Agricultural GSE Posts a Profit, Shares Soar

After losing money for all of last year, Farmer Mac earned $34 million in the first quarter of 2009, citing valuation gains from financial derivatives and trading assets. In trading Tuesday its share soared 112% to $7.69. Michael Gerber, president of the government-sponsored enterprise, said, "As we look ahead, we expect any credit losses to remain within manageable levels." He noted that, lenders in the agricultural and rural utilities sectors continue to face capital markets and economic challenges. Farmer Mac increased its capital surplus to $67 million at the end of March from $13 million at December 31. Its delinquencies totaled 1.9%. Formerly known as the Federal Agricultural Mortgage Corp., Farmer Mac provides liquidity to agricultural real estate and rural housing lenders. It purchases eligible loans directly from lenders and guarantees securities.