Farmer Mac Reports Fourth Quarter Results

Farmer Mac Reports Fourth Quarter Results 


WASHINGTON, Jan. 26  /PRNewswire-FirstCall/ -- The Federal Agricultural
Mortgage Corporation (Farmer Mac), (NYSE: AGM; AGM.A) today 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 or $0.70 per diluted share for third quarter 2004 and
$4.9 million or $0.40 per diluted share for fourth quarter 2003.  For the year
ended December 31, 2004, net income was $28.2 million or $2.32 per diluted
share, compared to $25.0 million or $2.08 per diluted share for the year ended
December 31, 2003.  Core earnings were $9.9 million or $0.82 per diluted share
for fourth quarter 2004, compared to $5.4 million or $0.44 per diluted share
for third quarter 2004 and $5.8 million or $0.47 per diluted share for fourth
quarter 2003.  For the year ended December 31, 2004, core earnings were $27.4
million or $2.25 per diluted share, compared to $23.0 million or $1.91 per
diluted share 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 Chief Executive Officer 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 December 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 December 31, 2003,
and $58.2 million and 1.21 percent as of December 31, 2002. Similarly, real
estate owned (REO) was reduced to $3.8 million as of December 31, 2004, from
$15.5 million as of December 31, 2003.

"After careful evaluation of the overall improved credit quality of Farmer
Mac's portfolio, the strong U.S. agricultural economy, the recent upward trends
in agricultural land values and the year-over-year reduction in Farmer Mac's
outstanding guarantees and commitments, Farmer Mac determined that the
appropriate level of allowance for losses as of December 31, 2004 was $17.1
million.  This resulted in the release of approximately $5.3 million from the
allowance for losses in fourth quarter 2004, which was $0.28 per diluted share.
 As of December 31, 2004, the allowance for losses was 37 basis points relative
to the outstanding Farmer Mac I portfolio, compared to $22.1 million and 44
basis points as of December 31, 2003 and $20.0 million and 42 basis points as
of December 31, 2002.

"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."

Non-GAAP Performance Measures

Farmer Mac reports its financial results in accordance with GAAP.  In addition
to GAAP measures, Farmer Mac presents certain non-GAAP performance measures. 
Farmer Mac uses the latter measures to develop financial plans, to gauge
corporate performance and to set incentive compensation because, in
management's view, the non-GAAP measures more accurately represent Farmer Mac's
economic performance, transaction economics and business trends. Investors and
the investment analyst community have previously relied upon similar measures
to evaluate Farmer Mac's historical and future performance. Farmer Mac's
disclosure of non-GAAP measures is not intended to replace GAAP information
but, rather, to supplement it.

"Core earnings" is one such non-GAAP measure that Farmer Mac developed to
present net income available to common stockholders less the after-tax effects
of unrealized gains and losses on financial derivatives resulting from
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("FAS 133").  The GAAP measure most
comparable to core earnings is net income available to common stockholders.
Unlike core earnings, however, the GAAP measure is heavily influenced by
unrealized gains or losses in the value of financial derivatives used to hedge
interest rate risk in Farmer Mac's mortgage portfolio.  Because the effects of
financial derivatives under FAS 133 included in the GAAP measure are driven by
fluctuations in interest rates that cannot reliably be predicted, Farmer Mac
does not project GAAP net income available to common stockholders.

The reconciliation of GAAP net income available to common stockholders to core
earnings is presented in the following table:

          Reconciliation of GAAP Net Income Available to Common
                      Stockholders to Core Earnings

                                                  Three Months Ended
                                            December 31,     December 31,
                                              2004             2003
                                               (in thousands, except per
                                                    share amounts)
                                                    Per              Per
                                                  Diluted          Diluted
                                                   Share            Share
  GAAP net income available
    to common stockholders                $9,837   $0.82   $4,896   $0.40

  Less the effects of FAS 133:
    Unrealized gains/(losses)
     on financial derivatives and
     trading assets, net of tax              (45)   0.00     (974)  (0.08)

    Benefit from non-amortization
     of premium payments on
     financial derivatives, net of
     tax                                    -       -          76    0.01

  Core earnings                           $9,882   $0.82   $5,794   $0.47



              Reconciliation of GAAP Net Income Available to
                   Common Stockholders to Core Earnings

                                                     Year Ended
                                             December 31,      December 31,
                                                2004              2003
                                               (in thousands, except per
                                                    share amounts)

                                                     Per               Per
                                                   Diluted           Diluted
                                                    Share             Share
  GAAP net income available
    to common stockholders                $28,228   $2.32   $25,030   $2.08

  Less the effects of FAS 133:
    Unrealized gains/(losses)
     on financial derivatives and
     trading assets, net of tax               588    0.05     1,720    0.14

    Benefit from non-amortization
     of premium payments on
     financial derivatives, net of
     tax                                      228    0.02       317    0.03

  Core earnings                           $27,412   $2.25   $22,993   $1.91




Later in this release, Farmer Mac provides additional information about the
impact of FAS 133 on GAAP net income available to common stockholders.

