As filed with the Securities and Exchange Commission on May 15, 1996 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996. Commission File Number 0-17440 FEDERAL AGRICULTURAL MORTGAGE CORPORATION (Exact name of registrant as specified in its charter) Federally chartered instrumentality of the United States ___________________________________ (State or other jurisdiction of incorporation or organization) 52-1578738 _________________________________________ (I.R.S. employer of identification number) 919 18th Street, N.W., Suite 200, Washington, D.C. 20006 _________________________________________ ____________________________ (Address of principal executive offices) (Zip code) (202) 872-7700 (Registrant's telephone number, including area code) ____________________________________________________ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. As of May 15, 1996, there were 990,000 shares of Class A Voting Common Stock, 593,401 shares of Class B Voting Common Stock, and 1,214,463 shares of Class C Non-Voting Common Stock outstanding.
PART I - FINANCIAL INFORMATION ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS The following interim consolidated financial statements of the Federal Agricultural Mortgage Corporation (the "Corporation" or "Farmer Mac") have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Such interim consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Certain information and footnote disclosures normally included in annual consolidated financial statements have been condensed or omitted as permitted by such rules and regulations. Management believes that the disclosures are adequate to present fairly the consolidated financial position, consolidated results of operations and consolidated cash flows at the dates and for the periods presented. These condensed financial statements should be read in conjunction with the audited 1995 financial statements of Farmer Mac. Results for interim periods are not necessarily indicative of those to be expected for the fiscal year. The following information concerning Farmer Mac's financial statements as of March 31, 1996, December 31, 1995 and March 31, 1995 is included herein. Consolidated Balance Sheets................................... 3 Consolidated Statements of Operations......................... 4 Consolidated Statements of Cash Flows......................... 5
<TABLE> <CAPTION> FEDERAL AGRICULTURAL MORTGAGE CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) March 31, December 31, 1996 1995 (unaudited) <S> <C> <C> ASSETS: Cash and cash equivalents $ 74,537 $ 8,336 Interest receivable 9,584 15,572 Guarantee fees receivable 333 573 Investment securities Held-to-maturity 7,419 7,419 Available-for-sale 54,688 55,862 Farmer Mac I & II Securities 401,049 417,169 Other investments 13,985 2,340 Farmer Mac I & II payments receivable 10,970 4,939 Office equipment, net 59 65 Prepaid expenses and other assets 302 189 TOTAL ASSETS $ 572,926 $ 512,464 LIABILITIES AND STOCKHOLDERS' EQUITY: LIABILITIES: Debentures, notes and bonds, net: Due within one year $ 279,200 $ 207,422 Due after one year 274,857 284,084 Accrued interest payable 6,663 8,394 Accounts payable and accrued expenses 715 740 Allowance for sold Farmer Mac I & II Securities 118 112 TOTAL LIABILITIES 561,553 500,752 STOCKHOLDERS' EQUITY Common stock: Class A Voting, $1 par value, no maximum authorization, 670,000 shares issued and outstanding 670 670 Class B Voting, $1 par value, no maximum authorization, 593,401 shares issued and outstanding 593 500 Class C Non-Voting, $1 par value, no maximum authorization, 1,214,463 shares issued and outstanding 1,214 1,170 Additional paid in capital 19,751 19,331 Loan receivable for purchase of stock (557) - Unrealized (loss) gain on securities available-for-sale (41) 140 Accumulated deficit (10,257) (10,099) TOTAL STOCKHOLDERS' EQUI TY 11,373 11,712 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 572,926 $ 512,464 See accompanying notes to consolidated financial statements. </TABLE>
<TABLE> <CAPTION> FEDERAL AGRICULTURAL MORTGAGE CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Amounts) Three months ended March 31, March 31, 1996 1995 (unaudited) <S> <C> <C> INTEREST INCOME: Investments and cash equivalents $ 1,469 $ 1,328 Farmer Mac I and II Securities 7,452 6,702 TOTAL INTEREST INCOME 8,921 8,030 INTEREST EXPENSE 8,394 7,763 NET INTEREST INCOME 527 267 OTHER INCOME: Guarantee fees 303 307 Miscellaneous 35 17 TOTAL OTHER INCOME 338 324 OTHER EXPENSES: Compensation and employee benefits 531 465 Professional fees 157 85 Insurance 51 57 Rent 41 42 Regulatory fees 71 92 Board of Directors fees and meeting expenses 88 78 Administrative 84 79 TOTAL OTHER EXPENSES 1,023 898 NET LOSS $ (158) $ (307) NET LOSS PER SHARE $ (0.06) $(0.13) See accompanying notes to consolidated financial statements. </TABLE>
