2013 ANNUAL REPORT - Farm Credit Mid-America...The farm’s original tractor was eventually sold, but before his father died, Ray and four of his brothers, who farm together today,

2013 ANNUAL REPORT

2013 ANNUAL REPORT

1 FARM CREDIT MID–AMERICA

REAL GROWTH IS MEASURED IN YEARSWe’ve seen amazing growth through the years. Our customers have, too. That’s why we want to use this year’s annual report to highlight some of our customers and to show you how Farm Credit Mid-America has helped them grow. We listen. Ask questions. Work with our customers to help them succeed.

22013 ANNUAL REPORT

BILL JOHNSON P R ESI D ENT A N D CH I EF E XECUTIVE O FFI CER

LISTENINGIn 2013, we changed our business model to allow our staff to spend additional time with customers. As a result, our staff has more time to listen, to ask questions and to understand more completely the needs of each person and each business. That’s because we recognize the complexity of agriculture, the unique needs of rural residents and the need for flexible solu-tions tailored for each customer’s situation.

COLLABORATIONCollaboration helps us bring new products and services to market faster, makes our organi-zation efficient and, most important, helps us serve you better. We are leveraging existing partnerships within the Farm Credit System to simplify delivery of customer services such as equipment financing and leasing.

EMPOWERMENTWe realize one of the primary ways we can help farmers manage risk is to ensure they have adequate working capital. This is espe-cially important for those who are getting

started in agriculture or wishing to expand, as they represent our industry’s future.

To address that need, a new initiative is being introduced to educate and support young and beginning farmers. Specially trained Farm Credit Mid-America staff will provide guidance to empower those new to the industry as they pursue an agricultural career or begin a life in the country.

THINKING AHEADWe are always looking for ways to streamline our processes so we can help turn agricul-ture’s rapid changes into opportunities. As an organization, we are challenging ourselves to improve by providing each other with feedback that helps us give you our best at all times. We are all accountable to each other, as we are all accountable to our customers.

We are committed to being better every day to help you reach your goals. We are look-ing to the future, knowing the needs of rural America will not be the same tomorrow. Our aim is to provide you with the opportunities, resources and tools you need to succeed.

Agriculture and rural America are rapidly changing, as are the expecta-tions of Farm Credit Mid-America customers. Consequently, we are looking at new ways to provide flexible, specialized financing, fresh approaches to strengthen customer interactions, and innovative products and services that will appeal to current customers and help attract new ones.

22,590Yo u ng Fa r m er s

I n P o r t f olio

$20.6 BO wn e d & M a n ag e d

A ss e t s

READY TO MEET AGRICULTURE'S FUTURE CHALLENGES


COMMUNITY ENGAGEMENTIn 2013, Farm Credit invested more than $2 million in programs that supported mostly youth and young farmers, local food production, and fighting hunger. In addition to ongoing support of 4-H and FFA, Farm Credit invested in several university programs, including the new multi-purpose animal science facility at Austin Peay State University in Tennessee and agriculture classrooms at several Ivy Tech Community College campuses across Indiana. Through Cleveland Crops in Ohio, we supported the employment of adults with disabilities by training them for careers in urban farming. Farm Credit’s donation to Kentucky’s Farm to Food Bank program provided fresh produce to Kentuckians in need while reducing waste and providing additional markets for farmers. These are just a few of the projects we championed in 2013. As our community engagement efforts evolve, our projects will continue to reflect the needs and priorities of the communities where we live and work and the customers we serve.

BOARD TRAININGYour Farm Credit board members also recog-nize that we must be prepared to anticipate and meet your future needs. Over the last year, we have been involved in focused, hands-on education on topics ranging from risk management and finance to attracting and retaining the best staff members. We realize that serving as directors of a nearly $21 billion cooperative takes con-tinuous learning and commitment. This will help ensure we are the kind of leaders Farm Credit needs to remain viable and valuable to our customers. Every day Farm Credit helps people turn dreams into a reality, guiding them through an evolving rural landscape. I couldn’t be more excited to be part of this organization and its future. We are well positioned to help our cus-tomers grow and keep rural America strong.

KEVIN COX CH AI R , B OA R D O F D I R EC TO R S

Farm Credit Mid-America's commitment to help secure the future of rural America extends beyond providing financial services. Our legacy of service supports communities through volunteerism and financial contributions to organizations and initiatives that improve lives.

$2.1 MC o m m u nit y I niti a tive s

23C o m m unit y E ngag em en t G ra n t s Fu n d e d I n 201 3

RESOURCES INVESTED DIRECTLY IN OUR COMMUNITIES

42013 ANNUAL REPORT

19 4 4 : O N E AC R E O F L A N D

When Marcless Sneed Sr. started farming in the mid 1940s, he had one acre of land. By the 1970s, he had built a successful Tennessee farm that supported his growing family of seven boys and two girls. His operation had grown considerably, but his success wasn’t just something measured in acreage.


201 3 : A L EG AC Y O F G R OW T H

Marcless left behind a rich history, defined by solid business relationships and a true passion for farming. A passion that has helped five of his sons continue a legacy, raising corn, soybeans, cotton, wheat and beef cattle. Three brothers are pictured here: (left to right) Marcelles Jr., Ray and Terry.

62013 ANNUAL REPORT

By the mid 1970s, the Sneed operation had grown considerably, to between 2,500 and 3,000 acres, according to Marcless’s son, Ray Sneed. At this time, the farm produced cotton, soybeans, wheat and Angus cattle. The farm’s original tractor was eventually sold, but before his father died, Ray and four of his brothers, who farm together today, found and restored this cherished piece of machinery. They brought it back to the farm as a lasting tribute to their father.

“I think my dad enjoyed that memento the most,” says Ray. “It was a great testament to the beginning of our family farm and to its continuation. Dad never did actually retire.


“I always refer to Farm Credit as a partner, because our interests are shared. When we succeed, they succeed.”

He stayed involved, working with us — not because he had to, but because we wanted him involved and he wanted to be involved.”

Today, Ray and his brothers work and own several thousand acres, mostly around Millington, Ten nessee, nea r Memphis, with some land in Arkansas. The Sneed brothers work w ith R ick Nelson , Vice President-Agribusiness, Farm Credit Mid-America, to finance several aspects of their operation and to secure crop insurance. The Farm Credit Agribusiness Division works with a variety of agricultural operations, like those of the Sneed family, that are involved in the food, fiber and horticulture industries.

“I always refer to Farm Credit as a part-ner, because our interests are shared,” says Ray. “When we succeed, they succeed. Once that understanding is there with your agent, you tend not to move because that relation-ship is much more valuable than half a point in a percentage rate.”

Among the projects Farm Credit helped the Sneeds finance were several irrigation systems, which cover 20 to 25 percent of their acreage. The Sneeds use irrigation to boost yields in good years and guard against weather-related challenges. Over the years, they’ve diversified their operation, double-cropping soybeans and corn behind

82013 ANNUAL REPORT

wheat, and gradually increasing the per-centage of acreage they irrigate.

“We’ve done a couple of different things to gain a better foothold than just a traditional scenario of plant, wait for rain and harvest,” says Ray. “Irrigation is playing a phenomenal role in helping us be more diversified.”

At this stage of their careers, the Sneed brothers are thinking seriously about suc-cession planning and determining who can best take the operation into the future is an important consideration.

“That’s one of the tools we have in the toolbox with Farm Credit,” says Ray. “I’m hoping we can leave the farm to someone

in the family who we can help bring along. Someone with the passion to embrace this way of life.”

97number of years Farm Credit has provided financing for rural America


11,931,139 REAL ESTATE MORTGAGE

2,931,147 PRODUCTION AND INTERMEDIATE TERM

1,112,888 AGRIBUSINESS

992,875 RURAL RESIDENTIAL REAL ESTATE

490,205 FINANCE LEASES AND OTHER

211,521 NON-ACCRUAL

OUR DIVERSE LOAN PORTFOLIO INCLUDES MANY DIFFERENT TYPES OF OPERATIONS AND PROPERTIES.

(as of December 31, 2013: Dollars in Thousands)REAL ESTATE MORTGAGE

PRODUCTION AND INTERMEDIATE TERM

AGRIBUSINESS

RURAL RESIDENTIAL AND REAL ESTATE

LEASES AND OTHER

NON-ACCRUAL

$

102013 ANNUAL REPORT

20 0 5 : G E T T I N G B AC K T O T H E I R R O O T S

Kevin and Michelle Williams both have off-farm jobs; Kevin works for Airgas in Bowling Green, Kentucky, and Michelle does freelance administrative work. Both experienced the joys of life on the farm during childhood, so after getting married in 2005, they often talked about buying some acres and moving back to the country.


201 3 : T H E S I M P L E T H I N G S I N L I F E M AT T E R T H E M O S T

Enjoying the quiet beauty of a breathtaking sunset from the porch of their new home is a pursuit that Kevin, Michelle and their two daughters, Madison and Claira, have grown to love. Add a couple of horses to the scene, and a lifelong dream of building a life in the country is realized.


Kevin and Michelle Williams have dis-covered that it really is the little things in life that matter most. Even better, many of those simple pleasures can be experienced without any fanfare — or furniture, for that matter.

The couple is putting the finishing touches on a country home on 10.5 acres of la nd just outside of Bowl i ng Green, Kentucky. Until construction is complete, they and their two daughters travel about 25 minutes to their new farm to work on eve-nings and weekends. “When we’re out there and have finished for the day, we sit back and enjoy the sunset or watch the horses graze,” says Michelle. “This is something we’ve long

wanted and it feels good to know that it’s right there at our fingertips.”

Kevin and Michelle have aspired to live in the country for some time. Initially, the couple worked with a local bank to purchase the land and expected to complete financ-ing construction of their new home with the same bank. Because of the size of their property, however, the bank suggested that partnering with Farm Credit Mid-America would be a better option.

“Farm Credit really knew the ins and outs of financing for larger acreages,” says Michelle. “With Farm Credit, the process has been hassle-free.”

“Farm Credit really knew the ins and outs of financing for larger acreages.”


58,162home loan customers


The Williamses meet monthly with Sarah Stafford, their Farm Credit Financial Services Officer, to make sure things stay on track. “Sarah has been great,” says Michelle. “She really understands what it is we want to do.”

They are also building a barn for their six horses. “Our daughters are in 4-H and show horses,” says Michelle. “To see them out there working with their horses is wonderful. As a parent, it gives you a sense of fulfillment.”

Farm life is spanning generations for the Williams family. “My grandparents had a farm and when I was growing up, I would go and help them out,” says Michelle.

6,195home loans made in 2013


25.9% INDIANA

24.5% OHIO

19.4% TENNESSEE

14.5% K ENTUCKY

15.7% OTHER

FARM CREDIT SERVES CUSTOMERS IN OUR FOUR-STATE AREA, AS WELL AS OUTSIDE THE REGION. HERE IS THE BREAKOUT OF LOAN VOLUME BY STATE.

(as of December 31, 2013)

“Kevin was raised on a farm in Scottsville, Kentucky. Living on a farm has been his dream for our family.”

After many busy months, the Williamses look forward to life quieting down a bit as they settle into their new home.

“If it hadn’t been for Farm Credit, build-ing our place in the country would have been more difficult,” says Michelle. “Farm Credit made the process much easier for us.”

Indiana

Ohio

Tennessee

Kentucky

Other

%


20 0 5 : P R E S E RV I N G T H E FA M I LY FA R M

Greg and Natalie Gilbert each took over their own grandparents’ farm. They didn’t plan on immersing themselves in agriculture, but after getting married, they both realized they wanted to do what they could to keep the family farm going and to preserve that history for the next generation.


201 3 : T H E FA M I LY FA R M H A S G R OW N

Today, the Gilberts have combined their family farms, and work 3,500 acres, including land they rent and some they custom farm for others. It’s an approach that has helped them grow their operation, keep their farms in the family and help the other landowners for whom they work.


It is often said that life is what happens while you are busy making other plans. That adage describes Natalie Gilbert’s experience with amazing accuracy.

After graduating from Indiana Univer-sity–Purdue University Indianapolis with a bachelor’s degree in journalism, family circumstances sent Natalie’s career path on a divergent course: She became a farmer, assuming management responsibilities for her grandparents’ farm.

“Being a farmer definitely was not on my radar,” Natalie recalls. “But I wanted to see the family farm continue, to preserve that history for the next generation.” Eventually,

Natalie started doing much of the field work herself. After marrying in 2005, she and her husband, Greg, combined her grand-parents’ operation with his grandparents’ farm. Four years later, Greg left his job to join Natalie in full-time farming.

“Combining our two family farms made farming a viable business for us,” says Natalie.

Today, the couple farms 3,500 acres, growing mostly corn and some soybeans. Their property includes land they rent and some they custom farm for others.

“This approach has helped us grow the operation and bring a lot to the table for the other landowners we do work for, in

“There aren’t many of us out here. Somebody’s got to keep things going, to make the food and the fuel. It’s important that Farm Credit keeps investing in people like us.”

$193.7 Mamount of equipment Farm Credit financed through dealerships in 2013


addition to farming our own land,” says Natalie. “It’s a way for us to be more diversi-fied and competitive.”

Natalie and Greg have been Farm Credit Mid-America customers for eight years, with an operating loan and farm mortgage. The couple works with their Farm Credit Financial Services Officer, Deb Jennings. “Deb takes the time to understand our operation,” says Natalie. “We have the flexibility to use our operating loan to purchase the inputs we need when we need them.”

Natalie and Greg sell their corn to two processors, one for ethanol production and the other for corn syrup processing. “Managing

risk is important to us, because markets can be so uncertain,” says Natalie. “Input costs are also all over the map. But we’ve been able to plant continuous corn with a lot of success and it’s helped us buy chemicals, fertilizer and seed in volume. That’s been a very good business strategy for us.”

To Natalie, farming is more than a life-style. “Today, you have to treat farming like a business, because there’s a lot of money involved,” she says. “My goal all along has been to take our investment – our farm – and make it into a successful business.”

Though they have had challenges, the couple has learned how to navigate

through them. “The tough times make you a better manager,” says Natalie. “You learn what to do, what not to do and how to do things better next time.”

Natalie and Greg intend to farm for years to come and grow the operation. “I think Farm Credit likes to help younger farmers succeed,” says Natalie. “There aren’t many of us out here. Somebody’s got to keep things going, to make the food and the fuel. It’s important that Farm Credit keeps investing in people like us.”

29.8% COR N A ND SOYBE A N

17.8% OTHER CROP S

12.4% C AT TLE

8.9% L A NDLOR DS

6.6% OTHER LIVESTOCK

5.4% RUR A L HOME

4.6% TIMBER

4.5% PROCESSING AND M ARK ETING

4.2% DAIRY

3.0% OTHER

2.8% POULTRY A ND EGGS

FROM CORN TO TIMBER , FARM CREDIT FINANCES A RANGE OF VITAL COMMODITIES.

(as of December 31, 2013)

CORN and SOYBEAN

OTHER CROPS

CATTLE

LANDLORDS

OTHER livestock

Rural Home

Timber

Processing And Marketing

Dairy

Other

Poultry And Eggs

%


EXECUTIVE LEADERSHIP TEAM

Bill Johnson President & Chief Executive Officer

David Lynn Senior Vice President – Financial Services

Randie Barnard Senior Vice President – Risk Management

Dick Poe Senior Vice President – Financial Services

Paul Bruce Senior Vice President – Financial Operations & Chief Financial Officer

Nancy Sparrow General Counsel

Dan Wagner Senior Vice President – Chief Information Officer

Heather Hornback Senior Vice President – Human Capital

Phil Kimmel Senior Vice President – Credit & Chief Credit Officer

Keith Lane Senior Vice President – Agribusiness

Kevin Cox, Chair 10345 S. 1100 E. Brazil, IN 47834

David Bates 894 Pecan LaneShepherdsville, KY 40165

George Stebbins 7883 N Montgomery County Line RoadEnglewood, OH 45322

Dan Flanagan, Vice Chair*

1235 Noe Road Campbellsville, KY 42718

Kaye Hurst Whitehead 6220 East County Road 650 SouthMuncie, IN 47302

Hugh Adams2298 Lower Sharon RoadDresden, TN 38225

Kendall Culp 3496 S 150 WRensselaer, IN 47978

Andrew Wilson 3485 Wilson RoadSomerset, OH 43783

Donald Blankenship, Secretary6319 Halls Hill ParkMurfreesboro, TN 37130

Dale Tucker 3835 Horton HighwayGreenville, TN 37745

Bob Barton 4095 Huffman Mill PikeLexington, KY 40511

John Kuegel Jr. 5230 Old Lyddane Bridge RoadOwensboro, KY 42301

Tony Wolfe 2197 E John Ford Road Hazleton, IN 47640

Bill Patterson 11380 Caves RoadChesterland, OH 44026

Barney Barnett** 1175 McMakin RoadShelbyville, KY 40065

Brandon Robbins 2702 Old Walton RoadCookeville, TN 38506

David Hahn** 3967 Shattuck AvenueColumbus, OH 43220-4171

LEADERSHIP

BOARD OF DIRECTORS

*On March 4, 2014, FCMA Director Dan Flanagan (Kentucky) was elected to the AgriBank Board of

Directors. The FMCA Board will address filling the vacancy at a future meeting.

**Appointed Directors.

Roger Earley 9160 SR 73 NWHillsboro, OH 45133

FARM CREDIT MID–AMERICA

D O LL A R S I N M I LLI O N S

NET INCOME

P ER CENTAG E

RETURN ON AVERAGE ASSETS (AFTER TAX)

LOANS TOTAL ASSETS

D O LL A R S I N B I LLI O N S D O LL A R S I N B I LLI O N S

2013 ANNUAL REPORT

$17.7

$308.4

$20.0

1.6%

2 0 0 9 2 010 2 011 2 012 2 013

$14 . 1 $15 . 0$16 . 5

$13 . 1

2 0 0 9 2 010 2 011 2 012 2 013

$16 . 4 $17. 5$19. 1

$15 . 3

2 0 0 9 2 010 2 011 2 012 2 013

$214 . 0

$2 78 . 6 $2 8 8 . 6

$141 .7

2 0 0 9 2 010 2 011 2 012 2 013

1.4%

1.7% 1.6%

1.0%

$17.7

$ 3 0 8 . 4

$2 0 . 0

1.6%

21

5MAR201420221891 5MAR201420221757 5MAR201420221624 5MAR201420221486 5MAR201420221343

FINANCIAL OVERVIEW

CONSOLIDATED FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

(DOLLARS IN THOUSANDS)

STATEMENT OF CONDITION DATA

2 013 2 012 2 011 2 010 2 009

Loans $17,669,775 $16,526,875 $15,010,650 $14,088,862 $13,053,455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Allowance for loan losses 46,810 60,650 80,734 125,787 64,453

Net loans 17,622,965 16,466,225 14,929,916 13,963,075 12,989,002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Investment in AgriBank, FCB 448,181 440,925 422,124 416,714 411,986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Investment securities 1,227,018 1,450,877 1,410,903 1,263,985 1,055,803. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other property owned 10,495 14,350 30,309 23,907 12,887. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other assets 723,716 684,663 712,020 775,089 788,379

Total assets $20,032,375 $19,057,040 $17,505,272 $16,442,770 $15,258,057

Obligations with maturities of one year or less $16,717,120 $16,051,081 $14,790,190 $14,008,073 $13,039,148. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Obligations with maturities greater than one year 1,818 2,073 2,317 2,558 2,761

Total liabilities 16,718,938 16,053,154 14,792,507 14,010,631 13,041,909

Protected members’ equity — — — 8 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates 85,693 84,541 82,000 79,957 77,917. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Unallocated surplus 3,227,744 2,919,345 2,630,765 2,352,174 2,138,222

Total members’ equity 3,313,437 3,003,886 2,712,765 2,432,139 2,216,148

Total liabilities and members’ equity $20,032,375 $19,057,040 $17,505,272 $16,442,770 $15,258,057

STATEMENT OF INCOME DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net interest income $391,875 $353,779 $316,475 $304,478 $256,305. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(Reversal of) provision for loan losses (3,031) 2,791 (10,416) 95,084 62,668. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Patronage income 67,877 65,374 61,748 78,909 57,817. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other expense, net 139,886 107,066 95,988 60,423 102,481. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Provision for income taxes 14,498 20,716 14,060 13,928 7,302

Net income $308,399 $288,580 $278,591 $213,952 $141,671

KEY FINANCIAL RATIOS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average assets 1.6% 1.6% 1.7% 1.4% 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average members’ equity 9.8% 10.1% 10.9% 9.2% 6.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net interest income as a percentage of average earning assets 2.1% 2.1% 2.0% 2.1% 1.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Members’ equity as a percentage of total assets 16.5% 15.8% 15.5% 14.8% 14.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net charge-offs as a percentage of average loans 0.1% 0.1% 0.2% 0.3% 0.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses as a percentage of loans 0.3% 0.4% 0.5% 0.9% 0.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Permanent capital ratio 15.9% 15.5% 14.8% 14.0% 13.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 15.4% 15.0% 14.2% 13.5% 12.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 15.4% 15.0% 14.2% 13.5% 12.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

No income was distributed to members in the form of cash patronage, dividends, stock, or allocated surplus during the five years presented.

