensive
Income
|
Net Transfers In
and/or Out
|
Ending
Balance
|
|||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
Recurring: | ||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||
Floating rate auction-rate certificates backed
by Government guaranteed student loans
|
$ | 63,344 | $ | - | $ | - | $ | 2,342 | $ | - | $ | 65,686 | ||||||||||||
Floating rate GSE subordinated debt
|
- | - | - | - | - | - | ||||||||||||||||||
Fixed rate GSE preferred stock
|
- | - | - | - | - | - | ||||||||||||||||||
Total available-for-sale investment securities
|
63,344 | - | - | 2,342 | - | 65,686 | ||||||||||||||||||
Trading:
|
||||||||||||||||||||||||
Floating rate asset-backed securities(1)
|
1,412 | (185 | ) | 142 | - | - | 1,369 | |||||||||||||||||
Fixed rate GSE preferred stock
|
- | - | - | - | - | - | ||||||||||||||||||
Total trading investment securities
|
1,412 | (185 | ) | 142 | - | - | 1,369 | |||||||||||||||||
Total investment securities
|
64,756 | (185 | ) | 142 | 2,342 | - | 67,055 | |||||||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||
Farmer Mac I
|
47,821 | 547,942 | - | 13,031 | - | 608,794 | ||||||||||||||||||
Farmer Mac II
|
40,436 | 1,214 | - | 330 | - | 41,980 | ||||||||||||||||||
Rural Utilities
|
1,629,883 | 150,000 | - | 3,810 | - | 1,783,693 | ||||||||||||||||||
Total available-for-sale
|
1,718,140 | 699,156 | - | 17,171 | - | 2,434,467 | ||||||||||||||||||
Trading:
|
||||||||||||||||||||||||
Farmer Mac II
|
- | - | - | - | - | - | ||||||||||||||||||
Rural Utilities
|
- | - | - | - | - | - | ||||||||||||||||||
Total trading
|
- | - | - | - | - | - | ||||||||||||||||||
Total Farmer Mac Guaranteed Securities
|
1,718,140 | 699,156 | - | 17,171 | - | 2,434,467 | ||||||||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||||||||||
Available-for-sale
|
880,424 | 88,117 | - | 2,360 | - | 970,901 | ||||||||||||||||||
Trading(2)
|
386,496 | (29,890 | ) | (2,067 | ) | - | - | 354,539 | ||||||||||||||||
Total USDA Guaranteed Securities
|
1,266,920 | 58,227 | (2,067 | ) | 2,360 | - | 1,325,440 | |||||||||||||||||
Total Assets at fair value
|
$ | 3,049,816 | $ | 757,198 | $ | (1,925 | ) | $ | 21,873 | $ | - | $ | 3,826,962 | |||||||||||
Liabilities:
|
||||||||||||||||||||||||
Financial derivatives(3)
|
$ | (3,678 | ) | $ | - | $ | 57 | $ | - | $ | - | $ | (3,621 | ) | ||||||||||
Total Liabilities at fair value
|
$ | (3,678 | ) | $ | - | $ | 57 | $ | - | $ | - | $ | (3,621 | ) | ||||||||||
Nonrecurring:
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Loans held for sale, at lower of cost or fair value
|
$ | 163,065 | $ | - | $ | (906 | ) | $ | - | $ | 33,533 | $ | 195,692 | |||||||||||
Loans held for investment, at fair value
|
4,256 | - | (374 | ) | - | (406 | ) | 3,476 | ||||||||||||||||
REO
|
- | - | (1,483 | ) | - | 5,202 | 3,719 | |||||||||||||||||
Total nonrecurring Assets at fair value
|
$ | 167,321 | $ | - | $ | (2,763 | ) | $ | - | $ | 38,329 | $ | 202,887 |
(1)
|
Unrealized gains are attributable to assets still held as of September 30, 2010 and are recorded in (losses)/gains on trading assets.
|
(2)
|
Includes unrealized losses of $3.6 million attributable to assets still held as of September 30, 2010 that are recorded in (losses)/gains on trading assets.
|
(3)
|
Unrealized gains are attributable to liabilities still held as of September 30, 2010 and are recorded in losses on financial derivatives.
|
Realized and
|
Unrealized
|
|||||||||||||||||||||||||||||||||||
Unrealized
|
Gains/(Losses)
|
|||||||||||||||||||||||||||||||||||
Gains/(Losses)
|
included in Other
|
|||||||||||||||||||||||||||||||||||
Beginning
|
included in
|
Comprehensive
|
Transfers
|
Transfers
|
Ending
|
|||||||||||||||||||||||||||||||
Balance
|
Purchases
|
Sales
|
Settlements
|
Income
|
Income
|
In
|
Out
|
Balance
|
||||||||||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||||||||||||||
Recurring: | ||||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Investment Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||||||||||
Floating rate auction-rate certificates backed
by Government guaranteed student loans
|
$ | 64,335 | $ | - | $ | - | $ | - | $ | - | $ | (2,092 | ) | $ | - | $ | - | $ | 62,243 | |||||||||||||||||
Trading:
|
||||||||||||||||||||||||||||||||||||
Floating rate asset-backed securities(1)
|
1,400 | - | - | (686 | ) | 1,049 | - | - | - | 1,763 | ||||||||||||||||||||||||||
Total Investment Securities
|
65,735 | - | - | (686 | ) | 1,049 | (2,092 | ) | - | - | 64,006 | |||||||||||||||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||||||||||||||
Farmer Mac I
|
942,809 | 1,801,500 | - | (2,023 | ) | - | 73,181 | - | - | 2,815,467 | ||||||||||||||||||||||||||
Farmer Mac II
|
37,637 | 3,268 | (3,213 | ) | (3,484 | ) | - | 2,391 | - | - | 36,599 | |||||||||||||||||||||||||
Rural Utilities
|
1,926,818 | - | - | (476,401 | ) | - | (2,483 | ) | - | - | 1,447,934 | |||||||||||||||||||||||||
Total Farmer Mac Guaranteed Securities
|
2,907,264 | 1,804,768 | (3,213 | ) | (481,908 | ) | - | 73,089 | - | - | 4,300,000 | |||||||||||||||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||||||||||||||||||||||
Available-for-sale
|
1,005,679 | 300,705 | - | (142,965 | ) | - | 29,596 | - | - | 1,193,015 | ||||||||||||||||||||||||||
Trading(2)
|
311,765 | - | - | (80,082 | ) | 1,700 | - | - | - | 233,383 | ||||||||||||||||||||||||||
Total USDA Guaranteed Securities
|
1,317,444 | 300,705 | - | (223,047 | ) | 1,700 | 29,596 | - | - | 1,426,398 | ||||||||||||||||||||||||||
Total Assets at fair value
|
$ | 4,290,443 | $ | 2,105,473 | $ | (3,213 | ) | $ | (705,641 | ) | $ | 2,749 | $ | 100,593 | $ | - | $ | - | $ | 5,790,404 | ||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||||
Financial derivatives(3)
|
$ | (3,390 | ) | $ | - | $ | - | $ | - | $ | 1,403 | $ | - | $ | - | $ | - | $ | (1,987 | ) | ||||||||||||||||
Total Liabilities at fair value
|
$ | (3,390 | ) | $ | - | $ | - | $ | - | $ | 1,403 | $ | - | $ | - | $ | - | $ | (1,987 | ) | ||||||||||||||||
Nonrecurring:
|
||||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||||
Loans held for sale
|
$ | 331,076 | $ | - | $ | - | $ | (4,617 | ) | $ | (964 | ) | $ | - | $ | 116,395 | $ | (441,890 | ) | $ | - | |||||||||||||||
Loans held for investment
|
11,971 | - | - | - | (308 | ) | - | 802 | (1,275 | ) | 11,190 | |||||||||||||||||||||||||
REO
|
1,925 | - | (1,088 | ) | - | (586 | ) | - | 1,289 | - | 1,540 | |||||||||||||||||||||||||
Total Nonrecurring Assets at fair value
|
$ | 344,972 | $ | - | $ | (1,088 | ) | $ | (4,617 | ) | $ | (1,858 | ) | $ | - | $ | 118,486 | $ | (443,165 | ) | $ | 12,730 |
(1)
|
Unrealized gains are attributable to assets still held as of September 30, 2011 and are recorded in (losses)/gains on trading assets.
|
(2)
|
Includes unrealized losses of $2.0 million attributable to assets still held as of September 30, 2011 that are recorded in (losses)/gains on trading assets.
|
(3)
|
Unrealized gains are attributable to liabilities still held as of September 30, 2011 and are recorded in losses on financial derivatives.
|
Beginning
Balance
|
Purchases,
Sales,
Issuances and
Settlements,
net
|
Realized and
Unrealized
Gains/(Losses)
included in
Income
|
Unrealized
Gains/(Losses)
included in Other
Comprehensive
Income
|
Net Transfers In
and/or Out
|
Ending
Balance
|
|||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
Recurring: | ||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Investment securities:
|
||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||
Floating rate auction-rate certificates backed
by Government guaranteed student loans
|
$ | 72,884 | $ | - | $ | - | $ | (7,198 | ) | $ | - | $ | 65,686 | |||||||||||
Floating rate GSE subordinated debt
|
47,562 | - | - | - | (47,562 | ) | - | |||||||||||||||||
Fixed rate GSE preferred stock
|
89,211 | - | - | - | (89,211 | ) | - | |||||||||||||||||
Total available-for-sale investment securities
|
209,657 | - | - | (7,198 | ) | (136,773 | ) | 65,686 | ||||||||||||||||
Trading:
|
||||||||||||||||||||||||
Floating rate asset-backed securities(1)
|
1,824 | (587 | ) | 132 | - | - | 1,369 | |||||||||||||||||
Fixed rate GSE preferred stock
|
88,148 | - | - | (88,148 | ) | - | ||||||||||||||||||
Total trading investment securities
|
89,972 | (587 | ) | 132 | - | (88,148 | ) | 1,369 | ||||||||||||||||
Total investment securities
|
299,629 | (587 | ) | 132 | (7,198 | ) | (224,921 | ) | 67,055 | |||||||||||||||
Farmer Mac Guaranteed Securities:
|
||||||||||||||||||||||||
Available-for-sale:
|
||||||||||||||||||||||||
Farmer Mac I
|
56,864 | 542,677 | - | 14,638 | (5,385 | ) | 608,794 | |||||||||||||||||
Farmer Mac II
|
764,792 | 1,411 | - | (1,039 | ) | (723,184 | ) | 41,980 | ||||||||||||||||
Rural Utilities
|
1,703,211 | 62,201 | - | 18,281 | - | 1,783,693 | ||||||||||||||||||
Total available-for-sale
|
2,524,867 | 606,289 | - | 31,880 | (728,569 | ) | 2,434,467 | |||||||||||||||||
Trading:
|
||||||||||||||||||||||||
Farmer Mac II
|
422,681 | - | - | (422,681 | ) | - | ||||||||||||||||||
Rural Utilities
|
451,448 | - | - | - | (451,448 | ) | - | |||||||||||||||||
Total trading
|
874,129 | - | - | - | (874,129 | ) | - | |||||||||||||||||
Total Farmer Mac Guaranteed Securities
|
3,398,996 | 606,289 | - | 31,880 | (1,602,698 | ) | 2,434,467 | |||||||||||||||||
USDA Guaranteed Securities:
|
||||||||||||||||||||||||
Available-for-sale
|
- | 225,696 | - | 22,021 | 723,184 | 970,901 | ||||||||||||||||||
Trading(2)
|
- | (76,679 | ) | 8,537 | - | 422,681 | 354,539 | |||||||||||||||||
Total USDA Guaranteed Securities
|
- | 149,017 | 8,537 | 22,021 | 1,145,865 | 1,325,440 | ||||||||||||||||||
Total Assets at fair value
|
$ | 3,698,625 | $ | 754,719 | $ | 8,669 | $ | 46,703 | $ | (681,754 | ) | $ | 3,826,962 | |||||||||||
Liabilities:
|
||||||||||||||||||||||||
Financial derivatives(3)
|
$ | (3,653 | ) | $ | - | $ | 32 | $ | - | $ | - | $ | (3,621 | ) | ||||||||||
Total Liabilities at fair value
|
$ | (3,653 | ) | $ | - | $ | 32 | $ | - | $ | - | $ | (3,621 | ) | ||||||||||
Nonrecurring:
|
||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Loans held for sale, at lower of cost or fair value
|
$ | 28,505 | $ | - | $ | (3,090 | ) | $ | - | $ | 170,277 | $ | 195,692 | |||||||||||
Loans held for investment, at fair value
|
- | - | (1,042 | ) | - | 4,518 | 3,476 | |||||||||||||||||
REO | - | (1,483 | ) | 5,202 | 3,719 | |||||||||||||||||||
Total Nonrecurring Assets at fair value
|
$ | 28,505 | $ | - | $ | (5,615 | ) | $ | - | $ | 179,997 | $ | 202,887 |
(1)
|
Unrealized gains are attributable to assets still held as of September 30, 2010 and are recorded in (losses)/gains on trading assets.
