Farmer Mac Reports Third Quarter Results

Farmer Mac Reports Third Quarter Results 


WASHINGTON, Oct. 27  /PRNewswire-FirstCall/ -- The Federal Agricultural
Mortgage Corporation (Farmer Mac), (NYSE: AGM; AGM.A) today reported U.S. GAAP
net income for third quarter 2004 of $8.6 million or $0.70 per diluted share,
compared to $2.0 million or $0.16 per diluted share for second quarter 2004 and
$3.3 million or $0.28 per diluted share for third quarter 2003.  For the nine
months ended September 30, 2004, net income was $18.4 million or $1.50 per
diluted share, compared to $20.1 million or $1.68 per diluted share for the
nine months ended September 30, 2003.  Core earnings were $5.4 million or $0.44
per diluted share for third quarter 2004, compared to $6.2 million or $0.51 per
diluted share for second quarter 2004 and $5.5 million or $0.46 per diluted
share for third quarter 2003.  For the nine months ended September 30, 2004,
core earnings were $17.5 million or $1.43 per diluted share, compared to $17.2
million or $1.43 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 September 30, 2004, 90-day delinquencies in Farmer Mac's
portfolio remained at low levels, in terms of both dollars and percentages. 
Those delinquencies totaled $47.6 million, representing 1.01 percent of the
portfolio, compared to $47.1 million and 0.98 percent as of September 30, 2003,
and $79.8 million and 1.77 percent as of September 30, 2002.  Real estate owned
(REO) was reduced to $7.3 million as of September 30, 2004, from $16.4 million
as of September 30, 2003.

"For third quarter 2004, new business volume was $145.3 million.  As in recent
quarters, Farmer Mac's new business continued to be slowed by certain economic
factors, particularly the increased liquidity of agricultural borrowers, the
increased available capital and liquidity of agricultural lenders, and
regulatory conditions.  Looking ahead, Farmer Mac is implementing a new
strategic alliance and sees additional longer-term opportunities that could
lead to more vigorous growth in business volume.

"The annuity-like nature of our income streams and the demonstrated credit
strength of the loans underlying our guarantees and LTSPCs, though offset by
Farmer Mac's reduced business volume, increased expenses, and current market
and regulatory conditions, lead us to continue to believe the Corporation's
2004 core earnings per diluted share will be at approximately the same level as
in 2003."

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.  Due in part to the
effects of FAS 133, Farmer Mac's GAAP net income available to common
stockholders increased to $8.6 million for third quarter 2004, compared to $3.3
million for third quarter 2003, while its core earnings were $5.4 million for
third quarter 2004, compared to $5.5 million for third quarter 2003. 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
                                            September 30,   September 30,
                                               2004             2003
                                    (in thousands, except per share amounts)
                                                    Per              Per
                                                  Diluted          Diluted
                                                   Share            Share
  GAAP net income available
    to common stockholders                $8,604   $0.70   $3,345   $0.28

  Less the effects of FAS 133:
    Unrealized gains/(losses)
      on financial derivatives and
      trading assets, net of tax           3,144    0.25   (2,269)  (0.19)
    Benefit from non-amortization
      of premium payments
      on financial derivatives,
      net of tax                              76    0.01       76    0.01


  Core earnings                           $5,384   $0.44   $5,538   $0.46



                                                  Nine Months Ended
                                            September 30,   September 30,
                                               2004             2003
                                    (in thousands, except per share amounts)
                                                    Per              Per
                                                  Diluted          Diluted
                                                   Share            Share

  GAAP net income available
    to common stockholders                $18,391   $1.50   $20,139   $1.68

  Less the effects of FAS 133:
    Unrealized gains/(losses)
      on financial derivatives and
      trading assets, net of tax              633    0.05     2,695    0.23
    Benefit from non-amortization
      of premium payments
      on financial derivatives,
      net of tax                              228    0.02       238    0.02


  Core earnings                           $17,530   $1.43   $17,206   $1.43






Later in this release, Farmer Mac provides additional information about the
impact of FAS 133, which increased GAAP net income available to common
stockholders by $3.2 million in third quarter 2004.

