The Federal Agricultural Mortgage Corporation (Farmer Mac, NYSE: AGM and AGMA) today announced diluted earnings per share of $0.25 for fourth quarter 2000 and $0.92 for the year, a 47 percent increase over fourth quarter 1999 diluted earnings of $0.17 per share and a 48 percent increase over 1999 diluted earnings of $0.62. Net income was $2.9 million for the quarter and $10.4 million for the year, compared to $1.9 million and $6.9 million for the same periods in 1999.

Farmer Mac President and Chief Executive Officer Henry D. Edelman observed, "Farmer Mac registered another strong earnings increase in the fourth quarter of 2000, bringing quarterly and annual Corporate results to new record levels. Despite industry-wide weakness in new agricultural mortgage volume during the last quarter, we continued our pattern of earnings advances. Though Farmer Mac I loan purchases and guarantees of $226 million during the fourth quarter represented a fallback from the $451 million level of the third quarter, this was consistent with the expected variability of volume from quarter to quarter, largely due to the unpredictability of swap and standby business. Nevertheless, reflecting the cumulative nature of our business, outstanding guarantee volume for all programs at the end of the quarter was up 32 percent over the year-earlier level."

"Although swap and standby commitment volume came in about 10 percent short of our expectations, we continue to see significant swap and standby opportunities for 2001," Mr. Edelman continued. "Agricultural mortgage business during the quarter was adversely affected by a generally higher interest rate environment, which dampened demand for farm mortgages overall, and long-term fixed-rate products in particular, and caused swap and standby commitment participants to pull back. If interest rates continue their recent downward trend, we would expect an increase in long-term, fixed-rate agricultural mortgage demand. This, in turn, would create incentives for lenders to enter into loan sales, swaps and long-term standby commitments with Farmer Mac to address their interest rate risk management and capital leverage concerns."

Mr. Edelman noted, "Growing inventories and weak markets for agricultural commodities and products worldwide, along with low prices and economic uncertainty in the agricultural sector, followed the trend of the last several years throughout 2000. The outlook for 2001 is for this trend to continue. These conditions suppressed the volume of agricultural land transfers and led to the enactment of legislation that provided substantial government financial support to farmers in 2000. It is too early to predict what federal agricultural support will be forthcoming in 2001, but we believe that preservation of the economic stability of the agricultural sector will continue to be a high priority for Congress and the new Administration. Similar support maintained farm sector income during recent years and contributed to stable farmland values in most regions of the nation. Though increased reliance on government payments enabled many farmers and ranchers to meet their existing mortgage obligations more easily, it also combined with economic uncertainty to mute farmer demand for new agricultural mortgage loans. We believe that Farmer Mac has responded effectively to these market conditions by expanding its product offerings to include short-term interest rate and adjustable rate mortgages, and by re-emphasizing to agricultural lenders the opportunity to reduce their concentrated exposures to local agricultural credit risks. Farmer Mac is well-positioned to benefit from the current rate environment and from anticipated interest rate reductions during 2001. Accordingly, our view is that the Corporation is on track to meet or exceed market analyst projections as of the date of this release for its financial performance in 2001."

Net Interest Income

Net interest income was $4.5 million for fourth quarter 2000, and $17.7 million for the year, compared to $3.6 million and $15.0 million for the same periods in 1999. The net interest yield, exclusive of guarantee fees, was 0.60 percent for fourth quarter 2000 and 0.63 percent for 2000, compared to 0.60 percent for third quarter 2000 and 0.54 percent for fourth quarter 1999 and 0.64 percent for 1999. The increase in net interest income was attributable to continued growth in our retained portfolio of Farmer Mac guaranteed securities (AMBS), augmented by the ongoing rebalancing of Farmer Mac's debt obligations and investment portfolio in response to developments in the financial markets.

Other Income

Other income, which is comprised of guarantee fee income and miscellaneous income, totaled $3.5 million for fourth quarter 2000 and $12.1 million for the year, compared to $2.5 million and $7.6 million, respectively, in 1999. Guarantee fee income, the largest component of other income, was $3.4 million for fourth quarter 2000, compared to $2.4 million for fourth quarter 1999 and $3.0 million for third quarter 2000. The relative increases in guarantee fees reflect an increase in the average balance of outstanding guarantees. Miscellaneous income was $149 thousand for fourth quarter 2000, compared to $110 thousand and $78 thousand for fourth quarter 1999 and third quarter 2000, respectively.