|
(2)
|
Includes unrealized gains of $4.0 million attributable to assets still held as of September 30, 2010 that are recorded in (losses)/gains on trading assets.
|
(3)
|
Unrealized gains are attributable to liabilities still held as of September 30, 2010 and are recorded in losses on financial derivatives.
|
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Fair Value
|
Carrying
Amount
|
Fair Value
|
Carrying
Amount
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 825,014 | $ | 825,014 | $ | 729,920 | $ | 729,920 | ||||||||
Investment securities
|
1,912,877 | 1,912,877 | 1,763,329 | 1,763,329 | ||||||||||||
Farmer Mac Guaranteed Securities
|
4,300,000 | 4,300,000 | 2,907,264 | 2,907,264 | ||||||||||||
USDA Guaranteed Securities
|
1,426,398 | 1,426,398 | 1,317,444 | 1,317,444 | ||||||||||||
Loans
|
2,890,590 | 2,796,532 | 2,642,399 | 2,558,599 | ||||||||||||
Financial derivatives
|
46,254 | 46,254 | 41,492 | 41,492 | ||||||||||||
Interest receivable
|
79,579 | 79,579 | 90,295 | 90,295 | ||||||||||||
Guarantee and commitment fees receivable:
|
||||||||||||||||
LTSPCs
|
22,018 | 14,980 | 14,191 | 13,666 | ||||||||||||
Farmer Mac Guaranteed Securities
|
17,922 | 15,267 | 19,058 | 21,086 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Notes payable:
|
||||||||||||||||
Due within one year
|
5,835,888 | 5,831,259 | 4,510,758 | 4,509,419 | ||||||||||||
Due after one year
|
4,255,812 | 4,060,382 | 3,530,656 | 3,430,656 | ||||||||||||
Debt securities of consolidated trusts held by
third parties
|
774,518 | 713,546 | 883,669 | 827,411 | ||||||||||||
Financial derivatives
|
166,633 | 166,633 | 113,687 | 113,687 | ||||||||||||
Accrued interest payable
|
48,998 | 48,998 | 57,131 | 57,131 | ||||||||||||
Guarantee and commitment obligations:
|
||||||||||||||||
LTSPCs
|
21,123 | 14,085 | 13,152 | 12,627 | ||||||||||||
Farmer Mac Guaranteed Securities
|
15,473 | 12,818 | 15,653 | 17,681 |
Note 8.
|
Business Segment Reporting
|
Reconciling
|
GAAP
|
|||||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
Corporate
|
Adjustments
|
Amounts
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest income (1)
|
$ | 38,949 | $ | 14,370 | $ | 13,135 | $ | 6,880 | $ | (2,213 | ) | $ | 71,121 | |||||||||||
Interest income related to consolidated trusts owned by third parties reclassified to guarantee fee income
|
(782 | ) | - | - | - | 782 | - | |||||||||||||||||
Interest expense (2)
|
(24,625 | ) | (11,665 | ) | (10,089 | ) | (3,408 | ) | 10,375 | (39,412 | ) | |||||||||||||
Net effective spread
|
13,542 | 2,705 | 3,046 | 3,472 | 8,944 | 31,709 | ||||||||||||||||||
Guarantee and commitment fees
|
5,562 | 51 | 1,317 | - | (782 | ) | 6,148 | |||||||||||||||||
Other income/(expense) (3)
|
236 | 26 | - | (946 | ) | (60,869 | ) | (61,553 | ) | |||||||||||||||
Non-interest income/(loss)
|
5,798 | 77 | 1,317 | (946 | ) | (61,651 | ) | (55,405 | ) | |||||||||||||||
Release of loan losses
|
349 | - | - | - | - | 349 | ||||||||||||||||||
Release of losses
|
452 | - | - | - | - | 452 | ||||||||||||||||||
Other non-interest expense
|
(3,891 | ) | (710 | ) | (1,319 | ) | (2,082 | ) | - | (8,002 | ) | |||||||||||||
Non-interest expense (4)
|
(3,439 | ) | (710 | ) | (1,319 | ) | (2,082 | ) | - | (7,550 | ) | |||||||||||||
Core earnings before income taxes
|
16,250 | 2,072 | 3,044 | 444 | (52,707 | ) (5) | (30,897 | ) | ||||||||||||||||
Income tax (expense)/benefit
|
(5,687 | ) | (725 | ) | (1,065 | ) | 3,161 | 18,447 | 14,131 | |||||||||||||||
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
|
10,563 | 1,347 | 1,979 | 3,605 | (34,260 | ) (5) | (16,766 | ) | ||||||||||||||||
Preferred stock dividends
|
- | - | - | (719 | ) | - | (719 | ) | ||||||||||||||||
Non-controlling interest
|
- | - | - | (5,547 | ) | - | (5,547 | ) | ||||||||||||||||
Segment core earnings
|
$ | 10,563 | $ | 1,347 | $ | 1,979 | $ | (2,661 | ) | $ | (34,260 | ) (5) | $ | (23,032 | ) | |||||||||
Total assets at carrying value
|
$ | 4,790,409 | $ | 1,483,750 | $ | 2,356,590 | $ | 2,799,758 | $ | - | $ | 11,430,507 | ||||||||||||
Total principal balance of on- and off-balance sheet program assets
|
8,088,365 | 1,463,129 | 2,289,899 | - | - | 11,841,393 |
(1)
|
Includes reconciling adjustments for yield maintenance income, discount amortization on certain prepaid loans and amortization of premiums on assets
consolidated at fair value to reflect core earnings amounts.
|
(2)
|
Based on effective funding cost determined for each operating segment, including expenses related to interest rate swaps, which are included in
losses on financial derivatives on the GAAP financial statements.
|
(3)
|
Includes reconciling adjustments for the reclassification of yield maintenance income, discount amortization on certain prepaid loans, expenses related to
interest rate swaps and fair value adjustments on loans held for sale, financial derivatives and trading assets. Also includes a reconciling adjustment
related to the recognition of deferred gains over the estimated lives of certain Farmer Mac II Guaranteed Securities and USDA Guaranteed Securities.
|
(4)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
|
(5)
|
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling
interest; and segment core earnings to corresponding GAAP measures: income before income taxes, net income and net income available to
common stockholders, respectively.
|
Reconciling
|
GAAP
|
|||||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
Corporate
|
Adjustments
|
Amounts
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest income (1)
|
$ | 24,748 | $ | 14,430 | $ | 14,074 | $ | 6,430 | $ | (1,107 | ) | $ | 58,575 | |||||||||||
Interest income related to consolidated
trusts owned by third parties reclassified to guarantee fee income
|
(952 | ) | - | - | - | 952 | - | |||||||||||||||||
Interest expense (2)
|
(16,130 | ) | (11,773 | ) | (10,959 | ) | (3,625 | ) | 8,961 | (33,526 | ) | |||||||||||||
Net effective spread
|
7,666 | 2,657 | 3,115 | 2,805 | 8,806 | 25,049 | ||||||||||||||||||
Guarantee and commitment fees
|
5,492 | 52 | 1,385 | - | (952 | ) | 5,977 | |||||||||||||||||
Other income/(expense) (3)
|
1,548 | 295 | 1 | (385 | ) | (10,787 | ) | (9,328 | ) | |||||||||||||||
Non-interest income/(loss)
|
7,040 | 347 | 1,386 | (385 | ) | (11,739 | ) | (3,351 | ) | |||||||||||||||
Provision for loan losses
|
(412 | ) | - | - | - | - | (412 | ) | ||||||||||||||||
Provision for losses
|
(105 | ) | - | - | - | - | (105 | ) | ||||||||||||||||
Other non-interest expense
|
(4,632 | ) | (579 | ) | (1,170 | ) | (1,652 | ) | - | (8,033 | ) | |||||||||||||
Non-interest expense (4)
|
(4,737 | ) | (579 | ) | (1,170 | ) | (1,652 | ) | - | (8,138 | ) | |||||||||||||
Core earnings before income taxes
|
9,557 | 2,425 | 3,331 | 768 | (2,933 | ) (5) | 13,148 | |||||||||||||||||
Income tax (expense)/benefit
|
(3,345 | ) | (849 | ) | (1,166 | ) | 3,448 | 1,027 | (885 | ) | ||||||||||||||
Core earnings before preferred stock dividends, attribution of income to non-controlling interest, and loss on retirement of preferred stock
|
6,212 | 1,576 | 2,165 | 4,216 | (1,906 | ) (5) | 12,263 | |||||||||||||||||
Preferred stock dividends
|
- | - | - | (720 | ) | - | (720 | ) | ||||||||||||||||
Non-controlling interest
|
- | - | - | (5,546 | ) | - | (5,546 | ) | ||||||||||||||||
Segment core earnings
|
$ | 6,212 | $ | 1,576 | $ | 2,165 | $ | (2,050 | ) | $ | (1,906 | ) (5) | $ | 5,997 | ||||||||||
Total assets at carrying value
|
$ | 2,393,213 | $ | 1,388,054 | $ | 2,431,811 | $ | 2,009,664 | $ | - | $ | 8,222,742 | ||||||||||||
Total principal balance of on- and
off-balance sheet program assets
|
7,761,847 | 1,365,993 | 2,353,453 | - | - | 11,481,293 |
(1)
|
Includes reconciling adjustments for yield maintenance income, discount amortization on certain prepaid loans and amortization of premiums on assets
consolidated at fair value to reflect core earnings amounts.
