Farmer Mac Continues Profit Advances in 2001

Operating Earnings Per Share Up 29% for First Quarter



Apr 19, 2001, 01:00 ET from Farmer Mac

    WASHINGTON, April 19 /PRNewswire/ -- The Federal Agricultural Mortgage
 Corporation (Farmer Mac) (NYSE:   AGM; AGMA) today announced diluted operating
 earnings per share of $0.27 for first quarter 2001, a new record reflecting a
 29 percent increase over first quarter 2000 diluted earnings per share of
 $0.21, and an 8 percent increase over fourth quarter 2000 diluted earnings per
 share of $0.25.  Operating income was $3.2 million for the quarter, compared
 to $2.4 million for first quarter 2000 and $2.9 million for fourth quarter
 2000.  Operating income, revenues, return on equity and earnings per share are
 new operating measures that exclude the cumulative effect of the change in
 accounting principles recognized on January 1, 2001 under Statement of
 Financial Accounting Standards No. 133, Accounting for Derivative Instruments
 and Hedging Activities ("FAS 133"), and its ongoing effects during the first
 quarter, in order to present measures consistent with prior presentations.
 Net income for first quarter 2001, including the cumulative and ongoing
 effects of FAS 133 during the quarter, was $2.2 million or $0.18 per share.
     Farmer Mac President and Chief Executive Officer Henry D. Edelman
 observed, "Farmer Mac demonstrated its ability once again to deliver
 consistent earnings growth.  At the end of the quarter, outstanding guarantee
 volume for all Farmer Mac programs was a record $3.2 billion, up 35 percent
 over the year-earlier level.  During the quarter, daily volume of loan
 purchases in both the Farmer Mac I cash window and Farmer Mac II programs grew
 steadily.  With regard to the latter program, we are pleased to note that
 Farmer Mac II set a new record, with purchases of $47 million for the first
 quarter."
     "Furthermore, we did $98 million in Farmer Mac I purchases and guarantees,
 including  $50 million in long-term standby commitments, and entered into
 agreements to provide Farmer Mac I long-term standby commitments for an
 additional $151 million that go into effect in the second quarter of 2001.
 Our flexibility to meet the changing and growing needs of agricultural lenders
 through these and other creative products has enhanced Farmer Mac's ability to
 increase its guarantee volume, and demand for these products continues to be
 strong in the second quarter.  Although the timing and size of these
 transactions will vary, lender awareness of their economic and regulatory
 benefits is growing in the marketplace and Farmer Mac is ready to meet the
 needs of the lenders."
     "On the whole, we believe that agricultural market conditions for 2001
 will be similar to those of 2000 -- low commodity prices, favorable interest
 rates, relatively stable land values and consistent federal agricultural
 support -- notwithstanding the change in the U.S. executive branch.  Farmer
 Mac will continue to manage its operations within these parameters for the
 benefit of the farming community and our stockholders.  We are confident that
 lenders' increasing focus on capital efficiency, competitiveness and credit
 concentration issues will keep the Corporation on track to meet or exceed
 market analyst projections as of the date of this release for its financial
 performance in 2001."
 
     Net Interest Income
     Net interest income was $5.5 million for first quarter 2001, compared to
 $4.6 million for first quarter 2000 and $4.5 million for fourth quarter 2000.
 The net interest yield, exclusive of guarantee fees, was 0.66 percent for
 first quarter 2001, compared to 0.67 percent for first quarter 2000 and 0.60
 percent for fourth quarter 2000.  The increases in net interest income and net
 interest yield resulted from continued growth in our retained portfolio of
 Farmer Mac guaranteed securities (AMBS), augmented by sound financial
 strategies, including the ongoing rebalancing of Farmer Mac's debt obligations
 and investment portfolio in response to developments in the financial markets.
 
     Other Income
     Other income, which is comprised of guarantee fee income and miscellaneous
 income, totaled $3.6 million for first quarter 2001, compared to $2.8 million
 for first quarter 2000 and $3.5 million for fourth quarter 2000.  Guarantee
 fee income, the largest component of other income, was $3.4 million for first
 quarter 2001, compared to $2.6 million for first quarter 2000 and $3.4 million
 for fourth quarter 2000.  The relative increases in guarantee fees reflect an
 increase in the average balance of outstanding guarantees.  Miscellaneous
 income was $166,000 for first quarter 2001, compared to $182,000 and $149,000
 for first quarter 2000 and fourth quarter 2000, respectively.
 
     Operating Expenses
     During first quarter 2001, operating expenses totaled $2.6 million,
 compared to $2.4 million for first quarter 2000 and $2.3 million for fourth
 quarter 2000.  Operating expenses were consistent as a percentage of operating
 revenues for the same quarters at 29 percent, compared to 33 percent and 28
 percent, respectively, in the prior periods.
 