Net Interest Income

Net interest income, which does not include guarantee fees from loans purchased
and retained prior to April 1, 2001 (the effective date of Statement of
Financial Accounting Standards No. 140, Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities ("FAS 140")), was $8.0
million for fourth quarter 2004, compared to $8.0 million for third quarter
2004 and $9.1 million for fourth quarter 2003.  The net interest yield was 88
basis points for fourth quarter 2004, compared to 84 basis points for third
quarter 2004 and 91 basis points for fourth quarter 2003.  The effect of FAS
140 for fourth quarter 2004 was the reclassification of guarantee fee income as
interest income in the amount of $1.0 million (11 basis points), compared to
$1.0 million (10 basis points) in third quarter 2004, and $1.1 million (11
basis points) in fourth quarter 2003.

Farmer Mac classifies the net interest income and expense realized on financial
derivatives that are not in fair value or cash flow hedge relationships as
gains and losses on financial derivatives and trading assets. This
classification resulted in reductions of the net interest yield of 5 basis
points, 5 basis points and 2 basis points for fourth quarter 2004, third
quarter 2004 and fourth quarter 2003, respectively.

The net interest yields for fourth quarter 2004, third quarter 2004 and fourth
quarter 2003 included the benefits of yield maintenance payments of 11 basis
points, 19 basis points and 11 basis points, respectively.  For fourth quarter
2004, yield maintenance payments increased net income by $0.7 million or $0.05
per diluted share, compared to $1.1 million or $0.09 per diluted share for
third quarter 2004 and $0.7 million or $0.06 per diluted share for fourth
quarter 2003.

Guarantee and Commitment Fees

Guarantee and commitment fees were $5.2 million for fourth quarter 2004,
compared to $5.3 million for third quarter 2004 and $5.4 million for fourth
quarter 2003.  As discussed above, $1.0 million of guarantee fee income was
classified as interest income in fourth quarter 2004, compared to $1.0 million
in third quarter 2004, and $1.1 million in fourth quarter 2003, pursuant to FAS
140.

Miscellaneous Income

Miscellaneous income for fourth quarter 2004 was $1.1 million, compared to $0.7
million for third quarter 2004 and $0.1 million for fourth quarter 2003. Of the
$1.1 million of miscellaneous income in fourth quarter 2004, $1.0 million
represented a recovery from a seller for a breach of representations and
warranties associated with the prior sale of agricultural mortgage loans to
Farmer Mac.  Farmer Mac had previously charged off that amount as losses on the
related loans.

Operating Expenses

Compensation and employee benefits for fourth quarter 2004 were $1.8 million,
compared to $1.7 million for third quarter 2004 and $1.6 million for fourth
quarter 2003.  General and administrative expenses for fourth quarter 2004 were
$2.9 million, compared to $2.0 million for third quarter 2004 and $2.1 million
for fourth quarter 2003.  The increases in compensation and employee benefits
and general and administrative expenses were due, in large part, to greater
staffing levels necessary for increased corporate governance and regulatory
compliance activities, including requirements of the Sarbanes- Oxley Act of
2002 and the Farm Credit Administration (FCA), as well as heightened focus on
the regulatory environment for government-sponsored enterprises generally. 
Regulatory fees for fourth quarter 2004 were $0.6 million, compared to $0.5
million for third quarter 2004 and $0.9 million for fourth quarter 2003.  FCA's
regulatory fees charged to Farmer Mac for the federal fiscal year ended
September 30, 2004 were $2.0 million, compared to $1.8 million for 2003.  FCA
has advised the Corporation that its fees for the federal fiscal year ending
September 30, 2005 are estimated to be $2.3 million.

Farmer Mac's net REO operating costs for fourth quarter 2004 were negligible,
compared to income of $0.1 million for third quarter 2004 and expense of $0.3
million for fourth quarter 2003.  Discussion of the provision for losses is
covered under the topic of "Credit" later in this release.

Capital

Farmer Mac's core capital totaled $237.7 million as of December 31, 2004,
compared to $233.6 million as of September 30, 2004 and $215.5 million as of
December 31, 2003.  The regulatory methodology for calculating core capital
excludes the effects on capital of Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity Securities ("FAS
115") and FAS 133, which are reported on Farmer Mac's balance sheet as
accumulated other comprehensive income/(loss).  Farmer Mac's core capital as of
December 31, 2004 exceeded the statutory minimum capital requirement of $128.9
million by $108.8 million.