|
(2)
|
Based on effective funding cost determined for each operating segment, including expenses related to interest rate swaps, which are included in
losses on financial derivatives on the GAAP financial statements.
|
(3)
|
Includes reconciling adjustments for the reclassification of yield maintenance income, discount amortization on certain prepaid loans, expenses related to
interest rate swaps and fair value adjustments on loans held for sale, financial derivatives and trading assets.
|
(4)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
|
(5)
|
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends, attribution of income to non-controlling
interest, and loss on retirement of preferred stock; and segment core earnings to corresponding GAAP measures: income before income taxes, net income,
and net income available to common stockholders, respectively.
|
Reconciling
|
GAAP
|
|||||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
Corporate
|
Adjustments
|
Amounts
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest income (1)
|
$ | 105,583 | $ | 42,080 | $ | 39,928 | $ | 21,100 | $ | (6,646 | ) | $ | 202,045 | |||||||||||
Interest income related to consolidated trusts owned by third parties reclassified to guarantee fee income
|
(2,495 | ) | - | - | - | 2,495 | - | |||||||||||||||||
Interest expense (2)
|
(67,301 | ) | (33,984 | ) | (30,793 | ) | (10,722 | ) | 28,695 | (114,105 | ) | |||||||||||||
Net effective spread
|
35,787 | 8,096 | 9,135 | 10,378 | 24,544 | 87,940 | ||||||||||||||||||
Guarantee and commitment fees
|
17,151 | 154 | 4,045 | - | (2,495 | ) | 18,855 | |||||||||||||||||
Other income/(expense) (3)
|
2,459 | 131 | - | (1,686 | ) | (68,002 | ) | (67,098 | ) | |||||||||||||||
Non-interest income/(loss)
|
19,610 | 285 | 4,045 | (1,686 | ) | (70,497 | ) | (48,243 | ) | |||||||||||||||
Provision for loan losses
|
(1,092 | ) | - | - | - | - | (1,092 | ) | ||||||||||||||||
Release of losses
|
3,321 | - | - | - | - | 3,321 | ||||||||||||||||||
Other non-interest expense
|
(12,651 | ) | (2,085 | ) | (3,698 | ) | (6,306 | ) | - | (24,740 | ) | |||||||||||||
Non-interest expense (4)
|
(9,330 | ) | (2,085 | ) | (3,698 | ) | (6,306 | ) | - | (21,419 | ) | |||||||||||||
Core earnings before income taxes
|
44,975 | 6,296 | 9,482 | 2,386 | (45,953 | ) (5) | 17,186 | |||||||||||||||||
Income tax (expense)/benefit
|
(15,741 | ) | (2,203 | ) | (3,319 | ) | 7,255 | 16,083 | 2,075 | |||||||||||||||
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
|
29,234 | 4,093 | 6,163 | 9,641 | (29,870 | ) (5) | 19,261 | |||||||||||||||||
Preferred stock dividends
|
- | - | - | (2,159 | ) | - | (2,159 | ) | ||||||||||||||||
Non-controlling interest
|
- | - | - | (16,641 | ) | - | (16,641 | ) | ||||||||||||||||
Segment core earnings
|
$ | 29,234 | $ | 4,093 | $ | 6,163 | $ | (9,159 | ) | $ | (29,870 | ) (5) | $ | 461 | ||||||||||
Total assets at carrying value
|
$ | 4,790,409 | $ | 1,483,750 | $ | 2,356,590 | $ | 2,799,758 | $ | - | $ | 11,430,507 | ||||||||||||
Total principal balance of on- and
off-balance sheet program assets
|
8,088,365 | 1,463,129 | 2,289,899 | - | - | 11,841,393 |
(1)
|
Includes reconciling adjustments for yield maintenance income, discount amortization on certain prepaid loans and amortization of premiums on assets
consolidated at fair value to reflect core earnings amounts.
|
(2)
|
Based on effective funding cost determined for each operating segment, including expenses related to interest rate swaps, which are included in
losses on financial derivatives on the GAAP financial statements.
|
(3)
|
Includes reconciling adjustments for the reclassification of yield maintenance income, discount amortization on certain prepaid loans, expenses related to
interest rate swaps and fair value adjustments on loans held for sale, financial derivatives and trading assets. Also includes a reconciling adjustment
related to the recognition of deferred gains over the estimated lives of certain Farmer Mac II Guaranteed Securities and USDA Guaranteed Securities.
|
(4)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
|
(5)
|
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling
interest; and segment core earnings to corresponding GAAP measures: income before income taxes, net income and net income available to
common stockholders, respectively.
|
Reconciling
|
GAAP
|
|||||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
Corporate
|
Adjustments
|
Amounts
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Interest income (1)
|
$ | 80,512 | $ | 40,863 | $ | 42,011 | $ | 19,303 | $ | (6,055 | ) | $ | 176,634 | |||||||||||
Interest income related to consolidated
trusts owned by third parties reclassified to guarantee fee income
|
(3,701 | ) | - | - | - | 3,701 | - | |||||||||||||||||
Interest expense (2)
|
(54,461 | ) | (33,495 | ) | (33,557 | ) | (10,876 | ) | 26,029 | (106,360 | ) | |||||||||||||
Net effective spread
|
22,350 | 7,368 | 8,454 | 8,427 | 23,675 | 70,274 | ||||||||||||||||||
Guarantee and commitment fees
|
16,527 | 403 | 4,377 | - | (3,701 | ) | 17,606 | |||||||||||||||||
Other income/(expense) (3)
|
2,823 | 298 | 1 | (1,599 | ) | (24,974 | ) | (23,451 | ) | |||||||||||||||
Non-interest income/(loss)
|
19,350 | 701 | 4,378 | (1,599 | ) | (28,675 | ) | (5,845 | ) | |||||||||||||||
Provision for loan losses
|
(1,392 | ) | - | - | - | - | (1,392 | ) | ||||||||||||||||
Provision for losses
|
(1,680 | ) | - | - | - | - | (1,680 | ) | ||||||||||||||||
Other non-interest expense
|
(11,267 | ) | (2,159 | ) | (3,322 | ) | (4,690 | ) | - | (21,438 | ) | |||||||||||||
Non-interest expense (4)
|
(12,947 | ) | (2,159 | ) | (3,322 | ) | (4,690 | ) | - | (23,118 | ) | |||||||||||||
Core earnings before income taxes
|
27,361 | 5,910 | 9,510 | 2,138 | (5,000 | ) (5) | 39,919 | |||||||||||||||||
Income tax (expense)/benefit
|
(9,577 | ) | (2,068 | ) | (3,329 | ) | 7,247 | 1,750 | (5,977 | ) | ||||||||||||||
Core earnings before preferred stock
dividends, attribution of income to non-controlling interest, and loss on retirement of preferred stock
|
17,784 | 3,842 | 6,181 | 9,385 | (3,250 | ) (5) | 33,942 | |||||||||||||||||
Preferred stock dividends
|
- | - | - | (3,410 | ) | (5,784 | ) | (9,194 | ) | |||||||||||||||
Non-controlling interest
|
- | - | - | (15,160 | ) | - | (15,160 | ) | ||||||||||||||||
Segment core earnings
|
$ | 17,784 | $ | 3,842 | $ | 6,181 | $ | (9,185 | ) | $ | (9,034 | ) (5) | $ | 9,588 | ||||||||||
Total assets at carrying value
|
$ | 2,393,213 | $ | 1,388,054 | $ | 2,431,811 | $ | 2,009,664 | $ | - | $ | 8,222,742 | ||||||||||||
Total principal balance of on- and
off-balance sheet program assets
|
7,761,847 | 1,365,993 | 2,353,453 | - | - | 11,481,293 |
(1)
|
Includes reconciling adjustments for yield maintenance income, discount amortization on certain prepaid loans and amortization of premiums on assets
consolidated at fair value to reflect core earnings amounts.
|
(2)
|
Based on effective funding cost determined for each operating segment, including expenses related to interest rate swaps, which are included in
losses on financial derivatives on the GAAP financial statements.
|
(3)
|
Includes reconciling adjustments for the reclassification of yield maintenance income, discount amortization on certain prepaid loans, expenses related to interest rate swaps and fair value adjustments on loans held for sale, financial derivatives and trading assets.
|
(4)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
|
(5)
|
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends, attribution of income to non-controlling interest, and loss on retirement of preferred stock; and segment core earnings to corresponding GAAP measures: income before income taxes, net income, and net income available to common stockholders, respectively.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
·
|
prospects for earnings;
|
|
·
|
prospects for growth in loan purchase, guarantee, securitization, and LTSPC volume;
|
|
·
|
trends in net interest income;
|
|
·
|
trends in portfolio credit quality, delinquencies, and provisions for losses;
|
|
·
|
trends in expenses;
|
|
·
|
trends in investment securities;
|
|
·
|
prospects for asset impairments and allowance for losses;
|
|
·
|
changes in capital position; and
|
|
·
|
other business and financial matters.
|
|
·
|
the availability to Farmer Mac and Farmer Mac II LLC of debt financing and, if available, the reasonableness of rates and terms;
|
|
·
|
legislative or regulatory developments that could affect Farmer Mac, including those related to the Dodd-Frank Act;
|
|
·
|
fluctuations in the fair value of assets held by Farmer Mac and Farmer Mac II LLC;
|
|
·
|
the rate and direction of development of the secondary market for agricultural mortgage and rural utilities loans, including lender interest in Farmer Mac credit products and the Farmer Mac secondary market;
|
|
·
|
the general rate of growth in agricultural mortgage and rural utilities indebtedness;
|
|
·
|
the impact of economic conditions and real estate values on agricultural mortgage lending;
|
|
·
|
developments in the financial markets, including possible investor, analyst and rating agency reactions to events involving GSEs, including Farmer Mac; and
|
|
·
|
financial market volatility, including the future level and direction of interest rates, commodity prices, and export demand for U.S. agricultural products.