     Credit
     As of March 31, 2001, Farmer Mac I loans purchased or guaranteed after the
 enactment in 1996 of changes to Farmer Mac's statutory charter ("post-1996 Act
 loans") that were 90 days or more past due, in foreclosure or in bankruptcy
 represented 2.62 percent of the principal balance of all post-1996 Act loans,
 compared to 1.45 percent as of March 31, 2000 and 1.25 percent as of December
 31, 2000.  (Farmer Mac assumes 100 percent of the credit risk on post-1996 Act
 loans; pre-1996 Act loans are supported by mandatory 10 percent subordinated
 interests that mitigate Farmer Mac's credit exposure.)  Farmer Mac anticipates
 fluctuations in the delinquency rate from quarter to quarter, with higher
 levels likely to be reported during the first and third quarters of each year
 due to the semiannual payment characteristics of most Farmer Mac loans.  While
 the year-over-year increase is not insignificant, it is more reflective of
 liquidity issues in the agricultural sector than a decline in land values or
 other potentially serious drivers of loan losses.
     Total direct governmental payments to the agricultural sector for 2000 are
 estimated by the U.S. Department of Agriculture (USDA) to have been a record
 $22.1 billion, resulting in farm income levels during 2000 significantly above
 the decade (1991-2000) average.  The federal income support is not allocated
 equally to producers of all agricultural commodities, however, and farmers and
 ranchers producing agricultural commodities that receive significant federal
 income support should demonstrate greater liquidity than those who do not
 receive payments. It is expected that additional federal support will be
 provided to the agricultural sector in 2001, although the specific amount has
 not yet been determined.
     As of March 31, 2001, the weighted average loan-to-value ratio for all
 post-1996 Act loans was 50.7 percent.  Although Farmer Mac expects to
 recognize losses on the existing post-1996 Act delinquent loans, management
 believes that those losses are adequately covered by the reserve for losses,
 based on the value of the collateral securing the loans.  Management believes
 that the delinquent loans have current loan-to-value ratios that adequately
 protect against losses at liquidation, with the exception of certain loans
 that are partly secured by depreciable assets that may result in Farmer Mac
 incurring losses upon loan liquidation.  Farmer Mac recognized $321,000 in
 losses in first quarter 2001.  Farmer Mac's provision for principal and
 interest losses was $1.4 million for first quarter 2001, compared to $1.3
 million for first quarter 2000 and $1.3 million for fourth quarter 2000.  As
 of March 31, 2001, Farmer Mac's reserve for losses totaled $12.4 million, or
 0.49 percent of outstanding post-1996 Act loans, compared to $7.9 million
 (0.42 percent) as of March 31, 2000.
 
     Provision for Income Taxes
     The provision for income taxes totaled $1.6 million for first quarter
 2001, compared to $1.3 million for first quarter 2000 and $1.6 million for
 fourth quarter 2000.  Farmer Mac's effective tax rate for each quarter was
 35.5 percent.
 
     Capital
     Farmer Mac's regulatory core capital totaled $104.8 million as of March
 31, 2001, compared with $91.6 million as of March 31, 2000 and $101.2 million
 as of December 31, 2000.  The capital balance as of March 31, 2001 exceeded
 Farmer Mac's regulatory minimum capital requirement by approximately $14.1
 million.
     On April 12, 2001, the Farm Credit Administration ("FCA") issued its final
 risk-based capital regulation for Farmer Mac.  The regulation is scheduled to
 become effective in approximately one month, and one year after the effective
 date Farmer Mac will be required to meet the risk-based capital standards.  As
 noted in our June 12, 2000 comment letter to the FCA on the proposed
 regulation, Farmer Mac believes that certain significant aspects of the risk-
 based capital regulation do not comply with the authorizing statute.  The
 economic model incorporated in the regulation is extremely complex, and we are
 still analyzing its potential effects.  We have requested that FCA assist us
 in understanding the operation of the regulation and the model; however, if
 unchanged, the regulation -- particularly those provisions that suggest to us
 that the FCA went outside the authorizing statute -- could lead to an increase
 in the capital requirement for certain newly guaranteed off-balance sheet
 program assets and so alter Farmer Mac's strategic plan for future growth.
 While we are at this time uncertain whether the regulation, as issued, would
 alter that strategic plan, we expect that any issues raised by the regulation
 will be resolved in accordance with the authorizing statute before Farmer Mac
 is required to meet the risk-based capital standards.
     Average return on equity, excluding the effects of Statement of Financial
 Accounting Standards No. 115, Accounting for Certain Investments in Debt and
 Equity Securities, and FAS 133, was 12.3 percent for first quarter 2001,
 compared to 10.5 percent for first quarter 2000 and 11.5 percent for fourth
 quarter 2000.
 
     Change in Accounting Principles
     FAS 133, a revised accounting rule for determining the treatment of
 derivative securities, became effective as of January 1, 2001.  FAS 133
 requires financial derivatives to be measured and recorded at fair value.
 Such derivatives, which Farmer Mac uses to hedge interest rate risk, were
 previously accounted for as off-balance sheet items and disclosed in the
 financial statement footnotes.
     The cumulative effect of this change in accounting principles, which
 accelerated recognition of certain costs associated with derivative
 instruments formerly amortized over the lives of those derivative instruments,
 was a charge of $726,000 and a negative adjustment of $8.6 million to other
 comprehensive income within stockholders' equity recognized on January 1,
 2001.  Farmer Mac projects that the charge to income will be offset over time
 (predominantly over the next two years) as Farmer Mac recognizes income from
 the assets hedged by the derivative instruments without recognizing any
 amortization of the related costs.  Additionally, further net after tax
 charges against earnings under FAS 133 during first quarter 2001 totaled
 $380,000, and those included as net after tax reductions to other
 comprehensive income were $3.6 million. Management believes that reporting
 results by reference to operating income, revenues, return on equity and
 earnings per share provides a more accurate comparison of Farmer Mac's
 financial performance to previous presentations.
 