<TABLE> FEDERAL AGRICULTURAL MORTGAGE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) Three Months Ended March 31, March 31, 1996 1995 (unaudited) <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Loss from Operations $ (158) $ (307) Adjustments to reconcile net loss to cash provided by operating activities: Amortization of premium on Farmer Mac I and II portfolio 942 1,403 Discount Note amortization 2,309 1,719 Decrease in guarantee fees receivable 240 124 Decrease in interest receivable 5,988 5,161 Increase in Farmer Mac I and II payments receivable (6,031) (3,536) Increase in prepaid expenses and other assets (113) (93) Amortization of debt issuance costs 45 50 Decrease in accounts payable and accrued expenses (25) (43) Decrease in accrued interest payable on Medium-Term Notes (1,731) (595) Provision for losses on Farmer Mac I Program 27 29 Other (20) (10) Net cash provided by operating activities 1,473 3,902 CASH FLOWS FROM INVESTING ACTIVITIES: Farmer Mac II purchases (15,033) (8,007) Purchases of investments (11,645) (19,002) Proceeds from maturity of investments 994 - Proceeds from Farmer Mac I and II principal repayments 30,190 18,465 Purchases of office equipment (3) (2) Net cash provided (used) by investing activities 4,503 (8,546) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of Medium-Term Notes - 9,989 Payments to redeem Medium-Term Notes (29,280) (7,185) Proceeds from issuance of Discount Notes 371,505 306,525 Discount Notes redeemed (282,000) (307,500) Net cash provided by financing activities 60,225 1,829 Net increase (decrease) in cash and cash equivalents 66,201 (2,815) Cash and cash equivalents at beginning of period 8,336 73,129 Cash and cash equivalents at end of period $ 74,537 $70,314 Supplemental disclosures of cash flow information: Cash paid during the three-month period for: Interest $ 7,800 $ 6,577 See accompanying notes to consolidated financial statements. </TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. ACCOUNTING POLICIES. (a) Principles of Consolidation Financial information at and for the three months ended March 31, 1996 is consolidated to include the accounts of Farmer Mac and its two wholly owned subsidiaries, Farmer Mac Mortgage Securities Corporation and Farmer Mac Acceptance Corporation. All material intercompany transactions have been eliminated in consolidation. (b) Reclassifications Certain reclassifications of the 1995 information were made to conform with the 1996 presentation. NOTE 2. OFF-BALANCE SHEET FARMER MAC GUARANTEED SECURITIES. Farmer Mac is a party to transactions involving financial instruments with off-balance sheet risk. These transactions include guarantees by Farmer Mac of securities not held in its portfolio. Farmer Mac issues guarantees in the normal course of business to fulfill its statutory purpose of increasing liquidity for agricultural mortgage lenders. Farmer Mac guarantees the timely payment of principal and interest on securities issued under the Farmer Mac I and Farmer Mac II Programs. The following table sets forth the outstanding principal balances of Farmer Mac Guaranteed Securities issued under the Farmer Mac I and Farmer Mac II Programs and not held in its portfolio. <TABLE> March 31, 1996 December 31, 1995 (In Thousands) <S> <C> <C> Farmer Mac I............... $ 82,392 $ 94,763 Farmer Mac II.............. $ 4,544 $ 4,810 </TABLE> NOTE 3. SUBSEQUENT EVENT. On April 10, 1996, Farmer Mac sold 320,000 newly issued shares of Class A Voting Common Stock to Zions First National Bank ("Zions") at a price of $8.00 per share. This transaction generated $2.6 million in new capital and increased the outstanding shares of Class A Voting Common Stock to 990,000 shares, of which Zions owns approximately 33%.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RERSULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Farmer Mac's primary sources of liquidity are issuances of debt obligations, and principal and interest payments received on mortgages underlying securities purchased by Farmer Mac under the Farmer Mac I and Farmer Mac II Programs. Farmer Mac's Board has authorized the issuance of up to $1.5 billion of Discount Notes and Medium-Term Notes. Funds from the borrowings may be used in the Farmer Mac I and Farmer Mac II Programs to cover transaction costs, guarantee payments and the costs of purchasing Guaranteed Portions, Qualified Loans and Securities (including Farmer Mac Guaranteed Securities backed by Guaranteed Portions and/or Qualified Loans). Funds from the borrowings also may be used for liquidity purposes. At March 31, 1996, Farmer Mac had $554.1 million of Discount Notes and Medium-Term Notes (net of unamortized debt issuance costs, discounts and premiums) outstanding, a $62.6 million increase from December 31, 1995. During the first three months of 1996, Farmer Mac issued $371.5 million of Discount Notes (net of discount) and redeemed $282.0 million of Discount Notes and $29.3 million of Medium-Term Notes. Farmer Mac did not issue any