|
Reconciliation of GAAP Net (Loss)/Income Attributable to Common Stockholders to Core Earnings
|
For the Three Months Ended
|
||||||||
September 30, 2011
|
September 30, 2010
|
|||||||
(in thousands, except per share amounts)
|
||||||||
GAAP net (loss)/income attributable to common stockholders
|
$ | (23,032 | ) | $ | 5,997 | |||
Less the net of tax effects of:
|
||||||||
Unrealized (losses)/gains on financial derivatives
|
(35,857 | ) | 2,106 | |||||
Unrealized losses on trading assets
|
(2,361 | ) | (1,119 | ) | ||||
Amortization of premiums on assets consolidated at fair value
|
(1,489 | ) | (1,863 | ) | ||||
Recognition of deferred gains related to certain Farmer Mac II Guaranteed Securities and USDA Guaranteed Securities
|
335 | - | ||||||
Net effects of settlements on agency forward contracts
|
(1,291 | ) | (441 | ) | ||||
Lower of cost or fair value adjustment on loans held for sale
|
6,403 | (589 | ) | |||||
Sub-total
|
(34,260 | ) | (1,906 | ) | ||||
Core earnings
|
$ | 11,228 | $ | 7,903 | ||||
Core earnings per share:
|
||||||||
Basic
|
$ | 1.08 | $ | 0.77 | ||||
Diluted
|
1.04 | 0.74 | ||||||
Weighted-average shares:
|
||||||||
Basic
|
10,354 | 10,277 | ||||||
Diluted
|
10,760 | 10,665 |
For the Nine Months Ended
|
||||||||
September 30, 2011
|
September 30, 2010
|
|||||||
(in thousands, except per share amounts)
|
||||||||
GAAP net income attributable to common stockholders
|
$ | 461 | $ | 9,588 | ||||
Less the net of tax effects of:
|
||||||||
Unrealized losses on financial derivatives
|
(31,316 | ) | (23 | ) | ||||
Unrealized (losses)/gains on trading assets
|
(230 | ) | 4,357 | |||||
Amortization of premiums on assets consolidated at fair value
|
(4,775 | ) | (5,246 | ) | ||||
Recognition of deferred gains related to certain Farmer Mac II Guaranteed Securities and USDA Guaranteed Securities
|
2,958 | - | ||||||
Net effects of settlements on agency forward contracts
|
(2,283 | ) | (329 | ) | ||||
Lower of cost or fair value adjustment on loans held for sale
|
5,776 | (2,009 | ) | |||||
Issuance costs on the retirement of preferred stock
|
- | (5,784 | ) | |||||
Sub-total
|
(29,870 | ) | (9,034 | ) | ||||
Core earnings
|
$ | 30,331 | $ | 18,622 | ||||
Core earnings per share:
|
||||||||
Basic
|
$ | 2.94 | $ | 1.82 | ||||
Diluted
|
2.83 | 1.76 | ||||||
Weighted-average shares:
|
||||||||
Basic
|
10,328 | 10,211 | ||||||
Diluted
|
10,715 | 10,576 |
For the Nine Months Ended
|
||||||||||||||||||||||||
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
Average
|
Income/
|
Average
|
Average
|
Income/
|
Average
|
|||||||||||||||||||
Balance
|
Expense
|
Rate
|
Balance
|
Expense
|
Rate
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Cash and investments
|
$ | 2,447,032 | $ | 21,100 | 1.15% | $ | 1,576,100 | $ | 19,303 | 1.63% | ||||||||||||||
Loans, Farmer Mac Guaranteed Securities
and USDA Guaranteed Securities (1)
|
6,569,953 | 152,599 | 3.10% | 4,328,706 | 112,070 | 3.45% | ||||||||||||||||||
Total interest-earning assets
|
$ | 9,016,985 | $ | 173,699 | 2.57% | $ | 5,904,806 | $ | 131,373 | 2.97% | ||||||||||||||
Funding:
|
||||||||||||||||||||||||
Notes payable due within one year
|
$ | 4,019,952 | $ | 6,962 | 0.23% | $ | 2,981,082 | $ | 7,353 | 0.33% | ||||||||||||||
Notes payable due after one year (2)
|
4,529,535 | 81,292 | 2.39% | 2,502,849 | 57,447 | 3.06% | ||||||||||||||||||
Total interest-bearing liabilities (3)
|
8,549,487 | 88,254 | 1.38% | 5,483,931 | 64,800 | 1.58% | ||||||||||||||||||
Net non-interest-bearing funding
|
467,498 | - | 420,875 | - | ||||||||||||||||||||
Total funding
|
9,016,985 | 88,254 | 1.31% | 5,904,806 | 64,800 | 1.46% | ||||||||||||||||||
Net interest income/yield prior to
consolidation of certain trusts
|
9,016,985 | 85,445 | 1.26% | 5,904,806 | 66,573 | 1.50% | ||||||||||||||||||
Net effect of consolidated trusts (4)
|
760,581 | 2,495 | 0.44% | 1,158,766 | 3,701 | 0.43% | ||||||||||||||||||
Adjusted net interest income/yield
|
$ | 9,777,566 | $ | 87,940 | 1.20% | $ | 7,063,572 | $ | 70,274 | 1.33% |
(1)
|
Excludes interest income of $28.3 million and $45.3 million in 2011 and 2010, respectively, related to consolidated trusts with beneficial interests owned by third parties.
|
(2)
|
Includes current portion of long-term notes.
|
(3)
|
Excludes interest expense of $25.9 million and $41.6 million in 2011 and 2010, respectively, related to consolidated trusts with beneficial interests owned by third parties.
|
(4)
|
Includes the effect of consolidated trusts with beneficial interests owned by third party investors.
|
For the Nine Months Ended September 30, 2011
|
||||||||||||
Compared to the Nine Months Ended
|
||||||||||||
September 30, 2010
|
||||||||||||
Increase/(Decrease) Due to
|
||||||||||||
Rate
|
Volume
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Income from interest-earning assets:
|
||||||||||||
Cash and investments
|
$ | (12,603 | ) | $ | 14,400 | $ | 1,797 | |||||
Loans, Farmer Mac Guaranteed Securities
and USDA Guaranteed Securities
|
(27,477 | ) | 68,006 | 40,529 | ||||||||
Total
|
(40,080 | ) | 82,406 | 42,326 | ||||||||
Expense from interest-bearing liabilities
|
(19,428 | ) | 42,882 | 23,454 | ||||||||
Change in net interest income prior to
consolidation of certain trusts (1)
|
$ | (20,652 | ) | $ | 39,524 | $ | 18,872 |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||||||||||||||||||
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||||||||
Dollars
|
Yield
|
Dollars
|
Yield
|
Dollars
|
Yield
|
Dollars
|
Yield
|
|||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||
Net interest income/yield prior to consolidation of certain trusts
|
$ | 30,927 | 1.26% | $ | 24,097 | 1.54% | $ | 85,445 | 1.26% | $ | 66,573 | 1.50% | ||||||||||||||||||||
Expense related to financial derivatives
|
(10,375 | ) | -0.42% | (8,961 | ) | -0.57% | (28,695 | ) | -0.42% | (26,029 | ) | -0.59% | ||||||||||||||||||||
Yield maintenance payments
|
(77 | ) | 0.00% | (339 | ) | -0.02% | (699 | ) | -0.01% | (595 | ) | -0.01% | ||||||||||||||||||||
Amortization of premiums on assets consolidated at fair value
|
2,290 | 0.09% | 2,867 | 0.18% | 7,346 | 0.11% | 8,071 | 0.18% | ||||||||||||||||||||||||
Amortization of discounts on certain prepaid loans (1)
|
- | 0.00% | (1,421 | ) | -0.09% | - | 0.00% | (1,421 | ) | -0.03% | ||||||||||||||||||||||
Net effective spread
|
$ | 22,765 | 0.93% | $ | 16,243 | 1.04% | $ | 63,397 | 0.94% | $ | 46,599 | 1.05% |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30, 2011
|
September 30, 2010
|
September 30, 2011
|
September 30, 2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Realized:
|
||||||||||||||||
Expense related to financial derivatives
|
$ | (10,375 | ) | $ | (8,961 | ) | $ | (28,695 | ) | $ | (26,029 | ) | ||||
Losses due to terminations or net settlements
|
(2,988 | ) | (1,172 | ) | (5,489 | ) | (2,441 | ) | ||||||||
Unrealized (losses)/gains due to fair value changes
|
(55,204 | ) | 3,309 | (48,184 | ) | 82 | ||||||||||
Amortization of financial derivatives transition adjustment
|
- | (40 | ) | - | (120 | ) | ||||||||||
Losses on financial derivatives
|
$ | (68,567 | ) | $ | (6,864 | ) | $ | (82,368 | ) | $ | (28,508 | ) |
|
·
|
purchases of $68.2 million of Farmer Mac I loans;
|
|
·
|
purchases of $1.0 billion of Farmer Mac I AgVantage securities;
|
|
·
|
the placement of $266.9 million of Farmer Mac I loans under LTSPCs;
|
|
·
|
purchases of $87.1 million of USDA-guaranteed portions of loans; and
|
|
·
|
purchases of $32.4 million of rural utilities loans.