     Forward-Looking Statements
     In addition to historical information, this release includes forward-
 looking statements reflecting management's current expectations for Farmer
 Mac's future financial results, business prospects and business developments.
 Management's expectations for Farmer Mac's future necessarily involve
 assumptions, estimates, and the evaluation of risks and uncertainties.
 Various factors could cause actual events or results to differ materially from
 those expectations. Some of the important factors that could cause Farmer
 Mac's actual results to differ materially from management's expectations
 include:  (1) uncertainties regarding the rate and direction of the
 development of the secondary market for agricultural mortgage loans; (2)
 uncertainties in the agricultural economy resulting from low commodity prices,
 weak demand for U.S. agricultural products and crop damage from natural
 disasters; and (3) the implementation of additional statutory or regulatory
 restrictions applicable to Farmer Mac, such as the imposition of regulatory
 risk-based capital requirements with an aggregate effect in excess of the
 statutory minimum and critical capital levels or restrictions on Farmer Mac's
 investment authority.  These and other factors are discussed in Farmer Mac's
 Annual Report on Form 10-K for the year ended December 31, 2000, as filed with
 the Securities and Exchange Commission on March 26, 2001. The forward-looking
 statements contained herein represent management's expectations as of the date
 of this release.  Farmer Mac undertakes no obligation to release publicly the
 results of any revisions to the forward-looking statements included herein to
 reflect events or circumstances after today, or to reflect the occurrence of
 unanticipated events.
     Farmer Mac is a stockholder-owned instrumentality of the United States
 chartered by Congress to establish a secondary market for agricultural real
 estate and rural housing mortgage loans, and to facilitate capital market
 funding for U.S. Department of Agriculture guaranteed farm program and rural
 development loans.  Farmer Mac's Class C and Class A common stocks are listed
 on the New York Stock Exchange under the symbols AGM and AGMA, respectively.
 Additional information about Farmer Mac (as well as the Form 10-K referenced
 above) is available on Farmer Mac's website at www.farmermac.com.  An audio
 recording of the conference call to discuss Farmer Mac's first quarter 2001
 earnings and this press release will be available on Farmer Mac's website
 after 2 p.m. eastern time, Friday, April 20, 2001.
 
                     Federal Agricultural Mortgage Corporation
                            Consolidated Balance Sheets
 
 
                                            March 31,  December 31,   March 31,
                                               2001        2000         2000
                                                      (in thousands)
     Assets:
      Cash and cash equivalents               $320,437    $537,871    $344,822
      Investment securities                    819,957     836,757     927,673
      Farmer Mac guaranteed securities       1,711,183   1,679,993   1,289,175
      Loans                                     12,407      30,279      28,897
      Financial Derivatives                        593         -           -
      Interest receivable                       33,570      55,681      29,308
      Guarantee fees receivable                  3,055       5,494       2,618
      Prepaid expenses and other assets         14,856      14,824      16,827
       Total assets                         $2,916,058  $3,160,899  $2,639,320
 
     Liabilities and stockholders' equity:
      Notes payable:
       Due within one year                  $2,024,233  $2,201,691  $1,781,310
       Due after one year                      715,901     767,492     745,735
        Total notes payable                  2,740,134   2,969,183   2,527,045
 
      Financial Derivatives                     19,610         -           -
      Accrued interest payable                  15,706      20,852      11,904
      Accounts payable and accrued expenses     12,417      26,880       5,398
      Reserve for losses                        12,386      11,323       7,901
       Total liabilities                     2,800,253   3,028,238   2,552,248
 
      Stockholders' equity                     115,805     132,661      87,072
       Total liabilities and stockholders'
        equity                              $2,916,058  $3,160,899  $2,639,320
 
 
 
                     Federal Agricultural Mortgage Corporation
                       Consolidated Statements of Operations
 
                                                     Quarter Ended
                                           March 31,  December 31,   March 31,
                                              2001        2000         2000
                                       (in thousands, except per share amounts)
     Interest income:
       Investments and cash equivalents       $21,088     $23,147     $21,958
       Farmer Mac guaranteed securities        28,740      28,886      21,694
       Loans                                      603         534       1,240
     Total interest income                     50,431      52,567      44,892
 
     Interest expense                          44,978      48,061      40,276
     Net interest income                        5,453       4,506       4,616
     Gains/(Losses) on financial
      derivatives
     and trading assets                          (589)          -           -
     Other income:
       Guarantee fees                           3,428       3,368       2,582
       Miscellaneous                              166         149         182
     Total other income                         3,594       3,517       2,764
     Total revenues                             8,458       8,023       7,380
     Other expenses:
       Compensation and employee benefits       1,237       1,168       1,251
       Regulatory fees                            223         133         150
       General and administrative               1,145         966       1,007
     Total operating expenses                   2,605       2,267       2,408
 
       Provision for losses                     1,383       1,297       1,317
     Total expenses                             3,988       3,564       3,725
     Income before income taxes                 4,470       4,459       3,655
 
     Income tax provision                       1,588       1,586       1,297
     Net Income before cumulative effect        2,882       2,873       2,358
     Cumulative effect of change
     in accounting principles, net of tax        (726)          -           -
 
     Net income                                $2,156      $2,873      $2,358
 
     Earnings per share:
         Basic earnings per share               $0.19       $0.26       $0.22
         Diluted earnings per share             $0.18       $0.25       $0.21
     Earnings per share excluding
      cumulative effect of change in
      accounting principles:
         Basic earnings per share               $0.26       $0.26       $0.22
         Diluted earnings per share             $0.25       $0.25       $0.21
     Operating Earnings per share:*
         Basic earnings per share               $0.28       $0.26       $0.22
         Diluted earnings per share             $0.27       $0.25       $0.21
 
      *  operating earnings per share excludes the cumulative effect of FAS 133
         and its ongoing effects during the first quarter 2001
 
                   Federal Agricultural Mortgage Corporation
                            Supplemental Information
 
 
     The following tables set forth quarterly activity regarding: loan purchase
 commitments; loan purchases and loan guarantees; AMBS issuances;
 delinquencies; and outstanding guarantees.
 