Operating Expenses

During fourth quarter 2000, operating expenses totaled $2.3 million, compared to $1.9 million for fourth quarter 1999, and $2.1 million for third quarter 2000. Operating expenses were consistent as a percentage of total revenues for the same quarters at 28 percent, compared to 31 percent and 28 percent, respectively, in the prior periods.

Credit

As of December 31, 2000, Farmer Mac I loans purchased or guaranteed after the enactment in 1996 of changes to Farmer Mac's statutory charter ("post-1996 Act loans") that were 90 days or more past due, in foreclosure or in bankruptcy represented 1.25 percent of the principal balance of all post-1996 Act loans, compared to 1.05 percent as of December 31, 1999, and 1.80 percent at September 30, 2000. (Farmer Mac assumes 100 percent of the credit risk on post-1996 Act loans; pre-1996 Act loans are supported by mandatory 10 percent subordinated interests that mitigate Farmer Mac's credit exposure.) Farmer Mac anticipates fluctuations in the delinquency rate from quarter to quarter, with higher levels likely to be reported during the first and third quarters of each year due to the semi-annual payment characteristics of most Farmer Mac loans. Congress provided significant income support to the agricultural sector for 2000, which, based on reports issued by the U.S. Department of Agriculture, resulted in farm income in 2000 being at levels greater than in 1999. This income support should help to moderate delinquencies as we enter 2001. The federal income support is not allocated equally to producers of all agricultural commodities, however, and farmers and ranchers producing agricultural commodities that do not receive significant federal income support are more likely to become delinquent on their agricultural mortgage loans than those receiving such support. Further, it is expected that additional federal support will be provided to the agricultural sector in 2001, although the specific amount has not yet been determined.

Farmer Mac's provision for principal and interest losses was $1.3 million for fourth quarter 2000 and $4.7 million for the year, compared to $1.2 million and $3.7 million, respectively, for the comparable periods in 1999. At December 31, 2000, Farmer Mac's reserve for losses totaled $11.3 million, or 0.45 percent of outstanding post-1996 Act loans, compared to $6.6 million (0.35 percent) at December 31, 1999. Farmer Mac did not incur any credit loss charge-offs in the fourth quarter 2000. Although Farmer Mac expects to incur credit losses on the existing post-1996 Act delinquent loans, Farmer Mac believes those losses are adequately covered by the reserve for losses, based on the value of the collateral securing the loans. As of December 31, 2000, the weighted average loan-to-value ratio for all post-1996 Act loans was 51 percent, and the weighted average loan-to-value ratio for all post-1996 Act loans that were 90 days or more past due, in foreclosure or in bankruptcy was 57 percent.

Provision for Income Taxes

The provision for income taxes totaled $1.6 million for fourth quarter 2000, and $5.7 million for the year, compared to $1.1 million and $3.7 million for the same periods in 1999. Farmer Mac's effective tax rates for the years 2000 and 1999 were 35.5 percent and 34.7 percent, respectively.

Capital

As of December 31, 2000, Farmer Mac's regulatory core capital was $101.3 million, compared with $88.8 million at December 31, 1999, and $98.3 million at September 30, 2000. The regulatory core capital balance at December 31, 2000 exceeded Farmer Mac's regulatory minimum capital requirements by approximately $4.1 million. Based on the current minimum capital requirements established by the Farm Credit Administration, Farmer Mac's current capital surplus would support additional guarantee growth in amounts ranging from $149 million of on-balance sheet guarantees to $546 million of off-balance sheet guarantees. Furthermore, should Farmer Mac deem it appropriate, on-balance sheet non-program assets of $1.4 billion could be replaced with on- and off-balance sheet program guarantees, resulting in the ability to carry further additional guarantees ranging from approximately $1.4 billion of on-balance sheet guarantees to over $5.1 billion of off-balance sheet guarantees. Ultimately, Farmer Mac could sell on-balance sheet program assets of $1.6 billion in order to support further increases of on- and off-balance sheet program guarantees, resulting in the cumulative ability to carry an additional $9.9 billion of off-balance sheet guarantees. Any of these transactions would, of course, be evaluated to optimize Farmer Mac's return on equity and capital flexibility.