|
Farmer Mac Loan Purchases, Guarantees and LTSPCs
|
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Farmer Mac I:
|
||||||||||||||||
Loans
|
$ | 68,201 | $ | 82,270 | $ | 397,030 | $ | 258,453 | ||||||||
LTSPCs
|
266,906 | 25,416 | 374,306 | 134,989 | ||||||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
1,001,500 | 550,000 | 1,801,500 | 550,000 | ||||||||||||
Farmer Mac II:
|
||||||||||||||||
USDA Guaranteed Securities
|
85,787 | 132,991 | 300,311 | 334,663 | ||||||||||||
Farmer Mac Guaranteed Securities
|
1,264 | 6,676 | 3,268 | 20,354 | ||||||||||||
Rural Utilities:
|
||||||||||||||||
Loans
|
32,387 | 35,242 | 148,782 | 171,986 | ||||||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
- | 250,000 | 2,796 | 250,000 | ||||||||||||
Total purchases, guarantees and commitments
|
$ | 1,456,045 | $ | 1,082,595 | $ | 3,027,993 | $ | 1,720,445 |
Outstanding Balance of Loans, Loans Underlying Farmer Mac
|
Guaranteed Securities and LTSPCs, and USDA Guaranteed Securities
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
On-balance sheet:
|
||||||||
Farmer Mac I:
|
||||||||
Loans
|
$ | 1,192,486 | $ | 972,206 | ||||
Loans held in trusts:
|
||||||||
Beneficial interests owned by Farmer Mac
|
236 | 3,697 | ||||||
Beneficial interests owned by third party investors
|
712,690 | 821,411 | ||||||
Farmer Mac Guaranteed Securities - AgVantage
|
2,741,000 | 941,500 | ||||||
Farmer Mac II:
|
||||||||
USDA Guaranteed Securities
|
1,380,836 | 1,297,439 | ||||||
Farmer Mac Guaranteed Securities
|
36,316 | 39,856 | ||||||
Rural Utilities:
|
||||||||
Loans
|
474,220 | 339,963 | ||||||
Loans held in trusts:
|
||||||||
Beneficial interests owned by Farmer Mac
|
386,800 | 400,228 | ||||||
Farmer Mac Guaranteed Securities - AgVantage
|
1,410,800 | 1,887,200 | ||||||
Total on-balance sheet
|
$ | 8,335,384 | $ | 6,703,500 | ||||
Off-balance sheet:
|
||||||||
Farmer Mac I:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
$ | 970,000 | $ | 2,945,000 | ||||
LTSPCs
|
1,811,280 | 1,754,597 | ||||||
Farmer Mac Guaranteed Securities
|
660,673 | 750,217 | ||||||
Farmer Mac II:
|
||||||||
Farmer Mac Guaranteed Securities
|
45,977 | 48,103 | ||||||
Rural Utilities:
|
||||||||
Farmer Mac Guaranteed Securities - AgVantage
|
18,079 | 15,292 | ||||||
Total off-balance sheet
|
$ | 3,506,009 | $ | 5,513,209 | ||||
Total
|
$ | 11,841,393 | $ | 12,216,709 |
AgVantage Balances by Year of Maturity
|
||||
As of
|
||||
September 30, 2011
|
||||
(in thousands)
|
||||
2012
|
$ | 498,500 | ||
2013
|
307,250 | |||
2014
|
1,060,900 | |||
2015
|
550,250 | |||
2016
|
1,002,000 | |||
Thereafter
|
1,720,979 | |||
Total
|
$ | 5,139,879 |
For the Three Months Ended
|
For the Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Farmer Mac I newly originated and current seasoned loan purchases
|
$ | 68,201 | $ | 82,270 | $ | 397,030 | $ | 258,453 | ||||||||
Defaulted loans purchased underlying Farmer Mac I Guaranteed Securities
|
2,921 | 1,133 | 7,292 | 3,456 | ||||||||||||
Defaulted loans purchased underlying LTSPCs
|
- | 781 | 13,974 | 1,861 | ||||||||||||
Total loan purchases | $ | 71,122 | $ | 84,184 | $ | 418,296 | $ | 263,770 |
|
·
|
loans held;
|
|
·
|
loans underlying Farmer Mac Guaranteed Securities; and
|
|
·
|
loans underlying LTSPCs.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Allowance for loan losses
|
$ | 10,699 | $ | 9,803 | ||||
Reserve for losses:
|
||||||||
Off-balance sheet Farmer Mac I Guaranteed Securities
|
363 | 635 | ||||||
LTSPCs
|
6,628 | 9,677 | ||||||
Total allowance for losses
|
$ | 17,690 | $ | 20,115 |
September 30, 2011
|
September 30, 2010
|
|||||||||||||||||||||||
Allowance
|
Total
|
Allowance
|
Total
|
|||||||||||||||||||||
for Loan
|
Reserve
|
Allowance
|
for Loan
|
Reserve
|
Allowance
|
|||||||||||||||||||
Losses
|
for Losses
|
for Losses
|
Losses
|
for Losses
|
for Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
For the Three Months Ended:
|
||||||||||||||||||||||||
Beginning Balance
|
$ | 11,053 | $ | 7,443 | $ | 18,496 | $ | 9,495 | $ | 9,470 | $ | 18,965 | ||||||||||||
Provision for/(release of) losses
|
(349 | ) | (452 | ) | (801 | ) | 412 | 105 | 517 | |||||||||||||||
Charge-offs
|
(5 | ) | - | (5 | ) | (465 | ) | - | (465 | ) | ||||||||||||||
Recoveries
|
- | - | - | - | - | - | ||||||||||||||||||
Ending Balance
|
$ | 10,699 | $ | 6,991 | $ | 17,690 | $ | 9,442 | $ | 9,575 | $ | 19,017 | ||||||||||||
For the Nine Months Ended:
|
||||||||||||||||||||||||
Beginning Balance
|
$ | 9,803 | $ | 10,312 | $ | 20,115 | $ | 6,292 | $ | 7,895 | $ | 14,187 | ||||||||||||
Provision for/(release of) losses
|
1,092 | (3,321 | ) | (2,229 | ) | 1,392 | 1,680 | 3,072 | ||||||||||||||||
Charge-offs
|
(196 | ) | - | (196 | ) | (465 | ) | - | (465 | ) | ||||||||||||||
Recoveries
|
- | - | - | 2,223 | - | 2,223 | ||||||||||||||||||
Ending Balance
|
$ | 10,699 | $ | 6,991 | $ | 17,690 | $ | 9,442 | $ | 9,575 | $ | 19,017 |
Outstanding
|
||||||||||||||||||||||||
Loans,
|
Less:
|
|||||||||||||||||||||||
Guarantees
(1)
,
|
Non-
|
REO and
|
||||||||||||||||||||||
LTSPCs
|
performing
|
Performing
|
90-day
|
|||||||||||||||||||||
and REO
|
Assets
|
Percentage
|
Bankruptcies
|
Delinquencies
|
Percentage
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
As of:
|
||||||||||||||||||||||||
September 30, 2011
|
$ | 4,381,264 | $ | 64,137 | 1.46 % | $ | 19,289 | $ | 44,848 | 1.02% | ||||||||||||||
June 30, 2011
|
4,315,987 | 67,254 | 1.56% | 12,621 | 54,633 | 1.27% | ||||||||||||||||||
March 31, 2011
|
4,314,328 | 69,706 | 1.62% | 12,382 | 57,324 | 1.33% | ||||||||||||||||||
December 31, 2010
|
4,304,120 | 81,778 | 1.90% | 11,530 | 70,248 | 1.63% | ||||||||||||||||||
September 30, 2010
|
4,225,346 | 78,448 | 1.86% | 13,648 | 64,800 | 1.53% | ||||||||||||||||||
June 30, 2010
|
4,299,417 | 71,300 | 1.66% | 15,289 | 56,011 | 1.30% | ||||||||||||||||||
March 31, 2010
|
4,303,663 | 83,977 | 1.95% | 13,542 | 70,435 | 1.64% | ||||||||||||||||||
December 31, 2009
|
4,396,642 | 62,020 | 1.41% | 12,494 | 49,526 | 1.13% | ||||||||||||||||||
September 30, 2009
|
4,379,450 | 84,779 | 1.94% | 25,341 | 59,438 | 1.36% |
Farmer Mac I Non-performing Assets as of September 30, 2011
|
||||||||||||||||
Distribution of
|
Outstanding
|
|||||||||||||||
Outstanding
|
Loans,
|
|||||||||||||||
Loans,
|
Guarantees,
|
Non-
|
Non-
|
|||||||||||||
Guarantees,
|
LTSPCs
|
performing
|
performing
|
|||||||||||||
LTSPCs and REO
|
and REO
(1)
|
Assets
(2)
|
Asset
|
|||||||||||||
(dollars in thousands)
|
||||||||||||||||
By year of origination:
|
||||||||||||||||
Before 2000
|
14% | $ | 606,488 | $ | 16,983 | 2.80% | ||||||||||
2000
|
2% | 97,276 | 1,087 | 1.12% | ||||||||||||
2001
|
4% | 177,961 | 7,044 | 3.96% | ||||||||||||
2002
|
5% | 238,165 | 4,586 | 1.93% | ||||||||||||
2003
|
7% | 285,467 | 3,974 | 1.39% | ||||||||||||
2004
|
7% | 288,065 | 1,497 | 0.52% | ||||||||||||
2005
|
8% | 370,554 | 3,344 | 0.90% | ||||||||||||
2006
|
9% | 408,516 | 7,741 | 1.89% | ||||||||||||
2007
|
9% | 388,983 | 14,096 | 3.62% | ||||||||||||
2008
|
9% | 393,702 | 2,007 | 0.51% | ||||||||||||
2009
|
7% | 290,385 | 1,778 | 0.61% | ||||||||||||
2010
|
11% | 480,223 | - | 0.00% | ||||||||||||
2011
|
8% | 355,479 | - | 0.00% | ||||||||||||
Total
|
100% | $ | 4,381,264 | $ | 64,137 | 1.46% | ||||||||||
By geographic region
(3)
:
|
||||||||||||||||
Northwest
|
18% | $ | 772,640 | $ | 14,706 | 1.90% | ||||||||||
Southwest
|
35% | 1,581,303 | 8,744 | 0.55% | ||||||||||||
Mid-North
|
20% | 865,731 | 16,892 | 1.95% | ||||||||||||
Mid-South
|
11% | 488,703 | 10,426 | 2.13% | ||||||||||||
Northeast
|
7% | 293,047 | 10,236 | 3.49% | ||||||||||||
Southeast
|
9% | 379,840 | 3,133 | 0.82% | ||||||||||||
Total
|
100% | $ | 4,381,264 | $ | 64,137 | 1.46% | ||||||||||
By commodity/collateral type:
|
||||||||||||||||
Crops
|
41% | $ | 1,811,004 | $ | 23,322 | 1.29% | ||||||||||
Permanent plantings
|
19% | 841,412 | 25,216 | 3.00% | ||||||||||||
Livestock
|
30% | 1,258,263 | 6,489 | 0.52% | ||||||||||||
Part-time farm
|
6% | 255,985 | 8,459 | 3.30% | ||||||||||||
AgStorage and processing
|
||||||||||||||||
(including ethanol facilities)
|
4% | 193,144 | - | 0.00% | ||||||||||||
Other
|
0% | 21,456 | 651 | 3.03% | ||||||||||||
Total
|
100% | $ | 4,381,264 | $ | 64,137 | 1.46% |
(1)
|
Excludes loans underlying AgVantage securities.
|
(2)
|
Includes loans 90 days or more past due, in foreclosure, restructured after delinquency, in bankruptcy (including loans performing under either their original loan terms or a court-approved bankruptcy plan) and real estate owned.
|
(3)
|
Geographic regions - Northwest (AK, ID, MT, ND, NE, OR, SD, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); 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); and Southeast (AL, AR, FL, GA, LA, MS, SC).