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 third quarter 2004, compared to $7.8 million for second quarter
2004 and $8.9 million for third quarter 2003.  The net interest yield was 84
basis points for third quarter 2004, compared to 81 basis points for second
quarter 2004 and 89 basis points for third quarter 2003.  The effect of FAS 140
for third quarter 2004 was the reclassification of guarantee fee income as
interest income in the amount of $1.0 million (10 basis points), compared to
$1.1 million (11 basis points) in each of second quarter 2004 and third 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 1 basis point for third quarter 2004, second quarter
2004 and third quarter 2003, respectively.

The net interest yields for third quarter 2004, second quarter 2004 and third
quarter 2003 included the benefits of yield maintenance payments of 19 basis
points, 13 basis points and 11 basis points, respectively.  For third quarter
2004, yield maintenance payments increased net income by $1.1 million or $0.09
per diluted share, compared to $0.8 million or $0.07 per diluted share for
second quarter 2004 and $0.7 million or $0.06 per diluted share for third
quarter 2003.

Guarantee and Commitment Fees

Guarantee and commitment fees were $5.3 million for third quarter 2004,
compared to $5.3 million for second quarter 2004 and $5.1 million for third
quarter 2003.  As discussed above, $1.0 million of guarantee fee income was
classified as interest income in third quarter 2004, compared to $1.1 million
in each of second quarter 2004 and third quarter 2003.

Miscellaneous Income

Miscellaneous income for third quarter 2004 was $0.7 million, compared to $2.0
million for second quarter 2004 and $0.4 million for third quarter 2003. Of the
$2.0 million for second quarter 2004, $1.8 million represented recoveries from
two sellers for breaches of representations and warranties associated with
prior sales of agricultural mortgage loans to Farmer Mac and no such recoveries
occurred in third quarter 2004 or 2003.  Farmer Mac had previously charged off
these amounts as losses on the related loans.

Operating Expenses

Compensation and employee benefits for third quarter 2004 were $1.7 million,
compared to $1.7 million for second quarter 2004 and $1.6 million for third
quarter 2003.  General and administrative expenses for third quarter 2004 were
$2.0 million, compared to $1.8 million for second quarter 2004 and $1.6 million
for third quarter 2003.  The year-to-year 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 third quarter 2004 were $0.5
million, compared to $0.6 million for second quarter 2004 and $0.4 million for
third quarter 2003.  FCA's regulatory fees charged to Farmer Mac for the
federal fiscal year ended September 30, 2004 were $2.0 million, and FCA has
advised the Corporation that its fees for the federal fiscal year ended
September 30, 2005 will be $2.3 million.  Farmer Mac expects all of the
above-mentioned expenses to continue at or above current levels through 2005.

Farmer Mac's net REO operating costs for third quarter 2004 resulted in income
of $0.1 million, compared to costs of $0.3 million for second quarter 2004. 
Net REO operating costs in prior periods were nominal.  Discussion of the
provision for losses is covered under the topic of "Credit" later in this
release.

Capital

Farmer Mac's core capital totaled $233.6 million as of September 30, 2004,
compared to $226.3 million as of June 30, 2004 and $206.4 million as of
September 30, 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
September 30, 2004 exceeded the statutory minimum capital requirement of $128.1
million by $105.5 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 September 30, 2004, the RBC test generated an estimated risk-based
capital requirement of $43.5 million, compared to the risk-based capital
requirement of $49.3 million as of June 30, 2004.  Farmer Mac's regulatory
capital of $256.1 million as of September 30, 2004 exceeded the RBC requirement
by approximately $212.6 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 third quarter 2004, Farmer Mac repurchased 70,951 shares of its Class C
Non-Voting Common Stock, at an average price of $19.88 per share, pursuant to
the Corporation's previously announced stock repurchase program. These
repurchases reduced the Corporation's capital by approximately $1.4 million.