Medium-Term Notes during the first three months of 1996. The $66.2 million increase in cash and cash equivalents, comprised largely of short-term commercial paper, from December 31, 1995 to March 31, 1996, was attributable primarily to Farmer Mac's Discount Note issuance strategy. As a result of the uncertainty associated with the legislative initiative at year end 1995, Farmer Mac lowered the amount of its Discount Notes outstanding at December 31, 1995. Following the enactment of the legislation in the 1996 first quarter, Farmer Mac increased its Discount Note issuances to reestablish its presence in that market, resulting in a corresponding increase in its short-term investment portfolio. The $10.5 million increase in investments, comprised of investment securities and other investments, from December 31, 1995 to March 31, 1996, primarily resulted from principal and interest payments received on mortgage-backed securities previously issued under the Corporation's Linked Portfolio Strategy, and held in anticipation of payments due on the related Notes. The payments received on the mortgage-backed securities also largely accounted for the $16.1 million net reduction in Farmer Mac I and II Securities and the $6.0 million decrease in interest receivable. Proceeds of any future Note issuances are expected to be used by the Corporation primarily to fund purchases of Qualified Loans, Guaranteed Portions and Securities under the Farmer Mac I and Farmer Mac II Programs and to maintain Farmer Mac's liquidity position. At March 31, 1996, Farmer Mac's total loss allowance was $414 thousand. Farmer Mac I and II Securities are shown net of the applicable allowance of $296 thousand at March 31, 1996, representing an increase of $16 thousand from year-end 1995; the allowance for Farmer Mac Guaranteed Securities not held by Farmer Mac was $118 thousand at March 31, 1996, representing an increase of $6 thousand from year-end 1995. Future additions to this allowance will be charged to earnings and the amounts in the allowance account will be used to cover payments of claims under Farmer Mac guarantees. Farmer Mac considers the amounts in the allowance account to be adequate to cover its exposure to guarantee payments in existing Farmer Mac I Guaranteed Securities. Before Farmer Mac is required to make a guarantee payment on those securities, full recourse must be taken against a reserve or subordinated interest initially established in an amount equal to at least ten percent (10%) of the initial pool balance. Under the new legislative authorities provided for in the 1996 Act, Farmer Mac may issue "first loss guarantees" and thus be subject to greater credit risk. Farmer Mac is evaluating the appropriateness of its loan loss reserve policy, particularly as a result of its new status as a first loss guarantor. At March 31, 1996, a total of five loans aggregating $4.9 million were 90 days or more past due, four loans totaling $1.5 million were in foreclosure and title to two loans with an outstanding principal balance of $709 thousand had been acquired by the trust in the Farmer Mac I Program. The 11 loans combined represent 2.2% of the aggregate principal amount of outstanding Farmer Mac I Securities at March 31, 1996. Management believes that no losses will be incurred by Farmer Mac as a result of the loans in foreclosure or the real estate owned by the trust. No loss allowance has been made specifically for the Farmer Mac II Program because the Guaranteed Portions are backed by the full faith and credit of the United States and are not exposed to credit losses. At March 31, 1996, Farmer Mac's regulatory required minimum capital was $6.5 million and its actual capital level was $11.4 million. At December 31, 1995, Farmer Mac's regulatory required minimum capital was $4.7 million, and its actual capital level was $11.7 million. As previously reported, the 1996 Act phases in higher capital requirements over a three-year transition period following the enactment of the 1996 Act. Certain levels of enforcement are given to the FCA depending upon Farmer Mac's compliance with these capital levels. See "Recent Legislative Revisions to Farmer Mac's Statutory Charter _ Summary of Statutory Changes _ Capital" and "Government Regulation of Farmer Mac _ Regulation _ Capital Standards" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 1995. If the fully phased-in (highest) standard under the 1996 Act had been in effect at March 31, 1996, Farmer Mac's actual capital would have been less than the total minimum capital required by $5.0 million. In the opinion of management, Farmer Mac has sufficient liquidity and capital for the next twelve months. Results of Operations Overview. As previously reported, Farmer Mac is in the process of implementing its new legislative authorities by following a two-phased approach. Work on Phase I -- development of an "economic risk model" for pricing loans