|
Farmer Mac I Credit Losses Relative to all
|
Cumulative Original Loans, Guarantees and LTSPCs
|
as of September 30, 2011
|
Cumulative
|
||||||||||||
Original Loans,
|
Cumulative
|
Cumulative
|
||||||||||
Guarantees and
|
Net Credit
|
Loss
|
||||||||||
LTSPCs
|
Losses
|
Rate
|
||||||||||
(dollars in thousands)
|
||||||||||||
By year of origination:
|
||||||||||||
Before 2000
|
$ | 6,546,356 | $ | 9,025 | 0.14 | % | ||||||
2000
|
770,713 | 2,936 | 0.38 | % | ||||||||
2001
|
1,133,645 | 177 | 0.02 | % | ||||||||
2002
|
1,160,165 | - | 0.00 | % | ||||||||
2003
|
968,305 | 58 | 0.01 | % | ||||||||
2004
|
705,114 | 116 | 0.02 | % | ||||||||
2005
|
841,940 | 69 | 0.01 | % | ||||||||
2006
|
862,438 | 7,714 | 0.89 | % | ||||||||
2007
|
635,058 | 1,523 | 0.24 | % | ||||||||
2008
|
629,125 | 3,257 | 0.52 | % | ||||||||
2009
|
398,061 | 1,193 | 0.30 | % | ||||||||
2010
|
527,674 | - | 0.00 | % | ||||||||
2011
|
375,256 | - | 0.00 | % | ||||||||
Total
|
$ | 15,553,850 | $ | 26,068 | 0.17 | % | ||||||
By geographic region
(1)
:
|
||||||||||||
Northwest
|
$ | 2,928,947 | $ | 11,027 | 0.38 | % | ||||||
Southwest
|
5,870,551 | 7,495 | 0.13 | % | ||||||||
Mid-North
|
2,662,412 | 6,815 | 0.26 | % | ||||||||
Mid-South
|
1,420,470 | (356 | ) | -0.03 | % | |||||||
Northeast
|
1,387,404 | 83 | 0.01 | % | ||||||||
Southeast
|
1,284,066 | 1,004 | 0.08 | % | ||||||||
Total
|
$ | 15,553,850 | $ | 26,068 | 0.17 | % | ||||||
By commodity/collateral type:
|
||||||||||||
Crops
|
$ | 6,331,449 | $ | 2,733 | 0.04 | % | ||||||
Permanent plantings
|
3,434,761 | 9,714 | 0.28 | % | ||||||||
Livestock
|
4,049,997 | 3,616 | 0.09 | % | ||||||||
Part-time farm
|
1,036,009 | 503 | 0.05 | % | ||||||||
AgStorage and processing
|
||||||||||||
(including ethanol facilities)
(2)
|
555,499 | 9,502 | 1.71 | % | ||||||||
Other
|
146,135 | - | 0.00 | % | ||||||||
Total
|
$ | 15,553,850 | $ | 26,068 | 0.17 | % |
(1)
|
Geographic regions - Northwest (AK, ID, MT, ND, NE, OR, SD, WA, WY); Southwest (AZ, CA, CO,
HI, NM, NV, UT); 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); and Southeast (AL,
AR, FL, GA, LA, MS, SC).
|
(2)
|
Several of the loans underlying agricultural storage and processing LTSPCs are for facilities under
construction and, as of September 30, 2011, approximately $31.7 million of the loans were not yet disbursed by the lender.
|
|
·
|
issuers of AgVantage securities and other investments held or guaranteed by Farmer Mac;
|
|
·
|
sellers and servicers; and
|
|
·
|
interest rate swap contract counterparties.
|
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||
Credit
|
Required
|
Credit
|
Required
|
|||||||||||||||||||
Counterparty
|
Balance
|
Rating
|
Collateralization
|
Balance
|
Rating
|
Collateralization
|
||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||
MetLife (1)
|
$ | 2,750,000 |
AA-
|
103% | $ | 2,750,000 |
AA-
|
103% | ||||||||||||||
CFC
|
1,428,879 | A | 100 % | 1,902,492 | A | 100% | ||||||||||||||||
M&I Bank (2)
|
- | 475,000 |
BBB- *+
|
106% | ||||||||||||||||||
Rabo Agrifinance, Inc.
|
900,000 | N/A | 106% | 600,000 | N/A | 106% | ||||||||||||||||
Rabobank N.A.
|
50,000 | N/A | 106% | 50,000 | N/A | 106% | ||||||||||||||||
Other (3)
|
11,000 | N/A |
111% to 120%
|
11,500 | N/A |
111% to 120%
|
||||||||||||||||
Total outstanding
|
$ | 5,139,879 | $ | 5,788,992 |
(1)
|
Includes securities issued by Metropolitan Life Insurance Company and MetLife Insurance Company of Connecticut.
|
(2)
|
M&I Bank was on credit watch positive (*+) as of December 31, 2010.
|
(3)
|
Consists of AgVantage securities issued by 4 different issuers as of September 30, 2011 and December 31, 2010.
|
Percentage Change in MVE from Base
|
||||||||||
Interest Rate
|
September 30,
|
December 31,
|
||||||||
Scenario
|
2011
|
2010
|
||||||||
+ 300 bp | -2.2% | -1.0% | ||||||||
+ 200 bp | 1.5% | 1.9% | ||||||||
+ 100 bp | 1.9% | 2.6% | ||||||||
- 100 bp | * | * | ||||||||
- 200 bp | * | * | ||||||||
- 300 bp | * | * |
*
|
As of the date indicated, a parallel shift of the U.S. Treasury yield curve by the number of basis points indicated produced negative interest rates for portions of this curve.
|
|
·
|
“pay-fixed” interest rate swaps, in which it pays fixed rates of interest to, and receives floating rates of interest from, counterparties;
|
|
·
|
“receive-fixed” interest rate swaps, in which it receives fixed rates of interest from, and pays floating rates of interest to, counterparties;
|
|
·
|
“basis swaps,” in which it pays variable rates of interest based on one index to, and receives variable rates of interest based on another index from, counterparties; and
|
|
·
|
“credit default swaps,” in which it pays a periodic fee to a counterparty in exchange for the counterparty’s agreement to make payments in the event of an instrument’s default or other credit event.
|
|
·
|
principal and interest payments and ongoing guarantee and commitment fees received on loans, Farmer Mac Guaranteed Securities, and LTSPCs;
|
|
·
|
principal and interest payments received from investment securities; and
|
|
·
|
the issuance of new discount notes and medium-term notes.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Cash and cash equivalents
|
$ | 825,014 | $ | 729,920 | ||||
Investment securities:
|
||||||||
Guaranteed by U.S. Government and its agencies
|
906,325 | 929,793 | ||||||
Guaranteed by GSEs
|
610,394 | 405,631 | ||||||
Preferred stock issued by GSEs
|
164,268 | 169,524 | ||||||
Corporate debt securities
|
85,918 | 163,188 | ||||||
Asset-backed securities principally backed by Government-guaranteed student loans
|
145,972 | 95,193 | ||||||
Total
|
$ | 2,737,891 | $ | 2,493,249 |
Farmer Mac Purchases, Guarantees and LTSPCs
|
||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
||||||||||||||||||
Loans and
|
and USDA
|
Loans and
|
||||||||||||||||||
Guaranteed
|
Guaranteed
|
Guaranteed
|
||||||||||||||||||
Securities
|
LTSPCs
(1)
|
Securities
|
Securities
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
For the quarter ended:
|
||||||||||||||||||||
September 30, 2011
|
$ | 1,069,701 | $ | 266,906 | $ | 87,051 | $ | 32,387 | $ | 1,456,045 | ||||||||||
June 30, 2011
|
416,930 | 53,248 | 99,275 | 38,674 | 608,127 | |||||||||||||||
March 31, 2011
|
711,899 | 54,152 | 117,253 | 80,517 | 963,821 | |||||||||||||||
December 31, 2010
|
474,216 | 128,752 | 102,858 | 543,966 | 1,249,792 | |||||||||||||||
September 30, 2010
|
632,270 | 25,416 | 139,667 | 285,242 | 1,082,595 | |||||||||||||||
June 30, 2010
|
98,235 | 32,430 | 123,062 | 77,726 | 331,453 | |||||||||||||||
March 31, 2010
|
77,948 | 77,143 | 92,288 | 59,018 | 306,397 | |||||||||||||||
December 31, 2009
|
86,872 | 108,646 | 94,936 | 16,009 | 306,463 | |||||||||||||||
September 30, 2009
|
40,732 | 37,083 | 76,119 | 553,644 | 707,578 | |||||||||||||||
For the year ended:
|
||||||||||||||||||||
December 31, 2010
|
1,282,669 | 263,741 | 457,875 | 965,952 | 2,970,237 | |||||||||||||||
December 31, 2009
|
195,318 | 234,166 | 346,432 | 1,739,653 | 2,515,569 |
(1)
|
As of September 30, 2011, approximately $31.7 million of the loans underlying $555.5 million of AgStorage and processing LTSPCs (including ethanol facilities) were not yet disbursed by the lender.
|
Outstanding Balance of Farmer Mac Loans,
|
||||||||||||||||||||
Guarantees and LTSPCs and USDA Guarantees
|
||||||||||||||||||||
Farmer Mac I
|
Farmer Mac II
|
Rural Utilities
|
||||||||||||||||||
Loans and
|
and USDA
|
Loans and
|
||||||||||||||||||
Guaranteed
|
Guaranteed
|
Guaranteed
|
||||||||||||||||||
Securities
|
LTSPCs
|
Securities
|
Securities
|
Total
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
As of:
|
||||||||||||||||||||
September 30, 2011
|
$ | 6,277,085 | $ | 1,811,280 | $ | 1,463,129 | $ | 2,289,899 | $ | 11,841,393 | ||||||||||
June 30, 2011
|
6,803,951 | 1,694,470 | 1,425,883 | 2,274,193 | 12,198,497 | |||||||||||||||
March 31, 2011
|
6,485,156 | 1,712,791 | 1,402,831 | 2,235,522 | 11,836,300 | |||||||||||||||
December 31, 2010
|
6,434,031 | 1,754,597 | 1,385,398 | 2,642,683 | 12,216,709 | |||||||||||||||
September 30, 2010
|
6,059,184 | 1,697,578 | 1,365,993 | 2,353,453 | 11,476,208 | |||||||||||||||
June 30, 2010 (1)
|
5,544,091 | 1,739,979 | 1,300,945 | 2,173,660 | 10,758,675 | |||||||||||||||
March 31, 2010 (2)
|
5,444,448 | 1,846,244 | 1,237,539 | 2,183,576 | 10,711,807 | |||||||||||||||
December 31, 2009
|
5,224,768 | 2,165,706 | 1,199,798 | 2,130,832 | 10,721,104 | |||||||||||||||
September 30, 2009
|
5,227,939 | 2,135,445 | 1,141,570 | 2,266,592 | 10,771,546 |
(1)
|
The Loans and Guaranteed Securities and LTSPCs amounts reflect the conversion of $86.0 million of existing LTSPCs to Farmer Mac I Guaranteed Securities during second quarter 2010 at the request of a program participant.
|
(2)
|
The Loans and Guaranteed Securities and LTSPCs amounts reflect the conversion of $265.8 million of existing LTSPCs to Farmer Mac I Guaranteed Securities during first quarter 2010 at the request of a program participant.