Farmer Mac is required to meet the capital standards of a risk-based capital
stress test promulgated by FCA ("RBC test") pursuant to federal statute.  The
RBC test determines the amount of regulatory capital (core capital plus the
allowance for losses excluding the REO valuation allowance) Farmer Mac would
need to maintain positive capital during a ten-year stress period while
incurring credit losses equivalent to the highest historical two- year
agricultural mortgage loss rates and an interest rate shock at the lesser of
600 basis points or 50 percent of the ten-year U.S. Treasury note rate. The RBC
test then adds to the resulting capital requirement an additional 30 percent
for management and operational risk.

As of December 31, 2004, the RBC test generated an estimated risk-based capital
requirement of $34.7 million, compared to the risk-based capital requirement of
$43.5 million as of September 30, 2004 and $38.8 million as of December 31,
2003.  Farmer Mac's regulatory capital of $254.8 million as of December 31,
2004 exceeded the RBC requirement by approximately $220.1 million.  Farmer Mac
is required to hold capital at the higher of the statutory minimum capital
requirement or the amount required by the RBC test.

During fourth quarter 2004, Farmer Mac repurchased 228,297 shares of its Class
C Non-Voting Common Stock, at an average price of $21.10 per share, pursuant to
the Corporation's previously announced stock repurchase program. These
repurchases reduced the Corporation's capital by approximately $4.8 million.

Credit

As of December 31, 2004, Farmer Mac's 90-day delinquencies totaled $25.3
million, representing 0.55 percent of the principal balance of all loans held
and loans underlying post-Farm Credit System Reform Act ("1996 Act") Farmer Mac
I Guaranteed Securities and LTSPCs, compared to $30.1 million (0.60 percent) as
of December 31, 2003.  The 90-day delinquencies are loans 90 days or more past
due, in foreclosure, restructured after delinquency, or in bankruptcy,
excluding loans performing under either their original loan terms or a
court-approved bankruptcy plan.

As of December 31, 2004, non-performing assets totaled $50.6 million,
representing 1.09 percent of the principal balance of all loans held and loans
underlying post-1996 Act Farmer Mac I Guaranteed Securities and LTSPCs,
compared to $70.0 million (1.39 percent) as of December 31, 2003.  Non-
performing assets are loans 90 days or more past due, in foreclosure,
restructured after delinquency, in bankruptcy, or REO.  The principal balance
of non-performing assets includes certain segments of the portfolio that have
cycled through foreclosure and into the REO asset category, which completes the
involuntary loan liquidation process.  Also included is a group of loans that
are current under the original loan terms or a court-approved bankruptcy plan,
though the borrowers on those loans have filed for bankruptcy protection.

From quarter to quarter, Farmer Mac anticipates that 90-day delinquencies and
non-performing assets will fluctuate, both in dollars and as a percentage of
the outstanding portfolio, with higher levels likely at the end of the first
and third quarters of each year corresponding to the semi-annual (January 1st
and July 1st) payment characteristics of many Farmer Mac I loans.

As of December 31, 2004, Farmer Mac had $3.8 million of REO, compared to $7.3
million as of September 30, 2004 and $15.5 million as of December 31, 2003. 
Analysis of the portfolio by geographic and commodity distribution indicates
that 90-day delinquencies have been and are expected to be most prevalent in
the geographic areas and in agricultural commodities that do not receive
significant government support.  Prior to acquisition of property securing a
loan, Farmer Mac develops a liquidation strategy that results in either an
immediate sale or retention pending later sale.  Farmer Mac evaluates these and
other alternatives based upon the economics of the transactions and the
requirements of local law.

After careful evaluation of the overall improved credit quality of Farmer Mac's
portfolio, the strong U.S. agricultural economy, the recent upward trends in
agricultural land values and the $345.7 million year-over-year reduction in
Farmer Mac's outstanding guarantees and commitments, Farmer Mac determined that
the appropriate level of allowance for losses as of December 31, 2004 was $17.1
million.  This resulted in the release of approximately $5.3 million from the
allowance for losses in fourth quarter 2004 ($0.28 per diluted share).  As of
December 31, 2004, the allowance for losses was 37 basis points relative to the
outstanding Farmer Mac I portfolio, compared to $22.1 million and 44 basis
points as of December 31, 2003 and $20.0 million and 42 basis points as of
December 31, 2002.