As of December 31, 2000, Farmer Mac's balance sheet stockholders' equity was $132.7 million, reflecting $31.5 million of net unrealized gains on securities available for sale. Such gains were recognized in fourth quarter 2000 pursuant to Statement of Financial Accounting Standards No. 115 (SFAS 115), Accounting for Certain Investments in Debt and Equity Securities.

As a result of the large net unrealized gains on AMBS of $30.2 million recognized in fourth quarter 2000, the return on average equity was 10.6 percent during fourth quarter 2000, compared to 8.8 percent during fourth quarter 1999 and 11.3 percent during third quarter 2000. Exclusive of the net effects of unrealized gains, the fourth quarter return on average equity would have been 11.5 percent.

Change in Accounting Principle

Statement of Financial Accounting Standards No. 133 (SFAS 133), Accounting for Derivative Instruments and Hedging Activities, became effective as of January 1, 2001. Farmer Mac is fully in compliance with SFAS 133, the adoption of which by reporting companies was mandatory. SFAS 133 requires derivative instruments, which Farmer Mac uses primarily to hedge interest rate risk, to be marked to their market values and included on the balance sheet. Previously, Farmer Mac accounted for derivative instruments off-balance sheet and disclosed them in the financial statement footnotes, in accordance with generally accepted accounting principles. The cumulative net effect of this change in accounting principle, which requires the acceleration of certain expenses associated with derivative instruments to January 1, 2001 and had no effect on fourth quarter 2000 results, is a negative adjustment to earnings of approximately $1 million for the first quarter of 2001. Farmer Mac has determined that this adjustment will be offset over time (predominantly over the next two years) as the Corporation recognizes income that is hedged by the derivative instruments.

The adoption of SFAS 133 will also produce a change to stockholders' equity during the first quarter of 2001 in the form of an approximately $8.5 million reduction in other comprehensive income that partially offsets the $31.5 million of net unrealized gains recognized in fourth quarter 2000. Those unrealized gains resulted from the appreciation of the Corporation's AMBS portfolio during fourth quarter 2000 due to the decline in interest rates in the fourth quarter.

Forward-Looking Statements

In addition to historical information, this release includes forward-looking statements reflecting 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 assumptions, estimates and the evaluation of risks and uncertainties. Various factors could cause actual events or results to differ materially from those expectations. Some of the important factors that could cause Farmer Mac's actual results to differ materially from management's expectations include: (1) uncertainties regarding the rate and direction of the development of the secondary market for agricultural mortgage loans; (2) uncertainties in the agricultural economy resulting from low commodity prices, weak demand for U.S. agricultural products and crop damage from natural disasters; and (3) the possibility of additional statutory or regulatory restrictions applicable to Farmer Mac, such as the imposition of regulatory risk-based capital requirements in excess of the statutory minimum and critical capital levels or restrictions on Farmer Mac's investment authority. These and other factors are discussed in Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000, as filed with the Securities and Exchange Commission on November 14, 2000. The forward-looking statements contained herein represent management's expectations as of the date of this release. Farmer Mac undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events.

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 U.S. Department of Agriculture guaranteed farm program and rural development loans. Farmer Mac's Class C and Class A common stocks are listed on the New York Stock Exchange under the symbols AGM and AGMA, respectively. Additional information about Farmer Mac (as well as the Form 10-Q referenced above) is available on Farmer Mac's website at www.farmermac.com . An audio recording of the conference call to discuss Farmer Mac's fourth quarter 2000 earnings and this press release will be available on Farmer Mac's website after 2 p.m. eastern time, Thursday, January 18, 2001.

                    Federal Agricultural Mortgage Corporation
                           Consolidated Balance Sheets
                                   (in thousands)

                                               December 31,      December 31,
                                                      2000              1999
                                                (unaudited)         (audited)
    Assets:
     Cash and cash equivalents                $    537,871      $    336,282
     Investment securities                         836,757           847,220
     Farmer Mac guaranteed securities            1,679,993         1,306,223
     Loans                                          30,279            38,509
     Interest receivable                            55,681            42,900
     Guarantee fees receivable                       5,494             4,358
     Prepaid expenses and other assets              14,824            14,918
      Total assets                             $ 3,160,899       $ 2,590,410

    Liabilities and stockholders' equity:
     Notes payable:
      Due within one year                      $ 2,141,548       $ 1,712,161
      Due after one year                           827,635           760,237
       Total notes payable                       2,969,183         2,472,398