AgriBank, FCB’s (AgriBank) financial condition and results of operations materially impact members’ investment in Farm Credit Mid-America, ACA. To request free copies of the AgriBankand combined AgriBank and Affiliated Associations’ financial reports contact us at P.O. Box 34390, Louisville, KY, 40232, (800) 444-FARM, or on our website at www.e-farmcredit.com. Youmay also contact AgriBank at 30 East 7th Street, Suite 1600, St. Paul, MN 55101, (651) 282-8800, or by e-mail at [email protected]. The AgriBank and combined AgriBank andAffiliated Associations’ financial reports are also available through AgriBank’s website at www.agribank.com.

To request free copies of our Annual or Quarterly Reports contact us as stated above. The Annual Report is available on our website no later than 75 days after the end of the calendar yearand members are provided a copy of such report no later than 90 days after the end of the calendar year. The Quarterly Reports are available on our website no later than 40 days after theend of each calendar quarter.

2013 ANNUAL REPORT 22

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following commentary reviews the consolidated financial condition and consoli- AGRICULTURAL AND ECONOMIC CONDITIONSdated results of operations of Farm Credit Mid-America, ACA (the Association) and its As reported in the United States Department of Agriculture (USDA) ‘Highlightssubsidiaries, Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCA (the from the 2013 Farm Income Forecast’, the USDA is forecasting net farm income tosubsidiaries) and provides additional specific information. The accompanying consoli- be $131.0 billion in 2013, up 15.1% from the USDA’s 2012 estimate of $113.8 billion.dated financial statements and notes to the consolidated financial statements also After adjusting for inflation, the net farm income for 2013 is expected to be thecontain important information about our financial condition and results of operations. highest since 1973. Substantial year-end crop inventories are expected as a result

of the good to excellent yields. The projected $10.9 billion increase in totalThe Farm Credit System (System) is a nationwide system of cooperatively expenses in 2013, to $352.0 billion, continues a string of year-to-year increasesowned banks and associations established by Congress to meet the credit needs (except for 2009) that have taken place since 2002. In both nominal and inflation-of American agriculture. As of December 31, 2013, the System consisted of three adjusted dollars, 2013 production expenses are expected to be the highest onFarm Credit Banks (FCB), one Agricultural Credit Bank (ACB), and 82 customer- record. Farm sector assets, debt, and equity are all forecasted to increase in 2013.owned cooperative lending institutions (associations). The System serves all As in the last several years, increases in farm asset values are expected to exceed50 states, Washington D.C., and Puerto Rico. This network of financial coopera- increases in farm debt, with farm real estate as the main driving force though ourtives is owned and operated by the rural customers the System serves. lending practices have, since 2011, limited collateral valuations consistent with

income generated by the collateral. Confirming the strength of the overall farmAgriBank, FCB (AgriBank), a System bank, and its affiliated associations are sector’s solvency, the USDA projects both the debt-to-asset ratio and debt-to-collectively referred to as the AgriBank Farm Credit District (AgriBank equity ratio to reach historic lows. In our service area, 2013 was generally positiveDistrict or the District). Farm Credit Mid-America, ACA is one of the affili- for most of our customers as it was for farmers throughout the Midwest. Inated associations in the District. addition, the general economy continues its gradual improvement with unem-

ployment improving and economic growth remaining stable to increasing slightly.On February 1, 2013, our name was officially changed from Farm CreditServices of Mid-America, ACA to Farm Credit Mid-America, ACA. Our sub- The Agricultural Act of 2014 (Farm Bill) was signed into law on February 7,sidiary entities were changed in a similar manner. 2014. This new Farm Bill will govern an array of federal farm and food

programs, including commodity price and support payments, farm credit,The Farm Credit Administration (FCA) is authorized by Congress to regulate agricultural conservation, research, rural development and foreign andthe System. The Farm Credit System Insurance Corporation (FCSIC) ensures domestic food programs for five years. The new Farm Bill eliminates $23.0 bil-the timely payment of principal and interest on Systemwide debt obligations lion in mandatory Federal spending, representing a significant reduction inand the retirement of protected borrower capital at par or stated value. the U.S. government farm policy support. The Farm Bill repeals direct pay-

ments and limits producers to risk management tools that offer protectionFORWARD-LOOKING INFORMATION when they suffer significant losses, such as insurance. The Farm Bill providesThis Annual Report includes forward-looking statements. These statements are continued support for crop insurance programs, strengthens livestock disas-not guarantees of future performance and involve certain risks, uncertainties, ter assistance and provides dairy producers with a voluntary margin protec-and assumptions that are difficult to predict. Words such as ‘‘anticipate’’, ‘‘believe’’, tion program without imposing government-mandated supply controls.‘‘estimate’’, ‘‘may’’, ‘‘expect’’, ‘‘intend’’, and similar expressions are used to identifysuch forward-looking statements. These statements reflect our current views LOAN PORTFOLIOwith respect to future events. However, actual results may differ materially from Total loans were $17.7 billion at December 31, 2013, an increase of $1.1 billionour expectations due to a number of risks and uncertainties which may be beyond from December 31, 2012. The components of loans are presented in theour control. These risks and uncertainties include, but are not limited to: following table (in thousands):– political, legal, regulatory, financial, and economic conditions and devel-

AS OF DECEMBER 31 2013 2012 2011opments in the United States (U.S.) and abroad,– economic fluctuations in the agricultural and farm-related business sectors, Accrual loans:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .– unfavorable weather, disease, and other adverse climatic or biological condi- Real estate mortgage $11,931,139 $11,143,868 $9,833,770

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .tions that periodically occur and impact agricultural productivity and income,Production and– changes in U.S. government support of the agricultural industry and the intermediate term 2,931,147 2,780,370 2,794,943

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .System as a government-sponsored enterprise, as well as investor andAgribusiness 1,112,888 919,368 736,243rating agency actions relating to events involving the U.S. government, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 992,875 1,011,067 1,003,519other government-sponsored enterprises, and other financial institutions, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .– actions taken by the Federal Reserve System in implementing monetary policy, Finance leases and other 490,205 436,543 355,689

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .– credit, interest rate, and liquidity risks inherent in our lending activities, and Non-accrual 211,521 235,659 286,486– changes in our assumptions for determining the allowance for loan losses,

Total loans $17,669,775 $16,526,875 $15,010,650other-than-temporary impairment, and fair value measurements.

FARM CREDIT MID-AMERICA23

8MAR201414473019

6MAR201411190103

8MAR201418120531


The finance leases and other category is comprised of finance leases, com- INTEREST RATE:munication, international, energy, water and waste disposal related loans as As of December 31, 2013well as loans originated under our mission related investment authority.

The increase in total loans from December 31, 2012 was primarily driven bystrong activity in mortgage and long-term lending. This growth was modestrelative to prior years due to producers’ elevated cash levels from cropinsurance proceeds and strong net farm income from 2012.

We offer variable, fixed, capped, indexed, and adjustable interest rate loan pro-

40.3% FIXED OVER 10 YRS.

19.1% FIXED 2-5 YRS. OR LESS

18.0% FIXED 6-10 YRS.

15.3% VARIABLE

7.3% FIXED 1 YR. OR LESS

grams as well as variable and fixed lease programs to our borrowers. We deter-mine interest margins charged on each lending program based on cost of funds, Portfolio Credit Qualitycredit risk, market conditions, and the need to generate sufficient earnings. The credit quality of our portfolio improved during 2013. Adversely classified loans

decreased to 2.4% of the portfolio at December 31, 2013, from 3.4% of the portfolioAs part of the Asset Pool program, we have sold participation interests in at December 31, 2012. Adversely classified loans are loans we have identified asreal estate loans to AgriBank. The total participation interests in this pro- showing some credit weakness outside our credit standards. The improvementgram were $544.0 million, $677.3 million, and $840.8 million at December 31, resulted from improved profitability in the livestock and poultry industries as well2013, 2012, and 2011, respectively. as improvement in the general economy. We have considered portfolio credit

quality in assessing the reasonableness of our allowance for loan losses.PORTFOLIO DISTRIBUTIONGEOGRAPHICAL DISTRIBUTION: Analysis of RiskAs of December 31, 2013 The following table summarizes risk information (accruing loans include

accrued interest receivable) (dollars in thousands):

AS OF DECEMBER 31 2013 2012 2011

Loans:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-accrual $211,521 $235,659 $286,486. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured 12,434 10,358 10,222. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more past

25.9% INDIANA

24.5% OHIO

19.4% TENNESSEE

14.5% KENTUCKY

15.7% OTHER

due — 7,994 714

Total risk loans 223,955 254,011 297,422AGRICULTURAL COMMODITIES: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 10,495 14,350 30,309As of December 31, 2013

Total risk assets $234,450 $268,361 $327,731

Non-accrual loans as percentage oftotal loans 1.2% 1.4% 1.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Risk loans as a percentage of total loans 1.3% 1.5% 2.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total delinquencies as a percentage oftotal loans 0.7% 1.1% 1.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our risk assets have decreased from December 31, 2012 and remain atacceptable levels. Total risk loans as a percentage of total loans remainswell within our established risk management guidelines.

The decrease in non-accrual loans resulted from improvement in the gen-eral economy which permitted some loans to return to an accruing statuswhile others were collected. Non-accrual loans remained at an acceptablelevel at December 31, 2013 and represented 1.2% of our total portfolio. AtDecember 31, 2013, 56.6% of our non-accrual loans were current.

29.8% CORN AND SOYBEANS

17.8% OTHER CROPS

12.4% CATTLE

8.9% LANDLORDS

6.6% OTHER LIVESTOCK

5.4% RURAL HOME

4.6% TIMBER

4.5% PROCESSING AND MARKETING

4.2% DAIRY

3.0% OTHER

2.8% POULTRY AND EGGS


The decrease in accruing loans 90 days or more past due was primarily due to INVESTMENT SECURITIES AND OTHER EARNING ASSETSbetter payment performance and continued, consistent delinquency servicing. In addition to loans, we hold investment securities and other earning assets.

Investments include our share of securities guaranteed by the Small BusinessThe decrease in other property owned was due to increased sales as a result of Administration, as well as Farm Services Administration securities, andimprovement in the residential and small part-time farmer real estate market. securities issued by the USDA. Investment securities totaled $1.2 billion,

$1.5 billion, and $1.4 billion at December 31, 2013, 2012, and 2011, respectively.The decrease in total delinquencies as a percentage of total loans wasprimarily due to improved servicing of loans, good agricultural prices, and The decline in investment securities is related to the maturity of investmentsan improving general economy. offset slightly by new volume acquired during the year. Our purchases of new

investments have declined due to revised FCA authority guidance and we expectAnalysis of the Allowance for Loan Losses the volume of investment securities to continue to decline in future years. TheThe allowance for loan losses is an estimate of losses on loans in our portfo- investment portfolio is evaluated for other-than-temporary impairment. To date,lio as of the financial statement date. We determine the appropriate level of we have not recognized any impairment on our investment portfolio.allowance for loan losses based on the periodic evaluation of factors such asloan loss history, probability of default, estimated loss severity, portfolio Other earning assets result from successor-in-interest contracts from ourquality, and current economic and environmental conditions. involvement with the federal government’s tobacco buy-out program. The vol-

ume was $74.0 million, $144.2 million, and $210.9 million at December 31, 2013,The following table presents allowance coverage, charge-off, and adverse 2012, and 2011, respectively. These amounts include both principal and interestasset information: income receivable. We discontinued the purchase of additional contracts during

2011. The final payment for these contracts was received in January 2014.AS OF DECEMBER 31 2013 2012 2011

Additional investment securities information is included in Notes 5 and 14.Allowance as a percentage of:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans 0.3% 0.4% 0.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RESULTS OF OPERATIONS

Non-accrual loans 22.1% 25.7% 28.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The following table illustrates profitability information (dollars in thousands):

Total risk loans 20.9% 23.9% 27.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FOR THE YEAR ENDED DECEMBER 31 2013 2012 2011Net charge-offs as a percentage ofaverage loans 0.1% 0.1% 0.2% Net income $308,399 $288,580 $278,591. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Adverse assets to risk funds 15.2% 22.5% 26.4% Return on average assets 1.6% 1.6% 1.7%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average members’ equity 9.8% 10.1% 10.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The allowance for loan losses balance decreased from December 31, 2012 asthe credit quality of our portfolio has improved and components of our Changes in these ratios relate directly to:allowance methodology have been updated to capture the latest trends. In – changes in income as discussed below,our opinion, the allowance for loan losses was reasonable in relation to the – changes in assets as discussed in the Loan Portfolio and Investmentrisk in our loan portfolio at December 31, 2013. The decrease in adverse Securities and Other Earning Assets sections, andassets to risk funds was driven by an improvement in credit quality in our – changes in members’ equity as discussed in the Capital Adequacy section.portfolio as of December 31, 2013 compared to December 31, 2012.

The following table summarizes the changes in components of net incomeAdditional loan information is included in Notes 3, 11, 12, 13, and 14. (in thousands):

For the year ended December 31 Increase (decrease) in net income

2013 2012 2011 2013 vs 2012 2012 vs 2011

Net interest income $391,875 $353,779 $316,475 $38,096 $37,304. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(Reversal of) provision for loan losses (3,031) 2,791 (10,416) 5,822 (13,207). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Patronage income 67,877 65,374 61,748 2,503 3,626. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other income 23,860 34,438 26,798 (10,578) 7,640. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Operating expenses 163,746 141,504 122,786 (22,242) (18,718). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Provision for income taxes 14,498 20,716 14,060 6,218 (6,656)

Net income $308,399 $288,580 $278,591 $19,819 $9,989



Net Interest Income Other IncomeNet interest income was $391.9 million for the year ended December 31, 2013. The change in other income was negatively impacted primarily due to ourThe following table quantifies changes in net interest income (in thousands): share of distributions from AIRA of $16.3 million during 2012 and lower

prepayment fees of $2.3 million. These negative impacts were partially2013 vs 2012 2012 vs 2011 offset by an $8.4 million decrease of write-downs compared to 2012 related

to our other property owned.Changes in volume $30,188 $31,564. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in rates 9,114 4,264. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating ExpensesChanges in non-accrual income and other (1,206) 1,476 The following presents a comparison of operating expenses by major cate-Net change $38,096 $37,304 gory and the operating rate (operating expenses as a percentage of average

earning assets) for the past three years (dollars in thousands):

Net interest income included income on non-accrual loans that totaled $10.0 mil- FOR THE YEAR ENDED DECEMBER 31 2013 2012 2011lion, $11.2 million, and $9.7 million in 2013, 2012, and 2011, respectively. Non-

Salaries and employee benefits $96,850 $87,079 $72,879accrual income is recognized when received in cash, collection of the recorded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchased and vendor services 8,467 8,390 7,369investment is fully expected, and prior charge-offs have been recovered. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communications 3,094 2,770 2,020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net interest margin (net interest income divided by average earning assets) Occupancy and equipment 11,611 10,500 11,087. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .was 2.1%, 2.1%, and 2.0% in 2013, 2012, and 2011, respectively. Net interestAdvertising and promotion 9,887 9,265 8,568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .margin remained steady over the prior year; however, margins could beExamination 2,752 2,881 2,775compressed in the future as interest rates rise and competition increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Farm Credit System insurance 15,170 7,235 8,079. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Reversal of) Provision for Loan Losses Other 15,915 13,384 10,009The fluctuation in the (reversal of) provision for loan losses was primarily

Total operating expenses $163,746 $141,504 $122,786due to the improvement in credit quality during 2013. Refer to Note 3 for

Operating rate 0.9% 0.8% 0.8%additional discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The change in operating expenses was primarily due to increased staffingPatronage Incomeduring the year as well as an increase in FCSIC insurance expense due to anWe received patronage income based on the average balance of our noteincrease in the premium rate charged by FCSIC in 2013.payable to AgriBank. AgriBank’s Board of Directors sets the patronage rate.

The patronage rate was 34.5 basis points, 32 basis points, and 31 basis points inProvision for Income Taxes2013, 2012, and 2011, respectively. We recorded patronage income of $54.5 mil-The decrease in income taxes was due to lower taxable income in 2013 whenlion, $47.9 million, and $42.7 million in 2013, 2012, and 2011, respectively.compared to the prior year as a result of the AIRA refund recorded in 2012.

Since 2008, we have participated in the Asset Pool program in which we sellRefer to Note 9 for additional discussion.participation interests in certain real estate loans to AgriBank. As part of this

program, we received patronage income in an amount that approximated theFUNDING AND LIQUIDITYnet earnings of the loans. Net earnings represents the net interest incomeFundingassociated with these loans adjusted for certain fees and costs specific to theWe borrow from AgriBank under a note payable, in the form of a line ofrelated loans as well as adjustments deemed appropriate by AgriBank relatedcredit, as described in Note 7.to the credit performance of the loans, as applicable. In addition, we received

patronage income in an amount that approximated the wholesale patronageThe following table summarizes note payable information (dollars in thousands):had we retained the volume. Patronage declared on these pools is solely at the

discretion of the AgriBank Board of Directors. We recorded asset poolFOR THE YEAR ENDEDpatronage income of $13.2 million, $17.4 million, and $19.0 million in 2013,DECEMBER 31 2013 2012 2011

2012, and 2011, respectively. As part of this income in 2012, we received aAverage balance $15,808,474 $14,961,343 $13,782,598$1.2 million share of the distribution from the Allocated Insurance Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average interest rate 2.0% 2.3% 2.7%Accounts (AIRA) related to the Asset Pool program. These reserve accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .were established in previous years by the FCSIC when premiums collectedincreased the level of the Farm Credit Insurance Fund above the required Our other source of lendable funds is from unallocated surplus. The repric-2.0% of insured debt. No such distributions were received in 2013 or 2011. ing attributes of our line of credit generally correspond to the repricing


attributes of our loan portfolio which significantly reduces our market INITIATIVESinterest rate risk. We are involved in a number of initiatives designed to improve our credit

delivery, related services, and marketplace presence. These include, but areLiquidity not limited to:Our approach to sustaining sufficient liquidity to fund operations and meet – Agnitioncurrent obligations is to maintain an adequate line of credit with AgriBank. – Farm Cash ManagementAt December 31, 2013, we had $2.1 billion available under our line of credit. – Customer FocusWe generally apply excess cash to this line of credit. – Continuous Improvement

– Human Capital DevelopmentCAPITAL ADEQUACY – AgriHedgeTotal members’ equity increased $309.6 million during 2013 primarily due – Farm Credit Leasingto net income for the period and an increase in capital stock and participa-tion certificates. Agnition

Agnition is our branded trade credit program. We have agreements withMembers’ equity position information is as follows (dollars in thousands): farm equipment dealers across the four-state service area in order to pro-

vide a point of sale financing option. This program will be discontinued inAS OF DECEMBER 31 2013 2012 2011 2014 and replaced with our participation in the AgDirect trade credit financ-Members’ equity $3,313,437 $3,003,886 $2,712,765 ing program. The AgDirect program includes origination and refinancing of. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

agricultural equipment loans through independent equipment dealers. TheSurplus as a percentage ofprogram is facilitated by another AgriBank District association through amembers’ equity 97.4% 97.2% 97.0%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .limited liability partnership in which we are a partial owner as of Decem-Permanent capital ratio 15.9% 15.5% 14.8%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ber 31, 2013. Through this program we will enter into agreements withTotal surplus ratio 15.4% 15.0% 14.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . certain dealer networks to provide alternative service delivery channels toCore surplus ratio 15.4% 15.0% 14.2% borrowers. These trade credit opportunities create more flexible and acces-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

sible financing options to borrowers through dealer point-of-purchasefinancing programs.Our capital plan is designed to maintain an adequate amount of surplus and

allowance for loan losses which represents our reserve for adversity prior toFarm Cash Managementimpairment of stock. We manage our capital to allow us to meet memberWe offer Farm Cash Management to our members. Farm Cash Managementneeds and protect member interests, both now and in the future.links members’ revolving lines of credit with an AgriBank investment bondto optimize members’ use of funds. Members are also eligible to invest inAt December 31, 2013, our permanent capital, total surplus, and core surplusFarm Cash Management stand-alone AgriBank investment bond accountsratios exceeded the regulatory minimum requirements. Additional discus-not linked to their loans.sion of these regulatory ratios is included in Note 8.

Customer FocusIn addition to these regulatory requirements, we establish an optimumTo improve our service to all customers we created and staffed a newpermanent capital target. This target allows us to maintain a capital basedivision during 2012 to meet the needs of the largest customers in our fouradequate for future growth and investment in new products and services.states. While the division was formed to work with the largest customers,The target is subject to revision as circumstances change. As of Decem-our objective was to further segment our portfolio and fully staff to provideber 31, 2013, our optimum permanent capital target was 15.0%.a higher level of service to all current and potential customers.