         Commitments to Purchase or Guarantee Farmer Mac I Loans (1)
                               Long-Term  5 and 7
                                Fixed      Year
                                 Rate     Resets    ARMs     Total  Outstanding
                                                 (in thousands)
     For the quarter ended:
 
      March 31, 2001            $40,463  $11,447  $59,494  $111,404  $18,398
      December 31, 2000         159,039    2,261   70,454   231,753   13,223
      September 30, 2000        288,274  126,909   40,097   455,280   10,983
      June 30, 2000              45,838    2,822   32,361    81,021    8,641
      March 31, 2000             10,369   16,835   32,438    59,642   10,707
      December 31,1999          317,357    6,882   75,326   399,565   12,470
      September 30, 1999         26,623   19,384   34,170    80,177   17,010
 
     For the year ended:
      December 31, 2000         384,944  158,013  164,390   707,347   18,398
      December 31, 1999         537,190   58,065  203,536   798,791   12,470
 
 
                 Purchases and Guarantees of Farmer Mac I Loans (1)
                                       Long-Term   5 and 7
                                         Fixed      Year
                                         Rate      Resets    ARMs      Total
                                                     (in thousands)
     For the quarter ended:
 
       March 31, 2001                   $39,742    $4,902   $53,651    $98,295
       December 31, 2000                160,706     1,176    64,344    226,226
       September 30,2000                286,303   126,845    37,801    450,949
       June 30, 2000                     43,508     5,702    30,778     79,988
       March 31, 2000                    11,917    13,185    33,181     58,283
       December 31, 1999                319,478     9,522    73,030    402,030
       September 30, 1999                26,670    14,862    29,029     70,561
 
     For the year ended:
       December 31, 2000                381,470   150,634   155,411    687,515
       December 31, 1999                662,186    57,176   483,402  1,202,764
 
 
 
                   Federal Agricultural Mortgage Corporation
                      Supplemental Information (continued)
 
 
                          Farmer Mac I AMBS Issuances (2)
                                          Long-Term  5 and 7
                                            Fixed     Year
                                            Rate     Resets    ARMs     Total
                                                      (in thousands)
     For the quarter ended:
       March 31, 2001                      $14,425   $4,900   $47,047  $66,372
       December 31, 2000                     6,777    1,176    27,824   35,777
       September 30,2000                     5,589    3,790    35,916   45,295
       June 30, 2000                        15,122    4,950    36,749   56,821
       March 31, 2000                        6,582   14,616    45,880   67,078
       December 31, 1999                   128,641    8,084    17,069  153,794
       September 30, 1999                   95,121   33,532    24,744  153,397
 
     For the year ended:
       December 31, 2000                    34,070   24,531   146,370  204,971
       December 31, 1999                   359,185   57,887   277,517  694,589
 
 
 
                Farmer Mac I Delinquencies (3)
 
                                                      Distribution of Post-1996
                            Post-1996  Pre-1996          Act Delinquencies
     As of:                   Act      Act (5)  Total     as of March 31, 2001
                                                        By loan-to-value ratio:
       March 31, 2001         2.62%    5.83%    2.72%     0.00% to 40.00%  13%
       December 31, 2000      1.25%    6.49%    1.44%    40.01% to 50.00%  15%
       September 30, 2000     1.80%    5.55%    1.96%    50.01% to 60.00%  31%
       June 30, 2000          1.25%    4.12%    1.41%    60.01% to 70.00%  38%
       March 31, 2000         1.45%    4.89%    1.65%    70.01% to 80.00%   3%
       December 31, 1999      1.05%    3.04%    1.18%               Total 100%
 
 
 
                   Federal Agricultural Mortgage Corporation
                      Supplemental Information (continued)
 
 
                             Outstanding Guarantees (4)
                                                      Farmer Mac I
                                               Post-1996 Act       Pre-1996
                                            AMBS         LTSPC        Act
                                                                 (in thousands)
     As of:
      March 31, 2001                     $1,466,443   $1,083,528      $72,646
      December 31, 2000                   1,615,914      862,804       83,513
      September 30, 2000                  1,621,516      707,850       92,536
      June 30, 2000                       1,354,623      575,143      100,414
      March 31, 2000                      1,310,710      551,423      107,403
      December 31, 1999                   1,266,522      575,097      118,214
      September 30, 1999                  1,118,266      367,934      130,452
 
 
                             Outstanding Guarantees (4)
 
                                            Farmer                  Held in
                                            Mac II      Total     Portfolio (5)
 
     As of:
      March 31, 2001                        $549,003  $3,171,620   $1,648,896
      December 31, 2000                      517,703   3,079,934    1,581,905
      September 30, 2000                     491,820   2,913,722    1,571,315
      June 30, 2000                          467,352   2,497,532    1,292,359
      March 31, 2000                         387,992   2,357,528    1,268,889
      December 31, 1999                      383,266   2,343,099    1,237,623
      September 30, 1999                     377,663   1,994,315    1,190,741
 
 
     (1) Includes long-term standby purchase commitments ("LTSPCs"), which
         obligate Farmer Mac to purchase loans in the pool at par when they
         become four or more months delinquent.  In exchange, Farmer Mac
         receives an annual commitment fee on the outstanding balance of the
         pool over the life of the loans.
     (2) Includes AMBS issued and retained by Farmer Mac.  Such transactions
         totaled $33.9 million in first quarter 2001, $20.7 million in fourth
         quarter 2000, $25.0 million in third quarter 2000, $21.7 million in
         second quarter 2000, $46.5 million in first quarter 2000 and $50.6
         million in fourth quarter 1999.
     (3) Includes loans 90 days or more past due, in foreclosure or in
         bankruptcy.
     (4) Pre-1996 Act loans back securities that are supported by unguaranteed
         subordinated interests representing approximately 10 percent of the
         balance of the loans.  Farmer Mac assumes 100 percent of the credit
         risk on post-1996 Act loans.  Farmer Mac II loans are guaranteed by
         the U.S. Department of Agriculture.
     (5) Included in total outstanding guarantees.
 