to be acquired either for cash (through its "cash window") or in exchange for Farmer Mac-guaranteed securities (through its "swap" program) -- is nearing completion. This economic risk model consists of several interrelated "modules," including a loss (guarantee fee) module, securitization module, operating expense module and capital module. The model is currently being evaluated, tested and verified by an independent consultant and is expected to be available for Farmer Mac's use during the 1996 second quarter. Phase II of the implementation planning process -- development of new policies and procedures necessary to implement a direct pooling (individual loan commitments, rate locks and loan purchases) program -- also is underway and is targeted for completion prior to the commencement of the fall agricultural lending season. Farmer Mac anticipates closing the first transaction under its new authorities during the 1996 second quarter. That transaction is expected to involve the purchase from AgFunding (Western Farm Credit Bank's "National AgriMortgage Funding" program) of approximately $100 million in loans, which Farmer Mac would use as collateral to support the issuance soon thereafter of guaranteed securities to be sold to capital markets investors. In addition to preparing for the foregoing loan purchase, Farmer Mac is pursuing swap transactions with portfolio holders of agricultural loans. While Farmer Mac believes there are many benefits to holders through the exchange of loans for Farmer Mac- guaranteed securities, there is no assurance that any such portfolio swap transactions actually will be consummated. Although Farmer Mac's new authorities give it the statutory flexibility to devise programs that operate under guidelines similar to those of Fannie Mae and Freddie Mac, that flexibility does not ensure the success of Farmer Mac's programs. As previously reported, a number of factors have constrained participation in Farmer Mac's programs to date and caused its core business activities to be unprofitable. Those factors have included: the excess liquidity of many agricultural lenders; the attractiveness of loans (otherwise qualified under the Farmer Mac programs) as investments for their originators; the disinclination of many lenders to offer intermediate-term adjustable rate and long-term fixed rate agricultural real estate loans, as a result of the higher profitability associated with short-term lending; the lack of borrower demand for intermediate- term and long-term loans due to the lower interest rates generally associated with shorter term loans; various restrictive provisions in Farmer Mac's charter; and the unfavorable regulatory capital treatment afforded banks and System Institutions holding subordinated securities created in Farmer Mac transactions. Even though the 1996 Act has removed those charter provisions that Farmer Mac had concluded were constraining the operation of the secondary market, most of the other enumerated factors, over which Farmer Mac has little, if any, control, may continue to exist as Farmer Mac seeks to implement its new authorities. If those factors persist, they will affect Farmer Mac's ability to generate the volume of business necessary to achieve profitability and ultimately comply with the requirement to raise capital to higher levels by February 1998. Several positive developments have come from the legislation, including significant increases in AgFunding's loan volume and lender network, as well as the purchase of a substantial portion of Farmer Mac's Voting Common Stock by Zions First National Bank during the 1996 second quarter. Despite these positive developments, and Farmer Mac's ongoing efforts to implement its new authorities under the 1996 Act, Farmer Mac's ability to operate profitably in the future remains uncertain. Profitability will be affected not only by guarantee volume, but also by any payments Farmer Mac must make on its guarantees; payments it must make on its Notes; the income it earns on its investment securities, its mortgage portfolio and other funds it is holding; and its administrative expenses. Losses, if any, on guarantees will be affected by many circumstances, including agricultural growing conditions, agricultural market conditions, changes in government agricultural support policies and the economy, both domestic and international. Farmer Mac's future is still dependent upon continued, more effective and significantly increased utilization of its programs by its Class A and Class B stockholders. General. Farmer Mac reported a net loss for the three months ended March 31, 1996 of $158 thousand, a decrease of $149 thousand from the $307 thousand loss reported for the three months ended March 31, 1995. The decrease in loss is largely attributable to an increase in net interest income, due to a decrease in the cost of interest-bearing liabilities over the comparable period in 1995.
