Farmer Mac / AGM

About Farmer Mac

1133 21st St. NW, Suite 600, Washington, D.C. 20036
www.farmermac.com | 202-872-7700 | Founded: 1988

Industry: Financial Services | Category: Public Companies

Farmer Mac restated past financial results last year, acknowledging that it had improperly accounted for derivatives, complex financial instruments used to hedge against risks such as movements in interest rates. Farmer Mac's business model is much like that of Fannie Mae and Freddie Mac, two other government-sponsored enterprises, and Farmer Mac ran afoul of one of the accounting rules at the heart of Fannie Mae's $6.3 billion restatement.
The rule requires companies to include in their quarterly income changes in the value of their derivatives, with certain exceptions. Farmer Mac ultimately determined that it did not qualify for such an exception. The company said its future earnings could reflect significant fluctuations related to derivatives.
The net effect of the correction was to reduce stockholders' equity by $3.5 million as of June 30, 2006, though it increased the company's profit for 2005 to $47 million from the $27.3 million originally reported.
In December, the government finalized a rule requiring Farmer Mac to hold more capital as a cushion against potential financial setbacks. Maintaining more capital can cut into profit. However, the company said it already exceeded the new requirement by $158.5 million, or 177 percent.
After assessing the quality of its investments and factors such as rising farmland values, Farmer Mac reduced the amount of money it had set aside to cover potential losses by $3.4 million as of Dec. 31, to $4.6 million.

President and CEO: Michael A. Gerber

2006 Financial Data

Revenues: $277,032,000 | Net Income: $32,013,000
Asssets: $4,953,673,000 | Earnings Per Share: $2.68
Stockholder Equity: $248,489,000 | Annual Dividend: $0.40
Total employees: 45 | Local employees: 40