     Accrued interest payable                       20,852            18,549
     Accounts payable and accrued
      expenses                                      26,880             5,736
     Reserve for losses                             11,323             6,584
      Total liabilities                          3,028,238         2,503,267

     Stockholders' equity                          132,661            87,143
      Total liabilities and stockholders'
       equity                                   $3,160,899       $ 2,590,410


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

                                Quarter Ended              Year Ended
                          December 31, December 31,  December 31, December 31,
                                 2000         1999          2000         1999
                            unaudited      audited     unaudited      audited
    Interest income:
      Investments and
       cash equivalents       $23,147      $20,048       $91,905      $70,554
      Farmer Mac guaranteed
       securities              28,886       20,689       100,649       63,054
      Loans                       534          951         2,866        6,769
    Total interest income      52,567       41,688       195,420      140,377

    Interest expense           48,061       38,070       177,722      125,419

    Net interest income         4,506        3,618        17,698       14,958

    Other income:
      Guarantee fees            3,368        2,388        11,677        7,396
      Miscellaneous               149          110           399          220
    Total other income          3,517        2,498        12,076        7,616

    Total revenues              8,023        6,116        29,774       22,574

    Other expenses:
      Compensation and
       employee benefits        1,168        1,190         4,521        4,577
      Regulatory fees             133          150           584          502
      General and
       administrative             966          572         3,744        3,232
    Total operating expenses    2,267        1,912         8,849        8,311

      Provision for losses      1,297        1,230         4,739        3,672

    Total expenses              3,564        3,142        13,588       11,983

    Income before income taxes  4,459        2,974        16,186       10,591

    Income tax provision        1,586        1,082         5,749        3,670

    Net income                 $2,873       $1,892       $10,437       $6,921

    Earnings per share:
        Basic earnings
         per share              $0.26        $0.17         $0.94        $0.64
        Diluted earnings
         per share              $0.25        $0.17         $0.92        $0.62


                  Federal Agricultural Mortgage Corporation
                           Supplemental Information

The following tables set forth quarterly activity regarding: loan purchase commitments; loan purchases and loan guarantees; AMBS issuances; delinquencies; and outstanding guarantees.

       Commitments to Purchase or Guarantee Farmer Mac I Loans (1) (2)

                                     Long-          5 and 7
                                      Term             Year
                                     Fixed           Resets
                                      Rate                           ARMs

    For the quarter ended:

     December 31, 2000          $   159,039      $    2,261    $   70,454
     September 30, 2000             288,274         126,909        40,097
     June 30, 2000                   45,838           2,822        32,361
     March 31, 2000                  10,369          16,835        32,438
     December 31,1999               317,357           6,882        75,326
     September 30, 1999              26,623          19,384        34,170
     June 30, 1999                   56,010          17,025        48,791

    For the year ended:
     December 31, 2000              503,520         148,827       175,350
     December 31, 1999              537,190          58,065       203,536


       Commitments to Purchase or Guarantee Farmer Mac I Loans (1) (2)

                                                       Total    Outstanding
    For the quarter ended:

     December 31, 2000                              $231,753         13,223
     September 30, 2000                              455,280         10,983
     June 30, 2000                                    81,021          8,641
     March 31, 2000                                   59,642         10,707
     December 31,1999                                399,565         12,470
     September 30, 1999                               80,177         17,010
     June 30, 1999                                   121,826         12,069

    For the year ended:
     December 31, 2000                               827,695         13,223
     December 31, 1999                               798,791         12,470


            Purchases and Guarantees of Farmer Mac I Loans (1)(2)

                           Long-Term 5 and 7 Year
                          Fixed Rate       Resets        ARMs        Total
                                              (in thousands)

    For the quarter ended:
     December 31, 2000     $ 160,706    $   1,176    $  64,344    $ 226,227
     September 30, 2000      286,303      126,845       37,801      450,949
     June 30, 2000            43,508        5,702       30,778       79,987
     March 31, 2000           11,917       13,185       33,181       58,283
     December 31, 1999       319,478        9,522       73,030      402,030
     September 30, 1999       26,670       14,862       29,029       70,561
     June 30, 1999            58,406       16,975       52,244      127,625

