Farmer Mac Reports Loss, Restates Earnings

The Federal Agricultural Mortgage Corp., Washington, has reported a net loss of $6.3 million ($0.58 per share) for the third quarter and announced the completion of its restatement of financial results for 2003-2005 and the first two quarters of this year.Farmer Mac attributed the loss, which compared with net income of $19.3 million ($1.70 per share) for the third quarter of 2005, to accounting losses on financial derivatives used for hedging. The government-sponsored enterprise said this was in contrast to its restated results for the first two quarters, in which gains on financial derivatives brought net income to $15.1 million and $13.4 million, respectively. "The restatement of our financial results corrected our accounting under [Statement of Financial Accounting Standards No. 133] and so eliminated the use of hedge accounting for financial derivatives used to hedge interest rate risk," said Henry D. Edelman, Farmer Mac's president and chief executive officer. "... [T]he accounting corrections under SFAS 133 had no effect on core earnings or cash flows, and an insignificant impact on Farmer Mac's financial position." The GSE can be found online at http://www.farmermac.com.