The changes in our capital ratios reflect changes in capital and assets. ReferContinuous Improvementto the Loan Portfolio and the Investment Securities and Other EarningTo become more efficient and improve the customer experience, we beganAssets sections for further discussion of the changes in assets. Additionalimplementing a disciplined approach to Continuous Improvement in 2011.members’ equity information is included in Note 8.Using time tested tools like Lean and Six Sigma, we are gaining a betterunderstanding of how our processes, people, and technology work together.We do not have a patronage program as the board continues to advocate lowSo far, we have implemented dozens of improvements that help eliminaterates upfront without patronage payments as members believe this strategyfrustrating and unnecessary steps for both our team members and customers.provides the most value to existing and future members of the cooperative.



Human Capital Development The marginal cost of debt approach simulates matching the cost of underlyingThroughout 2013, we hired and developed enough new people to grow our debt with substantially the same terms as the anticipated terms of our loanshuman capital base by 53 people. These positions were added to meet market- to borrowers. This methodology substantially protects us from market inter-place demands, improve the customer experience, and prepare for planned est rate risk.retirements over the next few years. Development of the entire workforcealso continued in areas including credit, critical thinking, and coaching. Investment

We are required to invest in AgriBank capital stock as a condition of bor-AgriHedge rowing. This investment may be in the form of purchased stock or stockIn 2013 we began offering the AgriHedge product to association borrowers. representing previously distributed AgriBank surplus. As of December 31,The AgriHedge product is a simple, effective way for farmers to hedge their 2013, we were required to maintain a stock investment equal to 2.5% of thecrop revenue by allowing them to establish a hedge price on their corn, average quarterly balance of our note payable to AgriBank plus an addi-soybeans, or wheat combining an operating loan with a third-party commod- tional 1.0% on growth that exceeded a targeted rate. AgriBank’s currentity swap product. This product combination enables the farmer to hedge bylaws allow AgriBank to increase the required investment to 4.0%. How-commodity price risk without typical upfront cash flows for fees and on-going ever, AgriBank currently has not communicated a plan to increase themargin calls (including costs of borrowing) of a traditional swap product. Fees required investment.incurred are paid by the farmer when the contract is settled and cash isreceived or paid. Eligible participants must meet certain credit criteria and In addition, we are required to hold AgriBank stock equal to 8.0% of thethe hedges must be for their own crop. The net impact to our consolidated quarter end Asset Pool program participation loan balance.financial statements was negligible for the year ended December 31, 2013.

At December 31, 2013, $326.1 million of our investment in AgriBank con-Farm Credit Leasing sisted of stock representing distributed AgriBank surplus and $122.1 millionIn September of 2012 we launched a partnership with Farm Credit Leasing consisted of purchased investment. For the periods presented in this report,(FCL), a System entity specializing in leasing products and providing indus- we have received no dividend income on this stock investment and we dotry expertise. Leases are originated and serviced by FCL and we purchase an not anticipate any in future years.interest in the cash flows of the transaction in the form of a loan participa-tion. At December 31, 2013 there was approximately $43.7 million of lease As an AgDirect, LLP partnering association, we are required to purchasevolume outstanding from customers to FCL under this new initiative and stock in AgDirect which purchases an equivalent amount of stock in$7.4 million outstanding as of December 31, 2012. We held a loan participa- AgriBank. Specifically, the AgDirect trade credit financing program istion interest of $22.5 million and $3.7 million as of December 31, 2013 and required to own stock in AgriBank in the amount of 6.0% of the AgDirect2012, respectively. This arrangement provides our members with a broader program’s outstanding participation loan balance at quarter end plus 6.0%selection of product offerings and enhanced lease expertise. of the expected balance to be originated during the following quarter.

At December 31, 2013 we held $79.3 million of lease volume originated prior Patronageto September 2012 in our retail sales offices. On January 2, 2014 we sold this We receive different types of discretionary patronage from AgriBank.lease volume to FCL. We simultaneously purchased approximately a 69% AgriBank’s Board of Directors sets the level of patronage for each of theinterest in the cash flows of the leases sold in the form of a loan participa- following:tion. As part of the transaction, we recognized a gain of $667 thousand. – patronage on our note payable with AgriBank and

– patronage based on the balance and net earnings of loans in the Asset PoolRELATIONSHIP WITH AGRIBANK program.BorrowingWe borrow from AgriBank to fund our lending operations in accordance Patronage income on our note payable with AgriBank was received in thewith the Farm Credit Act. Approval from AgriBank is required for us to form of cash and AgriBank stock.borrow elsewhere. A General Financing Agreement (GFA), as discussed inNote 7, governs this lending relationship. We began partnering in AgDirect through an investment in the partnership

in December 2013 and began actively participating in the trade creditCost of funds under the GFA includes a marginal cost of debt component, a financing program in January 2014. AgriBank’s Board of Directors also setsspread component, which includes cost of servicing, cost of liquidity, and the level of partnership distribution based on our share of the net earningsbank profit, and if applicable, a risk premium component. However, in the of the loans in the AgDirect trade credit financing program, adjusted forperiods presented, we were not subject to the risk premium component. required return on capital and servicing and origination fees. No partner-

ship distribution was received during the years ended December 31, 2013,2012, or 2011 as we had not yet joined the partnership.


Purchased Services Unincorporated Business Entities (UBEs)We purchase various services from AgriBank including certain financial and Certain circumstances, primarily for legal liability purposes, may warrant theretail systems, support, reporting services, technology services, and insur- need to establish separate entities to acquire and manage complex collateral.ance services.

As of December 31, 2013, we had an insignificant equity investment in RBFThe total cost of services we purchased from AgriBank was $5.3 million, Acquisition VIII, LLC which owns the assets of an ethanol plant acquired$5.3 million, and $5.1 million in 2013, 2012, and 2011, respectively. from a troubled borrower in 2009.

Impact on Members’ Investment Investment in Other Farm Credit InstitutionsDue to the nature of our financial relationship with AgriBank, the financial We have a relationship with CoBank, ACB (CoBank), a System bank, whichcondition and results of operations of AgriBank materially impact our mem- involves purchasing and selling participation interests in loans. As part ofbers’ investment. To request free copies of the AgriBank and the combined this relationship, our equity investment in CoBank was $18 thousand,AgriBank and Affiliated Associations’ financial reports as well as our $1 thousand, and $1 thousand at December 31, 2013, 2012, and 2011, respec-Annual or Quarterly Reports contact us at: tively. CoBank provides direct loan funds to associations in its charteredFarm Credit Mid-America, ACA territory and makes loans to cooperatives and other eligible borrowers.P.O. Box 34390Louisville, KY 40232 We began participating in the AgDirect trade credit financing program in(800) 444-FARM January 2014. In anticipation of our participation in the program, ourwww.e-farmcredit.com required investment in AgDirect, LLP, was $1.6 million at December 31, 2013.

Or contact AgriBank at: We have a relationship with Farm Credit Foundations (Foundations) whichAgriBank, FCB involves purchasing human resource information systems, benefit, payroll,30 East 7th Street, Suite 1600 and workforce management services. Foundations was operated as part ofSt. Paul, MN 55101 AgriBank prior to January 1, 2012 when it formed a separate System service(651) 282-8800 corporation. As of December 31, 2013 and 2012, our investment in [email protected] was $113 thousand. The total cost of services we purchased from Foundationswww.agribank.com was $658 thousand and $530 thousand in 2013 and 2012, respectively.

Our Annual Report is available on our website no later than 75 days after theend of the calendar year and members are provided a copy of such report nolater than 90 days after the end of the calendar year. The Quarterly Reportsare available on our website no later than 40 days after the end of eachcalendar quarter.

RELATIONSHIP WITH OTHER FARM CREDIT INSTITUTIONSFarm Credit LeasingIn 2012 we entered into an agreement with FCL, a System entity specializingin leasing products and providing industry expertise. Leases are originatedand serviced by FCL and we purchase an interest in the cash flows of thetransaction in the form of a loan participation. Refer to the Initiativessection for additional information on this relationship.


28FEB201419395466

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REPORT OF MANAGEMENT

We prepare the consolidated financial statements of Farm Credit Mid-America, ACA (the Association) and are responsible for their integrity andobjectivity, including amounts that must necessarily be based on judgments and estimates. The consolidated financial statements have been preparedin conformity with accounting principles generally accepted in the United States of America. The consolidated financial statements, in our opinion,fairly present the financial condition of the Association. Other financial information included in the Annual Report is consistent with that on theconsolidated financial statements.

To meet our responsibility for reliable financial information, we depend on accounting and internal control systems designed to provide reasonable,but not absolute assurance that assets are safeguarded and transactions are properly authorized and recorded. Costs must be reasonable in relationto the benefits derived when designing accounting and internal control systems. Financial operations audits are performed to monitor compliance.PricewaterhouseCoopers LLP, our independent auditors, audit the consolidated financial statements. They also conduct a review of internal controlsto the extent necessary to comply with auditing standards generally accepted in the United States of America. The Farm Credit Administration alsoperforms examinations for safety and soundness as well as compliance with applicable laws and regulations.

The Board of Directors has overall responsibility for our system of internal control and financial reporting. The Board of Directors and its AuditCommittee consults regularly with us and meets periodically with the independent auditors and other auditors to review the scope and results of theirwork. The independent auditors have direct access to the Board of Directors, which is composed solely of directors who are not officers or employeesof the Association.

The undersigned certify we have reviewed the Association’s Annual Report and it has been prepared in accordance with all applicable statutoryor regulatory requirements and the information contained herein is true, accurate, and complete to the best of our knowledge and belief.

D. KEVIN COXChair of the BoardFarm Credit Mid-America, ACA

WILLIAM L. JOHNSONChief Executive OfficerFarm Credit Mid-America, ACA

PAUL BRUCEChief Financial OfficerFarm Credit Mid-America, ACA

March 12, 2014


21FEB201316121069

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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Farm Credit Mid-America, ACA (the Association) principal executives and principal financial officers, or persons performing similar functions, areresponsible for establishing and maintaining adequate internal control over financial reporting for the Association’s consolidated financial statements.For purposes of this report, ‘‘internal control over financial reporting’’ is defined as a process designed by, or under the supervision of the Association’sprincipal executives and principal financial officers, or persons performing similar functions, and effected by its Board of Directors, management andother personnel, to provide reasonable assurance regarding the reliability of financial reporting information and the preparation of the consolidatedfinancial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includesthose policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Association, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial information in accordance with accounting principles generally accepted in the United States of America, and that receipts and expendituresare being made only in accordance with authorizations of management and directors of the Association, and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use or disposition of the Association’s assets that could have a material effecton its consolidated financial statements.

The Association’s management has completed an assessment of the effectiveness of internal control over financial reporting as of December 31, 2013.In making the assessment, management used the 1992 framework in Internal Control — Integrated Framework, promulgated by the Committee ofSponsoring Organizations of the Treadway Commission, commonly referred to as the ‘‘COSO’’ criteria.

Based on the assessment performed, the Association concluded that as of December 31, 2013, the internal control over financial reporting waseffective based upon the COSO criteria. Additionally, based on this assessment, the Association determined that there were no material weaknessesin the internal control over financial reporting as of December 31, 2013.

WILLIAM L. JOHNSONChief Executive OfficerFarm Credit Mid-America, ACA

PAUL BRUCEChief Financial OfficerFarm Credit Mid-America, ACA

March 12, 2014


5MAR201400020585

REPORT OF AUDIT COMMITTEE

The consolidated financial statements were prepared under the oversight of the Audit Committee. The Audit Committee is composed of a subset ofthe Board of Directors of Farm Credit Mid-America, ACA (the Association). The Audit Committee oversees the scope of the Association’s internal auditprogram, the approval, and independence of PricewaterhouseCoopers LLP (PwC) as independent auditors, the adequacy of the Association’s system ofinternal controls and procedures, and the adequacy of management’s action with respect to recommendations arising from those auditing activities.The Audit Committee’s responsibilities are described more fully in the Internal Control Policy and the Audit Committee Charter.

Management is responsible for internal controls and the preparation of the consolidated financial statements in accordance with accounting principlesgenerally accepted in the United States of America. PwC is responsible for performing an independent audit of the consolidated financial statementsin accordance with auditing standards generally accepted in the United States of America and to issue their report based on their audit. The AuditCommittee’s responsibilities include monitoring and overseeing these processes.

In this context, the Audit Committee reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2013,with management. The Audit Committee also reviewed with PwC the matters required to be discussed by Statement on Auditing Standards No. 114,The Auditor’s Communication with Those Charged with Governance, and both PwC and the internal auditors directly provided reports on significantmatters to the Audit Committee.

The Audit Committee had discussions with and received written disclosures from PwC confirming its independence. The Audit Committee alsoreviewed the non-audit services provided by PwC, if any, and concluded these services were not incompatible with maintaining PwC’s independence.The Audit Committee discussed with management and PwC any other matters and received any assurances from them as the Audit Committeedeemed appropriate.

Based on the foregoing review and discussions, and relying thereon, the Audit Committee recommended that the Board of Directors include theaudited consolidated financial statements in the Annual Report for the year ended December 31, 2013.

JAMES WILLIAM PATTERSONChair of the Audit CommitteeFarm Credit Mid-America, ACA

Audit Committee Members:Barney BarnettRoger EarleyJames William PattersonGeorge E. StebbinsKaye Hurst Whitehead

March 12, 2014


7MAR201319572341

8MAR201416103157

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors and Members of Farm Credit Mid-America, ACA,

We have audited the accompanying consolidated financial statements of Farm Credit Mid-America, ACA (the Association) and itssubsidiaries, which comprise the consolidated statements of condition as of December 31, 2013, 2012 and 2011, and the relatedconsolidated statements of income, changes in members’ equity and cash flows for the years then ended.

Management’s Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenanceof internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from materialmisstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our auditsin accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financialstatements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement ofthe consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controlrelevant to the Association’s preparation and fair presentation of the consolidated financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theAssociation’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluatingthe overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial positionof Farm Credit Mid-America, ACA and its subsidiaries at December 31, 2013, 2012 and 2011, and the results of its operations and its cashflows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

March 12, 2014

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CONSOLIDATED STATEMENTS OF CONDITION

AS OF DECEMBER 31 (IN THOUSANDS) 2013 2012 2011

ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans $17,669,775 $16,526,875 $15,010,650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 46,810 60,650 80,734

Net loans 17,622,965 16,466,225 14,929,916

Investment in AgriBank, FCB 448,181 440,925 422,124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,227,018 1,450,877 1,410,903. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest receivable 132,836 129,699 128,900. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Premises and equipment, net 69,760 42,380 32,851. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets 74,048 144,199 210,945. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 10,495 14,350 30,309. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assets held for lease, net 398,005 323,065 281,646. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 49,067 45,320 57,678

Total assets $20,032,375 $19,057,040 $17,505,272

LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note payable to AgriBank, FCB $16,479,097 $15,818,603 $14,578,386. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest payable 78,645 81,645 92,107. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax liabilities, net 115,774 101,758 82,361. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities 45,422 51,148 39,653

Total liabilities 16,718,938 16,053,154 14,792,507

Contingencies and commitments — — —

MEMBERS’ EQUITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates 85,693 84,541 82,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,227,744 2,919,345 2,630,765

Total members’ equity 3,313,437 3,003,886 2,712,765

Total liabilities and members’ equity $20,032,375 $19,057,040 $17,505,272

The accompanying notes are an integral part of these consolidated financial statements.


CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEAR ENDED DECEMBER 31 (IN THOUSANDS) 2013 2012 2011

Interest income $701,389 $693,885 $695,109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense 309,514 340,106 378,634

Net interest income 391,875 353,779 316,475. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Reversal of) provision for loan losses (3,031) 2,791 (10,416)

Net interest income after (reversal of) provision for loan losses 394,906 350,988 326,891

Other income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patronage income 67,877 65,374 61,748. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financially related services income 6,403 5,993 5,649. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fee income 7,474 10,733 12,291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allocated Insurance Reserve Accounts distribution — 16,332 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating lease income 11,248 11,483 11,674. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned losses, net (2,141) (10,536) (3,974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous income, net 876 433 1,158

Total other income 91,737 99,812 88,546

Operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Salaries and employee benefits 96,850 87,079 72,879. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other operating expenses 66,896 54,425 49,907

Total operating expenses 163,746 141,504 122,786

Income before income taxes 322,897 309,296 292,651. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 14,498 20,716 14,060

Net income $308,399 $288,580 $278,591



CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

CapitalProtected Stock and TotalMembers’ Participation Unallocated Members’

(IN THOUSANDS) Equity Certificates Surplus Equity

Balance as of December 31, 2010 $8 $79,957 $2,352,174 $2,432,139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net income — — 278,591 278,591. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates issued — 6,811 — 6,811. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates retired (8) (4,768) — (4,776)

Balance as of December 31, 2011 — 82,000 2,630,765 2,712,765. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net income — — 288,580 288,580. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates issued — 7,808 — 7,808. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates retired — (5,267) — (5,267)

Balance as of December 31, 2012 — 84,541 2,919,345 3,003,886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net income — — 308,399 308,399. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates issued — 6,556 — 6,556. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates retired — (5,404) — (5,404)

Balance as of December 31, 2013 $— $85,693 $3,227,744 $3,313,437



CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31 (IN THOUSANDS) 2013 2012 2011

Cash flows from operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Net income $308,399 $288,580 $278,591. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Depreciation on premises and equipment 4,248 3,839 4,115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(Gain) loss on sale of premises and equipment (87) 137 (132). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Depreciation on assets held for lease 57,455 47,361 37,959. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Gain on disposal of assets held for lease (679) (240) (380). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Amortization of premiums on investment securities 15,913 16,931 14,778. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(Reversal of) provision for loan losses (3,031) 2,791 (10,416). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Stock patronage received from AgriBank, FCB (25,360) (23,969) (27,889). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Loss on other property owned 1,741 9,945 3,227. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Changes in operating assets and liabilities:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest receivable (10,868) (7,844) (5,005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other assets (2,135) 12,471 22,267. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accrued interest payable (3,000) (10,462) (6,184). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other liabilities 8,290 30,892 10,267

Net cash provided by operating activities 350,886 370,432 321,198

Cash flows from investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Increase in loans, net (1,151,388) (1,536,483) (967,981). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Redemptions of investment in AgriBank, FCB, net 18,104 5,168 22,479. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Purchases of investment in other Farm Credit Institutions, net (1,612) (113) —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Decrease (increase) in investment securities, net 207,946 (56,905) (161,696). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Decrease in other earning assets, net 70,151 66,746 61,012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Purchases of assets held for lease, net (131,716) (88,540) (60,850). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Proceeds from sales of other property owned 8,971 12,673 10,393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Purchases of premises and equipment, net (31,541) (13,505) (2,824)

Net cash used in investing activities (1,011,085) (1,610,959) (1,099,467)

Cash flows from financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Increase in note payable to AgriBank, FCB, net 660,494 1,240,217 777,793. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Capital stock and participation certificates (retired) issued, net (295) 310 476

Net cash provided by financing activities 660,199 1,240,527 778,269

Net change in cash — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cash at beginning of year — — —

Cash at end of year $— $— $—

Supplemental schedule of non-cash activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Stock financed by loan activities $5,524 $6,221 $5,281. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Stock applied against loan principal 4,064 3,975 3,710. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Stock applied against interest 13 15 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Interest transferred to loans 7,718 7,030 6,895. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Loans transferred to other property owned 8,877 10,815 20,022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Financed sales of other property owned 2,020 4,156 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Interest paid $312,514 $350,568 $384,818. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Taxes paid 2,419 3,334 986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1ORGANIZATION AND OPERATIONS and interest on Farm Credit Systemwide debt obligations, to ensure the

retirement of protected borrower capital at par or stated value, and forFARM CREDIT SYSTEM AND DISTRICT other specified purposes.The Farm Credit System (System) is a nationwide system of cooperativelyowned banks and associations established by Congress to meet the credit At the discretion of the FCSIC, the Insurance Fund is also available toneeds of American agriculture. As of December 31, 2013, the System consisted provide assistance to certain troubled System institutions and for the oper-of three Farm Credit Banks (FCB), one Agricultural Credit Bank (ACB), and 82 ating expenses of the FCSIC. Each System bank is required to pay premiumscustomer-owned cooperative lending institutions (associations). AgriBank, into the Insurance Fund until the assets in the Insurance Fund equal 2.0% ofFCB (AgriBank), a System bank, and its affiliated associations are collectively the aggregated insured obligations adjusted to reflect the reduced risk onreferred to as the AgriBank Farm Credit District (AgriBank District or the loans or investments guaranteed by federal or state governments. ThisDistrict). At December 31, 2013, the District consisted of 17 Agricultural Credit percentage of aggregate obligations can be changed by the FCSIC, at its soleAssociations (ACA) that each have wholly-owned Federal Land Credit Associa- discretion, to a percentage it determines to be actuarially sound. The basistion (FLCA) and Production Credit Association (PCA) subsidiaries. for assessing premiums is debt outstanding with adjustments made for non-

accrual loans and impaired investment securities which are assessed aFLCAs are authorized to originate long-term real estate mortgage loans. surcharge while guaranteed loans and investment securities are deductionsPCAs are authorized to originate short-term and intermediate-term loans. from the premium base. AgriBank, in turn, assesses premiums to DistrictACAs are authorized to originate long-term real estate mortgage loans and associations each year based on similar factors.short-term and intermediate-term loans either directly or through theirsubsidiaries. Associations are authorized to provide lease financing options ASSOCIATIONfor agricultural purposes and are also authorized to purchase and hold Farm Credit Mid-America, ACA (the Association) and its subsidiaries, Farmcertain types of investments. AgriBank provides funding to all associations Credit Mid-America, FLCA and Farm Credit Mid-America, PCA (the subsidi-chartered within the District. aries) are lending institutions of the System. We are a member-owned coop-

erative providing credit and credit-related services to, or for the benefit of,Associations are authorized to provide, either directly or in participation eligible members for qualified agricultural purposes in all counties in Indi-with other lenders, credit and related services to eligible borrowers. Eligible ana; all counties in Ohio, with the exception of Marion, Crawford, Wyandot,borrowers may include farmers, ranchers, producers or harvesters of Hancock, Seneca, Wood, Ottawa, Lucas, and Sandusky; all counties in Ken-aquatic products, rural residents, and farm-related service businesses. In tucky, with the exception of Graves, Hickman, Carlisle, Fulton, Ballard,addition, associations can participate with other lenders in loans to similar McCracken, Calloway, and Marshall; and all counties in Tennessee.entities. Similar entities are parties that are not eligible for a loan from aSystem lending institution, but have operations that are functionally simi- On February 1, 2013, our name was officially changed from Farm Creditlar to the activities of eligible borrowers. Services of Mid-America, ACA to Farm Credit Mid-America, ACA. Our sub-

sidiary entities were changed in a similar manner.The Farm Credit Administration (FCA) is authorized by Congress to regulate theSystem banks and associations. We are examined by the FCA and certain associa- We borrow from AgriBank and provide financing and related services to ourtion actions are subject to the prior approval of the FCA and/or AgriBank. members. Our ACA holds all the stock of the FLCA and PCA subsidiaries.