Credit

As of September 30, 2004, Farmer Mac's 90-day delinquencies totaled $47.6
million, representing 1.01 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 $47.1 million (0.98 percent) as
of September 30, 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 September 30, 2004, non-performing assets totaled $75.0 million,
representing 1.58 percent of the principal balance of all loans held and loans
underlying post-1996 Act Farmer Mac I Guaranteed Securities and LTSPCs,
compared to $84.6 million (1.74 percent) as of September 30, 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 September 30, 2004, Farmer Mac had $7.3 million of REO, compared to $9.2
million as of June 30, 2004 and $16.4 million as of September 30, 2003. The
commodity and geographic diversification of the REO properties is consistent
with the commodity and geographic diversification of the non- performing
assets.  Analysis of the portfolio by geographic and commodity distribution
indicates that non-performing assets, including REO, 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.

As of September 30, 2004, Farmer Mac analyzed the following three categories of
assets for impairment, based on the fair value of the underlying collateral:
(1) the $75.0 million of non-performing assets; (2) the $27.2 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 $35.9 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 $138.1 million of assets measured for impairment
against updated appraised values, other updated collateral valuations or
discounted values.  Of the assets so analyzed, $126.6 million were found to be
collateralized adequately and $11.5 million of assets were found not to be
collateralized adequately, with individual collateral shortfalls totaling $1.3
million.  Accordingly, Farmer Mac allocated specific allowances of $1.3 million
to those under-collateralized assets as of September 30, 2004.  After the
allocation of specific allowances from the total allowance for losses of $22.5
million, the non-specific or general allowance and the contingent obligation
for inherent probable losses totaled $21.2 million.

During third quarter 2004, Farmer Mac charged off $1.1 million in losses
against the allowance for losses, compared to $2.0 million in second quarter
2004 and $1.3 million in third 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 third quarter 2004, Farmer Mac recovered $0.1 million of previously
charged off losses.  Farmer Mac's total provision for losses was $1.6 million
for third quarter 2004, compared to $1.6 million for second quarter 2004 and
$2.2 million for third quarter 2003.  As of September 30, 2004, Farmer Mac's
allowance for losses and contingent obligation for probable losses totaled
$22.5 million, or 47 basis points of the outstanding balance of loans held and
loans underlying post-1996 Act Farmer Mac I Guaranteed Securities and LTSPCs,
compared to $21.8 million (45 basis points) as of June 30, 2004 and $22.7
million (47 basis points) as of September 30, 2003.  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.

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 September 30, 2004.  The contingent obligation for probable
losses is a component of Farmer Mac's guarantee and commitment obligation.

                                                         Contingent
                            Allowance   REO     Reserve  Obligation
                            for Loan  Valuation   for    for Probable
                             Losses   Allowance  Losses    Losses     Total

                                           (in thousands)

  Beginning balance          $5,565     $545   $13,187     $2,501   $21,798
    Provision for losses       (144)     210     1,334        215     1,615
    Net charge-offs            (196)    (755)        -          -      (951)
  Ending balance             $5,225       $-   $14,521     $2,716   $22,462



  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 September 30, 2004,
a parallel increase of 100 basis points across the entire U.S. Treasury yield
curve would have decreased MVE by 0.5 percent, while a parallel decrease of 100
basis points would have decreased MVE by 1.0 percent. As of September 30, 2004,
a parallel increase of 100 basis points would have increased Farmer Mac's NII,
a shorter-term measure of interest rate risk, by 9.4 percent, while a parallel
decrease of 100 basis points would have decreased NII by 7.6 percent.  Farmer
Mac's duration gap, another measure of interest rate risk, was minus 0.2 months
as of September 30, 2004.

The economic effects of financial derivatives, including interest rate swaps,
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 September 30, 2004, Farmer Mac had
$614.6 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 September
30, 2004, Farmer Mac had $905.7 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 September 30, 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 third quarter 2004, the increase in net
after-tax income resulting from FAS 133 was $3.2 million and the net after-tax
decrease in accumulated other comprehensive income was $10.6 million.  During
second quarter 2004, the decrease in net after-tax income resulting from FAS
133 was $4.3 million and the net after-tax increase in accumulated other
comprehensive income was $27.1 million.  For third quarter 2003, the decrease
in net after-tax income resulting from FAS 133 was $2.2 million and the net
after-tax increase in accumulated other comprehensive income was $11.5 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. Statements
by either FCA, the federal regulator of both Farmer Mac and the primary lenders
in the Farm Credit System (FCS), or 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, or
both, have cautioned FCS institutions about doing business with GSEs, including
Farmer Mac, and have 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.  While Farmer Mac expects to be able to
comply with the regulation if it is adopted in its current form, the
Corporation disagrees with certain aspects of the proposed regulation and
submitted comments on the proposal to FCA accordingly.

