Farmer Mac Reports Lower '06 Profits

Touting record new-business volume of $3 billion in 2006, the Federal Agricultural Mortgage Corp., Washington, has reported net income of $29.8 million ($2.68 per share) for the year, down from $47.0 million ($4.09 per share) in 2005.For the fourth quarter, Farmer Mac's net income totaled $7.6 million ($0.70 per share), compared with a net loss of $11.9 million ($1.04 per share) in the fourth quarter of 2005. "Farmer Mac's record business volume for 2006 was attributable principally to its marketing strategies focused on large, high-asset-quality program transactions, backed by increasing numbers of mortgage loans on farmers, ranchers, and rural homeowners," said Henry D. Edelman, Farmer Mac's president and chief executive officer. "These transactions achieve greater protection for Farmer Mac against adverse credit performance, with commensurately lower compensation for the assumption of credit risk and administrative costs, resulting in projected risk-adjusted marginal returns on equity approximately equal to those of other Farmer Mac transactions." The government-sponsored enterprise can be found online at http://www.farmermac.com.