The following table summarizes the changes in the components of Farmer Mac's
allowance for losses and contingent obligation for probable losses for the
three months ended December 31, 2004.  The contingent obligation for probable
losses is a component of Farmer Mac's guarantee and commitment obligation.

                                                         Contingent
                       Allowance     REO                 Obligation
                       for Loan   Valuation   Reserve   for Probable
                        Losses    Allowance  for Losses    Losses     Total
                                        (in thousands)

  Beginning balance     $5,225        $-      $14,521      $2,716   $22,462
    Provision for
     losses               (830)      100       (3,788)       (739)   (5,257)
    Net charge-offs        -        (100)          (4)        -        (104)
  Ending balance        $4,395        $-      $10,729      $1,977   $17,101




As of December 31, 2004, Farmer Mac analyzed the following three categories of
assets for impairment, based on the fair value of the underlying collateral:
(1) the $50.6 million of non-performing assets; (2) the $32.3 million of loans
for which Farmer Mac has adjusted the timing of borrowers' payment schedules
within the past three years, but still expects to collect all amounts due and
has not made economic concessions; and (3) the additional $56.6 million of
performing loans that have previously been delinquent or are secured by real
estate that produces commodities currently under stress. Those individual
assessments covered a total of $139.5 million of assets measured for impairment
against updated appraised values, other updated collateral valuations or
discounted values.  Of the $139.5 million of assets analyzed, $126.6 million
were found to be collateralized adequately and $12.9 million of assets were
found not to be collateralized adequately, with individual collateral
shortfalls totaling $1.4 million.  Accordingly, Farmer Mac allocated specific
allowances of $1.4 million to those under- collateralized assets as of December
31, 2004.  After the allocation of specific allowances from the total allowance
for losses of $17.1 million, the non-specific or general allowance and the
contingent obligation for inherent probable losses totaled $15.7 million.

During fourth quarter 2004, Farmer Mac charged off $0.1 million of losses
against the allowance for losses, compared to charge offs of $1.1 million in
third quarter 2004 and $1.9 million in fourth quarter 2003.  In certain
collateral liquidation scenarios, Farmer Mac may recover amounts previously
charged off or incur additional losses, if liquidation proceeds vary from
previous estimates.  During fourth quarter 2004, Farmer Mac received $1.0
million from a seller for a breach of representations and warranties associated
with the prior sale of agricultural mortgage loans to Farmer Mac. This recovery
is reported as miscellaneous income on the Consolidated Statements of
Operations.  Farmer Mac had previously charged off this amount as losses on the
related loans.

Based on Farmer Mac's analysis of its entire portfolio, individual loan-
by-loan analyses and loan collection experience, Farmer Mac believes that
specific and inherent probable losses are covered adequately by its allowance
for losses.

Interest Rate Risk

Farmer Mac measures its interest rate risk through several tests, including the
sensitivity of its Market Value of Equity ("MVE") and Net Interest Income
("NII") to uniform or "parallel" yield curve shocks.  As of December 31, 2004,
a parallel increase of 100 basis points across the entire U.S. Treasury yield
curve would have decreased MVE by 1.2 percent, while a parallel decrease of 100
basis points would have had a negligible effect on MVE.  As of December 31,
2004, a parallel increase of 100 basis points would have increased Farmer Mac's
NII, a shorter-term measure of interest rate risk, by 9.2 percent, while a
parallel decrease of 100 basis points would have decreased NII by 7.7 percent. 
Farmer Mac's duration gap, another measure of interest rate risk, was plus 0.4
months as of December 31, 2004.

The economic effects of all financial derivatives are included in the MVE, NII
and duration gap analyses.  As an alternative to long-term fixed-rate debt
issuance, Farmer Mac issues short-term debt and enters into contracts to pay
fixed rates of interest and receive floating rates of interest from
counterparties.  These "floating-to-fixed" interest rate swaps are used to
adjust the characteristics of Farmer Mac's short-term debt to match more
closely the cash flow and duration characteristics of its longer-term assets,
thereby reducing interest rate risk, and also to derive an overall lower
effective fixed-rate cost of borrowing than would otherwise be available in the
conventional debt market.  As of December 31, 2004, Farmer Mac had $648.5
million notional amount of floating-to-fixed interest rate swaps for terms
ranging from 1 to 15 years.  In addition, Farmer Mac enters into "fixed-to-
floating" interest rate swaps and "basis swaps" to adjust the characteristics
of its assets and liabilities to match more closely, on a cash flow and
duration basis, thereby reducing interest rate risk.  As of December 31, 2004,
Farmer Mac had $856.7 million notional amount of such interest rate swaps.