Average Balances, Income and Expense, Yields and Rates. The following table presents, for the periods indicated, information regarding interest income on average interest-earning assets and related yields, as well as interest expense on average interest- bearing liabilities and related rates paid. The average balances were calculated by averaging month-end balances. <TABLE> Three Months Ended March 31, (Dollars in Thousands) 1996 1995 _________________________ __________________________ (Dollars in Thousands) Average Income Average Average Income/ Average Balances Expense Rate Balances Expense Rate ASSETS: <S> <C> <C> <C> <C> <C> <C> Earning assets: Farmer Mac I and II Securities $ 411,025 $ 7,452 7.25% $ 370,210 $ 6,702 7.24% Investments and cash equivalents 106,441 1,469 5.52% 93,776 1,328 5.66% Total earning assets 517,466 8,921 6.90% 463,986 8,030 6.92% Other assets 14,838 11,220 $ 532,304 $ 475,206 LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing liabilities Debentures, notes and bonds, net $ 513,960 $ 8,394 6.53% $ 456,572 $ 7,763 6.80% Other liabilities 6,771 6,594 Stockholders' equity 11,573 12,040 $ 532,304 $ 475,206 Net interest income/ spread $ 527 0.37% $ 267 0.12% Net yield on interest earning assets 0.41% 0.23% </TABLE>
Rate/Volume Analysis. The table below sets forth certain information regarding the changes in the components of Farmer Mac's net interest income for the periods indicated. For each category, information is provided on changes attributable to (a) changes in volume (change in volume multiplied by old rate); (b) changes in rate (change in rate multiplied by old volume); and (c) the total. Combined rate/volume variances, a third element of the calculation, are allocated based on their relative size. <TABLE> Three Months Ended March 31, 1996 Compared to Three Months Ended March 31, 1995 Increase or (Decrease) Due to Rate Volume Total (in thousands) <S> <C> <C> <C> Income from interest-earning assets: Farmer Mac I and II Securities $ 10 $ 740 $ 750 Investments and cash equivalents (33) 174 141 Total income from interest-earning assets (23) 914 891 Expense on interest-bearing liabilities (289) 920 631 Change in net interest income $ 266 $ (6) $ 260 </TABLE>
PERIOD ENDED MARCH 31, 1996 COMPARED TO PERIOD ENDED MARCH 31, 1995 Net Interest Income. Net interest income totaled $527 thousand for the three months ended March 31, 1996, a $260 thousand increase from the three months ended March 31, 1995. The increase in net interest income is attributable to the 25 basis point (0.25%) increase in the net interest spread, primarily a result of the decrease in the cost of interest- bearing liabilities from the three months ended March 31, 1995 to the three months ended March 31, 1996. Interest Income. Interest income totaled $8.9 million and $8.0 million for the three months ended March 31, 1996 and 1995, respectively. The $891 thousand increase is attributable to the increase in the average balance of interest-earning assets which more than offset the slight decline in the average rate of interest-earning assets. The increase in the average balance of interest-earning assets is attributable to the increases in the average balance of Guaranteed Portions and Securities issued under the Farmer Mac II Program and the average balance of investments. Interest Expense. Interest expense for the three months ended March 31, 1996 and 1995 totaled $8.4 million and $7.8 million, respectively. The $631 thousand increase in interest expense is attributable to the increase in the average balance of interest-bearing liabilities, offset by the decrease in the average cost of those liabilities. The average balance of interest-bearing liabilities increased $57.4 million from $456.6 million at March 31,1995 to $514.0 million at March 31, 1996. Other Income. Other income totaled $338 thousand and $324 thousand for the three months ended March 31, 1996 and 1995, respectively. Guarantee fee income, the principal component of other income, decreased $4 thousand from $307 thousand for the three months ended March 31, 1995 to $303 thousand for the three months ended March 31, 1996, a result of the reduction in total Guaranteed Securities outstanding from the comparable period in 1995. Miscellaneous income, composed primarily of transaction fees generated from the Farmer Mac II Program, increased $18 thousand from $17 thousand for the three months ended March 31, 1995 to $35 