 

SOURCE Farmer Mac
    WASHINGTON, April 19 /PRNewswire/ -- The Federal Agricultural Mortgage
 Corporation (Farmer Mac) (NYSE:   AGM; AGMA) today announced diluted operating
 earnings per share of $0.27 for first quarter 2001, a new record reflecting a
 29 percent increase over first quarter 2000 diluted earnings per share of
 $0.21, and an 8 percent increase over fourth quarter 2000 diluted earnings per
 share of $0.25.  Operating income was $3.2 million for the quarter, compared
 to $2.4 million for first quarter 2000 and $2.9 million for fourth quarter
 2000.  Operating income, revenues, return on equity and earnings per share are
 new operating measures that exclude the cumulative effect of the change in
 accounting principles recognized on January 1, 2001 under Statement of
 Financial Accounting Standards No. 133, Accounting for Derivative Instruments
 and Hedging Activities ("FAS 133"), and its ongoing effects during the first
 quarter, in order to present measures consistent with prior presentations.
 Net income for first quarter 2001, including the cumulative and ongoing
 effects of FAS 133 during the quarter, was $2.2 million or $0.18 per share.
     Farmer Mac President and Chief Executive Officer Henry D. Edelman
 observed, "Farmer Mac demonstrated its ability once again to deliver
 consistent earnings growth.  At the end of the quarter, outstanding guarantee
 volume for all Farmer Mac programs was a record $3.2 billion, up 35 percent
 over the year-earlier level.  During the quarter, daily volume of loan
 purchases in both the Farmer Mac I cash window and Farmer Mac II programs grew
 steadily.  With regard to the latter program, we are pleased to note that
 Farmer Mac II set a new record, with purchases of $47 million for the first
 quarter."
     "Furthermore, we did $98 million in Farmer Mac I purchases and guarantees,
 including  $50 million in long-term standby commitments, and entered into
 agreements to provide Farmer Mac I long-term standby commitments for an
 additional $151 million that go into effect in the second quarter of 2001.
 Our flexibility to meet the changing and growing needs of agricultural lenders
 through these and other creative products has enhanced Farmer Mac's ability to
 increase its guarantee volume, and demand for these products continues to be
 strong in the second quarter.  Although the timing and size of these
 transactions will vary, lender awareness of their economic and regulatory
 benefits is growing in the marketplace and Farmer Mac is ready to meet the
 needs of the lenders."
     "On the whole, we believe that agricultural market conditions for 2001
 will be similar to those of 2000 -- low commodity prices, favorable interest
 rates, relatively stable land values and consistent federal agricultural
 support -- notwithstanding the change in the U.S. executive branch.  Farmer
 Mac will continue to manage its operations within these parameters for the
 benefit of the farming community and our stockholders.  We are confident that
 lenders' increasing focus on capital efficiency, competitiveness and credit
 concentration issues will keep the Corporation on track to meet or exceed
 market analyst projections as of the date of this release for its financial
 performance in 2001."
 
     Net Interest Income
     Net interest income was $5.5 million for first quarter 2001, compared to
 $4.6 million for first quarter 2000 and $4.5 million for fourth quarter 2000.
 The net interest yield, exclusive of guarantee fees, was 0.66 percent for
 first quarter 2001, compared to 0.67 percent for first quarter 2000 and 0.60
 percent for fourth quarter 2000.  The increases in net interest income and net
 interest yield resulted from continued growth in our retained portfolio of
 Farmer Mac guaranteed securities (AMBS), augmented by sound financial
 strategies, including the ongoing rebalancing of Farmer Mac's debt obligations
 and investment portfolio in response to developments in the financial markets.
 
     Other Income
     Other income, which is comprised of guarantee fee income and miscellaneous
 income, totaled $3.6 million for first quarter 2001, compared to $2.8 million
 for first quarter 2000 and $3.5 million for fourth quarter 2000.  Guarantee
 fee income, the largest component of other income, was $3.4 million for first
 quarter 2001, compared to $2.6 million for first quarter 2000 and $3.4 million
 for fourth quarter 2000.  The relative increases in guarantee fees reflect an
 increase in the average balance of outstanding guarantees.  Miscellaneous
 income was $166,000 for first quarter 2001, compared to $182,000 and $149,000
 for first quarter 2000 and fourth quarter 2000, respectively.
 
     Operating Expenses
     During first quarter 2001, operating expenses totaled $2.6 million,
 compared to $2.4 million for first quarter 2000 and $2.3 million for fourth
 quarter 2000.  Operating expenses were consistent as a percentage of operating
 revenues for the same quarters at 29 percent, compared to 33 percent and 28
 percent, respectively, in the prior periods.
 