The Farm Credit Act established the Farm Credit System Insurance Corpo- We offer various risk management services, including crop hail and multi-ration (FCSIC) to administer the Farm Credit Insurance Fund (Insurance peril crop insurance for borrowers and those eligible to borrow. We alsoFund). The Insurance Fund is used to ensure the timely payment of principal offer fee appraisals and commodity price hedging to our members.


2...................................................................................................................

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES accrual loans is applied to reduce the recorded investment in the loan, exceptin those cases where the collection of the recorded investment is fully

ACCOUNTING PRINCIPLES AND REPORTING POLICIES expected and the loan does not have any unrecovered prior charge-offs. InOur accounting and reporting policies conform to accounting principles these circumstances interest is credited to income when cash is received.generally accepted in the United States of America (GAAP) and the prevail- Loans are charged-off at the time they are determined to be uncollectible.ing practices within the financial services industry. Preparing financial Non-accrual loans may be returned to accrual status when:statements in conformity with GAAP requires us to make estimates and – principal and interest are current,assumptions that affect the reported amounts of assets and liabilities and – prior charge-offs have been recovered,disclosure of contingent assets and liabilities at the date of the consolidated – the ability of the borrower to fulfill the contractual repayment termsfinancial statements and the reported amounts of revenues and expenses is fully expected,during the period. Actual results could differ from those estimates. – the borrower has demonstrated payment performance, and

– the loan is not classified as doubtful or loss.Certain amounts in prior years’ financial statements have been reclassifiedto conform to the current year’s presentation. In situations where, for economic or legal reasons related to the borrower’s

financial difficulties, we grant a concession for other than an insignificantPRINCIPLES OF CONSOLIDATION period of time to the borrower that we would not otherwise consider, theThe consolidated financial statements present the consolidated financial related loan is classified as a troubled debt restructuring, also known as aresults of Farm Credit Mid-America, ACA and its subsidiaries. All material restructured loan. A concession is generally granted in order to minimizeintercompany transactions and balances have been eliminated in consolidation. economic loss and avoid foreclosure. Concessions vary by program and bor-

rower and may include interest rate reductions, term extensions, paymentSIGNIFICANT ACCOUNTING POLICIES deferrals, or an acceptance of additional collateral in lieu of payments. InLOANS: Loans are carried at their principal amount outstanding net of any limited circumstances, principal may be forgiven. Loans classified as troub-unearned income, cumulative charge-offs, unamortized deferred fees and costs led debt restructurings are considered risk loans.on originated loans, and unamortized premiums or discounts on purchased loans.Loan interest is accrued and credited to interest income based upon the daily ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is an estimate ofprincipal amount outstanding. Material fees, net of related costs, are deferred and losses in our loan portfolio as of the financial statement date. We determinerecognized over the life of the loan as an adjustment to net interest income. Other the appropriate level of allowance for loan losses based on periodic evalua-loan fees are netted with the related origination costs and included as an adjust- tion of factors such as:ment to net interest income. The net amount of these fees and expenses are not – loan loss history,material to the consolidated financial statements taken as a whole. – estimated probability of default,

– estimated loss severity,We place loans in non-accrual status when: – portfolio quality, and– principal or interest is delinquent for 90 days or more (unless the loan is – current economic and environmental conditions.

well secured and in the process of collection) or– circumstances indicate that full collection is not expected. Loans in our portfolio that are considered impaired are analyzed individually to

establish a specific allowance. A loan is impaired when it is probable that allWhen a loan is placed in non-accrual status, we reverse current year accrued amounts due will not be collected according to the contractual terms of the loaninterest to the extent principal plus accrued interest before the transfer agreement. We generally measure impairment based on the net realizable value ofexceeds the net realizable value of the collateral. Any unpaid interest accrued the collateral. All risk loans are considered to be impaired loans. Risk loans include:in a prior year is capitalized to the recorded investment of the loan, unless the – non-accrual loans,net realizable value is less than the recorded investment in the loan, then it is – accruing restructured loans, andcharged-off against the allowance for loan losses. Any cash received on non- – accruing loans 90 days or more past due.



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We record a specific allowance to reduce the carrying amount of the risk loan OTHER PROPERTY OWNED: Other property owned, consisting of real and personalby the amount the recorded investment exceeds the net realizable value of property acquired through foreclosure or deed in lieu of foreclosure, is recordedcollateral. When we deem a loan to be uncollectible, we charge the loan princi- at the fair value less estimated selling costs upon acquisition. Any initial reduc-pal and prior year(s) accrued interest against the allowance for loan losses. tion in the carrying amount of a loan to the fair value of the collateral receivedSubsequent recoveries, if any, are added to the allowance for loan losses. is charged to the allowance for loan losses. Revised estimates to the fair value

less costs to sell are reported as adjustments to the carrying amount of theAn allowance is recorded for probable and estimable credit losses as of the asset, provided that such adjusted value is not in excess of the carrying amountfinancial statement date for loans that are not individually assessed as at acquisition. Related income, expenses, and gains or losses from operationsimpaired. We use a two-dimensional loan risk rating model that incorporates a and carrying value adjustments are included in ‘‘Other property owned losses,14-point rating scale to identify and track the probability of borrower default net’’ in the Consolidated Statements of Income.and a separate 6-point scale addressing the loss severity. The combination ofestimated default probability and loss severity is the primary basis for recogni- LEASES: We have finance and operating leases. Under finance leases, unearnedtion and measurement of loan collectability of these pools of loans. These income from lease contracts represents the excess of gross lease receivables plusestimated losses may be adjusted for relevant current environmental factors. residual receivables over the cost of leased equipment. We amortize net unearned

finance income to earnings using the interest method. The carrying amount ofChanges in the allowance for loan losses consist of provision activity, finance leases is included in ‘‘Loans’’ in the Consolidated Statements of Conditionrecorded in ‘‘(Reversal of) provision for loan losses’’ in the Consolidated and represents lease rent receivables net of the unearned income plus the residualStatements of Income, recoveries, and charge-offs. receivable. Under operating leases, property is recorded at cost and depreciated on a

straight-line basis over the lease term to an estimated residual value. We recognizeINVESTMENT IN AGRIBANK: Accounting for our stock investment in AgriBank is operating lease revenue evenly over the term of the lease and charge depreciationon a cost plus allocated equities basis. and other expenses against revenue as incurred in ‘‘Operating lease income’’ in the

Consolidated Statements of Income. The amortized cost of operating leases isINVESTMENT SECURITIES: We are authorized to purchase and hold certain types included in ‘‘Assets held for lease, net’’ in the Consolidated Statements of Conditionof investments. As we have the positive intent and ability to hold these and represents the asset cost net of accumulated depreciation.investments to maturity, they have been classified as held-to-maturity andare carried at cost adjusted for the amortization of premiums and accretion of POST-EMPLOYMENT BENEFIT PLANS: The District has various post-employmentdiscounts. If an investment is determined to be other-than-temporarily benefit plans in which our employees participate. Expenses related to theseimpaired, the carrying value of the security is written down to fair value. The plans are included in the ‘‘Salaries and employee benefits’’ in the Consoli-impairment loss is separated into credit related and non-credit related com- dated Statements of Income.ponents. The credit related component is expensed through ‘‘Miscellaneousincome, net’’ in the Consolidated Statements of Income in the period of The defined contribution plan allows eligible employees to save for theirimpairment. The non-credit related component is recognized in other compre- retirement either pre-tax, post-tax, or both, with an employer match on ahensive income and amortized over the remaining life of the security as an percentage of the employee’s contributions. We provide benefits under thisincrease in the security’s carrying amount. plan in the form of a fixed percentage of salary contribution in addition to

the employer match. Employer contributions are expensed when incurred.PREMISES AND EQUIPMENT: The carrying amount of premises and equipment isat cost, less accumulated depreciation. Calculation of depreciation is gener- Certain employees also participate in the defined benefit retirement plan of theally on the straight-line method over the estimated useful lives of the District. The plan is comprised of two benefit formulas. At their option, employeesassets. Gains or losses on disposition are included in ‘‘Miscellaneous income, hired prior to October 1, 2001 are on the cash balance formula or on the final averagenet’’ in the Consolidated Statements of Income. Depreciation and mainte- pay formula. New benefits eligible employees hired between October 1, 2001 andnance and repairs expenses are included in ‘‘Other operating expenses’’ in December 31, 2006 are on the cash balance formula. Effective January 1, 2007, thethe Consolidated Statements of Income and improvements are capitalized. defined benefit retirement plan was closed to new employees. The District plan


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utilizes the ‘‘Projected Unit Credit’’ actuarial method for financial reporting purposes Level 2 — Observable inputs other than quoted prices included within Level 1and the ‘‘Entry Age Normal Cost’’ method for funding purposes. that are observable for the asset or liability either directly or indirectly.

Certain employees also participate in the non-qualified defined benefit Pen- Level 2 — inputs include the following:sion Restoration Plan of the AgriBank District. This plan restores retire- – quoted prices for similar assets or liabilities in active markets,ment benefits to certain highly compensated eligible employees that would – quoted prices for identical or similar assets or liabilities in markets thathave been provided under the qualified plan if such benefits were not above are not active so that they are traded less frequently than exchange-the Internal Revenue Code compensation or other limits. traded instruments, quoted prices that are not current, or principal mar-

ket information that is not released publicly,We also provide certain health insurance benefits to eligible retired employ- – inputs that are observable such as interest rates and yield curves, prepay-ees according to the terms of those benefit plans. The anticipated cost of ment speeds, credit risks, and default rates, andthese benefits is accrued during the employees’ active service period. – inputs derived principally from or corroborated by observable market

data by correlation or other means.INCOME TAXES: The ACA and PCA accrue federal and state income taxes.Deferred tax assets and liabilities are recognized for future tax consequences Level 3 — Unobservable inputs that are supported by little or no marketof temporary differences between the carrying amounts and tax basis of activity and that are significant to the fair value of the assets or liabilities.assets and liabilities. Deferred tax assets are recorded if the deferred tax These unobservable inputs reflect the reporting entity’s own assumptionsasset is more likely than not to be realized. If the realization test cannot be about assumptions that market participants would use in pricing the assetmet, the deferred tax asset is reduced by a valuation allowance. The expected or liability. Level 3 assets and liabilities include financial instruments whosefuture tax consequences of uncertain income tax positions are accrued. value is determined using pricing models, discounted cash flow methodolo-

gies, or similar techniques, as well as instruments for which the determina-The FLCA is exempt from federal and other taxes to the extent provided in tion of fair value requires significant management judgment or estimation.the Farm Credit Act.

RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTSSTATEMENTS OF CASH FLOWS: For purposes of reporting cash flow, cash We have assessed the potential impact of accounting standards that haveincludes cash on hand. been issued, but are not yet effective, and have determined that no such

standards are expected to have a material impact to our consolidated finan-FAIR VALUE MEASUREMENT: The accounting guidance describes three levels of cial statements. In addition, no accounting pronouncements were adoptedinputs that may be used to measure fair value. during 2013.

Level 1 — Quoted prices in active markets for identical assets or liabilitiesthat the reporting entity has the ability to access at the measurement date.



3...................................................................................................................

LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans consisted of the following (dollars in thousands):

2013 2012 2011

AS OF DECEMBER 31 Amount % Amount % Amount %

Real estate mortgage $12,077,663 68.3% $11,298,575 68.4% $10,014,583 66.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 2,964,868 16.8% 2,825,749 17.1% 2,859,528 19.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,113,251 6.3% 919,755 5.6% 736,481 4.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,023,348 5.8% 1,045,861 6.3% 1,042,501 6.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 490,645 2.8% 436,935 2.6% 357,557 2.4%

Total $17,669,775 100.0% $16,526,875 100.0% $15,010,650 100.0%

The finance leases and other category is comprised of finance leases, com- PORTFOLIO CONCENTRATIONSmunication, international, energy, water and waste disposal related loans as We have individual borrower, agricultural, and territorial concentrations.well as loans originated under our mission related investment authority. As of December 31, 2013, volume plus commitments to our ten largest bor-

rowers totaled an amount equal to 2.9% of total loans and commitments.Generally, FCA loan types are defined as:– Real estate mortgage — long-term real estate loans made to borrowers Our agricultural commodity concentrations at December 31, 2013, included:

typically for farm real estate, refinancing existing mortgages, or con- corn and soybeans 29.8%, other crops 17.8%, cattle 12.4%, landlords 8.9%,structing various facilities used in operations. other livestock 6.6%, and rural home 5.4%. No other single commodity

– Production and intermediate term — loans made to borrowers typically exceeded 5% of loan volume. Our commodity concentrations have notfor operating funds and equipment. changed materially from prior years.

– Agribusiness — loans made to cooperatives and their subsidiaries, farmrelated businesses, and processing and marketing entities. Our portfolio is concentrated primarily in the following states at December 31,

– Rural residential real estate — loans made to borrowers for any rural 2013: Indiana 25.9%, Ohio 24.5%, Tennessee 19.4%, and Kentucky 14.5%.home purpose.

– Finance leases and other loans — lease receivables made under regulatory While these concentrations represent our maximum potential credit risk asauthorities and loans that do not meet the individual definitions described above. it relates to recorded loan principal, a substantial portion of our lending

activities are collateralized. This reduces our exposure to credit loss associ-ated with our lending activities. We consider credit risk exposure in estab-lishing the allowance for loan losses.


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PARTICIPATIONSWe may purchase or sell participation interests with other parties in order to General Financing Agreement (GFA) limitations. The following table presentsdiversify risk, manage loan volume, or comply with the FCA Regulations or information regarding participations purchased and sold (in thousands):

Other Farm CreditAgriBank Institutions Non-Farm Credit Institutions Total

Participations Participations Participations ParticipationsAS OF DECEMBER 31, 2013 Purchased Sold Purchased Sold Purchased Sold Purchased Sold

Real estate mortgage $— $(571,126) $180,197 $(6,708) $1,051,355 $(886) $1,231,552 $(578,720). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — — 73,009 — 132,474 (87) 205,483 (87). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (2,118) 820,495 (132,043) 116,398 — 936,893 (134,161). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — (28) 115 — 12,795 (6,118) 12,910 (6,146). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — 196,337 — 175,514 — 371,851 —

Total $— $(573,272) $1,270,153 $(138,751) $1,488,536 $(7,091) $2,758,689 $(719,114)

As of December 31, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $— $(695,391) $163,619 $(2,009) $992,614 $(5,348) $1,156,233 $(702,748). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — — 82,902 (4,334) 103,400 (1,010) 186,302 (5,344). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (6,500) 631,290 (112,076) 123,825 (94) 755,115 (118,670). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — — 126 — 14,037 (48) 14,163 (48). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Total $— $(701,891) $1,021,240 $(118,419) $1,385,313 $(6,500) $2,406,553 $(826,810)

As of December 31, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $— $(858,206) $132,729 $(6,948) $918,781 $(5,333) $1,051,510 $(870,487). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — — 90,831 — 137,629 (1,124) 228,460 (1,124). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (17,226) 523,260 (71,462) 64,488 (100) 587,748 (88,788). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — — — — 15,755 (58) 15,755 (58). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Total $— $(875,432) $791,184 $(78,410) $1,303,901 $(6,615) $2,095,085 $(960,457)

Information in the preceding chart excludes loans entered into under our mission related investment authority.



...................................................................................................................

CREDIT QUALITY AND DELINQUENCY – Doubtful: loans exhibit similar weaknesses to substandard loans; how-One credit quality indicator we utilize is the FCA Uniform Classification System ever, doubtful loans have additional weaknesses in existing factors, con-that categorizes loans into five categories. The categories are defined as follows: ditions, and values that make collection in full highly questionable, and– Acceptable: loans are expected to be fully collectible and represent the – Loss: loans are considered uncollectible.

highest quality,– Other assets especially mentioned (OAEM): loans are currently collectible, The following table summarizes loans and related accrued interest receiva-

but exhibit some potential weakness, ble classified under the FCA Uniform Classification System by loan type– Substandard: loans exhibit some serious weakness in repayment capacity, (dollars in thousands):

equity, and/or collateral pledged on the loan,

Substandard/Acceptable OAEM Doubtful/Loss Total

AS OF DECEMBER 31, 2013 Amount % Amount % Amount % Amount %

Real estate mortgage $11,692,603 96.2% $199,472 1.6% $270,507 2.2% $12,162,582 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 2,782,881 92.8% 107,988 3.6% 107,305 3.6% 2,998,174 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,074,414 96.1% 40,961 3.7% 2,626 0.2% 1,118,001 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 969,297 94.5% 8,506 0.8% 48,018 4.7% 1,025,821 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 485,276 98.8% 4,297 0.9% 1,475 0.3% 491,048 100.0%

Total $17,004,471 95.6% $361,224 2.0% $429,931 2.4% $17,795,626 100.0%

As of December 31, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 846,171 91.5% 39,805 4.3% 38,498 4.2% 924,474 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other 431,583 98.7% 4,801 1.1% 947 0.2% 437,331 100.0%

Total $15,784,151 94.9% $290,428 1.7% $573,575 3.4% $16,648,154 100.0%

As of December 31, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 653,882 88.3% 67,870 9.2% 18,196 2.5% 739,948 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other 351,099 98.1% 4,499 1.3% 2,324 0.6% 357,922 100.0%

Total $14,055,008 92.9% $484,153 3.2% $591,849 3.9% $15,131,010 100.0%


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The following table provides an aging analysis of past due loans and relatedaccrued interest receivable by loan type (in thousands):

Not Past Due30-89 90 Days or Less than 90 Days

Days or More Total 30 Days Total Past DueAS OF DECEMBER 31, 2013 Past Due Past Due Past Due Past Due Loans and Accruing

Real estate mortgage $45,229 $35,585 $80,814 $12,081,768 $12,162,582 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 9,918 11,334 21,252 2,976,922 2,998,174 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 144 37 181 1,117,820 1,118,001 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 15,675 7,085 22,760 1,003,061 1,025,821 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — 223 223 490,825 491,048 —

Total $70,966 $54,264 $125,230 $17,670,396 $17,795,626 $—

As of December 31, 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $56,804 $59,662 $116,466 $11,262,327 $11,378,793 $7,830. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 12,393 15,921 28,314 2,830,913 2,859,227 116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,561 36 1,597 922,877 924,474 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 18,203 10,645 28,848 1,019,481 1,048,329 48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 172 318 490 436,841 437,331 —

Total $89,133 $86,582 $175,715 $16,472,439 $16,648,154 $7,994

As of December 31, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $64,646 $62,991 $127,637 $9,966,134 $10,093,771 $306. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 17,478 28,121 45,599 2,848,796 2,894,395 408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 386 205 591 739,357 739,948 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 23,028 12,820 35,848 1,009,126 1,044,974 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 80 622 702 357,220 357,922 —

Total $105,618 $104,759 $210,377 $14,920,633 $15,131,010 $714



...................................................................................................................