thousand for the three months ended March 31, 1996. The increase in transaction fees resulted from the increased level of issuances under the Farmer Mac II Program. Farmer Mac issued $15.0 million of Farmer Mac II Securities in the three months ended March 31, 1996, as compared to $4.4 million of Farmer Mac II Securities and $3.5 million of Guaranteed Portions purchased during the three months ended March 31, 1995. Other Expenses. Other expenses totaled $1.0 million for the three months ended March 31, 1996, an increase of $125 thousand from the three months ended March 31, 1995. The increase in other expenses is attributable to the increases in professional fees and compensation and employee benefits, which were partially offset by the decrease in regulatory fees. Professional fees, comprised of fees for legal, accounting and consulting services, increased $72 thousand from the three months ended March 31, 1995 to the three months ended March 31, 1996. These increases were largely the result of legal and consulting fees incurred during the 1996 first quarter. Farmer Mac incurred legal fees in connection with negotiating the documentation to effect the purchase by Zions First National Bank of Class A Voting Common Stock. Farmer Mac utilized consultants to assist with the Corporation's legislative initiative, to develop the economic risk model and to advise the Board of Directors on executive compensation. Regulatory fees decreased $21 thousand from the three months ended March 31, 1995 to the three months ended March 31, 1996, a result of the decrease in Farmer Mac's assessment from $368 thousand for the 1994-95 FCA fiscal year to $285 thousand for the 1995-96 FCA fiscal year. Compensation and employee benefits increased $66 thousand from the three months ended March 31, 1995 to the three months ended March 31, 1996, a result of an increase in staffing from the comparable periods in 1995, and a change in the officer compensation structure. Farmer Mac added two additional employees, one in the second quarter of 1995 and one in the fourth quarter of 1995, to assist with the Farmer Mac II Program and portfolio analysis. The Board of Directors worked with a compensation consultant to establish a new compensation structure for officers, which included incorporating the former initial level of targeted annual incentive compensation into annual base salary and devising a long-term incentive compensation program involving the use of non-qualified stock options. No options have been granted under this new structure, although target levels have been established. Dividends. Farmer Mac has not paid and does not expect to pay dividends on its common stock in the near future. Dividends on the common stock are subject to determination and declaration by the Board. In February 1992, the Board adopted a policy stating that no dividends would be paid on Farmer Mac Voting or Non-Voting Common Stock until such time Farmer Mac's stockholders' equity is at least equal to $22 million (the amount of gross proceeds raised by Farmer Mac in its initial common stock offering). Thereafter, up to 50% of accumulated net earnings may be paid out as dividends, provided that stockholders' equity remains at least equal to $22 million. No preference between holders of the Voting Common Stock and Class C Non-Voting Common Stock has been established relating to dividends. The ratio of dividends paid on each share of Class C Non-Voting Common Stock to each share of Voting Common Stock, however, will be three-to-one. Dividends paid to holders of Class A and Class B Voting Common Stock will be equal.
PART II - OTHER INFORMATION Item 1. Legal Proceedings. The registrant is not a party to any pending legal proceedings. Item 2. Changes in Securities. Not applicable. Item 3. Defaults upon Senior Securities. Not applicable. Item 4. Submission of Matters to a Vote of Stockholders. Not applicable. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Description * 3.1 - Title VIII of the Farm Credit Act of 1971, as most recently amended by the Farm Credit System Reform Act of 1996, P.L. 104-105 (Form 10-K filed March 29, 1996). ** 3.2 - Amended and restated Bylaws of the Registrant. +* 10.1 - Stock Option Plan (Previously filed as Exhibit 19.1 to Form 10-Q filed August 14, 1992). ____________________ * Incorporated by reference to the indicated prior filing. ** Filed herewith. + Management contract or compensatory plan.