     Credit
     As of March 31, 2001, Farmer Mac I loans purchased or guaranteed after the
 enactment in 1996 of changes to Farmer Mac's statutory charter ("post-1996 Act
 loans") that were 90 days or more past due, in foreclosure or in bankruptcy
 represented 2.62 percent of the principal balance of all post-1996 Act loans,
 compared to 1.45 percent as of March 31, 2000 and 1.25 percent as of December
 31, 2000.  (Farmer Mac assumes 100 percent of the credit risk on post-1996 Act
 loans; pre-1996 Act loans are supported by mandatory 10 percent subordinated
 interests that mitigate Farmer Mac's credit exposure.)  Farmer Mac anticipates
 fluctuations in the delinquency rate from quarter to quarter, with higher
 levels likely to be reported during the first and third quarters of each year
 due to the semiannual payment characteristics of most Farmer Mac loans.  While
 the year-over-year increase is not insignificant, it is more reflective of
 liquidity issues in the agricultural sector than a decline in land values or
 other potentially serious drivers of loan losses.
     Total direct governmental payments to the agricultural sector for 2000 are
 estimated by the U.S. Department of Agriculture (USDA) to have been a record
 $22.1 billion, resulting in farm income levels during 2000 significantly above
 the decade (1991-2000) average.  The federal income support is not allocated
 equally to producers of all agricultural commodities, however, and farmers and
 ranchers producing agricultural commodities that receive significant federal
 income support should demonstrate greater liquidity than those who do not
 receive payments. It is expected that additional federal support will be
 provided to the agricultural sector in 2001, although the specific amount has
 not yet been determined.
     As of March 31, 2001, the weighted average loan-to-value ratio for all
 post-1996 Act loans was 50.7 percent.  Although Farmer Mac expects to
 recognize losses on the existing post-1996 Act delinquent loans, management
 believes that those losses are adequately covered by the reserve for losses,
 based on the value of the collateral securing the loans.  Management believes
 that the delinquent loans have current loan-to-value ratios that adequately
 protect against losses at liquidation, with the exception of certain loans
 that are partly secured by depreciable assets that may result in Farmer Mac
 incurring losses upon loan liquidation.  Farmer Mac recognized $321,000 in
 losses in first quarter 2001.  Farmer Mac's provision for principal and
 interest losses was $1.4 million for first quarter 2001, compared to $1.3
 million for first quarter 2000 and $1.3 million for fourth quarter 2000.  As
 of March 31, 2001, Farmer Mac's reserve for losses totaled $12.4 million, or
 0.49 percent of outstanding post-1996 Act loans, compared to $7.9 million
 (0.42 percent) as of March 31, 2000.
 
     Provision for Income Taxes
     The provision for income taxes totaled $1.6 million for first quarter
 2001, compared to $1.3 million for first quarter 2000 and $1.6 million for
 fourth quarter 2000.  Farmer Mac's effective tax rate for each quarter was
 35.5 percent.
 
     Capital
     Farmer Mac's regulatory core capital totaled $104.8 million as of March
 31, 2001, compared with $91.6 million as of March 31, 2000 and $101.2 million
 as of December 31, 2000.  The capital balance as of March 31, 2001 exceeded
 Farmer Mac's regulatory minimum capital requirement by approximately $14.1
 million.
     On April 12, 2001, the Farm Credit Administration ("FCA") issued its final
 risk-based capital regulation for Farmer Mac.  The regulation is scheduled to
 become effective in approximately one month, and one year after the effective
 date Farmer Mac will be required to meet the risk-based capital standards.  As
 noted in our June 12, 2000 comment letter to the FCA on the proposed
 regulation, Farmer Mac believes that certain significant aspects of the risk-
 based capital regulation do not comply with the authorizing statute.  The
 economic model incorporated in the regulation is extremely complex, and we are
 still analyzing its potential effects.  We have requested that FCA assist us
 in understanding the operation of the regulation and the model; however, if
 unchanged, the regulation -- particularly those provisions that suggest to us
 that the FCA went outside the authorizing statute -- could lead to an increase
 in the capital requirement for certain newly guaranteed off-balance sheet
 program assets and so alter Farmer Mac's strategic plan for future growth.
 While we are at this time uncertain whether the regulation, as issued, would
 alter that strategic plan, we expect that any issues raised by the regulation
 will be resolved in accordance with the authorizing statute before Farmer Mac
 is required to meet the risk-based capital standards.
     Average return on equity, excluding the effects of Statement of Financial
 Accounting Standards No. 115, Accounting for Certain Investments in Debt and
 Equity Securities, and FAS 133, was 12.3 percent for first quarter 2001,
 compared to 10.5 percent for first quarter 2000 and 11.5 percent for fourth
 quarter 2000.
 
     Change in Accounting Principles
     FAS 133, a revised accounting rule for determining the treatment of
 derivative securities, became effective as of January 1, 2001.  FAS 133
 requires financial derivatives to be measured and recorded at fair value.
 Such derivatives, which Farmer Mac uses to hedge interest rate risk, were
 previously accounted for as off-balance sheet items and disclosed in the
 financial statement footnotes.
     The cumulative effect of this change in accounting principles, which
 accelerated recognition of certain costs associated with derivative
 instruments formerly amortized over the lives of those derivative instruments,
 was a charge of $726,000 and a negative adjustment of $8.6 million to other
 comprehensive income within stockholders' equity recognized on January 1,
 2001.  Farmer Mac projects that the charge to income will be offset over time
 (predominantly over the next two years) as Farmer Mac recognizes income from
 the assets hedged by the derivative instruments without recognizing any
 amortization of the related costs.  Additionally, further net after tax
 charges against earnings under FAS 133 during first quarter 2001 totaled
 $380,000, and those included as net after tax reductions to other
 comprehensive income were $3.6 million. Management believes that reporting
 results by reference to operating income, revenues, return on equity and
 earnings per share provides a more accurate comparison of Farmer Mac's
 financial performance to previous presentations.
 