|
Outstanding Balance of Loans Held and Loans Underlying
|
On-Balance Sheet Farmer Mac Guaranteed Securities and USDA Guaranteed Securities
|
5-to-10-Year
|
Total
|
|||||||||||||||
ARMs &
|
1-Month-to-
|
Held in
|
||||||||||||||
Fixed Rate
|
Resets
|
3-Year ARMs
|
Portfolio
|
|||||||||||||
(in thousands)
|
||||||||||||||||
As of:
|
||||||||||||||||
September 30, 2011
|
$ | 5,233,417 | $ | 1,192,497 | $ | 1,909,470 | $ | 8,335,384 | ||||||||
June 30, 2011
|
4,193,132 | 1,198,740 | 1,907,698 | 7,299,570 | ||||||||||||
March 31, 2011
|
3,835,010 | 1,164,567 | 1,893,487 | 6,893,064 | ||||||||||||
December 31, 2010
|
3,662,363 | 1,133,871 | 1,907,266 | 6,703,500 | ||||||||||||
September 30, 2010
|
3,006,105 | 1,087,714 | 1,883,049 | 5,976,868 | ||||||||||||
June 30, 2010
|
2,269,059 | 1,036,781 | 1,885,693 | 5,191,533 | ||||||||||||
March 31, 2010
|
2,365,557 | 1,332,369 | 1,820,896 | 5,518,822 | ||||||||||||
December 31, 2009
|
1,923,697 | 723,017 | 1,422,403 | 4,069,117 | ||||||||||||
September 30, 2009
|
2,071,801 | 677,593 | 1,382,817 | 4,132,211 |
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(a)
|
Farmer Mac is a federally chartered instrumentality of the United States and its debt and equity securities are exempt from registration pursuant to Section 3(a)(2) of the Securities Act of 1933.
|
|
(b)
|
Not applicable.
|
|
(c)
|
None.
|
Item 3.
|
Defaults
Upon Senior Securities
|
|
(a)
|
None.
|
|
(b)
|
None.
|
Item 4.
|
(Removed and Reserved)
|
Item 5.
|
Other Information
|
|
(a)
|
None.
|
|
(b)
|
None.
|
Item 6.
|
Exhibits
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
#
|
Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
†*
|
10.1.3
|
-
|
Form of SAR Agreement under the 2008 Omnibus Incentive Plan (Previously filed as Exhibit 10 to Form 8-K filed June 11, 2008).
|
†*
|
10.1.4
|
-
|
Form of Restricted Stock Agreement (Officers) under the 2008 Omnibus Incentive Plan (Previously filed as Exhibit 10.1 to Form 8-K filed June 10, 2009).
|
†*
|
10.1.5
|
-
|
Form of Restricted Stock Agreement (Directors) under the 2008 Omnibus Incentive Plan (Previously filed as Exhibit 10.2 to Form 8-K filed June 10, 2009).
|
†*
|
10.2
|
-
|
Amended and Restated Employment Agreement dated as of April 1, 2011 between Michael A. Gerber and the Registrant (Form 10-Q filed May 10, 2011).
|
†*
|
10.3
|
-
|
Compiled Amended and Restated Employment Contract dated as of June 5, 2008 between Tom D. Stenson and the Registrant (Previously filed as Exhibit 10.4 to Form 10-Q filed August 12, 2008).
|
†*
|
10.4
|
-
|
Compiled Amended and Restated Employment Contract dated June 5, 2008 between Timothy L. Buzby and the Registrant (Previously filed as Exhibit 10.5 to Form 10-Q filed August 12, 2008).
|
†*
|
10.4.1
|
-
|
Amendment No. 6 to Employment Contract between Timothy L. Buzby and the Registrant, dated as of April 2, 2009 (Form 10-Q filed August 10, 2009).
|
10.5
|
-
|
Exhibit number reserved for future use.
|
|
†*
|
10.6
|
-
|
Description of compensation agreement between the Registrant and its directors (Form 10-K filed March 16, 2011).
|
*
|
10.7
|
-
|
Farmer Mac I Seller/Servicer Agreement dated as of August 7, 1996 between Zions First National Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*
|
10.8
|
-
|
Medium-Term Notes U.S. Selling Agency Agreement dated as of October 1, 1998 between Zions First National Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*
|
10.9
|
-
|
Discount Note Dealer Agreement dated as of September 18, 1996 between Zions First National Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
#
|
Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
*#
|
10.10
|
-
|
ISDA Master Agreement and Credit Support Annex dated as of June 26, 1997 between Zions First National Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*#
|
10.11
|
-
|
Amended and Restated Master Central Servicing Agreement dated as of May 1, 2004 between Zions First National Bank and the Registrant (Previously filed as Exhibit 10.11.2 to Form 10-Q filed August 9, 2004).
|
*#
|
10.11.1
|
-
|
Amendment No. 1 to Amended and Restated Master Central Servicing Agreement between Zions First National Bank and the Registrant, dated as of June 1, 2009 (Form 10-Q filed August 10, 2009).
|
*#
|
10.11.2
|
-
|
Amendment No. 2. to Amended and Restated Master Central Servicing Agreement between Zions First National Bank and the Registrant, dated as of August 25, 2010 (Form 10-Q filed November 9, 2010).
|
*#
|
10.12
|
-
|
Loan Closing File Review Agreement dated as of August 2, 2005 between Zions First National Bank and the Registrant (Form 10-Q filed November 9, 2005).
|
*#
|
10.13
|
-
|
Long Term Standby Commitment to Purchase dated as of August 1, 1998 between AgFirst Farm Credit Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*#
|
10.13.1
|
-
|
Amendment No. 1 dated as of January 1, 2000 to Long Term Standby Commitment to Purchase dated as of August 1, 1998 between AgFirst Farm Credit Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*
|
10.13.2
|
-
|
Amendment No. 2 dated as of September 1, 2002 to Long Term Standby Commitment to Purchase dated as of August 1, 1998, as amended by Amendment No. 1 dated as of January 1, 2000, between AgFirst Farm Credit Bank and the Registrant (Form 10-Q filed November 14, 2002).
|
*
|
10.14
|
-
|
Lease Agreement, dated June 28, 2001 between EOP – Two Lafayette, L.L.C. and the Registrant (Previously filed as Exhibit 10.10 to Form 10-K filed March 27, 2002).
|
*#
|
10.15
|
-
|
Long Term Standby Commitment to Purchase dated as of August 1, 2007 between Farm Credit Bank of Texas and the Registrant (Previously filed as Exhibit 10.20 to Form 10-Q filed November 8, 2007).
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
#
|
Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
#
|
Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
*
|
10.25
|
First Supplemental Note Purchase Agreement dated as of March 24, 2011 between Farmer Mac Mortgage Securities Corporation, National Rural Utilities Cooperative Finance Corporation, and the Registrant (Form 10-Q filed May 10, 2011).
|
|
**
|
10.26
|
Amended and Restated Master Sale and Servicing Agreement dated as of August 12, 2011 between National Rural Utilities Cooperative Finance Corporation and the Registrant.
|
|
*#
|
10.27
|
Credit Support Agreement dated as of September 1, 2009 between National Rural Utilities Cooperative Finance Corporation and the Registrant (Previously filed as Exhibit 10.38 to Form 10-Q filed August 9, 2010).
|
|
*
|
10.28
|
Indenture dated as of September 1, 2009 between National Rural Utilities Cooperative Finance Corporation, U.S. Bank National Association and the Registrant (Previously filed as Exhibit 10.39 to Form 10-Q filed August 9, 2010).
|
|
*
|
10.29
|
Sublease Agreement dated as of December 6, 2010 between Mayer Brown LLP and the Registrant (Previously filed as Exhibit 10.43 to Form 10-K/A filed June 1, 2011).
|
|
*
|
21
|
-
|
List of the Registrant’s subsidiaries (Form 10-K filed March 16, 2010).
|
**
|
31.1
|
-
|
Certification of Chief Executive Officer relating to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**
|
31.2
|
-
|
Certification of Chief Financial Officer relating to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**
|
32
|
-
|
Certification of Chief Executive Officer and Chief Financial Officer relating to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
#
|
Portions of this exhibit have been omitted and filed separately with the SEC pursuant to a request for confidential treatment.
|
FEDERAL AGRICULTURAL MORTGAGE CORPORATION | |||
November 9, 2011
|
|||
By:
|
/s/ Michael A. Gerber
|
||
Michael A. Gerber
President and Chief Executive Officer
(Principal Executive Officer)
|
|||
/s/ Timothy L. Buzby
|
|||
Timothy L. Buzby
Senior Vice President – Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
|
i.
|
The Borrower is either an Eligible Class A Member or an Eligible Class B Member that has received, or is eligible to receive, a loan from RUS under the Rural Electrification Act of 1936.
|
|
ii.
|
Such loan is a fixed or variable rate term loan that was closed by the Seller. At the time of sale, such loan has an outstanding principal amount of up to $22.5 million (or any higher amount permitted by Farmer Mac and specified as the Purchase Price for a Qualified Loan in the applicable Commitment Letter) and a remaining period until maturity in the range of one (1) to thirty-five (35) years,
provided, however
, that if such loan provides for an interest rate reset, the resets shall occur no more frequently than once every month. Such loan is secured by substantially all of the assets of the Borrower. Such assets may also secure one or more prior or future loans made by the Seller, RUS or another party to the same Borrower.
|
|
iii.
|
Such loan is payable in full upon maturity or amortizes on a level principal or level debt service basis.
|
|
iv.
|
Interest is payable on such loan monthly, quarterly, semi-annually or annually, as specified in the applicable Commitment Letter. Unless otherwise specified in the related Commitment Letter, interest due under the loan shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.
|
|
v.
|
The documentation for such loan (including any Covered Loan) provides that in the event of prepayment of a fixed rate loan on any date other than an interest reset date, the Borrower must pay a Prepayment Premium. The documentation for any Covered Loan also provides that in the event of prepayment of the loan on any date other than the maturity date, the Borrower must pay a Premium Make-Whole Amount.
|
|
vi.
|
The full amount of such loan is advanced by the time of sale and no further draws are permitted.
|
|
vii.
|
At the time of the sale, the Seller will have at least one other loan to the same Borrower in the Seller’s portfolio. In addition, at the time of sale, it will be the intention of the Seller to maintain a credit relationship with such Borrower until such time as the loan to such Borrower purchased by the Purchaser pursuant to this Master Agreement is repaid in full.
|
|
viii.
|
No event of default with respect to such loan shall have been declared by the Seller and be continuing at the time of sale.
|
|
ix.
|
Such loan is a performing loan and is not more than thirty (30) days delinquent in payment.
|
|
x.
|
Such loan shall have been documented in accordance with the Seller’s existing practices and procedures at the time, and in form and substance that are substantially similar to the documentation used by Seller for loans of similar character in the Seller’s own loan portfolio as of the Sale Date,
provided, however,
that prior to its sale hereunder to the Purchaser, the Mortgage Note and related Loan Agreement will be prepared and will include all of the provisions of a Qualified Loan contemplated by this Master Agreement.