Farmer Mac uses financial derivatives for hedging purposes, not for speculative
purposes.  All of Farmer Mac's financial derivative transactions are conducted
through standard, collateralized agreements that limit Farmer Mac's potential
credit exposure to any counterparty.  As of December 31, 2004, Farmer Mac had
no uncollateralized net exposure to any counterparty.

Financial Derivatives and Financial Statement Effects of FAS 133

Farmer Mac accounts for its financial derivatives under FAS 133, which became
effective January 1, 2001.  The implementation of FAS 133 resulted in
significant accounting changes to both the consolidated statements of
operations and balance sheets.  During fourth quarter 2004, the decrease in net
after-tax income resulting from FAS 133 was $0.1 million and the net after-tax
increase in accumulated other comprehensive income was $7.1 million. During
third quarter 2004, the increase in net after-tax income resulting from FAS 133
was $3.2 million and the net after-tax increase in accumulated other
comprehensive income was $10.6 million.  For fourth quarter 2003, the decrease
in net after-tax income resulting from FAS 133 was $0.9 million and the net
after-tax increase in accumulated other comprehensive income was $11.0 million.
 Accumulated other comprehensive income is not a component of Farmer Mac's
regulatory core capital.

Regulatory Matters

Regulatory actions continue to affect Farmer Mac's business outlook.  Both FCA,
the federal regulator of both Farmer Mac and the primary lenders in the Farm
Credit System (FCS), and the Farm Credit System Insurance Corporation (FCSIC),
a U.S. Government controlled corporation managed by a three-member board of
directors composed of the members of the FCA Board, have cautioned FCS
institutions about doing business with GSEs, including Farmer Mac, and FCSIC
raised technical objections to FCS institutions' use of Farmer Mac AMBS swaps.

During second quarter 2004, FCA published a proposed regulation relating to
Farmer Mac's investments and liquidity.  Farmer Mac expects to be able to
comply with the regulation if it is adopted in its current form, though
analysis indicates it could limit future increases in Farmer Mac's non-program
investment portfolio and the related net interest income.  The Corporation
disagrees with certain aspects of the proposed regulation and submitted
comments on the proposal to FCA accordingly.

During third quarter 2004, FCA published a proposed regulation that, if adopted
as proposed, could adversely affect Farmer Mac's business by establishing a new
risk-weight allocation of capital applicable to Farmer Mac transactions with
FCS institutions, a major segment of Farmer Mac's customer base.  That proposed
regulation would have an effective date eighteen months after the final
regulation is published.  As set forth in prior disclosures, Farmer Mac
disagrees with the proposed regulation as it would affect the Corporation, and
has submitted a comment letter to FCA setting forth its position.

Forward-Looking Statements

In addition to historical information, this release includes forward- looking
statements that reflect 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 a number
of assumptions and estimates and the evaluation of risks and uncertainties.
Various factors could cause Farmer Mac's actual results or events to differ
materially from the expectations as expressed or implied by the forward-
looking statements, including uncertainties regarding:  (1) the rate and
direction of development of the secondary market for agricultural mortgage
loans; (2) the possible establishment of additional statutory or regulatory
restrictions or constraints on Farmer Mac that could hamper its growth or
diminish its profitability; (3) legislative or regulatory developments or
interpretations of Farmer Mac's statutory charter that could adversely affect
Farmer Mac or the ability or motivation of certain lenders to participate in
its programs or the terms of any such participation, or increase the cost of
regulation and related corporate activities; (4) possible reaction in the
financial markets to events involving government-sponsored enterprises other
than Farmer Mac; (5) Farmer Mac's access to the debt markets at favorable rates
and terms; (6) the possible effect of the risk-based capital requirement, which
could, under certain circumstances, be in excess of the statutory minimum
capital requirement; (7) the rate of growth in agricultural mortgage
indebtedness; (8) lender interest in Farmer Mac credit products and the Farmer
Mac secondary market; (9) borrower preferences for fixed-rate agricultural
mortgage indebtedness; (10) competitive pressures in the purchase of
agricultural mortgage loans and the sale of agricultural mortgage backed and
debt securities; (11) substantial changes in interest rates, agricultural land
values, commodity prices, export demand for U.S. agricultural products and the
general economy; (12) protracted adverse weather, market or other conditions
affecting particular geographic regions or particular commodities related to
agricultural mortgage loans backing Farmer Mac I Guaranteed Securities or under
LTSPCs; (13) the willingness of investors to invest in agricultural
mortgage-backed securities; or (14) the effects on the agricultural economy or
the value of agricultural real estate of any changes in federal assistance for
agriculture.  Other factors are discussed in Farmer Mac's Annual Report on Form
10-K for the year ended December 31, 2003, as filed with the SEC on March 15,
2004 and Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended
September 30, 2004, as filed with the SEC on November 9, 2004.  The
forward-looking statements contained in this release represent management's
expectations as of the date of this release.  Farmer Mac undertakes no
obligation to release publicly the results of revisions to any forward-looking
statements included in this release to reflect any future events or
circumstances, except as otherwise mandated by the SEC.