     Forward-Looking Statements
     In addition to historical information, this release includes forward-
 looking statements reflecting management's current expectations for Farmer
 Mac's future financial results, business prospects and business developments.
 Management's expectations for Farmer Mac's future necessarily involve
 assumptions, estimates, and the evaluation of risks and uncertainties.
 Various factors could cause actual events or results to differ materially from
 those expectations. Some of the important factors that could cause Farmer
 Mac's actual results to differ materially from management's expectations
 include:  (1) uncertainties regarding the rate and direction of the
 development of the secondary market for agricultural mortgage loans; (2)
 uncertainties in the agricultural economy resulting from low commodity prices,
 weak demand for U.S. agricultural products and crop damage from natural
 disasters; and (3) the implementation of additional statutory or regulatory
 restrictions applicable to Farmer Mac, such as the imposition of regulatory
 risk-based capital requirements with an aggregate effect in excess of the
 statutory minimum and critical capital levels or restrictions on Farmer Mac's
 investment authority.  These and other factors are discussed in Farmer Mac's
 Annual Report on Form 10-K for the year ended December 31, 2000, as filed with
 the Securities and Exchange Commission on March 26, 2001. The forward-looking
 statements contained herein represent management's expectations as of the date
 of this release.  Farmer Mac undertakes no obligation to release publicly the
 results of any revisions to the forward-looking statements included herein to
 reflect events or circumstances after today, or to reflect the occurrence of
 unanticipated events.
     Farmer Mac is a stockholder-owned instrumentality of the United States
 chartered by Congress to establish a secondary market for agricultural real
 estate and rural housing mortgage loans, and to facilitate capital market
 funding for U.S. Department of Agriculture guaranteed farm program and rural
 development loans.  Farmer Mac's Class C and Class A common stocks are listed
 on the New York Stock Exchange under the symbols AGM and AGMA, respectively.
 Additional information about Farmer Mac (as well as the Form 10-K referenced
 above) is available on Farmer Mac's website at www.farmermac.com.  An audio
 recording of the conference call to discuss Farmer Mac's first quarter 2001
 earnings and this press release will be available on Farmer Mac's website
 after 2 p.m. eastern time, Friday, April 20, 2001.
 
                     Federal Agricultural Mortgage Corporation
                            Consolidated Balance Sheets
 
 
                                            March 31,  December 31,   March 31,
                                               2001        2000         2000
                                                      (in thousands)
     Assets:
      Cash and cash equivalents               $320,437    $537,871    $344,822
      Investment securities                    819,957     836,757     927,673
      Farmer Mac guaranteed securities       1,711,183   1,679,993   1,289,175
      Loans                                     12,407      30,279      28,897
      Financial Derivatives                        593         -           -
      Interest receivable                       33,570      55,681      29,308
      Guarantee fees receivable                  3,055       5,494       2,618
      Prepaid expenses and other assets         14,856      14,824      16,827
       Total assets                         $2,916,058  $3,160,899  $2,639,320
 
     Liabilities and stockholders' equity:
      Notes payable:
       Due within one year                  $2,024,233  $2,201,691  $1,781,310
       Due after one year                      715,901     767,492     745,735
        Total notes payable                  2,740,134   2,969,183   2,527,045
 
      Financial Derivatives                     19,610         -           -
      Accrued interest payable                  15,706      20,852      11,904
      Accounts payable and accrued expenses     12,417      26,880       5,398
      Reserve for losses                        12,386      11,323       7,901
       Total liabilities                     2,800,253   3,028,238   2,552,248
 
      Stockholders' equity                     115,805     132,661      87,072
       Total liabilities and stockholders'
        equity                              $2,916,058  $3,160,899  $2,639,320
 
 
 
                     Federal Agricultural Mortgage Corporation
                       Consolidated Statements of Operations
 
                                                     Quarter Ended
                                           March 31,  December 31,   March 31,
                                              2001        2000         2000
                                       (in thousands, except per share amounts)
     Interest income:
       Investments and cash equivalents       $21,088     $23,147     $21,958
       Farmer Mac guaranteed securities        28,740      28,886      21,694
       Loans                                      603         534       1,240
     Total interest income                     50,431      52,567      44,892
 
     Interest expense                          44,978      48,061      40,276
     Net interest income                        5,453       4,506       4,616
     Gains/(Losses) on financial
      derivatives
     and trading assets                          (589)          -           -
     Other income:
       Guarantee fees                           3,428       3,368       2,582
       Miscellaneous                              166         149         182
     Total other income                         3,594       3,517       2,764
     Total revenues                             8,458       8,023       7,380
     Other expenses:
       Compensation and employee benefits       1,237       1,168       1,251
       Regulatory fees                            223         133         150
       General and administrative               1,145         966       1,007
     Total operating expenses                   2,605       2,267       2,408
 
       Provision for losses                     1,383       1,297       1,317
     Total expenses                             3,988       3,564       3,725
     Income before income taxes                 4,470       4,459       3,655
 
     Income tax provision                       1,588       1,586       1,297
     Net Income before cumulative effect        2,882       2,873       2,358
     Cumulative effect of change
     in accounting principles, net of tax        (726)          -           -
 
     Net income                                $2,156      $2,873      $2,358
 
     Earnings per share:
         Basic earnings per share               $0.19       $0.26       $0.22
         Diluted earnings per share             $0.18       $0.25       $0.21
     Earnings per share excluding
      cumulative effect of change in
      accounting principles:
         Basic earnings per share               $0.26       $0.26       $0.22
         Diluted earnings per share             $0.25       $0.25       $0.21
     Operating Earnings per share:*
         Basic earnings per share               $0.28       $0.26       $0.22
         Diluted earnings per share             $0.27       $0.25       $0.21
 
      *  operating earnings per share excludes the cumulative effect of FAS 133
         and its ongoing effects during the first quarter 2001
 
                   Federal Agricultural Mortgage Corporation
                            Supplemental Information
 
 
     The following tables set forth quarterly activity regarding: loan purchase
 commitments; loan purchases and loan guarantees; AMBS issuances;
 delinquencies; and outstanding guarantees.
 