    For the year ended:
     December 31, 2000       502,434      146,908      166,104      815,446
     December 31, 1999       662,186       57,176      483,402    1,202,764


                  Federal Agricultural Mortgage Corporation
                     Supplemental Information (continued)

                     Farmer Mac I AMBS Issuances (1) (3)

                          Long-Term 5 and 7 Year          ARMs         Total
                         Fixed Rate       Resets
                                           (in thousands)

    For the quarter ended:
      December 31, 2000      $6,777       $1,176       $27,824       $35,777
      September 30, 2000      5,589        3,790        35,916        45,295
      June 30, 2000          15,122        4,950        36,749        56,821
      March 31, 2000          6,582       14,616        45,880        67,078
      December 31, 1999     128,641        8,084        17,069       153,794
      September 30, 1999     95,121       33,532        24,744       153,397
      June 30, 1999           1,018           --        44,397        45,415

    For the year ended:
      December 31, 2000      34,070       24,531       146,370       204,972
      December 31, 1999     359,185       57,887       277,517       694,589


                        Farmer Mac I Delinquencies (4)

                                                     Distribution of Post-1996
                    Post-1996 Pre-1996                   Act Delinquencies
    As of:                Act      Act(5) Total        as of December 31, 2000

                                                  By loan-to-value ratio:
    December 31, 2000   1.25%    6.49%    1.44%            0.00% to 40.00% 15%
    September 30, 2000  1.80%    5.55%    1.96%           40.01% to 50.00% 13%
    June 30, 2000       1.25%    4.12%    1.41%           50.01% to 60.00% 39%
    March 31, 2000      1.45%    4.89%    1.65%           60.01% to 70.00% 31%
    December 31, 1999   1.05%    3.04%    1.18%           70.01% to 80.00%  2%
                                                                    Total 100%


                  Federal Agricultural Mortgage Corporation
                     Supplemental Information (continued)

                          Outstanding Guarantees (5)
                                                    Farmer Mac I
                                            Post-1996 Act             Pre-1996
                                        AMBS             LTSPC             Act

                                                    (in thousands)
    As of:
      December 31, 2000           $1,615,914          $862,804         $83,513
      September 30, 2000           1,621,516           707,850          92,536
      June 30, 2000                1,354,623           575,143         100,414
      March 31, 2000               1,310,710           551,423         107,403
      December 31,1999             1,266,522           575,097         118,214
      September 30, 1999           1,118,266           367,934         130,452
      June 30, 1999                  984,538           375,915         142,842


                                      Farmer                           Held in
                                      Mac II             Total   Portfolio (6)
                                                (in thousands)
    As of:
    December 31, 2000               $517,703         3,079,934      $1,581,905
    September 30, 2000               491,820         2,913,721       1,571,315
    June 30, 2000                    467,352         2,497,532       1,292,359
    March 31, 2000                   387,992         2,357,529       1,268,889
    December 31,1999                 383,266         2,343,099       1,237,623
    September 30, 1999               377,663         1,994,315       1,190,741
    June 30, 1999                    367,250         1,870,545       1,046,303

    (1)  Includes guarantees issued by Farmer Mac through swap transactions.
         Such transactions totaled $103.2 million in fourth quarter 1999 and
         $73.6 million in first quarter 1999.

    (2)  Includes long-term standby purchase commitments (LTSPC) of
         $180.2 million committed to and executed in fourth quarter 2000,
         $158.3 million committed to and executed in third quarter 2000, and
         $34.4 million committed to and executed in second quarter 2000.  Such
         transactions obligate Farmer Mac to purchase loans in the pool at par
         when they become four or more months delinquent.  In exchange, Farmer
         Mac receives an annual commitment fee on the outstanding balance of
         the pool over the life of the loans.

    (3)  Includes AMBS issued and retained by Farmer Mac.  Such transactions
         totaled $20.7 million in fourth quarter 2000, $25.0 million in third
         quarter 2000, $21.7 million in second quarter 2000, $46.5 million in
         first quarter 2000, and $50.6 million in fourth quarter 1999.

    (4)  Includes loans 90 days or more past due, in foreclosure or in
          bankruptcy.

    (5)  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 assumes 100 percent of the credit
         risk on post-1996 Act loans.  Farmer Mac II loans are guaranteed by
         the U.S. Department of Agriculture.

    (6)  Included in total outstanding guarantees.