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 USDA-guaranteed farm program and rural development loans.  Farmer
Mac's Class C non-voting and Class A voting common stocks are listed on the New
York Stock Exchange under the symbols AGM and AGM.A, respectively. Additional
information about Farmer Mac (as well as the Forms 10-K and 10-Q referenced
above) is available on Farmer Mac's website at http://www.farmermac.com/.  The
conference call to discuss Farmer Mac's fourth quarter 2004 earnings and this
press release will be webcast on Farmer Mac's website beginning at 11:00 a.m.
eastern time, Thursday, January 27, 2005, and an audio recording of that call
will be available for two weeks on Farmer Mac's website after the call is
concluded.

                Federal Agricultural Mortgage Corporation
                       Consolidated Balance Sheets
                               (unaudited)
                              (in thousands)

                                              December 31,      December 31,
                                                 2004              2003

  Assets:
   Cash and cash equivalents                    $430,504          $623,674
   Investment securities                       1,056,143         1,064,782
   Farmer Mac Guaranteed Securities            1,376,847         1,508,134
   Loans held for sale                            15,281            46,662
   Loans held for investment                     871,988           942,929
     Allowance for loan losses                    (4,395)           (5,967)
        Loans, net                               882,874           983,624
   Real estate owned, net of valuation
    allowance of zero and $0.2 million             3,845            15,478
   Financial derivatives                           1,499               961
   Interest receivable                            55,931            58,423
   Guarantee and commitment fees
    receivable                                    19,871            16,885
   Deferred tax asset, net                         6,518            10,891
   Prepaid expenses and other assets              10,585            16,798
    Total Assets                              $3,844,617        $4,299,650
  Liabilities and Stockholders' Equity:
   Notes payable:
    Due within one year                       $2,520,172        $2,799,384
    Due after one year                           962,201         1,136,110
     Total notes payable                       3,482,373         3,935,494
   Financial derivatives                          47,793            67,670
   Accrued interest payable                       23,311            26,342
   Guarantee and commitment obligation            16,869            14,144
   Accounts payable and accrued
    expenses                                      26,690            29,574
   Reserve for losses                             10,729            13,172
    Total Liabilities                          3,607,765         4,086,396
   Preferred stock                                35,000            35,000
   Common stock at par                            11,822            12,054
   Additional paid-in capital                     87,777            88,652
   Accumulated other comprehensive
    income/(loss)                                   (882)           (2,295)
   Retained earnings                             103,135            79,843
   Total Stockholders' Equity                    236,852           213,254
    Total Liabilities and Stockholders'
     Equity                                   $3,844,617        $4,299,650



                Federal Agricultural Mortgage Corporation
                  Consolidated Statements of Operations
                               (unaudited)
                 (in thousands, except per share amounts)

                                        Three Months Ended    Year Ended
                                         December December December December
                                            31,     31,      31,      31,
                                           2004     2003    2004     2003

  Interest income:
    Investments and cash equivalents      $10,528  $8,796  $36,386  $35,287
    Farmer Mac Guaranteed Securities       16,668  17,708   66,222   73,692
    Loans                                  12,412  12,901   51,386   52,580
       Total interest income               39,608  39,405  153,994  161,559
  Interest expense                         31,636  30,311  120,747  124,307
  Net interest income                       7,972   9,094   33,247   37,252
  Provision for loan losses                   830    (509)  (1,589)  (6,524)
  Net interest income after provision for
   loan losses                              8,802   8,585   31,658   30,728

  Guarantee and commitment fees             5,235   5,424   20,977   20,685
  Gains/(Losses) on financial derivatives
   and trading assets                         399  (1,297)   2,846    2,357
  Gain on sale of Farmer Mac Guaranteed
   Securities                                 -       -        367      -
  Gains/(Losses) on the sale of real
   estate owned                               642     201      523      178
  Miscellaneous income                      1,126      69    4,311      812
       Total revenues                      16,204  12,982   60,682   54,760