RISK LOANSThe following table presents risk loan information (accruing loans include Non-accrual loans by loan type were as follows (in thousands):accrued interest receivable) (in thousands):

AS OF DECEMBER 31 2013 2012 2011 AS OF DECEMBER 31 2013 2012 2011

Non-accrual loans: Real estate mortgage $146,524 $154,708 $180,813. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current $119,695 $121,618 $144,746 Production and intermediate term 33,721 45,378 64,585. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Past due 91,826 114,041 141,740 Agribusiness 362 388 238. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 30,473 34,794 38,982Total non-accrual loans 211,521 235,659 286,486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Finance leases and other 441 391 1,868Accruing restructured loans 12,434 10,358 10,222

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more past Total $211,521 $235,659 $286,486due — 7,994 714

Total risk loans $223,955 $254,011 $297,422 The decrease in non-accrual loans resulted from improvement in the gen-Volume with specific reserves $22,172 $34,232 $51,871 eral economy which permitted some loans to return to an accruing status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

while others were collected.Volume without specific reserves 201,783 219,779 245,551

Total risk loans $223,955 $254,011 $297,422Accruing loans 90 days or more past due and related accrued interest by

Total specific reserves $4,931 $8,863 $14,317 loan type were as follows (in thousands):. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AS OF DECEMBER 31 2013 2012 2011FOR THE YEAR ENDED DECEMBER 31 2013 2012 2011

Real estate mortgage $— $7,830 $306Income on accrual risk loans $758 $847 $829 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Production and intermediate term — 116 408Income on non-accrual loans 9,985 11,191 9,715 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — 48 —Total income on risk loans $10,743 $12,038 $10,544Total $— $7,994 $714Average risk loans $240,184 $278,065 $312,680

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The decrease in accruing loans 90 days or more past due was primarily due tobetter payment performance and continued, consistent delinquency servicing.


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Impaired loans are considered to be all risk loans and any other loansindividually assessed for impairment. The following table provides addi-tional impaired loan information (in thousands):

For the year endedAs of December 31, 2013 December 31, 2013

Recorded Unpaid Principal Related Average Impaired Interest IncomeInvestment Balance Allowance Loans Recognized

Impaired loans with a related allowance for loan losses:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $13,769 $20,196 $2,872 $14,494 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 5,642 7,020 1,742 6,695 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 29 30 29 5 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 2,732 4,265 288 2,864 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — — —

Total $22,172 $31,511 $4,931 $24,058 $—

Impaired loans with no related allowance for loan losses:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $144,516 $166,785 $— $152,138 $7,368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 28,664 41,096 — 34,011 1,964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 333 332 — 348 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 27,828 35,337 — 29,168 1,377. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 442 440 — 461 —

Total $201,783 $243,990 $— $216,126 $10,743

Total impaired loans:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $158,285 $186,981 $2,872 $166,632 $7,368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 34,306 48,116 1,742 40,706 1,964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 362 362 29 353 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 30,560 39,602 288 32,032 1,377. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 442 440 — 461 —

Total $223,955 $275,501 $4,931 $240,184 $10,743



...................................................................................................................






Agribusiness — — — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Total $34,232 $55,323 $8,863 $38,642 $—




Agribusiness 388 398 — 158 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 31,103 36,672 — 32,766 1,408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 391 391 — 1,245 —

Total $219,779 $261,775 $— $239,423 $12,038




Agribusiness 388 398 — 158 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 35,018 42,996 487 36,891 1,408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 391 391 — 1,245 —

Total $254,011 $317,098 $8,863 $278,065 $12,038


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Agribusiness 724 744 404 4,880 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Total $51,871 $73,699 $14,317 $58,680 $—




Agribusiness 237 474 — 2,946 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 35,297 43,165 — 32,134 965. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 1,868 9,751 — 3,703 492

Total $247,836 $297,720 $— $254,000 $10,544




Agribusiness 961 1,218 404 7,826 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 39,434 48,796 601 36,082 965. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 1,868 9,751 — 3,703 492

Total $299,707 $371,419 $14,317 $312,680 $10,544

The recorded investment in the loan is the face amount increased or decreased by applicable accrued interest and unamortized premium, discount, financecharges, and acquisition costs and may also reflect a previous direct charge-off of the investment.

Unpaid principal balance represents the contractual principal balance of the loan.

We did not have any material commitments to lend additional money to borrowers whose loans were at risk at December 31, 2013.



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TROUBLED DEBT RESTRUCTURINGSIncluded within our loans are troubled debt restructurings. These loans The following table presents information regarding troubled debt restruc-have been modified by granting a concession in order to maximize the turings that occurred during the year ended December 31 (in thousands):collection of amounts due when a borrower is experiencing financial diffi-culties. All risk loans, including troubled debt restructurings, are analyzedwithin our allowance for loan losses.

2013 2012 2011

Pre-modification Post-modification Pre-modification Post-modification Pre-modification Post-modification

Real estate mortgage $8,464 $9,102 $8,734 $8,832 $6,736 $6,802. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 24,377 23,871 2,826 2,700 4,605 4,527. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 277 278 — — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,433 1,241 1,590 1,472 1,120 1,119

Total $34,551 $34,492 $13,150 $13,004 $12,461 $12,448

Pre-modification outstanding represents the recorded investment of the The following table presents information regarding troubled debt restruc-loan just prior to restructuring and post-modification outstanding repre- turings outstanding as of December 31 (in thousands):sents the recorded investment of the loan immediately following the

2013 2012 2011restructuring. The recorded investment of the loan is the face amount of the

Troubled debt restructurings $37,003 $27,532 $22,509receivable increased or decreased by applicable accrued interest and unam- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Troubled debt restructurings in non-ortized premium, discount, finance charges, and acquisition costs and mayaccrual status 24,569 17,174 12,287also reflect a previous direct charge-off of the investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Troubled debt restructurings increased due to restructuring activity duringThe following table presents troubled debt restructurings that defaultedthe year, but were substantially offset by charge-offs related to collateralduring the years ended December 31 in which the modification date wasanalysis as well as payments on restructured loans. There were no addi-within 12 months of the respective reporting period (in thousands):tional commitments to lend to borrowers whose loans have been modified in

2013 2012 2011 a troubled debt restructuring at December 31, 2013.Real estate mortgage $588 $2,372 $4,035. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 243 28 1,926. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — 508 715

Total $831 $2,908 $6,676


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ALLOWANCE FOR LOAN LOSSESA summary of the changes in the allowance for loan losses follows The allowance for loan losses balance decreased from December 31, 2012(in thousands): due primarily to improvement in the credit quality of our portfolio as well as

normal periodic updates to our methodology including probability of defaultFor the year ended December 31 2013 2012 2011 factors which were revised to reflect the most current historical trends.Balance at beginning of year $60,650 $80,734 $125,787. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A summary of changes in the allowance for loan losses and period end(Reversal of) provision for loan losses (3,031) 2,791 (10,416). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . recorded investments in loans by loan type follows (in thousands):Loan recoveries 10,361 5,205 7,006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (21,170) (28,080) (41,643)

Balance at end of year $46,810 $60,650 $80,734

Production and RuralReal Estate Intermediate Residential Finance leases

Mortgage Term Agribusiness Real Estate and other Total

Allowance for loan losses:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Balance as of December 31, 2012 $31,244 $12,019 $9,624 $5,264 $2,499 $60,650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 3,415 (5,134) (4,231) 3,001 (82) (3,031). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 1,907 8,160 — 294 — 10,361. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (11,432) (4,931) (3) (4,804) — (21,170)

Balance as of December 31, 2013 $25,134 $10,114 $5,390 $3,755 $2,417 $46,810

Ending balance: individually evaluated for impairment $2,872 $1,742 $29 $288 $— $4,931

Ending balance: collectively evaluated for impairment $22,262 $8,372 $5,361 $3,467 $2,417 $41,879

Recorded investments in loans outstanding:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance as of December 31, 2013 $12,162,582 $2,998,174 $1,118,001 $1,025,821 $491,048 $17,795,626

Ending balance: individually evaluated for impairment $158,285 $34,306 $362 $30,560 $442 $223,955

Ending balance: collectively evaluated for impairment $12,004,297 $2,963,868 $1,117,639 $995,261 $490,606 $17,571,671



...................................................................................................................

Production and RuralReal Estate Intermediate Residential Finance leases

Mortgage Term Agribusiness Real Estate and other Total


Balance as of December 31, 2011 $36,362 $32,287 $7,653 $3,721 $711 $80,734. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 4,623 (11,434) 2,054 5,750 1,798 2,791. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 2,181 2,836 1 187 — 5,205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (11,922) (11,670) (84) (4,394) (10) (28,080)

Balance as of December 31, 2012 $31,244 $12,019 $9,624 $5,264 $2,499 $60,650

Ending balance: individually evaluated for impairment $3,425 $4,951 $— $487 $— $8,863

Ending balance: collectively evaluated for impairment $27,819 $7,068 $9,624 $4,777 $2,499 $51,787


Ending balance as of December 31, 2012 $11,378,793 $2,859,227 $924,474 $1,048,329 $437,331 $16,648,154

Ending balance: individually evaluated for impairment $172,426 $45,788 $388 $35,018 $391 $254,011

Ending balance: collectively evaluated for impairment $11,206,367 $2,813,439 $924,086 $1,013,311 $436,940 $16,394,143


Balance as of December 31, 2010 $65,471 $34,514 $15,491 $7,620 $2,691 $125,787. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Reversal of) provision for loan losses (16,762) 2,607 (2,617) 444 5,912 (10,416). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 4,717 1,292 800 197 — 7,006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (17,064) (6,126) (6,021) (4,540) (7,892) (41,643)

Balance as of December 31, 2011 $36,362 $32,287 $7,653 $3,721 $711 $80,734

Ending balance: individually evaluated for impairment $5,234 $8,078 $404 $601 $— $14,317

Ending balance: collectively evaluated for impairment $31,128 $24,209 $7,249 $3,120 $711 $66,417


Ending balance as of December 31, 2011 $10,093,771 $2,894,395 $739,948 $1,044,974 $357,922 $15,131,010

Ending balance: individually evaluated for impairment $191,292 $66,152 $961 $39,434 $1,868 $299,707

Ending balance: collectively evaluated for impairment $9,902,479 $2,828,243 $738,987 $1,005,540 $356,054 $14,831,303


4 5....................................................... .......................................................

INVESTMENT IN AGRIBANK INVESTMENT SECURITIES AND OTHER EARNING ASSETS

As of December 31, 2013, we were required by AgriBank to maintain an We held investment securities of $1.2 billion, $1.5 billion, and $1.4 billion atinvestment equal to 2.5% of the average quarterly balance of our note December 31, 2013, 2012, and 2011, respectively. Our investment securitiespayable to AgriBank plus an additional 1.0% on growth that exceeded a consisted of:targeted rate. – securities containing loans guaranteed by the Small Business Administra-

tion (SBA),As of December 31, 2013, we were also required by AgriBank to maintain an – investment securities made up of Farm Services Administration securi-investment equal to 8.0% of the quarter end balance of the participation ties (FSA), andinterests in real estate loans sold to AgriBank under the Asset Pool program. – securities issued by the United States Department of Agriculture (USDA).

The balance of our investment in AgriBank, all required stock, was Our investments are either mortgage-backed securities (MBS), which are$448.2 million, $440.9 million, and $422.1 million at December 31, 2013, generally longer-term investments, or asset-backed securities (ABS), which2012, and 2011, respectively. are generally shorter-term investments.

The investment securities have been classified as held-to-maturity. Theinvestment portfolio is evaluated for other-than-temporary impairment. Todate, we have not recognized any impairment on our investment portfolio.

The following table presents further information on investment securities(dollars in thousands):

AS OF WeightedDECEMBER 31, Average Amortized Unrealized Unrealized Fair2013 Yield Cost Gains Losses Value

MBS 2.7% $1,086,943 $7,498 $19,671 $1,074,770. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS 2.4% 140,075 4,439 411 144,103

Total 2.6% $1,227,018 $11,937 $20,082 $1,218,873

AS OF WeightedDECEMBER 31, Average Amortized Unrealized Unrealized Fair2012 Yield Cost Gains Losses Value

MBS 2.7% $1,254,371 $7,251 $27,300 $1,234,322. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS 2.4% 196,506 4,568 1,115 199,959

Total 2.6% $1,450,877 $11,819 $28,415 $1,434,281



...................................................................................................................

AS OF Weighted A summary of investments in an unrealized loss position presented by theDECEMBER 31, Average Amortized Unrealized Unrealized Fair length of time the investments have been in continuous unrealized loss2011 Yield Cost Gains Losses Value position follows (in thousands):MBS 2.8% $1,182,191 $6,761 $30,884 $1,158,068. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Less than 12 months Greater than 12 monthsABS 1.9% 228,712 4,860 1,406 232,166Unrealized UnrealizedTotal 2.6% $1,410,903 $11,621 $32,290 $1,390,234

AS OF DECEMBER 31, 2013 Fair Value Losses Fair Value Losses

MBS $50,597 $2,612 $717,869 $17,059. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The decline in investment securities was related to the maturity of invest-ABS 4,208 16 21,721 395ments offset slightly by new volume acquired during the year. Our purchasesTotal $54,805 $2,628 $739,590 $17,454of new investments have declined due to revised FCA authority guidance.

Investment income is recorded in ‘‘Interest income’’ in the Consolidated Unrealized losses associated with investment securities are not consideredStatements of Income and totaled $32.5 million, $37.3 million, and to be other-than-temporary due to the 100% guarantee of the principal by$34.4 million in 2013, 2012, and 2011, respectively. the U.S. government. However, the premiums paid to purchase the invest-

ment are not guaranteed and are amortized over the weighted averageThe following table presents contractual maturities of our investment maturity of each loan as a reduction of interest income. Repayment ofsecurities (in thousands): principal is assessed at least quarterly, and any remaining unamortized

premium is taken as a reduction to interest income if principal repayment isAS OF DECEMBER 31, 2013 Amortized Cost unlikely, or when a demand for payment is made for the guarantee. AtLess than one year $156 December 31, 2013, the majority of the $20.1 million unrealized loss repre-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

sents unamortized premium.One to five years 53,515. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Five to ten years 211,675. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other earning assets result from successor-in-interest contracts from ourMore than ten years 961,672 involvement with the federal government’s tobacco buy-out program. TheTotal $1,227,018 volume was $74.0 million, $144.2 million, and $210.9 million at December 31,

2013, 2012, and 2011, respectively. These amounts include both principal andinterest income receivable. We evaluate these assets for impairment. TheseExpected maturities differ from contractual maturities because borrowersassets are 100% guaranteed by the U.S. government. We discontinued themay have the right to prepay obligations.purchase of additional contracts during 2011. The final payments werereceived in January 2014.


6 7....................................................... .......................................................

PREMISES, EQUIPMENT, AND ASSETS HELD FOR LEASE, NET NOTE PAYABLE TO AGRIBANK

Premises and equipment consisted of the following (in thousands): Our note payable to AgriBank represents borrowings, in the form of a line ofcredit, to fund our loan portfolio. The line of credit is governed by a GFA and

AS OF DECEMBER 31 2013 2012 2011 our assets serve as collateral. The following table summarizes note payableinformation (dollars in thousands):Land, buildings, and improvements $80,339 $60,722 $49,369

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Furniture and equipment 29,085 21,263 20,395 AS OF DECEMBER 31 2013 2012 2011

Subtotal 109,424 81,985 69,764 Line of credit $18,600,000 $16,675,000 $16,100,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Less: accumulated depreciation 39,664 39,605 36,913 Outstanding principal under

the line of credit 16,479,097 15,818,603 14,578,386Premises and equipment, net $69,760 $42,380 $32,851 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest rate 1.9% 2.0% 2.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

We also hold property for the purpose of agricultural leasing, primarily farmOur note payable matures on April 30, 2014, at which time the note will beequipment and livestock facilities. Net operating lease income totaledrenegotiated.$11.2 million, $11.5 million, and $11.7 million in 2013, 2012, and 2011, respec-

tively. Net operating lease assets totaled $398.0 million, $323.1 million, andThe GFA provides for limitations on our ability to borrow funds based on$281.6 million at December 31, 2013, 2012, and 2011, respectively.specified factors or formulas relating primarily to outstanding balances,credit quality, and financial condition. At December 31, 2013, and through-out the year, we were within the specified limitations and in compliancewith all debt covenants.



8...................................................................................................................

MEMBERS’ EQUITY Regulatory capital includes all of our investment in AgriBank that is in excessof the required investment under an allotment agreement with AgriBank. We

CAPITALIZATION REQUIREMENTS no longer have any excess stock at December 31, 2013, 2012, or 2011.In accordance with the Farm Credit Act, each borrower is required to investin us as a condition of obtaining a loan. As authorized by the Agricultural DESCRIPTION OF EQUITIESCredit Act and our capital bylaws, our Board of Directors has adopted a The following table presents information regarding classes and number ofcapital plan that establishes a stock purchase requirement for obtaining a shares of stock and participation certificates outstanding as of Decem-loan of 2.0% of the customer’s total loan(s) or one thousand dollars, which- ber 31, 2013. All shares and participation certificates are stated at a $5.00ever is less. The stock purchase requirement of obtaining a lease is one par value.share of Class D common stock for those eligible to hold such stock, or one SharesClass B participation certificate for those not eligible to hold such stock. In Outstandingaddition, the purchase of one Class B participation certificate is required of Class D common stock (at-risk) 14,090,756

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .all customers who purchase financial services and are not a stockholder.Class B participation certificates (at-risk) 3,047,832. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Board of Directors may increase the amount of required investment to

the extent authorized in the capital bylaws. The borrower acquires owner-ship of the capital stock at the time the loan or lease is made. The aggregate Under our bylaws, we are also authorized to issue Class C preferred stock.par value of the stock is added to the principal amount of the related This stock is at-risk and nonvoting with a $5.00 par value per share. Cur-obligation. We retain a first lien on the stock or participation certificates rently, no stock of this class has been issued.owned by customers.

Only holders of Class D common stock have voting rights. Our bylaws do notREGULATORY CAPITALIZATION REQUIREMENTS prohibit us from paying dividends on any classes of stock. However, noUnder capital adequacy regulations, we are required to maintain a perma- dividends have been declared to date.nent capital ratio of at least 7.0%, a total surplus ratio of at least 7.0%, and acore surplus ratio of at least 3.5%. The calculation of these ratios in accor- Our bylaws generally permit stock and participation certificates to bedance with the FCA Regulations is discussed as follows: retired at the discretion of our Board of Directors and in accordance with– The permanent capital ratio is average at-risk capital divided by average our capitalization plans, provided prescribed capital standards have been

risk-adjusted assets. At December 31, 2013, our ratio was 15.9%. met. At December 31, 2013, we exceeded the prescribed standards. We do not– The total surplus ratio is average unallocated surplus less any deductions anticipate any significant changes in capital that would affect the normal

made in the computation of permanent capital divided by average risk- retirement of stock.adjusted assets. At December 31, 2013, our ratio was 15.4%.

– The core surplus ratio is average unallocated surplus less any deductionsmade in the computation of total surplus and less any excess stock invest-ment in AgriBank divided by average risk-adjusted assets. At Decem-ber 31, 2013, our ratio was 15.4%.


9....................................................... .......................................................

In the event of our liquidation or dissolution, according to our bylaws, any INCOME TAXESremaining assets after payment or retirement of all liabilities will be dis-tributed in the following order of priority: PROVISION FOR INCOME TAXES– first, to holders of Class C preferred stock and Our provision for income taxes follows (dollars in thousands):– second, to holders of Class D common stock and Class B participation

FOR THE YEAR ENDED DECEMBER 31 2013 2012 2011certificates in proportion that the aggregate interest paid by each holderover the prior two years bears to the total interest paid by all holders of Current:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .stock and participation certificates. Federal $17 $890 $(498)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State 465 429 421In the event of impairment, losses will be absorbed pro rata by impairmentTotal current 482 1,319 (77)based on the following order of priority:

– first, to holders of Class D common stock and Class B participation certifi- Deferred:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

cates and Federal 13,443 18,217 13,055. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .– second, to holders of Class C preferred stock.