+* 10.1.1 - Amendment No. 1 to Stock Option Plan Previously filed as Exhibit 10.2 to Form 10-Q filed August 16, 1993). +* 10.2 - Employment Agreement dated May 5, 1989 between Henry D. Edelman and the Registrant (Previously filed as Exhibit 10.4 to Form 10-K filed February 14, 1990). +* 10.2.1 - Amendment No. 1 dated January 10, 1991 to Employment Agreement between Henry D. Edelman and the Registrant (Previously filed as Exhibit 10.4 to Form 10-K filed April 1, 1991). +* 10.2.2 - Amendment to Employment Contract dated as of June 1, 1993 between Henry D. Edelman and the Registrant (Previously filed as Exhibit 10.5 to Form 10-Q filed November 15, 1993). +* 10.2.3 - Amendment No. 3 dated as of June 1, 1994 to Employment Contract between Henry D. Edelman and the Registrant (Previously filed as Exhibit 10.5 to Form 10-Q filed November 15, 1994). +* 10.2.4 - Amendment No. 4 dated as of February 8, 1996 to Employment Contract between Henry D. Edelman and the Registrant (Form 10-K filed March 29, 1996). +* 10.3 - Employment Agreement dated May 11, 1989 between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.5 to Form 10-K filed February 14, 1990). +* 10.3.1 - Amendment dated December 14, 1989 to Employment Agreement between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.5 to Form 10-K filed February 14, 1990). +* 10.3.2 - Amendment No. 2 dated February 14, 1991 to Employment Agreement between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.7 to Form 10-K filed April 1, 1991). ___________________ * Incorporated by reference to the indicated prior filing. + Management contract or compensatory plan.
+* 10.3.3 - Amendment to Employment Contract dated as of June 1, 1993 between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.9 to Form 10-Q filed November 15, 1993). +* 10.3.4 - Amendment No. 4 dated June 1, 1993 to Employment Contract between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.11 to Form 10-K filed March 30, 1994). +* 10.3.5 - Amendment No. 5 dated as of June 1, 1994 to Employment Contract between Nancy E. Corsiglia and the Registrant (Previously filed as Exhibit 10.12 to Form 10-Q filed August 15, 1994). +* 10.3.6 - Amendment No. 6 dated as of June 1, 1995 to Employment Contract between Nancy E. Corsiglia and the Registrant (Form 10-Q filed August 14, 1995). +* 10.3.7 - Amendment No. 7 dated as of February 8, 1996 to Employment Contract between Nancy E. Corsiglia and the Registrant (Form 10-K filed March 29, 1996). +* 10.4 - Employment Agreement dated June 13, 1989 between Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.6 to Form 10-K filed April 1, 1990). +* 10.4.1 - Amendment No. 1 dated February 14, 1991 to Employment Agreement between Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.9 to Form 10-K filed April 1, 1991). +* 10.4.2 - Amendment to Employment Contract dated as of June 1, 1993 between Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.12 to Form 10-Q filed November 15, 1993). +* 10.4.3 - Amendment No. 3 dated June 1, 1993 to Employment Contract between Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.16 to Form 10-K filed March 30,1994). _________________ * Incorporated by reference to the indicated prior filing. + Management contract or compensatory plan.
* 10.4.4 - Amendment No. 4 dated as of June 1, 1994 to Employment Contract between Thomas R. Clark and the Registrant (Previously filed as Exhibit 10.17 to Form 10-Q filed August 15, 1994). +* 10.4.5 - Amendment No. 5 dated as of June 1, 1995 to Employment Contract between Thomas R. Clark and the Registrant (Form 10-Q filed August 14, 1995). +* 10.4.6 - Amendment No. 6 dated as of February 8, 1996 to Employment Contract between Thomas R. Clark and the Registrant (Form 10-K filed March 29, 1996). +* 10.5 - Employment Agreement dated April 29, 1994 between Charles M. Lewis and the Registrant (Previously filed as Exhibit 10.18 to Form 10-Q filed August 15, 1994). +* 10.5.1 - Amendment No. 1 dated as of June 1, 1995 to Employment Contract between Charles M. Lewis and the Registrant (Form 10-Q filed August 14, 1995). +* 10.5.2 - Amendment No. 2 dated as of February 8, 1996 to Employment Contract between Charles M. Lewis and the Registrant (Form 10-K filed March 29, 1996). +* 10.6 - Employment Agreement dated October 7, 1991 between Michael T. Bennett and the Registrant (Previously filed as Exhibit 10.16 to Form 10-K filed March 30, 1992). +* 10.6.1 - Amendment to Employment Contract dated as of June 1, 1993 between Michael T. Bennett and the Registrant (Previously filed as Exhibit 10.17 to Form 10-Q filed November 15, 1993). +* 10.6.2 - Amendment No. 2 dated June 1, 1993 to Employment Contract between Michael T. Bennett and the Registrant (Previously filed as Exhibit 10.21 to Form 10-K filed March 30, 1994). +* 10.6.3 - Amendment No. 3 dated June 1, 1994 to Employment Contract between Michael T. Bennett and the Registrant (Previously filed as Exhibit 10.22 to Form 10-K filed August 15, 1994). __________________ * Incorporated by reference to the indicated prior filing. + Management contract or compensatory plan.