         Commitments to Purchase or Guarantee Farmer Mac I Loans (1)
                               Long-Term  5 and 7
                                Fixed      Year
                                 Rate     Resets    ARMs     Total  Outstanding
                                                 (in thousands)
     For the quarter ended:
 
      March 31, 2001            $40,463  $11,447  $59,494  $111,404  $18,398
      December 31, 2000         159,039    2,261   70,454   231,753   13,223
      September 30, 2000        288,274  126,909   40,097   455,280   10,983
      June 30, 2000              45,838    2,822   32,361    81,021    8,641
      March 31, 2000             10,369   16,835   32,438    59,642   10,707
      December 31,1999          317,357    6,882   75,326   399,565   12,470
      September 30, 1999         26,623   19,384   34,170    80,177   17,010
 
     For the year ended:
      December 31, 2000         384,944  158,013  164,390   707,347   18,398
      December 31, 1999         537,190   58,065  203,536   798,791   12,470
 
 
                 Purchases and Guarantees of Farmer Mac I Loans (1)
                                       Long-Term   5 and 7
                                         Fixed      Year
                                         Rate      Resets    ARMs      Total
                                                     (in thousands)
     For the quarter ended:
 
       March 31, 2001                   $39,742    $4,902   $53,651    $98,295
       December 31, 2000                160,706     1,176    64,344    226,226
       September 30,2000                286,303   126,845    37,801    450,949
       June 30, 2000                     43,508     5,702    30,778     79,988
       March 31, 2000                    11,917    13,185    33,181     58,283
       December 31, 1999                319,478     9,522    73,030    402,030
       September 30, 1999                26,670    14,862    29,029     70,561
 
     For the year ended:
       December 31, 2000                381,470   150,634   155,411    687,515
       December 31, 1999                662,186    57,176   483,402  1,202,764
 
 
 
                   Federal Agricultural Mortgage Corporation
                      Supplemental Information (continued)
 
 
                          Farmer Mac I AMBS Issuances (2)
                                          Long-Term  5 and 7
                                            Fixed     Year
                                            Rate     Resets    ARMs     Total
                                                      (in thousands)
     For the quarter ended:
       March 31, 2001                      $14,425   $4,900   $47,047  $66,372
       December 31, 2000                     6,777    1,176    27,824   35,777
       September 30,2000                     5,589    3,790    35,916   45,295
       June 30, 2000                        15,122    4,950    36,749   56,821
       March 31, 2000                        6,582   14,616    45,880   67,078
       December 31, 1999                   128,641    8,084    17,069  153,794
       September 30, 1999                   95,121   33,532    24,744  153,397
 
     For the year ended:
       December 31, 2000                    34,070   24,531   146,370  204,971
       December 31, 1999                   359,185   57,887   277,517  694,589
 
 
 
                Farmer Mac I Delinquencies (3)
 
                                                      Distribution of Post-1996
                            Post-1996  Pre-1996          Act Delinquencies
     As of:                   Act      Act (5)  Total     as of March 31, 2001
                                                        By loan-to-value ratio:
       March 31, 2001         2.62%    5.83%    2.72%     0.00% to 40.00%  13%
       December 31, 2000      1.25%    6.49%    1.44%    40.01% to 50.00%  15%
       September 30, 2000     1.80%    5.55%    1.96%    50.01% to 60.00%  31%
       June 30, 2000          1.25%    4.12%    1.41%    60.01% to 70.00%  38%
       March 31, 2000         1.45%    4.89%    1.65%    70.01% to 80.00%   3%
       December 31, 1999      1.05%    3.04%    1.18%               Total 100%
 
 
 
                   Federal Agricultural Mortgage Corporation
                      Supplemental Information (continued)
 
 
                             Outstanding Guarantees (4)
                                                      Farmer Mac I
                                               Post-1996 Act       Pre-1996
                                            AMBS         LTSPC        Act
                                                                 (in thousands)
     As of:
      March 31, 2001                     $1,466,443   $1,083,528      $72,646
      December 31, 2000                   1,615,914      862,804       83,513
      September 30, 2000                  1,621,516      707,850       92,536
      June 30, 2000                       1,354,623      575,143      100,414
      March 31, 2000                      1,310,710      551,423      107,403
      December 31, 1999                   1,266,522      575,097      118,214
      September 30, 1999                  1,118,266      367,934      130,452
 
 
                             Outstanding Guarantees (4)
 
                                            Farmer                  Held in
                                            Mac II      Total     Portfolio (5)
 
     As of:
      March 31, 2001                        $549,003  $3,171,620   $1,648,896
      December 31, 2000                      517,703   3,079,934    1,581,905
      September 30, 2000                     491,820   2,913,722    1,571,315
      June 30, 2000                          467,352   2,497,532    1,292,359
      March 31, 2000                         387,992   2,357,528    1,268,889
      December 31, 1999                      383,266   2,343,099    1,237,623
      September 30, 1999                     377,663   1,994,315    1,190,741
 
 
     (1) Includes long-term standby purchase commitments ("LTSPCs"), which
         obligate Farmer Mac to purchase loans in the pool at par when they
         become four or more months delinquent.  In exchange, Farmer Mac
         receives an annual commitment fee on the outstanding balance of the
         pool over the life of the loans.
     (2) Includes AMBS issued and retained by Farmer Mac.  Such transactions
         totaled $33.9 million in first quarter 2001, $20.7 million in fourth
         quarter 2000, $25.0 million in third quarter 2000, $21.7 million in
         second quarter 2000, $46.5 million in first quarter 2000 and $50.6
         million in fourth quarter 1999.
     (3) Includes loans 90 days or more past due, in foreclosure or in
         bankruptcy.
     (4) Pre-1996 Act loans back securities that are supported by unguaranteed
         subordinated interests representing approximately 10 percent of the
         balance of the loans.  Farmer Mac assumes 100 percent of the credit
         risk on post-1996 Act loans.  Farmer Mac II loans are guaranteed by
         the U.S. Department of Agriculture.
     (5) Included in total outstanding guarantees.
 
 SOURCE  Farmer Mac