State 573 1,180 1,082

Total deferred 14,016 19,397 14,137All classes of stock are transferable to other customers who are eligible tohold such class as long as we meet the regulatory minimum capital Provision for income taxes $14,498 $20,716 $14,060requirements. Effective tax rate 4.5% 6.7% 4.8%

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PATRONAGE DISTRIBUTIONSThe FCA Regulations prohibit patronage distributions to the extent they The following table quantifies the differences between the provision forwould reduce our permanent capital ratio below the minimum permanent income taxes and income taxes at the statutory rates (in thousands):capital adequacy standards. We do not foresee any events that would result

FOR THE YEAR ENDED DECEMBER 31 2013 2012 2011in this prohibition in 2014. However, we do not have a patronage program tomake such distributions. Federal tax at statutory rate $113,014 $105,161 $99,501

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Impact of graduated rates — 553 381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State tax, net 614 898 614. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of non-taxable entity (99,241) (86,375) (86,533). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other 111 479 97

Provision for income taxes $14,498 $20,716 $14,060



...................................................................................................................

DEFERRED INCOME TAXES A valuation allowance for the deferred tax assets was not necessary atTax laws require certain items to be included in our tax returns at different December 31, 2013, 2012, or 2011.times than the items are reflected on our Consolidated Statements ofIncome. Some of these items are temporary differences that will reverse We have not provided for deferred income taxes on approximatelyover time. We record the tax effect of temporary differences as deferred $188.8 million of patronage allocations received from AgriBank prior totax assets and liabilities netted on our Consolidated Statements of Condi- 1993. Such allocations, distributed in the form of stock, are subject to taxtion. Deferred tax assets and liabilities were composed of the following only upon conversion to cash. Our intent is to permanently maintain this(in thousands): investment in AgriBank. Additionally, we have not provided deferred

income taxes on accumulated FLCA earnings of $2.3 billion as it is our intentAS OF DECEMBER 31 2013 2012 2011 to permanently maintain this equity in the FLCA or to distribute the earn-

ings to members in a manner that results in no additional tax liability to us.Allowance for loan losses $3,555 $3,565 $8,065. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Postretirement benefit accrual 325 357 388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our income tax returns are subject to review by various United StatesPreviously taxed non-accrual taxing authorities. We record accruals for items that we believe may beinterest 1,247 1,372 1,169. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . challenged by these taxing authorities. However, we had no uncertainNet operating loss carryforward 3,456 3,576 7,103 income tax positions at December 31, 2013. In addition, we believe we are no. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Leasing related, net (121,248) (107,350) (94,892) longer subject to income tax examinations for years prior to 2010.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank 2002 allocated stock (2,918) (2,915) (2,917). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued pension asset (1,432) (1,533) (1,569). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 1,241 1,170 292

Deferred tax liabilities, net $(115,774) $(101,758) $(82,361)

Gross deferred tax assets $9,824 $10,040 $17,017

Gross deferred tax liabilities $(125,598) $(111,798) $(99,378)


10...................................................................................................................

EMPLOYEE BENEFIT PLANS As disclosed in the District financial statements, the defined benefit pensionplan reflects an unfunded liability totaling $255.2 million at December 31, 2013.

PENSION AND POST-EMPLOYMENT BENEFIT PLANS The pension benefits funding status reflects the net of the fair value of the planComplete financial information for the pension and post-employment bene- assets and the projected benefit obligation at the date of these consolidatedfit plans may be found in the Combined AgriBank and Affiliated Associa- financial statements. The projected benefit obligation is the actuarial presenttions 2013 Annual Report (District financial statements). value of all benefits attributed by the pension benefit formula to employee

service rendered prior to the measurement date based on assumed futureThe Farm Credit Foundations Plan Sponsor and Trust Committees provide compensation levels. The projected benefit obligation of the District-wide planoversight of the benefit plans. These governance committees are comprised of was $1.0 billion, $1.1 billion, and $934.8 million at December 31, 2013, 2012, andelected or appointed representatives (senior leadership and/or Board of Direc- 2011, respectively. The fair value of the plan assets was $759.5 million,tor members) from the participating organizations. The Coordinating Commit- $640.1 million, and $557.6 million at December 31, 2013, 2012, and 2011, respec-tee (a subset of the Plan Sponsor Committee comprised of AgriBank District tively. The accumulated benefit obligation, which is the actuarial present valuerepresentatives) is responsible for decisions regarding retirement benefits at of the benefits attributed to employee service rendered before the measure-the direction of the AgriBank District participating employers. The Trust Com- ment date and based on current employee service and compensation, exceedsmittee is responsible for fiduciary and plan administrative functions. pension plan assets. The accumulated benefit obligation for the District-wide

plan was $864.2 million, $908.2 million, and $788.0 million at December 31,PENSION PLAN: Certain employees participate in the AgriBank District Retire- 2013, 2012, and 2011, respectively. The funding status is subject to many vari-ment Plan, a District-wide multi-employer defined benefit retirement plan. ables including performance of plan assets and interest rate levels. Therefore,The Department of Labor has determined the plan to be a governmental changes in assumptions could significantly affect these estimates.plan; therefore, the plan is not subject to the provisions of the EmployeeRetirement Income Security Act of 1974, as amended (ERISA). As the plan is Costs are determined for each individual employer based on costs directly relatednot subject to ERISA, the plan’s benefits are not insured by the Pension to their current employees as well as an allocation of the remaining costs basedBenefit Guaranty Corporation. Accordingly, the amount of accumulated proportionately on the estimated projected liability of the employer under thisbenefits that participants would receive in the event of the plan’s termina- plan. We recognize our proportional share of expense and contribute a propor-tion is contingent on the sufficiency of the plan’s net assets to provide tional share of funding. Total plan expense for participating employers wasbenefits at that time. This Plan is noncontributory and covers certain eligi- $63.3 million, $52.7 million, and $44.0 million for 2013, 2012, and 2011, respec-ble District employees. The assets, liabilities, and costs of the plan are not tively. Our allocated share of plan expenses included in ‘‘Salaries and employeesegregated by participating entities. As such, plan assets are available for benefits’’ in the Consolidated Statements of Income was $12.3 million, $10.3 mil-any of the participating employers’ retirees at any point in time. Addition- lion, and $8.7 million for 2013, 2012, and 2011, respectively. Participating employ-ally, if a participating employer stops contributing to the plan, the unfunded ers contributed $59.0 million, $51.3 million, and $27.9 million to the plan in 2013,obligations of the plan may be borne by the remaining participating employ- 2012, and 2011, respectively. Our allocated share of these pension contributionsers. Further, if we choose to stop participating in the plan, we may be was $11.5 million, $10.1 million, and $5.6 million for 2013, 2012, and 2011, respec-required to pay an amount based on the underfunded status of the plan, tively. Benefits paid to participants in the District were $49.8 million in 2013, nonereferred to as a withdrawal liability. Because of the multi-employer nature of which were paid to our senior officers who were actively employed during theof the plan, any individual employer is not able to unilaterally change the year. While the plan is a governmental plan and is not subject to minimumprovisions of the plan. If an employee transfers to another employer within funding requirements, the employers contribute amounts necessary on an actua-the same plan, the employee benefits under the plan transfer. Benefits are rial basis to provide the plan with sufficient assets to meet the benefits to be paidbased on salary and years of service. There is no collective bargaining agree- to participants. The amount of the total District employer contributions expectedment in place as part of this plan. to be paid into the pension plans during 2014 is $32.7 million. Our allocated share

of these pension contributions is expected to be $6.4 million. The amount ulti-mately to be contributed and the amount ultimately recognized as expense as



...................................................................................................................

well as the timing of those contributions and expenses, are subject to many 2012, and 2011, respectively. The Pension Restoration Plan is unfunded andvariables including performance of plan assets and interest rate levels. These we make annual contributions to fund benefits paid to our retirees coveredvariables could result in actual contributions and expenses being greater than or by the plan. Our cash contributions, equal to the benefits paid, wereless than the amounts reflected in the District financial statements. $331 thousand, $1.0 million, and $514 thousand for 2013, 2012, and 2011,

respectively. There were no benefits paid under the Pension RestorationRETIREE MEDICAL PLANS: District employers also provide certain health insur- Plan to our senior officers who were actively employed during 2013.ance benefits to eligible retired employees according to the terms of the benefitplan. The anticipated costs of these benefits are accrued during the period of RETIREMENT SAVINGS PLANSthe employee’s active status. Postretirement benefit income included in ‘‘Sala- We participate in a defined contribution retirement savings plan. For employ-ries and employee benefits’’ in the Consolidated Statements of Income were ees hired before January 1, 2007, employee contributions are matched dollar$230 thousand, $216 thousand, and $212 thousand for 2013, 2012, and 2011, for dollar up to 2.0% and 50 cents on the dollar on the next 4.0% on both pre-respectively. Our cash contributions, equal to the benefits paid, were $26 thou- tax and post-tax contributions. The maximum employer match is 4.0%. Forsand, $28 thousand, and $29 thousand for 2013, 2012, and 2011, respectively. employees hired after December 31, 2006, we contribute 3.0% of the

employee’s compensation and will match employee contributions dollar forNONQUALIFIED RETIREMENT PLAN: We also participate in the District-wide non- dollar up to a maximum of 6.0% on both pre-tax and post-tax contributions.qualified defined benefit Pension Restoration Plan. This plan restores The maximum employer contribution is 9.0%.retirement benefits to certain highly compensated eligible employees thatwould have been provided under the qualified plan if such benefits were not We also participate in the Nonqualified Deferred Compensation Plan. Eligibleabove the Internal Revenue Code compensation or other limits. participants must meet one of the following criteria: certain salary thresholds

as determined by the IRS, be either a Chief Executive Officer or President of aAs disclosed in the District financial statements, the Pension Restoration Plan participating employer, or have previously elected pre-tax deferrals in 2006reflects an unfunded liability totaling $25.3 million at December 31, 2013. This under predecessor nonqualified deferred compensation plans. Under this planplan is funded as the benefits are paid; therefore, there are no assets in the the employee may defer a portion of his/her salary, bonus, and other compen-plan and the unfunded liability is equal to the projected benefit obligation. sation. Additionally, the plan provides for supplemental employer matchingThe projected benefit obligation of the Pension Restoration Plan was contributions related to any compensation deferred by the employee that$25.3 million, $23.5 million, and $16.6 million at December 31, 2013, 2012, and would have been eligible for a matching contribution under the retirement2011, respectively. The accumulated benefit obligation for the Pension Resto- savings plan if it were not for certain IRS limitations.ration Plan was $19.8 million, $17.5 million, and $13.6 million at December 31,2013, 2012, and 2011, respectively. The amount of the pension benefits funding Employer contribution expenses for the retirement savings plans, included instatus is subject to many variables including interest rate levels. Therefore, ‘‘Salaries and employee benefits’’ in the Consolidated Statements of Income,changes in assumptions could significantly affect these estimates. were $4.8 million, $3.8 million, and $3.0 million in 2013, 2012, and 2011, respec-

tively. These expenses were equal to our cash contributions for each year.Costs are determined for each individual employer based on costs directlyrelated to their current employees. Total Pension Restoration Plan expense Additionally, we participate in the Pre-409A Frozen Nonqualified Deferredfor participating employers was $3.6 million, $2.4 million, and $2.5 million Compensation Plan. This plan serves the same purpose as the Nonqualifiedfor 2013, 2012, and 2011, respectively. Our allocated share of plan expenses Deferred Compensation Plan. However, the plan was frozen effective Janu-included in ‘‘Salaries and employee benefits’’ in the Consolidated Statements ary 1, 2007. As such, no additional participants are eligible to enter the planof Income was $284 thousand, $321 thousand, and $260 thousand for 2013, and no additional employer contributions will be made to the plan.


11...................................................................................................................

RELATED PARTY TRANSACTIONS The related parties can be different each year end primarily due to changesin the composition of our Board of Directors. Advances and repayments to

In the ordinary course of business, we may enter into loan transactions with related parties at the end of each year are included in the preceding chart.our officers, directors, their immediate family members, and other organiza-tions with which such persons may be associated. Such transactions are sub- Additional transactions other than loans in the ordinary course of businessject to special approval requirements contained in the FCA Regulations and involving directors and senior officers include our dealer credit programare made on the same terms, including interest rates, amortization schedules, which provides financing for new and used equipment for an equipmentand collateral, as those prevailing at the time for comparable transactions dealership that is co-owned by Director Brandon Robbins. All dealerships inwith other persons. In our opinion, none of these loans outstanding at Decem- the dealer credit program are offered the same terms and conditions.ber 31, 2013 involved more than a normal risk of collectability.

We purchase various services from AgriBank including financial and retailThe following table presents information on loans and leases to related systems, support, and reporting, technology services, and insurance ser-parties (in thousands): vices. The total cost of services we purchased from AgriBank was $5.3 mil-

lion, $5.3 million, and $5.1 million in 2013, 2012, and 2011, respectively. We2013 2012 2011 also purchase human resource information systems, benefit, payroll, and

workforce management services from Farm Credit Foundations (Founda-As of December 31:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

tions). Foundations was operated as a part of AgriBank prior to January 1,Total related party loans and leases $10,182 $17,473 $13,730. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2012 when it formed a separate System service corporation. The SystemFor the year ended December 31:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . entities using Foundations’ services contributed an investment into the

Advances to related parties $2,852 $6,624 $5,373 service corporation in January 2012. As of December 31, 2013 and 2012, our. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .investment in Foundations was $113 thousand. The total cost of servicesRepayments by related parties 2,976 4,991 4,655

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .purchased from Foundations was $658 thousand and $530 thousand in 2013and 2012, respectively.



12...................................................................................................................

CONTINGENCIES AND COMMITMENTS we had commitments to extend credit and unexercised commitmentsrelated to standby letters of credit of $2.9 billion. Additionally, we had

In the normal course of business, we have contingent liabilities and out- $16.1 million of issued standby letters of credit as of December 31, 2013.standing commitments which may not be reflected in the accompanyingconsolidated financial statements. We do not anticipate any material losses Commitments to extend credit and letters of credit generally have fixedbecause of these contingencies or commitments. expiration dates or other termination clauses and we may require payment

of a fee. If commitments to extend credit and letters of credit remainWe may be named as a defendant in lawsuits or legal actions in the normal unfulfilled or have not expired, they may have credit risk not recognized incourse of business. At the date of these consolidated financial statements, the financial statements. Many of the commitments to extend credit andwe were not aware of any such actions that would have a material impact on letters of credit will expire without being fully drawn upon. Therefore, theour financial condition. However, such actions could arise in the future. total commitments do not necessarily represent future cash requirements.

Certain letters of credit may have recourse provisions that would enable usWe have commitments to extend credit and letters of credit to satisfy the to recover from third parties amounts paid under guarantees, thereby limit-financing needs of our borrowers. These financial instruments involve, to ing our maximum potential exposure. The credit risk involved in issuingvarying degrees, elements of credit risk not recognized in the financial these financial instruments is essentially the same as that involved instatements. Commitments to extend credit are agreements to lend to a extending loans to borrowers and we apply the same credit policies.borrower as long as there is not a violation of any condition established inthe loan contract. Standby letters of credit are agreements to pay a benefici-ary if there is a default on a contractual arrangement. At December 31, 2013,


13...................................................................................................................

FAIR VALUE MEASUREMENTS at the measurement date in the principal or most advantageous market forthe asset or liability. Accounting guidance also establishes a fair value hierar-

Fair value is defined as the price that would be received to sell an asset or paid chy, with three levels of inputs that may be used to measure fair value. Referto transfer a liability in an orderly transaction between market participants to Note 2 for a more complete description of the three input levels.

NON-RECURRING BASISWe did not have any assets or liabilities measured at fair value on a recurring basis at December 31, 2013, 2012, or 2011. We may be required, from time to time,to measure certain assets at fair value on a non-recurring basis. Information on assets measured at fair value on a non-recurring basis follows (in thousands):

AS OF DECEMBER 31, 2013 Fair Value Measurement Using Total GainsLevel 1 Level 2 Level 3 Total Fair Value (Losses)

Loans $— $18,104 $— $18,104 $(17,238). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned — — 10,915 10,915 (1,741). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Loans $— $26,638 $— $26,638 $(22,626). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Loans $— $39,432 $— $39,432 $6,101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


VALUATION TECHNIQUES

LOANS: Represents the carrying amount and related write-downs of loans OTHER PROPERTY OWNED: Represents the fair value and related losses ofwhich were evaluated for individual impairment based on the appraised foreclosed assets that were measured at fair value based on the collateralvalue of the underlying collateral. When the value of the collateral, less value, which is generally determined using appraisals, or other indicationsestimated costs to sell, is less than the principal balance of the loan, a based on sales of similar properties. Costs to sell represent transaction costsspecific reserve is established. Costs to sell represent transaction costs and and are not included as a component of the asset’s fair value.are not included as a component of the asset’s fair value.

Refer to Note 2 for a description of the methods used to determine the fairvalue hierarchy.



14...................................................................................................................

FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of all our financial instruments is as follows (in thousands):

2013 2012 2011

Carrying Carrying CarryingAS OF DECEMBER 31 Amount Fair Value Amount Fair Value Amount Fair Value

Financial assets:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net loans $17,622,965 $17,345,519 $16,466,225 $16,730,439 $14,929,916 $15,234,463. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,227,018 1,218,873 1,450,877 1,434,281 1,410,903 1,390,234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets 74,048 74,185 144,199 147,519 210,945 219,986. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial liabilities:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Note payable to AgriBank, FCB $16,479,097 $16,246,759 $15,818,603 $16,068,610 $14,578,386 $14,851,754. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unrecognized financial instruments:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commitments to extend credit and letters of credit $(3,651) $(3,027) $(3,497). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Quoted market prices are generally not available for our financial instru- A description of the methods and assumptions used to estimate the fairments. Accordingly, we base fair values on: value of each class of our financial instruments, for which it is practical to– judgments regarding future expected losses, estimate that value, follows:– current economic conditions,– risk characteristics of various financial instruments, NET LOANS: Because no active market exists for our loans, fair value is– credit risk, and estimated by discounting the expected future cash flows using current– other factors. interest rates at which similar loans would be made or repriced to borrowers

with similar credit risk. In addition, loans are valued using the Farm CreditThese estimates involve uncertainties, matters of judgment, and cannot be interest rate yield curve, prepayment rates, contractual loan information,determined with precision. Changes in assumptions could significantly credit classification, and collateral values. As the discount rates are basedaffect the estimates. upon internal pricing mechanisms and other management estimates, man-

agement has no basis to determine whether the fair values presented wouldEstimating the fair value of our investment in AgriBank is not practical be indicative of the exit price negotiated in an actual sale. Furthermore,because the stock is not traded. As discussed in Notes 2 and 4, the invest- certain statutory or regulatory factors not considered in the valuation, suchment is a requirement of borrowing from AgriBank. as the unique statutory rights of System borrowers, could render our portfo-

lio less marketable outside the System.

For fair value of loans individually impaired, we assume collection willresult only from the sale of the underlying collateral. Fair value is estimatedto equal the total net realizable value of the underlying collateral. Costs tosell represent transaction costs and are not included as a component of theasset’s fair value.


...................................................................................................................

INVESTMENT SECURITIES: If an active market exists, the fair value is based on NOTE PAYABLE TO AGRIBANK: Estimating the fair value of the note payable tocurrently quoted market prices. For those securities for which an active AgriBank is determined by segregating the note into pricing pools accordingmarket does not exist, we estimate the fair value of these investments by to the types and terms of the underlying loans funded. We discount thediscounting the expected future cash flows using current interest rates estimated cash flows from these pools using the current rate charged byadjusted for credit risk. AgriBank for additional borrowings with similar characteristics.

OTHER EARNING ASSETS: Other earning assets result from successor-in-inter- COMMITMENTS TO EXTEND CREDIT AND LETTERS OF CREDIT: Estimating the fairest contracts from our involvement with the federal government’s tobacco value of commitments and letters of credit is determined by the inherentbuy-out program. We estimate the fair value of these investments by dis- credit loss in such instruments.counting the expected future cash flows using current interest rates.



15...................................................................................................................

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Quarterly consolidated results of operations for the year ended December 31 follows (in thousands):

2013 First Second Third Fourth Total

Net interest income $95,119 $97,432 $99,108 $100,216 $391,875. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 3,989 1,729 (5,270) (3,479) (3,031). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patronage income 13,593 13,705 13,340 27,239 67,877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expense, net 34,095 34,358 32,879 38,554 139,886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 2,797 3,167 4,659 3,875 14,498

Net income $67,831 $71,883 $80,180 $88,505 $308,399



(Reversal of) provision for loan losses (9,204) (1,412) 8,036 5,371 2,791. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




Net income $72,939 $82,975 $60,719 $71,947 $288,580



Provision for (reversal of) loan losses 15,992 6,963 (22,931) (10,440) (10,416). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




Net income $48,693 $52,839 $90,064 $86,995 $278,591


16...................................................................................................................