|
|
xi.
|
The principal balance of such loan, when aggregated with (x) the aggregate principal balance of all loans to the same Borrower previously sold hereunder, (y) the aggregate principal balance of all Other Pledged Obligations with respect to the same Borrower and (z) the aggregate principal balance of all Other Sold Obligations with respect to the same Borrower, will not exceed $50,000,000 (or any higher amount permitted by Farmer Mac and set forth in the Commitment Letter or otherwise communicated to CFC in writing).
|
|
xii.
|
The principal balance of such loan, when aggregated with (x) the aggregate principal balance of all loans to the same Borrower previously sold hereunder and (y) the aggregate principal balance of all Other Sold Obligations with respect to the same Borrower, will not exceed $22,500,000 (or any higher amount permitted by Farmer Mac and set forth in the Commitment Letter or otherwise communicated to CFC in writing).
|
|
xiii.
|
With respect to any loan, the Borrower of which is a Class B Member, the principal balance of such loan, when aggregated with (x) the aggregate principal balance of all other loans to Class B Members previously sold hereunder, (y) the aggregate principal balance of all Other Sold Obligations with respect to Class B Members and (z) the aggregate principal balance of all Other Pledged Obligations with respect to Class B Members, will not exceed $2.0 billion (or any higher amount permitted by Farmer Mac and communicated to CFC in writing).
|
|
xiv.
|
With respect to any loan the Borrower of which is a Class B Member, the documentation for such loan contains a representation and warranty from the Borrower as of the Sale Date that the Borrower has not acquired, or committed to acquire, an ownership interest in any nuclear energy generating facility built or planned to be built after January 1, 2010.
|
|
xv.
|
Unless otherwise specified in the related Commitment Letter, the repayment terms of such Qualified Loan shall not provide a conversion option exercisable by the Borrower to convert to a different loan product.
|
|
i.
|
a copy of the most recent Compliance Certification by an officer of the related Borrower;
|
|
ii.
|
the most recent fiscal year-end certified audit of such Borrower;
|
|
iii.
|
with respect to Class A Members, a copy of the most recent unaudited annual financial statements of such Borrower (which may be set forth on a Seller form or RFOR Distribution);
|
|
iv.
|
with respect to Class A Members, copies of the RFOR Distribution of such Borrower for each of the three most recent years;
|
|
v.
|
with respect to Class A Members, the most recent Key Ratio Trend Analysis, as available;
|
|
vi.
|
with respect to Class B Members, a copy of the most recent unaudited annual financial statements of such Borrower (which may be set forth on a Seller form, RFOR Power Supply, or FERC Form 1, as applicable);
|
|
vii.
|
with respect to Class B Members, copies of the RFOR Power Supply, or FERC Form 1, as applicable, of such Borrower for each of the three most recent years;
|
|
viii.
|
with respect to Class B Members, the most recent G&T Trend Analysis, as available;
|
|
ix.
|
the most recent narrative with respect to such Borrower, as prepared by the Seller;
|
|
x.
|
the most recent Borrower Rating of such Borrower;
|
|
xi.
|
all correspondence between the Master Servicer and such Borrower that pertains to the Qualified Loan sold under this Master Agreement, or to the collateral by which it is secured, from origination of the Qualified Loan until payoff or foreclosure; and
|
|
xii.
|
documentation of any loan servicing actions taken with respect to the Qualified Loan.
|
|
Section 2.03.
Servicing File and Mortgage File
.
|
(a)
|
the Seller shall have received the related Purchase Price from the Purchaser;
|
(b)
|
the Custodian shall have received the Mortgage File from the Seller; and
|
|
(c)
|
as of the date(s) that the conditions set forth in (a) and (b) above have been met, an Insolvency Event shall not have occurred and be continuing with respect to the Seller or the Purchaser.
|
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
, as Purchaser
|
||
By:
|
/s/Tom Stenson
|
|
Name:
|
Tom Stenson
|
|
Title:
|
EVP
|
|
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
, as Seller and Master Servicer
|
||
By:
|
/s/Richard Larochelle
|
|
Name:
|
Richard Larochelle
|
|
Title:
|
Senior Vice President
|
Borrower Eligibility
Requirements –
|
Each Covered Loan to a Class A Member must be a Qualified Loan and also satisfy the following minimum criteria:
|
||
Distribution
Cooperatives
|
·
|
Borrower is in compliance with the Loan Agreement, Mortgage and Mortgage Note in all material respects;
|
|
|
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – Distribution equal to at least 1.5 for the last partial calendar year (year-to-date) to the quarter ending no earlier than four months prior to the Sale Date;
|
|
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – Distribution equal to at least 1.5 for the last full calendar year;
|
||
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – Distribution equal to at least 1.2 in each of the two (2) calendar years prior to the last full calendar year;
|
||
·
|
Borrower has a current Facility Rating of 3.0 or better (lower), with a minimum (no higher than) Facility Rating of 4.5 during the thirty-six (36) months prior to the Sale Date;
|
||
·
|
No deterioration of Borrower’s Facility Rating greater than 1.5 has occurred in the twenty-four (24) months prior to the Sale Date;
|
||
·
|
Borrower’s Equity to Total Assets averaged at least 20% for the three (3) calendar years prior to the Sale Date; and
|
||
·
|
Borrower’s Long-Term Debt to Net Utility Plant Ratio averaged less than or equal to 90% for the three (3) calendar years prior to the Sale Date.
|
||
Each Covered Loan to a Class B Member must be a Qualified Loan and also satisfy the following minimum criteria:
|
|||
Borrower Eligibility Requirements -
|
·
|
Borrower is in compliance with the Loan Agreement, Mortgage and Mortgage Note in all material respects;
|
|
G&T Cooperatives
|
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – G&T equal to at least 1.2 for the last partial calendar year (year-to-date) to the quarter ending no earlier than four months prior to the Sale Date;
|
|
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – G&T greater than 1.2 for the last full calendar year;
|
||
·
|
Borrower has a minimum Modified Debt Service Coverage Ratio – G&T equal to at least 1.1 for each of the two (2) calendar years prior to the last full calendar year;
|
||
·
|
Borrower has a current Facility Rating of 3.0 or better (lower);
|
||
·
|
Borrower’s Facility Rating has been no higher than 4.0 during the thirty-six (36) months prior to the Sale Date, with no deterioration of risk rating greater than 1.5 in the twenty-four (24) months prior to the Sale Date;
|
·
|
Borrower’s Debt to EBITDA Ratio averaged less than or equal to 12 for the three (3) calendar years prior to the Sale Date;
|
||
·
|
Borrower’s Equity to Total Assets averaged at least 10% for the three (3) calendar years prior to the Sale Date;
|
||
·
|
Borrower’s Equity to Total Capitalization Ratio averaged at least 25% for the three (3) calendar years prior to the Sale Date;
|
||
·
|
The Borrower has not acquired, or committed to acquire, an ownership interest in any nuclear energy generating facility built, or planned to be built, after January 1, 2010.
|
||
Other Requirements – all Borrowers
|
·
|
The Borrower under a Covered Loan shall not be located in the State of Florida.
|
|
Loan Maturity
|
No less than five (5) years and no longer than thirty five (35) years.
|
||
Amortization
|
Semi-annual, quarterly or monthly debt service payments amortized on a level debt service basis over Farmer Mac amortization period options, but no longer than 35 years.
|
||
Security
|
“All asset” mortgage with Seller as the sole mortgagee (for itself and as agent for Farmer Mac), as a co-mortgagee,
pari-passu
with other lenders, including but not limited to the United States of America, acting by and through RUS, or secured under a trust indenture.
|
||
Fees
|
No origination, commitment or documentation fees to
Borrower
.
|
||
Seller
Portfolio Requirement
|
On the Sale Date, Seller shall have in its portfolio at least one secured loan with a maturity of greater than one year and is not structured as a revolving line of credit, from each Borrower whose Covered Loan is sold to Farmer Mac.
|
NATIONAL RURAL UTILITIES
COOPERATIVE FINANCE
CORPORATION , as Seller and Master Servicer |
||
By:
|
|
|
Name:
|
||
Title:
|
Very truly yours,
|
||
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
, as Purchaser
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
Accepted and Agreed:
|
||
NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION
, as Seller and Master Servicer
|
||
By:
|
|
|
Name:
|
||
Title:
|
Coop ID
|
Loan
Number
|
Date of
Payment
|
Total
Payment
Amount
|
Principal
Payment
Amount
|
Interest
Payment
Amount
|
Servicing
Fee
Amount
|
Net
Interest
Payment
Amount
|
|||||||
Borrower Name
|
Coop ID
|
Payment Due
Date
|
Servicer’s
Comments
|
|||
Coop
ID
|
Borrower
|
Loan
Number
|
Loan
Amount
|
Sale
Date
|
Maturity
Date
|
Servicing
Fee
|
Payment
Frequency
|
|||||||
Coop
ID
|
Loan
Number
|
Beginning
Principal
Balance
|
Ending
Principal
Balance
|
Loan
Interest
Rate
(Base
Rate)
|
Gross
Monthly
Interest
Accrual
|
Delinquency Code
|
||||||
Delinquency Code
|
Delinquency Code Description
|
|
1
|
Current
|
|
2
|
30-60 Days
|
|
3
|
60-90 Days
|
|
4
|
90-180 Days
|
|
5
|
180+ Days
|
|
6
|
Foreclosure
|
|
7
|
Bankruptcy
|
|
8
|
REO
|
|
||
Name:
|
|
|
Title:
|
|
Billing
Period:
|
Coop
ID
|
Loan
Number
|
Date
of
Loan
|
Interest
Payment
|
Principal
Payment
|
Ending Period
Scheduled Balance
|
Ending Period
Actual Balance
|
Interest
Rate
|
Delinquency
Code
|
|||||||||
To:
|
|
From:
|
|
Date:
|
|
Re:
|
Month/Year
Remittance Amount
|
Interest
|
$ | ||||
Principal
|
|||||
Principal Prepayments
|
|||||
Prepayment Premiums
|
|||||
Premium Make-Whole Amount
|
|||||
Investment Account Earnings
|
|||||
Late Charges
|
|||||
Total Remittance
|
$ |
1.
|
I have reviewed this Quarterly Report on Form 10-Q of the Federal Agricultural Mortgage Corporation for the fiscal quarter ended September 30, 2011;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Michael A. Gerber
|
||
Michael A. Gerber
|
||
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of the Federal Agricultural Mortgage Corporation for the fiscal quarter ended September 30, 2011;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Timothy L. Buzby
|
||
Timothy L. Buzby
|
||
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
/s/ Michael A. Gerber
|
|
Michael A. Gerber
|
|
Chief Executive Officer
|
|
/s/ Timothy L. Buzby
|
|
Timothy L. Buzby
|
|
Chief Financial Officer
|
|
Date: November 9, 2011
|