On August 5, 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 is subject to a 90-day public comment period and, as drafted, 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 intends to submit 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 June
30, 2004, as filed with the SEC on August 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 third quarter 2004 earnings and this
press release will be webcast on Farmer Mac's website beginning at 9:00 a.m.
eastern time, Thursday, October 28, 2004, 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)

                                           September    December   September
                                               30,         31,         30,
                                              2004        2003        2003

  Assets:
   Cash and cash equivalents               $499,806    $623,674    $513,370
   Investment securities                    949,391   1,064,782   1,083,477
   Farmer Mac Guaranteed Securities       1,349,256   1,508,134   1,521,167
   Loans held for sale                       13,863      46,662      30,511
   Loans held for investment                886,409     942,929     949,132
     Allowance for loan losses               (5,225)     (5,967)     (6,171)
        Loans, net                          895,047     983,624     973,472
   Real estate owned, net of valuation
    allowance of zero, $0.2 million,
    and $1.0 million                          7,279      15,478      16,413
   Financial derivatives                        940         961       2,816
   Interest receivable                       37,820      58,423      42,290
   Guarantee and commitment fees
    receivable                               18,894      16,885      14,729
   Deferred tax asset, net                   10,800      10,891      10,408
   Prepaid expenses and other assets         15,687      16,798      18,229
    Total Assets                         $3,784,920  $4,299,650  $4,196,371

  Liabilities and Stockholders' Equity:
   Notes payable:
    Due within one year                  $2,201,229  $2,799,384  $2,763,811
    Due after one year                    1,222,609   1,136,110   1,074,070
     Total notes payable                  3,423,838   3,935,494   3,837,881

   Financial derivatives                     57,873      67,670      82,112
   Accrued interest payable                  25,689      26,342      29,782
   Guarantee and commitment obligation       17,751      14,144      15,659
   Accounts payable and accrued expenses     17,146      29,574      16,279
   Reserve for losses                        14,521      13,172      10,592
    Total Liabilities                     3,556,818   4,086,396   3,992,305

   Preferred stock                           35,000      35,000      35,000
   Common stock at par                       12,033      12,054      11,796
   Additional paid-in capital                89,146      88,652      84,655
   Accumulated other comprehensive loss      (5,487)     (2,295)     (2,336)
   Retained earnings                         97,410      79,843      74,951
   Total Stockholders' Equity               228,102     213,254     204,066
    Total Liabilities and Stockholders'
     Equity                              $3,784,920  $4,299,650  $4,196,371



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

                                         Three Months      Nine Months
                                            Ended             Ended
                                         Sept.   Sept.    Sept.    Sept.
                                          30,     30,      30,      30,
                                         2004    2003     2004     2003

  Interest income:
    Investments and cash equivalents    $9,412  $7,994  $25,857  $26,490
    Farmer Mac Guaranteed Securities    16,689  17,783   49,555   55,984
    Loans                               12,285  13,543   38,974   39,679
       Total interest income            38,386  39,320  114,386  122,153
  Interest expense                      30,417  30,402   89,112   93,995
  Net interest income                    7,969   8,918   25,274   28,158
  Provision for loan losses                144  (3,391)  (2,420)  (6,015)
  Net interest income after provision
   for loan losses                       8,113   5,527   22,854   22,143

  Guarantee and commitment fees          5,269   5,056   15,742   15,261
  Gains/(Losses) on financial
   derivatives and trading assets        5,350  (3,348)   2,446    3,653
  Gain on sale of Farmer Mac Guaranteed
   Securities                              -       -        367      -
  Gains/(Losses) on the sale of real
   estate owned                            133      79     (120)     (23)
  Miscellaneous income                     703     354    3,185      743
       Total revenues                   19,568   7,668   44,474   41,777

  Expenses:
    Compensation and employee benefits   1,715   1,582    5,227    4,488
    General and administrative           2,038   1,550    5,929    3,949
    Regulatory fees                        504     383    1,565    1,148
    REO operating costs, net               (52)    -        290      -
    Provision for losses                 1,759  (1,190)   2,426      300
       Total operating expenses          5,964   2,325   15,437    9,885

