The Federal Agricultural Mortgage Corporation (Farmer Mac) reported U.S. GAAP net income of $9.8 million or $0.82 per diluted share for fourth quarter 2004, compared to $8.6 million for third quarter 2004 and $4.9 million for fourth quarter 2003.



For the year ended Dec. 31, 2004, net income was $28.2 million, compared to $25.0 million for last year. Core earnings were $9.9 million for fourth quarter 2004, compared to $5.4 million for third quarter 2004 and $5.8 million for fourth quarter 2003. For the year ended Dec. 31, 2004, core earnings were $27.4 million, compared to $23.0 million for the corresponding period in the prior year.



Farmer Mac reports its "core earnings," a non-GAAP measure, in addition to GAAP earnings. Farmer Mac uses the core earnings measure to present net income available to common stockholders less the after-tax effects of unrealized gains and losses on financial derivatives resulting from the application of the derivative accounting standards.



Farmer Mac President and CEO Henry D. Edelman stated, "The portfolio of loans underlying Farmer Mac's guarantees and LTSPCs continues to perform well, underscoring the effectiveness of Farmer Mac's ongoing credit risk management and the strength of the U.S. agricultural economy. We are pleased that, as of Dec. 31, 2004, 90-day delinquencies in Farmer Mac's portfolio remained at low levels, in terms of both dollars and percentages. Those delinquencies totaled $25.3 million, representing 0.55 percent of the portfolio, compared to $30.1 million and 0.60 percent as of Dec. 31, 2003, and $58.2 million and 1.21 percent as of Dec. 31, 2002. Similarly, real estate owned (REO) was reduced to $3.8 million as of Dec. 31, 2004, from $15.5 million as of Dec. 31, 2003.



"For fourth quarter 2004, new business volume was $117.4 million. As in recent quarters, Farmer Mac's new business was slow as a result of the increased liquidity of agricultural borrowers, the increased available capital and liquidity of agricultural lenders, and regulatory conditions. Looking forward, Farmer Mac's Board and management are focused on the long-term growth of the business and the development of new ways to serve the financing needs of rural America.



"For 2005, Farmer Mac remains confident of opportunities for growth and increased business volume, but the effect of any new business on earnings will depend on the timing and nature of the transactions. Farmer Mac's earnings are affected also by recoveries under representation and warranty claims and the receipt of yield maintenance payments. Taking account of all these variables, and the release of a portion of the allowance for losses in fourth quarter 2004, we anticipate core earnings for 2005 will be somewhat below the level achieved in 2004."



Source: Company Release