Farmer Mac Reports Third Quarter Results
Date : 11/10/2008 @ 7:18PM
Source : PR Newswire
Stock : (AGM)
Quote : 2.81 0.07 (2.55%) @ 8:00PM
Farmer Mac Reports Third Quarter Results
$9.8 Billion Guarantee Portfolio Remains Strong; Results Significantly Affected by Previously Announced Investment Losses
WASHINGTON, Nov. 10 /PRNewswire-FirstCall/ -- The Federal Agricultural Mortgage Corporation (Farmer Mac, NYSE: AGM and AGM.A) today stated that previously reported large writedowns on two investments -- Fannie Mae and Lehman Brothers Holdings Inc. -- were the primary contributors to Farmer Mac incurring a loss on both a core earnings and a GAAP basis for third quarter 2008. Exclusive of those writedowns, Farmer Mac would have reported core earnings for third quarter of $6.7 million. Farmer Mac's underlying business remains sound, and the investment losses were somewhat reduced by higher net interest income attributable to continued favorable funding costs, as well as ongoing fee income from the Corporation's $9.8 billion guarantee portfolio.
In September 2008, when Fannie Mae entered conservatorship and Lehman Brothers Holdings Inc. declared bankruptcy, Farmer Mac held in its investment portfolio $50.0 million of Fannie Mae floating rate preferred stock and $60.0 million of Lehman Brothers senior debt securities. As a result of these events, Farmer Mac recognized other-than-temporary impairment charges on these holdings of $44.7 million (in addition to the $5.3 million other-than-temporary impairment recorded in the second quarter) and $52.4 million, respectively, during third quarter 2008.
On a GAAP basis, Farmer Mac's third quarter 2008 net loss was $106.1 million or $10.55 per diluted share, compared to a net loss of $8.6 million or $0.82 per diluted share for third quarter 2007. For the nine months ended September 30, 2008, the net loss to common stockholders was $93.0 million or $9.33 per diluted share, compared to net income of $13.7 million or $1.29 per diluted share for the nine months ended September 30, 2007.