  Income before income taxes            13,604   5,343   29,037   31,892

  Income tax expense                     4,440   1,438    8,966   10,073

  Net income                             9,164   3,905   20,071   21,819

  Preferred stock dividends               (560)   (560)  (1,680)  (1,680)

  Net income available to common
   stockholders                         $8,604  $3,345  $18,391  $20,139

  Earnings per common share:
      Basic earnings per common share    $0.71   $0.28    $1.52    $1.72
      Diluted earnings per common share  $0.70   $0.28    $1.50    $1.68



                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:

    September 30, 2004               $23,229    $84,097  $38,010   $145,336
    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
    September 30, 2002                58,475    140,157   37,374    236,006

  For the year ended:
    December 31, 2003                192,577    763,342  271,229  1,227,148
    December 31, 2002                747,881  1,155,479  173,011  2,076,371





    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:
  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
  September 30, 2002                      2,127,460    2,407,469    35,297


                                              Farmer Mac
                                                  II              Total

                                                     (in thousands)

  As of:
  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
  September 30, 2002                            630,452          5,200,678



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

                                 Fixed Rate  5-to-10-  1-Month-to-
                                (10-yr. Wtd. Year ARMs   3-Year
                                 Avg. Term)  and Resets   ARMs     Total

                                              (in thousands)
  As of:
      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
      September 30, 2002         1,000,518    934,435   498,815   2,433,768



                Non-performing Assets and 90-Day Delinquencies

                        Outstanding
                       Post-1996 Act
                           Loans,
                         Guarantees      Non-
                             and      performing
                           LTSPCs      Assets(3)       Percentage

                                 (dollars in thousands)
  As of:
    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%
    September 30, 2002   4,506,330       91,286           2.03%


                           Less:
                          REO and
                         Performing      90-Day
                        Bankruptcies  Delinquencies(4)  Percentage


                                  (dollars in thousands)
  As of:
    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%
    September 30, 2002      11,460       79,826           1.77%



            Distribution of Post-1996 Act Non-performing Assets
            and 90-Day Delinquencies by Original LTV Ratio(5)
                         as of September 30, 2004

                          (dollars in thousands)

                                          Non-             90-Day
                                     performing Percent- Delinquen- Percent-
    Original LTV Ratio                   Assets    age      cies      age

     0.00% to 40.00%                      $5,311     7%    $4,334      9%
    40.01% to 50.00%                      15,588    21%    10,615     22%
    50.01% to 60.00%                      33,714    45%    18,741     40%
    60.01% to 70.00%                      16,815    22%    11,117     23%
    70.01% to 80.00%                       3,417     5%     2,777      6%
    80.01% +                                 177     0%       -        0%
                             Total       $75,022   100%   $47,584    100%



            Distribution of Post-1996 Act Non-performing Assets
             and 90-Day Delinquencies by Loan Origination Date
                         as of September 30, 2004

                          (dollars in thousands)

                     Outstanding
                     Post-1996 Act
           Loan         Loans,    Non-                 90-Day
        Origination  Guarantees   Performing Percent- Delinquen-  Percent-
           Date      and LTSPCs   Assets       age       cies      age

        Before 1994   $577,672     $2,896     0.50%    $2,001      0.35%
           1994        137,947        656     0.48%       656      0.48%
           1995        131,148      2,589     1.97%     1,817      1.39%
           1996        308,300      8,745     2.84%     5,392      1.77%
           1997        365,381     12,488     3.42%     5,745      1.60%
           1998        580,036     12,206     2.10%     7,444      1.29%
           1999        588,624     16,035     2.72%    11,704      2.00%
           2000        347,383      8,755     2.52%     4,647      1.35%
           2001        541,206      7,025     1.30%     4,758      0.88%
           2002        594,977      3,048     0.51%     2,841      0.48%
           2003        463,527        579     0.12%       579      0.12%
           2004        120,638          -     0.00%         -      0.00%
            Total   $4,756,839    $75,022     1.58%   $47,584      1.01%



  (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