  Expenses:
    Compensation and employee benefits      1,809   1,634    7,036    6,121
    General and administrative              2,868   2,078    8,800    6,031
    Regulatory fees                           576     857    2,141    2,005
    REO operating costs, net                   (4)    264      287      264
    Provision for losses                   (4,427)    459   (2,001)     761
       Total operating expenses               822   5,292   16,263   15,182
  Income before income taxes               15,382   7,690   44,419   39,578
  Income tax expense                        4,985   2,234   13,951   12,308
  Net income                               10,397   5,456   30,468   27,270
  Preferred stock dividends                  (560)   (560)  (2,240)  (2,240)
  Net income available to common
   stockholders                            $9,837  $4,896  $28,228  $25,030

  Earnings per common share:
      Basic earnings per common share       $0.83   $0.42    $2.35    $2.13
      Diluted earnings per common share     $0.82   $0.40    $2.32    $2.08
      Common stock dividends                $0.10    $-      $0.10     $-



                Federal Agricultural Mortgage Corporation
                         Supplemental Information



The following tables present quarterly and annual information regarding loan

purchases, guarantees and LTSPCs, outstanding guarantees and LTSPCs and non-

               performing assets and 90-day delinquencies.



               Farmer Mac Purchases, Guarantees and LTSPCs

                               Farmer Mac I

                                 Loans and
                                 Guaranteed             Farmer
                                 Securities  LTSPCs     Mac II     Total
                                               (in thousands)
  For the quarter ended:

    December 31, 2004             $28,211    $34,091    $55,122   $117,424
    September 30, 2004             23,229     84,097     49,798    157,124
    June 30, 2004                  27,520    127,098     34,671    189,289
    March 31, 2004                 25,444    147,273     34,483    207,200
    December 31, 2003              25,148    218,097     44,971    288,216
    September 30, 2003             42,760    199,646    106,729    349,135
    June 30, 2003                  65,615    179,025     77,636    322,276
    March 31, 2003                 59,054    166,574     41,893    267,521
    December 31, 2002              62,841    395,597     38,714    497,152

  For the year ended:
    December 31, 2004             104,404    392,559    174,074    671,037
    December 31, 2003             192,577    763,342    271,229  1,227,148



     Outstanding Balance of Farmer Mac Loans, Guarantees and LTSPCs (1)

                                                    Farmer Mac I

                                           Post-1996 Act

                                      Loans and
                                     Guaranteed                    Pre-1996
                                     Securities       LTSPCs         Act
                                                  (in thousands)
  As of:
    December 31, 2004                $2,371,405     $2,295,103     $18,639
    September 30, 2004                2,406,133      2,381,006      18,909
    June 30, 2004                     2,521,026      2,390,779      22,155
    March 31, 2004                    2,566,412      2,382,648      22,261
    December 31, 2003                 2,696,530      2,348,702      24,734
    September 30, 2003(2)             2,721,775      2,174,182      25,588
    June 30, 2003                     2,108,180      2,790,480      28,057
    March 31, 2003                    2,111,861      2,732,620      29,216
    December 31, 2002                 2,168,994      2,681,240      31,960


     Outstanding Balance of Farmer Mac Loans, Guarantees and LTSPCs (1)

                                              Farmer Mac II         Total
                                                      (in thousands)
  As of:
    December 31, 2004                           $768,542         $5,453,689
    September 30, 2004                           742,474          5,548,522
    June 30, 2004                                715,750          5,649,710
    March 31, 2004                               722,978          5,694,299
    December 31, 2003                            729,470          5,799,436
    September 30, 2003(2)                        720,584          5,642,129
    June 30, 2003                                668,899          5,595,616
    March 31, 2003                               650,152          5,523,849
    December 31, 2002                            645,790          5,527,984



          Outstanding Balance of Loans Held and Loans Underlying
            On-Balance Sheet Farmer Mac Guaranteed Securities

                                        5-to-10-
                           Fixed Rate     Year     1-Month-to-
                         (10-yr. Wtd.   ARMs and     3-Year
                           Avg. Term)    Resets       ARMs        Total
                                            (in thousands)
  As of:
    December 31, 2004       $763,210    $923,520    $533,686   $2,220,416
    September 30, 2004       753,205     929,641     520,246    2,203,092
    June 30, 2004            782,854     978,531     529,654    2,291,039
    March 31, 2004           818,497     978,263     548,134    2,344,894
    December 31, 2003        860,874   1,045,217     542,024    2,448,115
    September 30, 2003       865,817   1,037,168     535,915    2,438,900
    June 30, 2003            889,839   1,064,824     511,700    2,466,363
    March 31, 2003           880,316   1,057,310     515,910    2,453,536
    December 31, 2002      1,003,434     981,548     494,713    2,479,695