+* 10.6.4 - Amendment No. 4 dated as of June 1, 1995 to Employment Contract between Michael T. Bennett and the Registrant (Form 10-Q filed August 14, 1995). +* 10.6.5 - Amendment No. 5 dated as of February 8, 1996 to Employment Contract between Michael T. Bennett and the Registrant (Form 10-K filed March 29, 1996). +* 10.7 - Employment Agreement dated March 15, 1993 between Christopher A. Dunn and the Registrant (Previously filed as Exhibit 10.17 to Form 10-Q filed May 17, 1993). +* 10.7.1 - Amendment to Employment Contract dated as of June 1, 1993 between Christopher A. Dunn and the Registrant (Previously filed as Exhibit 10.19 to Form 10-Q filed November 15, 1993). +* 10.7.2 - Amendment No. 2 dated June 1, 1993 to Employment Contract between Christopher A. Dunn and the Registrant (Previously filed as Exhibit 10.25 to Form 10-K filed March 30, 1994). +* 10.7.3 - Amendment No. 3 dated as of June 1, 1994 toEmployment Contract between Christopher A. Dunn and the Registrant (Previously filed as Exhibit 10.26 to Form 10-Q filed August 15, 1994). +* 10.7.4 - Amendment No. 4 dated as of June 1, 1995 to Employment Contract between Christopher A. Dunn and the Registrant (Form 10-Q filed August 14, 1995). +* 10.7.5 - Amendment No. 5 dated as of February 8, 1996 to Employment Contract between Christopher A. Dunn and the Registrant (Form 10-K filed March 29, 1996). * 10.8 - Lease Agreement, dated September 30, 1991 between 919 Eighteenth Street, N.W. Associates Limited Partnership and the Registrant (Previously filed as Exhibit 10.20 to Form 10-K filed March 30, 1992). __________________ * Incorporated by reference to the indicated prior filing. + Management contract or compensatory plan.
* 10.9 - Strategic Alliance Agreement, dated November 15, 1994 between Western Farm Credit Bank and the Registrant, as amended January 1, 1995 (Previously filed as Exhibit 10.28 to Form 10-K filed March 31, 1995). * 10.9.1 - Amendment No. 2 dated as of December 15, 1995 to Strategic Alliance Agreement between Western Farm Credit Bank and the Registrant (Form 10-K filed March 29, 1996). ** 10.9.2 - Amendment No. 3 dated as of March 15, 1996 to Strategic Alliance Agreement between Western Farm Credit Bank and the Registrant. 21 - Subsidiaries. 21.1 - Farmer Mac Mortgage Securities Corporation, a Delaware Corporation. 21.2 - Farmer Mac Acceptance Corporation, a Delaware Corporation. * 99.1 _ Map of U.S. Department of Agriculture (USDA) Regions (Previously filed as Exhibit 1.1 to Form 10-K filed April 1, 1991). (b) Reports on Form 8-K. The Registrant filed a report on Form 8-K on February 10, 1996 to report the amendment of its charter through the enactment of the Farm Credit System Reform Act, P.L. 104-105, 110 Stat. 162 (1996). The charter, as amended, was included with the Registrant's Form 10-K filed March 29, 1996 as Exhibit 3.1. ___________________ * Incorporated by reference to the indicated prior filing. ** Filed herewith. + Management contract or compensatory plan.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FEDERAL AGRICULTURAL MORTGAGE CORPORATION May 15, 1996 By: /s/ Henry D. Edelman _____________________________________ Henry D. Edelman President and Chief Executive Officer (Principal Executive Officer) /s/ Nancy E. Corsiglia ___________________________________ Nancy E. Corsiglia Vice President - Business Development, Treasurer and Chief Financial Officer (Principal Financial Officer)
Securities and Exchange Commission Washington, D.C. 20549 Exhibits to Form 10-Q under The Securities Exchange Act of 1934 Federal Agricultural Mortgage Corporation
Exhibit Description ** 3.2 Amended and restated Bylaws of the Registrant. ** 10.9.2 Amendment No. 3 dated as of March 15, 1996 to Strategic Alliance Agreement between Western Farm Credit Bank and the Registrant. ___________________ ** Filed Herewith.
EXHIBIT 3.2
EXHIBIT 10.9.2