SUBSEQUENT EVENTS On January 2, 2014 we sold $79.3 million of lease volume to FCL. We simulta-neously purchased approximately a 69% interest in the cash flows of the

We have evaluated subsequent events through March 12, 2014, which is the leases sold in the form of a loan participation. As part of the transaction, wedate the consolidated financial statements were available to be issued. recognized a gain of $667 thousand.There have been no material subsequent events that would require recogni-tion in our 2013 consolidated financial statements or disclosures in the On March 5, 2014, the AgriBank Board of Directors approved an amendmentNotes to Consolidated Financial Statements, except for the sale of a portion to the AgriBank capital plan which reduces the base required stock invest-of our leasing portfolio to Farm Credit Leasing (FCL) in January 2014 and a ment for all affiliated associations, including Farm Credit Mid-America,revision to our required investment in AgriBank. from 2.5% to 2.25% effective March 31, 2014.


DISCLOSURE INFORMATION REQUIRED BY REGULATIONS (UNAUDITED)

DESCRIPTION OF BUSINESS SELECTED FINANCIAL DATAGeneral information regarding the business is discussed in Note 1 of this The ‘‘Consolidated Five-Year Summary of Selected Financial Data’’ isAnnual Report. presented at the beginning of this Annual Report.

The description of significant business developments, if any, is discussed in MANAGEMENT’S DISCUSSION AND ANALYSISthe ‘‘Management’s Discussion and Analysis’’ section of this Annual Report. Information regarding any material aspects of our financial condition,

changes in financial condition, and results of operations are discussed in theDESCRIPTION OF PROPERTY ‘‘Management’s Discussion and Analysis’’ section of this Annual Report.There are 93 offices located throughout our territory making and servicinglong and short-term loans. We own 74 buildings and lease 19 office spaces. In BOARD OF DIRECTORSaddition to our central office located in Louisville, we have also leased Our Board of Directors is organized into the following committees to carryadditional space in Louisville to accommodate staff. There are 92 sales out Board responsibilities:offices which are supported by 7 special account units and 4 central process- – The Audit Committee oversees financial reporting, the adequacy of ouring units. A single building may house multiple offices. The owned facilities internal control systems, the scope of the our internal audit program, thehave net book values ranging between $11 thousand and $7.7 million. Cur- independence of the outside auditors, the processes for monitoring com-rently, there are 5 buildings being held for sale. During 2013, construction pliance with laws and regulations and the code of ethics. The Audit Com-was completed on new facilities for the replacement of the following offices mittee also oversees the adequacy of management’s action with respect toin Indiana: Lagrange, Marion, Rensselaer, Corydon, and Crawfordsville, in recommendations arising from auditing activities;Ohio: Archbold, London, and Sugarcreek, and in Kentucky: Russellville, – The Governance Committee addresses issues of Board governance and theMt. Sterling, and Glasgow. Board’s continuing efforts to strengthen and renew the Board, adminis-

ters a process for maintaining and periodically reviewing board policies,LEGAL PROCEEDINGS and administers a planning process focused upon achieving our missionInformation regarding legal proceedings is discussed in Note 12 of this and maintaining a viable, competitive institution;Annual Report. We were not subject to any enforcement actions as of – The Human Resources Committee oversees and provides overall directionDecember 31, 2013. and/or recommendations for compensation, benefits, and human resource

performance management programs; andDESCRIPTION OF CAPITAL STRUCTURE – The Risk Management Committee oversees the integration of risk manage-Information regarding our capital structure is discussed in Note 8 of this ment activities throughout our organization. Committee members reviewAnnual Report. ongoing risk assessments of current and emerging risks to ensure ade-

quate planning and resources are directed at managing the identifiedDESCRIPTION OF LIABILITIES risks. The Committee also establishes and promotes an effective riskInformation regarding liabilities is discussed in Notes 7, 8, 9, 10, 12, and 14 of culture throughout our organization.this Annual Report.

Information regarding directors who served as of December 31, 2013, includ-ing business experience in the last five years follows:

NamePosition Term of Office Business experience and employment during past five years

D. Kevin Cox Second year of a four year term Self-employed farmer (corn, soybeans, alfalfa, and feeder cattle);Chair trucking operation; previously, farming included background in wheat. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dan E. Flanagan Third year of a four year term Self-employed farmer (poultry, grain, and produce); business owner (sale/Vice Chair removal of chicken litter); former Deputy Commissioner of Kentucky

Deptartment of Agriculture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship Second year of a four year term Self-employed farmer (vegetables, hay, corn, beans, wheat, customSecretary farming, and beef cattle). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

R. Hugh Adams Second year of a two year term Self-employed farmer (grain); retired from Tennessee Farm Bureau (FieldDirector Service Director). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett Fourth year of a four year term Retired (formerly president/owner of management recruiting business)Outside Director


NamePosition Term of Office Business experience and employment during past five years

Robert E. Barton Fourth year of a four year term Self-employed farmer (tobacco, corn, wheat, and soybeans); country grainDirector elevator; previously, farming included background in cattle operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates, III First year of a four year term Self-employed farmer (beef, corn, wheat, hay, barley, and alfalfa);Director previously, farming included background in dairy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp First year of a four year term Self-employed farmer (corn, soybeans, wheat, beef cattle, and hogs)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Roger D. Earley Fourth year of a four year term Self-employed farmer (corn, soybeans, wheat, hay, beef cattle, broodDirector stock, heifers, and bulls). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David E. Hahn First year of a four year term Professor, Department of Agricultural, Environmental and DevelopmentOutside Director Economics, College of Food, Agriculture, and Environmental Sciences at

Ohio State University and part-time farmer (grain). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel Jr. Second year of a four year term Self-employed farmer (dairy, hay, and grain)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson Second year of a four year term Manager, Fruit Farm Market (apples, strawberries, and peaches) and ViceDirector President of Patterson Farms, Inc. (family farm operation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins Third year of a four year term Part-time farmer (cow-calf operation), Co-Owner of Mountain FarmDirector International, LLC (equipment dealership), and formerly a Financial

Services Officer for Farm Credit Mid-America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

George E. Stebbins First year of a four year term Self-employed farmer (corn, soybeans, wheat, and weaner pigs)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker First year of a four year term Part-time farmer (hay, timber, and heifers); retired from Greene CountyDirector Tennessee School System, North Greene High School (agriculture

education).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kaye Hurst Whitehead Third year of a four year term Self-employed farmer (corn, soybeans, wheat, and hay; hog operation)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson Third year of a four year term Self-employed farmer (com, soybeans, wheat, hay, cattle, and hogs)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tony G. Wolfe Fourth year of a four year term Self-employed farmer (corn, soybeans, wheat, and beef cattle); GibsonDirector County Councilman; former Field Representative for Indiana Farm

Bureau. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional business interests where a director serves on the board of direc- Kendell Culp is a director of Indiana Soybean Alliance (agriculture), Jaspertors or as a senior officer includes: County Drainage (sanitation), Jasper County Regional Water and Sewer Dis-R. Hugh Adams is a director of the Weakley County Farm Bureau (agricul- trict (sanitation), Jasper County Economic Development (county develop-ture) and the West Tennessee River Basin Authority (environmental ment), Northwest Indiana Solid Waste District (sanitation), and Northwestconservation). Indiana Workforce Development (state development).

Barney Barnett is a director of Farm Credit Foundations (employee benefits). Dan E. Flanagan is the president of Taylor Co. Farmers Market (agriculture),chair of the Kentucky Council of Agriculture Board (agriculture), vice chair

David A. Bates, III is the president of Bullitt County Farm Bureau of the Kentucky Council on Postsecondary Education Board (education),(agriculture). secretary and treasurer of the Kentucky Poultry Federation (agriculture),

director of the AgriBank District Farm Credit Council Board (agriculture),Donald Blankenship serves on the AgriBank District Farm Credit Council and director of the National Farm Credit Council Board (agriculture).Board (agriculture).

David E. Hahn serves on the AgriBank District Farm Credit Council BoardD. Kevin Cox is a director of Parke County REMC (electric cooperative). (agriculture).



John L. Kuegel Jr. is a director of the Daviess County Farm Bureau Board Directors are compensated in the form of an annual retainer paid monthly(agriculture), Daviess County Extension Council (cooperative education), for time spent in preparing and attending board and committee meetings,and District 2 Chair of Kentucky Farm Bureau (agriculture). advisory committee meetings, customer appreciation meetings, summer

planning, and AgriBank annual meetings. For the month of January 2013 theJames William Patterson is a director of Geauga County Farm Bureau (agri- monthly rate paid was $2,723. Beginning February 1, 2013, the retainerculture) and is a trustee for the Ohio Farm Bureau Federation (agriculture). increased to a monthly rate of $2,780. In addition, directors were compen-

sated at the daily rate of $350 for attendance at designated meetings notDale B. Tucker is a director of Greene Farmers Cooperative (farm supply specified above but set out by board policy. Directors were also reimbursedcooperative). for reasonable expenses incurred in connection with attending such

meetings.Kaye Hurst Whitehead serves as a director of the Delaware County PorkProducers (agriculture), the Indiana University Health Ball Memorial Hospi- In 2013, the officers of the Board (Chair, Vice Chair and Secretary) and thetal (medical facility), the Ivy Tech Community College (education), chair of Chair of each of the Board’s standing committees (Audit, Governance,the Delaware County Farm Bureau (agriculture), and serves on the AgriBank Human Resources, and Risk Management) received an annual retainer paidDistrict Farm Credit Council Board (agriculture). monthly for the additional time commitments of their positions. The

monthly amounts paid were as follows: Board Chair — $300, Board ViceTony G. Wolfe is a director of the Gibson County Farm Bureau (agriculture), Chair and Secretary — $125, and Board Committee Chairs — $104. Addition-the Indiana Association of Counties (county government advocacy), the ally, directors serving on standing committees received $175 for participa-County Council Association (county government advocacy), Gibson County tion in conference call meetings.Chamber of Commerce (county tourism/development), Shiloh Church Ceme-tery Board (community organization), and Selective Service System Boardfor Gibson County (military).


Information regarding compensation paid to each director who served during 2013 follows:

Number of Days Served 1Compensation Paid

Other Official for Service on a Total CompensationBoard Meetings Activities Board Committee 4 Name of Committee Paid in 2013

R. Hugh Adams 16.0 17.5 $525 Human Resources $35,947. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dan B. Ashby3 12.0 31.5 1,113 Governance 32,470. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett 18.0 15.5 875 Audit 34,897. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Robert E. Barton 17.0 14.0 875 Audit 35,772. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates III 17.0 16.0 — 33,672. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship 18.0 15.5 — 37,447. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Kevin Cox 18.0 32.5 — 42,522. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp2 6.0 4.0 — 9,059. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Roger D. Earley 18.0 18.0 700 Human Resources 35,072. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kathryn Eschbacher-Timberlake3 12.0 39.5 175 Governance 29,782. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dan E. Flanagan 18.0 26.0 1,250 Risk Management 40,272. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David E. Hahn 18.0 29.0 700 Audit 39,622. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel, Jr. 18.0 17.5 350 Governance 35,772. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson 16.0 22.0 1,950 Audit 38,423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins 18.0 8.5 383 Governance 33,706. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

George E. Stebbins 18.0 15.0 350 Audit 34,372. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker2 6.0 0.0 — 8,359. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kaye Hurst Whitehead 18.0 29.5 175 Human Resources 38,397. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson 18.0 13.5 1,846 Human Resources 35,693. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tony G. Wolfe 18.0 30.5 175 Human Resources 37,172

Total $11,442 $668,428

1 The number of board meeting days and per diem totals include travel time to and from meetings.2 Elected to Board of Directors in October 2013.3 Term expired in October 2013.4 All directors serve on board committees. The additional compensation paid was for serving as a committee chair or participation in meetings not held in conjunction with board meeting dates.



SENIOR OFFICERSThe senior officers and the date each began his/her current position include:

Name Position Business experience and employment during past five years

William Johnson President and Chief Executive Officer Vice President of Operations/Information Services for AgriBank fromAugust 2006 to March 2009; Senior Vice President and Chief RiskInformation Officer for AgriBank from March 2009 to January 2011;Executive Vice President of Business Services for AgriBank fromJanuary 2011 to February 2011; President and Chief Executive Officer-Elect of Farm Credit Services of Mid-America from March 2011 to May2011; President and Chief Executive Officer of Farm Credit Mid-Americafrom May 2011 to present.*

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Randall Barnard Senior Vice President — Risk Management Vice President — Internal Audit October 1999 to February 2010; SeniorVice President — Risk Management March 2010 to present.

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Paul Bruce Senior Vice President — Financial Operations and Senior Vice President — Financial Operations and Chief Financial OfficerChief Financial Officer from March 2003 to present.

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Heather Hornback Senior Vice President — Human Capital Director of Training and Development from April 2001 to December2008; Vice President — Human Resources from January 2009 to May2012; Senior Vice President — Human Capital from June 2012 to present.

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Philip Kimmel Senior Vice President — Credit and Chief Credit Officer Senior Vice President — Credit and Chief Credit Officer from January2008 to present.

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Keith Lane Senior Vice President — Agribusiness Vice President — Agribusiness and Dealer Credit from March 2007 toOctober 2011; Senior Vice President — Agribusiness from November 2011to present.

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David Lynn Senior Vice President — Financial Services Senior Vice President — Financial Services from September 2002 to present.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Richard Poe Senior Vice President — Financial Services Senior Vice President — Financial Services from July 2007 to present.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nancy Sparrow General Counsel General Counsel from June 2008 to present.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Daniel Wagner Senior Vice President — Chief Information Officer Vice President and Chief Technology Officer for Farm Credit Services ofAmerica from November 2008 to May 2012; Senior Vice President — ChiefInformation Officer of Farm Credit Mid-America from June 2012 to present.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

* On February 1, 2013 Farm Credit Services of Mid-America, ACA name was changed to Farm Credit Mid-America, ACA.

Other business interests where a senior officer served as a director or senior officer compensation program supports our risk management goals throughofficer include: its balance of the following: (1) a balanced mix of base and variable pay, (2) aWilliam Johnson is a director of the Local Food Association Board (agriculture). balanced use of performance measures that are risk-adjusted where appro-

priate, and (3) a pay-for-performance process that allocates individualRandall Barnard is a partner of Barnard Farm (family farming operation). awards based on both results and how those results were achieved.

Paul Bruce is a director of Farm Credit Foundations (employee benefits). Elements of Compensation: Senior officers, including the CEO, are compensatedwith a mix of direct cash and retirement plans generally available to all

SENIOR OFFICER COMPENSATION employees. The Board of Directors determines the appropriate balance ofCompensation Overview: The CEO and senior officer compensation program’s base salary and short-term incentives, while keeping their responsibilitiesdesign and governance follows prudent risk management standards, while to shareholders top of mind. Base salary and short-term incentives areproviding total compensation that promotes the association’s mission and intended to be competitive with annual compensation for comparable posi-business strategy to ensure a safe, sound, and dependable source of credit tions at peer organizations.and related services for agriculture and rural America. The association’scompensation philosophy aims to provide total cash compensation that is Base Salary: Base salaries for all team members, including the CEO and seniorcompetitive within the relevant market in order to recruit, reward and officers, are determined by the position and responsibilities, performance,retain team members to meet the association’s objectives, while remaining and competitive market compensation data. The CEO’s base salary increasealigned with the best interests of cooperative shareholders. The senior is determined by combining an individual performance rating established by


the Board of Directors and the association’s performance. Senior officer Board of Directors will set independent three-year performance objectives atbase salary increases are determined by each officer’s individual perform- the beginning of each plan year, including efficiency, credit quality, and Aver-ance rating. CEO and senior officer base salary programs are annually age Daily Balance (ADB) growth. In addition, the Board of Directors, at its solereviewed and approved by the Board of Directors. discretion, may increase or decrease the amount of the incentive calculated.

Short-term Incentive: The Board of Directors approves the short-term incentive The first plan year will be from 2014 through 2016, and the payout will occurprogram each year and eligible team members, including the CEO and senior during the first quarter of 2017. The Board of Directors must approve allofficers, participate in the program. The 2013 program included team and payouts. In addition, to create the desired alignment between compensationassociation performance measures based on financial and business results, and long-term performance sooner, there will be a one-time two-year tran-association initiatives, and credit performance. These measures include effi- sition program that runs from 2014 to 2015. The payout for this program willciency ratio, earning asset growth, crop insurance growth, adverse credit, credit occur during the first quarter of 2016. The Human Resources Committee ofadministration, and loan turnaround time. Association-level measures are the Board of Directors will administer the plan as it relates to the CEO andapproved by the Board of Directors and are consistent with the association’s delegate the administration as it relates to other participants to the CEObusiness plan for the corresponding year. Team measures align to the associa- and human resources function. In addition, the CEO, at his sole discretion,tion and also include measures specific to each business division. Payouts are may increase or decrease the amount of the incentive calculated based onearned only when specific levels of performance are achieved, and are paid out market compensation and individual contributions and performance.within 75 days of the end of the plan year (the plan year is the calendar year).The 2014 short-term program will be similar to the 2013 program. Retirement Plans: We also have various post-employment benefit plans which

are generally available to all association employees, including the CEO andThe CEO’s short-term incentive opportunity is established by the Board of senior officers, based on dates of service to the association and are notDirectors. The Board of Directors has full discretion regarding the amount of otherwise differentiated by position, unless specifically stated. Informationthe payout, and it has consistently used the results from the short-term incen- regarding the post-employment benefit plans is included in Notes 2 and 10tive plan to determine the payout amount. The CEO’s short-term incentive is of this Annual Report.based solely on the association’s performance, while senior officer short-termincentive is based on both their team (35%) and the association’s (65%) per- Other Components of Compensation: Additionally, compensation associated with anyformance. Senior officers’ team measures are established by the CEO. company-paid vehicles, group term life insurance premiums, disability insurance

premiums, or dependent financial aid may be made available to the CEO andLong-term Incentive: In 2013, the Board of Directors approved implementing a senior officers based on job criteria or similar plans available to all employees.long-term incentive program, beginning in 2014, to align the CEO and seniorofficers to the association’s long-term business objectives, while providing the A summary of compensation earned by the CEO and senior officers followsopportunity for a competitive market-based total compensation package. The (in thousands):

Name of Individual Year Salary Bonus Deferred/Perquisites Other Total

William Johnson, CEO 2013 $457 $202 $58 $147 $864. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

William Johnson, CEO 2012 414 224 5 23 666. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

William Johnson, CEO 2011 385 155 7 132 679. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Winters, CEO1 2011 429 — 12 26 467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aggregate number of senior officers excluding CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nine 2013 $1,869 $623 $43 $887 $3,422. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nine 2012 1,641 686 28 134 2,489. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nine2 2011 1,440 373 22 68 1,903. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Mr. Winters retired August 2011.2 Includes senior officer who retired February 2011.



The amount included in ‘‘Other’’ in the preceding table includes: No tax reimbursements are made to senior officers.– Compensation paid related to the relocation of senior officers in 2012.– In 2011, the amount includes monetary and non-monetary gifts for the Members may request information on the compensation paid during 2013 to

retirement of Mr. Winters which was effective August 31, 2011, as well as the individuals included in the preceding table. In accordance with the FCAthe relocation of Mr. Johnson who became President and Chief Executive Regulations, an advisory vote on CEO and/or senior officer compensation isOfficer-Elect effective March 16, 2011. Mr. Johnson became President and required when five percent of the voting stockholders petition for suchChief Executive Officer effective May 1, 2011. vote. Although the advisory votes are non-binding, our Board of Directors

– Any changes in the value of pension benefits beginning in 2013. The will take into consideration the outcome of the vote when making futurechange in value of the pension benefits is defined as the change in the CEO and senior officer compensation decisions. Beginning in 2015, the FCAvested portion of the present value of the accumulated benefit obligation Regulations require a non-binding vote by the voting stockholders, alsofrom December 31, 2012 to December 31, 2013 for the District-wide Pen- referred to as an advisory vote, to be held if compensation (exclusive of thesion Plan and the Pension Restoration Plan, as applicable, as disclosed in value of the change in pension benefits), as reported in the December 31,Note 10 of the consolidated financial statements. This value is not 2014 Annual Report, for either the CEO or the aggregate senior officer groupreflected for the years 2012 or 2011. increased 15 percent or more from December 31, 2013. During the year

– Employer match on defined contribution plans available to all employees. ended December 31, 2013 no advisory vote was held.For comparability, disclosures from 2012 and 2011 have been modified toinclude this match.