              Non-performing Assets and 90-Day Delinquencies

                            Outstanding
                           Post-1996 Act
                               Loans,
                           Guarantees and    Non-performing
                               LTSPCs          Assets(3)       Percentage
                                       (dollars in thousands)
  As of:
    December 31, 2004        $4,642,208         $50,636          1.09%
    September 30, 2004        4,756,839          75,022          1.58%
    June 30, 2004             4,882,505          69,751          1.43%
    March 31, 2004            4,922,759          91,326          1.86%
    December 31, 2003         5,020,032          69,964          1.39%
    September 30, 2003        4,871,756          84,583          1.74%
    June 30, 2003             4,875,059          80,169          1.64%
    March 31, 2003            4,820,887          94,822          1.97%
    December 31, 2002         4,821,634          75,308          1.56%


              Non-performing Assets and 90-Day Delinquencies

                            Less: REO and
                              Performing        90-Day
                             Bankruptcies   Delinquencies(4)   Percentage
                                       (dollars in thousands)
  As of:
    December 31, 2004           $25,353         $25,283          0.55%
    September 30, 2004           27,438          47,584          1.01%
    June 30, 2004                36,978          32,773          0.68%
    March 31, 2004               33,951          57,375          1.17%
    December 31, 2003            39,908          30,056          0.60%
    September 30, 2003           37,442          47,141          0.98%
    June 30, 2003                28,883          51,286          1.06%
    March 31, 2003               18,662          76,160          1.58%
    December 31, 2002            17,094          58,214          1.21%



           Distribution of Post-1996 Act Non-performing Assets
            and 90-Day Delinquencies by Original LTV Ratio(5)
                         as of December 31, 2004
                          (dollars in thousands)

                            Non-
                         performing                  90-Day
    Original LTV Ratio     Assets    Percentage   Delinquencies   Percentage
     0.00% to 40.00%       $3,752        8%          $2,823           11%
    40.01% to 50.00%        7,132       14%           2,321            9%
    50.01% to 60.00%       26,494       52%          12,349           49%
    60.01% to 70.00%       12,128       24%           7,030           28%
    70.01% to 80.00%        1,059        2%             689            3%
    80.01% +                   71        0%              71            0%
                 Total    $50,636      100%         $25,283          100%



           Distribution of Post-1996 Act Non-performing Assets
            and 90-Day Delinquencies by Loan Origination Date
                         as of December 31, 2004
                          (dollars in thousands)

                Outstanding
               Post-1996 Act
     Loan         Loans,        Non-
  Origination   Guarantees  performing                 90-Day
     Date       and LTSPCs    Assets   Percentage  Delinquencies  Percentage


  Before 1994    $541,561     $1,755      0.32%         $892        0.16%
  1994            130,935        507      0.39%          507        0.39%
  1995            127,128      2,869      2.26%        2,097        1.66%
  1996            292,258      8,108      2.77%        5,427        1.87%
  1997            353,594      8,127      2.30%        2,342        0.67%
  1998            565,536      7,328      1.30%        2,167        0.39%
  1999            567,633      9,071      1.60%        5,138        0.91%
  2000            341,760      5,280      1.54%        1,741        0.51%
  2001            519,914      6,069      1.17%        3,979        0.77%
  2002            575,000        937      0.16%          408        0.07%
  2003            449,799        585      0.13%          585        0.13%
  2004            177,090        -        0.00%          -          0.00%
      Total    $4,642,208    $50,636      1.09%      $25,283        0.55%


  (1) Farmer Mac assumes 100 percent of the credit risk on post-1996 Act
      loans.  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 II loans are
      guaranteed by the U.S. Department of Agriculture.
  (2) The Loans and Guaranteed Securities and LTSPCs amounts reflect the
      conversion of $722.3 million of existing LTSPCs to Guaranteed
      Securities during third quarter 2003 at the request of a program
      participant.
  (3) Non-performing assets are loans 90 days or more past due, in
      foreclosure, restructured after delinquency, in bankruptcy (including
      loans performing under either their original loan terms or a court-
      approved bankruptcy plan) or real estate owned.
  (4) 90-day delinquencies are loans 90 days or more past due, in
      foreclosure, restructured after delinquency, or in bankruptcy,
      excluding loans performing under either their original loan terms or a
      court-approved bankruptcy plan.
  (5) Original LTV ratio is calculated by dividing the loan principal
      balance at the time of guarantee, purchase or commitment by the
      appraised value at the date of loan origination or, when available,
      the updated appraised value at the time of guarantee, purchase or
      commitment.


DATASOURCE: Farmer Mac



CONTACT:  Jerome Oslick of Farmer Mac, [phone]



Web site:  http://www.farmermac.com/ 

Copyright