A summary of the pension benefits attributable to the CEO and senior officers as of December 31, 2013 follows (dollars in thousands):

Present Value of Payments MadeYears of Accumulated During the

Name of Individual Plan Credited Service Benefits Reporting Period

William Johnson, CEO AgriBank District Retirement Plan 31.2 $390 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank District Pension Restoration Plan 31.2 84 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aggregate number of senior officers, excluding CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eight AgriBank District Retirement Plan 31.8 $9,362 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effective January 1, 2007, the AgriBank District Retirement Plan was closed On January 17, 2014, the President signed into law the Consolidated Appro-to new employees. Therefore, any employee starting employment with the priations Act which includes language prohibiting the FCA from using anyAgriBank District after that date are not eligible to be in the plan. funds available to ‘‘to implement or enforce’’ the regulation. In addition, on

February 7, 2014, the President signed into law the Agricultural Act of 2014.On October 3, 2012, FCA adopted a regulation that requires all System Section 5404 of the law directs FCA to within 60 days of enactment of theinstitutions to hold advisory votes on the compensation for all senior law ‘‘review its rules to reflect the Congressional intent that a primaryofficers and/or the CEO when the compensation of either the CEO or the responsibility of boards of directors of Farm Credit System institutions, assenior officer group increases by 15 percent or more from the previous elected representatives of their stockholders, is to oversee compensationreporting period. In addition, the regulation requires associations to hold an practices.’’ FCA has not yet taken any action with respect to their regulationadvisory vote on CEO and/or senior officer compensation when 5 percent of in response to these actions.the voting stockholders petition for the vote and to disclose the petitionauthority in the annual report to shareholders. The regulation became Transactions with Senior Officers and Directorseffective December 17, 2012, and the base year for determining whether Information regarding related party transactions is discussed in Note 11 ofthere is a 15 percent or greater increase was 2013. No association has held an this Annual Report.advisory vote based on a stockholder petition in 2013.


Travel, Subsistence, and Other Related Expenses Relationship with Qualified Public AccountantDirectors and senior officers are reimbursed for reasonable travel, subsis- There were no changes in independent auditors since the last Annualtence, and other related expenses associated with business functions. A copy Report to members and we are in agreement with the opinion expressed byof our policy for reimbursing these costs is available by contacting us at: the independent auditors. The total fees paid during 2013 were $175 thou-

sand. The fees paid were for audit services.Farm Credit Mid-America, ACA

P.O. Box 34390 Financial StatementsLouisville, KY 40232 The ‘‘Report of Management’’, ‘‘Report on Internal Control Over Financial

(800) 444-FARM Reporting’’, ‘‘Report of Audit Committee’’, ‘‘Independent Auditor’s Report’’,www.e-farmcredit.com ‘‘Consolidated Financial Statements’’, and ‘‘Notes to Consolidated Financial

Statements’’ are presented prior to this portion of the Annual Report.The total directors’ travel, subsistence, and other related expenses were$243 thousand, $206 thousand, and $180 thousand in 2013, 2012, and 2011, Credit and Services to Young, Beginning, and Small Farmers and Ranchersrespectively. Information regarding credit and services to young, beginning, and small

farmers and ranchers, and producers or harvesters of aquatic products isInvolvement in Certain Legal Proceedings discussed in an addendum to this Annual Report.No events occurred during the past five years that are material to evaluat-ing the ability or integrity of any person who served as a director or senior Equal Employment Opportunityofficer on January 1, 2014 or at any time during 2013. We are an equal opportunity employer. It is our policy to provide equal

employment opportunity to all persons regardless of race, color, religion,Member Privacy national origin, sex, age, disability, veteran status, genetic information, sex-The FCA Regulations protect members’ nonpublic personal financial infor- ual orientation, creed, marital status, status with regard to public assis-mation. Our directors and employees are restricted from disclosing infor- tance, membership or activity involving a local human rights commission, ormation about our association or our members not normally contained in any other characteristic protected by law. We comply with all state and localpublished reports or press releases. equal employment opportunity regulations. We conduct all personnel deci-

sions and processes relating to our employees and job applicants in anenvironment free of discrimination and harassment.


YOUNG, BEGINNING, AND SMALL FARMERS AND RANCHERS (UNAUDITED)

The Board of Directors has approved a policy to serve the credit and related New Loan Portfolioneeds of young, beginning and small farmers and ranchers in our territory. We have also set a goal that 20% or more of new loans or leases will be closedThe definitions of young, beginning and small farmers and ranchers follow: to young farm customers, 30% or more new loans or leases will be closed to– Young: a farmer, rancher, producer or harvester of aquatic products who beginning farmers, and 60% or more of new loans or leases will be closed

is age 35 or younger as of the loan transaction date. to small farm customers.– Beginning: a farmer, rancher, producer or harvester of aquatic products

% of Loanswho has 10 years or less farming or ranching experience as of the loanActual Goaltransaction date.

– Small: a farmer, rancher, producer or harvester of aquatic products who Young 22.2% 20.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

normally generates less than $250,000 in annual gross sales of agricul- Beginning 33.8% 30.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .tural or aquatic products.Small 62.7% 60.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEMOGRAPHICSSAFETY AND SOUNDNESS OF THE PROGRAMWe have used the 2007 USDA Ag Census as our source of demographic dataIt is the responsibility of the President and Chief Executive Officer or hisfor Young, Beginning and Small Farmers (YBS). There are 301,339 farms indesignee for development of appropriate standards and procedures to sup-the four state territory of Indiana, Kentucky, Ohio and Tennessee. Of thatport implementation of this policy and special programs approved by thenumber, there are 17,439 young farmers (or 5.8%); 76,052 beginning farmersBoard of Directors. The Board of Directors reviews the ongoing adequacy of(or 25.2%), and 282,415 small farmers (or 93.7%). The census data is as ofthis policy at least annually and monitors progress on a quarterly basis.2007 whereas our portfolio data is based on the number of current YBS

customers and/or loans in the current year.Management has developed a young, beginning and small farmer programthat provides sound and constructive credit through standard or specialMISSION STATEMENTprograms targeted to this group.Our mission for the Young, Beginning and Small Farmer Program is to

provide sound and constructive credit to meet the needs of the next genera-YBS PROGRAM FEATUREStion of young, beginning and small farmers by offering standard or specialWe implemented a young, beginning and small farmer and rancher programprograms targeted to this group.with four components, all of which will continue in 2014.

TARGETS AND GOALS– Special underwriting program for young and beginning farmers. In 2013,Total Loan Portfolio

we provided special underwriting standards on 142 loans representingThe goal of the young farmer program is to maintain the percentage that$28.0 million in loan volume.young farmers represent of the total farm members in our portfolio at 25%

– Farm Service Agency (FSA) loan guarantee reimbursement of 50% foror higher; the goal of the beginning farmer program is to maintain theyoung or beginning farmers. In 2013, we waived our origination fees andpercentage that beginning farmers represent of the total farm members inreimbursed members 50% of their FSA guarantee fees on 53 loans repre-our portfolio at 45% or higher; the goal of the small farmer program is tosenting more than $157 thousand in reimbursed FSA fees.maintain the percentage that small farmers represent of the total farm

– Working with small and part-time farmers to help them invest in diversi-members in our portfolio at 70% or higher.fied businesses and other assets that maintain and strengthen the infra-structure of rural communities. In 2013, the association made 373 loansIn 2013, there were 80,958 farm members in our portfolio. Of that number,representing $57.7 million in loan volume, to small and part-time farmersthere were 22,590 young farmers, 42,283 beginning farmers, and 67,477for diversified investment purposes.small farmers. Farm members could qualify in more than one category.

– Reimbursement of up to $500 dollars (one time only) to young or begin-These numbers surpass the goals as follows:ning members who attend business, production, financial management, or

% of Member Base agricultural leadership development programs that will help them intheir farm business.Actual Goal

Young 27.9% 25.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Beginning 52.2% 45.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small 83.4% 70.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


STEWARDSHIP AND SPONSORSHIPS OUTREACH AND EDUCATIONIn 2013, we held numerous grain marketing and crop seminars attended by In 2013, we sponsored specific university programs designed to attract andYBS customers throughout our territory. We also supported young people retain young people in the field of agriculture providing one-time financialby providing more than $125,000 in scholarships to students from Indiana, gifts to Wilmington College of Ohio, Austin Peay State University in Tennes-Ohio, Kentucky, and Tennessee enrolled in college programs related to agri- see, Middle Tennessee State University, and Ivy Tech Community College inculture careers. The Board has a ‘‘stewardship philosophy’’ that contributed Indiana. We continue to serve as one of five founding partners in Purdue’san additional $2.1 million in programs and gifts that benefitted rural com- Center for Commercial Agriculture and are a member of the council withmunities, young people, commodity groups, and other agricultural organiza- the objective of becoming the leading source of management education andtions. Employees also participated in and supported organizations like FFA, knowledge generation for farmers. We also partner with the University of4-H, and Young Farmer groups by conducting training and education ses- Tennessee in creating the UT Scholars Program which provides internships,sions to help the next generation of farmers. We also made capital invest- educational opportunities, and financial support to students pursuingments at 4-H camps across our territory. degrees — and eventually careers — in agriculture.

In 2014, we will launch new underwriting standards which will enable us toprovide greater financial support to young and beginning farmers. Addition-ally, we will launch online learning tools aimed to engage and educate youngand beginning borrowers on farm financial management.


FUNDS HELD PROGRAM

The Association offers a Funds Held Program (Funds Held) that provides for Commercial loans, with the exception of lines of credit, are paid a rate ofcustomers to make uninsured advance payments on loans. The following interest similar to short-term money market rates. The rate was 0.40 per-terms and conditions apply to all Funds Held unless the loan agreement, or cent as of January 1, 2014.related documents, between the Association and the customer provide forother limitations. WITHDRAWALS

Money in Funds Held may be withdrawn for the following items, dependingPAYMENT APPLICATION on the customer’s loan program.Loan payments received by the Association before the loan has been billedwill normally be placed into Funds Held and applied against the next install- – Customers may request that Funds Held or interest on Funds Held bement date. Loan payments received after the loan has been billed will be applied to their loan balance at any time.directly applied to the installment due on the loan and related charges, if – Customers with real estate and commercial loans may use Funds Held forany. Funds received in excess of the billed amount will be placed into Funds future installments or insurance. In addition, customers may make up toHeld unless the customer has specified the funds to be applied as a special four additional withdrawals for other approved purposes in lieu ofprepayment of principal. increasing the loan amount. These four withdrawals have a minimum size

limit of the lesser of $500 or the remaining balance in Funds Held in aWhen a loan installment becomes due, moneys in Funds Held for the loan 12-month period.will be automatically applied toward the installment on the due date. Anyaccrued interest on Funds Held will be applied first. If the balance in Funds ASSOCIATION OPTIONSHeld does not fully satisfy the entire installment, the customer must pay the In the event of default on any loan, or if Funds Held exceeds the maximumdifference by the installment due date. limit as established above, or if the Association discontinues its Funds Held

program, the Association may apply funds in the account to the unpaidACCOUNT MAXIMUM balance and other amounts due, and shall return any excess funds to theThe amount in Funds Held may never exceed the unpaid principal balance customer.of the loan. Many loans have a further limit equal to the total payments duefor the next year. In addition, Funds Held on loans with certain prepayment If the customers sell, assign or transfer any interest in the underlyingpenalties may not exceed 10 percent of the original principal balance. Funds collateral, the Association may apply the funds in the account against theHeld is generally not available on revolving lines of credit loans. remaining loan balance.

INTEREST RATE If all customers who are party to the loan are deceased, the Association mayInterest will accrue on Funds Held at a simple rate of interest that may be apply the funds in the account to the remaining loan balance.changed by the association from time to time. But the rate will not exceedthe interest rate charged on the related loan except in rare cases. The UNINSURED ACCOUNTcurrent interest rate is based upon the following criteria: Funds Held is not a depository account and is not insured. In the event of

Association liquidation, customers having balances in Funds Held shall beReal estate loans closed under the loan program in effect prior to October 1, notified according to FCA Regulations then in effect.1994, are paid a rate of interest equal to the loan rate.

QUESTIONSReal estate loans closed under the loan program in effect on October 1, 1994, Please direct all questions regarding Funds Held to your local Farm Creditand later are paid a rate of interest similar to short-term money market Mid-America representative by calling 1-800-444-FARM (3276).rates. The rate was 0.40 percent as of January 1, 2014.


JOB #: 52906 Print Scale: NoneCLIENT CODE: FARM01 Version: _CLIENT: Farm Credit

Description: BW Annual Report 2013 - Bylaws Publication: _Document Name: 52906_FC_AnnualReport2013_By-

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NOTICE TO CUSTOMERS CONCERNING INVESTMENTS

This notice contains information about your stock investment in Farm Credit Mid-America, ACA (Association). Please read it carefully and make sure you understand both the benefits and risks of an investment in the Association.

Association Capitalization Bylaws (a copy of which is included as part of this publication) require an investment in stock or participation certificates in the amount of 2 percent of the loan amount or $1,000, whichever is less, when obtaining a loan from either of its wholly owned subsidiaries, the Farm Credit Mid-America, FLCA (FLCA) or the Farm Credit Mid-America, PCA (PCA). The Association’s Board of Directors (Board) has the discretion to apply the stock requirement on a per-customer basis or a per-loan basis. Currently, the stock requirement is on a per customer basis.

The Association also sells stock or participation certificates to any eligible customer of the FLCA or PCA as a condition of obtaining a lease and as a con-dition for purchasing related services. The amount of stock or participation certificates required may range from one share to no more than the require-ment for obtaining a loan, at the discretion of the Board. At this time, the Board has decided to require one share for both leasing and related services.

The voting stock issued by the Association is called “Class D Stock” (Stock) and is issued only to farmers, ranchers and producers or harvesters of aquatic products. Other persons who are eligible to borrow or lease from or purchase financially related services with the FLCA or PCA, but who are not eligible to own Stock, must purchase “Participation Certificates” (Certificates), which are issued on essentially the same terms as Stock except as described below.

Stock and Certificates issued as a condition of doing business with the Association (which may include stock issued in connection with loan renew-als, assumptions, refinancing, etc.) are an investment in the Association that is at risk and not a compensating balance.

HOW STOCK AND CERTIFICATES ARE PURCHASED

Shares of Stock (and units of Certificates) are sold for their par value (or face amount) of $5 each and can be paid for either with cash or with the proceeds of a loan.

When the purchase price is borrowed, the amount of the FLCA and/or PCA loan includes the cost of the Stock or Certificates and interest is charged on the entire loan. The portion of the FLCA or PCA loan proceeds attributable to the purchase price of the Stock or Certificates is withheld and applied to the purchase price of the Stock or Certificates. The total amount of the loan, including the portion used to pay for the Stock or Certificates, is a legally enforceable obligation that must be repaid in full. The Association does not issue physical certificates for Stock or Certificates. Instead, the ownership of Stock or Certificates is evidenced by entries recorded on the combined books of the Association as reflected in periodic account statements sent to each customer.

CERTAIN IMPORTANT CHARACTERISTICS OF STOCK AND CERTIFICATES

The principal difference between Stock and Certificates is that the Stock entitles its holder to one vote (regardless of how many shares are owned) with respect to the election of Association directors and other matters on which stockholders are entitled to vote. Holders of Certificates have no vot-ing rights. In all other respects, Stock and Certificates have substantially the same rights and restrictions.

Association bylaws provide that dividends may be paid on Stock or Certificates with the approval of the Board. Dividends may not be paid if, after or due to such action, the permanent capital of the Association would thereafter fail to meet the minimum capital adequacy standards established by the FCA.

The FLCA or PCA takes a lien on the Stock or Certificates held by a customer as additional security for the customer’s loan. If the customer defaults, the value of the customer’s investment (not to exceed par value, or face amount) may be applied against the balance due on the loan. If the customer’s Stock or Certificates are transferred, they are still subject to this lien. In any event, Stock and Certificates are transferable only to persons eligible to purchase such equities.

Stock and Certificates do not appreciate in value. Any retirement or con-version will be at their original issue price or, if less, their book value. The possibility that this investment may result in a loss is discussed below under the heading “Impairment.”

RETIREMENT OF STOCK AND CERTIFICATES

Under Association bylaws, Stock and Certificates are retired only at the dis-cretion of the Board. Stock is retired at the lower of book value or par value, while Certificates are retired at the lower of book value or face amount. Book value will be determined in accordance with generally accepted accounting principles (GAAP).

Under Federal Law, there is no automatic right to have Stock or Certificates retired upon repayment of the customer’s loan or when the customer ceases to conduct other business with the FLCA and/or PCA.

Under the Association’s existing Equity Policy, equity is on a customer basis and is required on existing fixed, adjustable or variable rate loans origi-nated after July 1, 1995, in an amount not less than two percent or $1,000, whichever is less, according to the customer’s total loan balances (when the customer is the same on each loan).

Equity of one share is required on a lease or for a non-customer to qualify for related services.

The Equity Policy may be amended by the Board at any time at their sole discretion and in accordance with the Act, Regulations and Bylaws.

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Effective 01/01/03, the Board’s policy permits the retirement of customer equity only if the Association’s permanent capital percentage is above the Board’s stated minimum, established annually. The Board allows stock to be retired by management provided that retirements are in accordance with the Association’s capital plan; the Association’s permanent capital ratio will be in excess of 12 percent after any such retirements; the Association meets and maintains all applicable minimum surplus and collateral standards; and the aggregate amount of stock purchases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,– a non-borrower is no longer a purchaser of related services, or– the customer’s loan is sold into the secondary market without recourse, or – management approves a partial retirement when a customer’s loan is in

good standing and due to paydown, requests excess stock to be retired.

The retirement policy may be suspended or modified at any time at the discre-tion of the Board in order to protect the financial condition of the Association.

The Association is prohibited from retiring Stock or Certificates if such retirement results in the Association’s failure to satisfy the minimum cap-ital adequacy standards established by the FCA.

Of course, even though you may be given the opportunity to have your stock retired, you are not required to retire your Stock or Certificates after repaying your FLCA and/or PCA loan and may continue to hold this invest-ment. However, if you do not borrow from the FLCA and/or PCA during the following two years, your Class D Stock will be converted into non-voting Class C Stock.

IMPAIRMENT

Your ownership of Stock or Certificates in the Association is an investment and is subject to certain risks that could result in a partial or complete loss of investment. You are responsible for repayment of the entire amount of the FLCA and/or PCA loan, including the amount borrowed to pay for your Stock or Certificates, regardless of the value of your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of inadequate evaluation of credit risks or adverse trends in agriculture, such as loss of international markets, over-production, weather conditions or disease,

– increases in the amount of non-accrual FLCA and/or PCA loans and prop-erties acquired from borrowers that reduce revenues, and

– impairment of AgriBank (Bank) stock owned by the Association due to losses in other associations within the district, loan losses and operat-ing expenses of the Bank and the Bank’s joint and several liabilities on

Systemwide debt securities issues by other Banks in the national Farm Credit System.

As a result of these or any other risks, the capital of the Association could become impaired. Impairment means that the book value of the Stock or Certificates has declined below par value (or face value), which is $5 per share or unit. (For example, if the Association were to suffer loan losses which exceeded its other income, its bad debt reserve and its surplus accounts, the Stock and Certificates could have a book value less than $5 and thus would be impaired.) So long as the capital of the Association is impaired, its customers would receive less than they had paid for their stock upon retirement. If the Association were to be liquidated at the time when its capital is impaired, holders of Stock or Certificates would receive less than the par value or face amount of their investment and may suffer a total loss of their investment in the Association. However, in any event, customers would remain liable for the full amount of their loan from the FLCA and/or PCA, including the portion used to pay for the purchase of Stock or Certificates.

Of course, the Association will take all feasible action to prevent its capital from becoming impaired. The FLCA and PCA maintain loss reserves (and surplus accounts) to protect against this possibility.

The Farm Credit Act provides a mechanism for providing financial assistance to distressed Farm Credit System entities. This mechanism is described in the Association’s 2013 Annual Report. However, the assistance mechanisms in the Farm Credit Act provide no assurance to customers that Stock and Certificates will be protected. Therefore members are advised to review the financial statements of the Association and of the Bank and other available information about the Farm Credit System. Copies of the Association and the Bank’s Annual and Interim Reports to Investors are available from the Association upon request.

ASSOCIATION PERMANENT CAPITAL STANDARDS

The Association presently meets its minimum permanent capital standard. The Association does not know of any reason it will not meet its permanent capital standard on the next earnings distribution date, though no earnings distribution date is scheduled.

800 AUTHORIZED SHARES

The Association is authorized to issue:

a one million (1,000,000) shares of Class C Preferred Stock with a par value of $5 per share to be issued as provided in Section 810.3 of these Bylaws;

b an unlimited number of shares of Class D Common Stock with a par value of $5 per share to be issued as provided in Sections 810.4 and 845.2 of these Bylaws;

c the outstanding number of Participation Certificates as of the

CAPITALIZATION BYLAWS

Merger Date, of FLBA 4th, FLBA B and FLBA M and PCA 4th issued prior to October 6, 1988, which were converted by book entry at the par, face or stated value of $5 per unit into a like number of Class A Participation Certificates of the Association;

d an unlimited number of Class B Participation Certificates, with a face value of $5 per unit to be issued as provided in Section 810.6 of these Bylaws; and

e such number of shares of such other classes of Capital Stock as may be provided for in an amendment or amendments to these Bylaws as adopted pursuant to Article XIV, provided, however, if the class being proposed in any amendment or amendments is for Preferred Stock other than Preferred Stock to be issued to the Farm Credit System’s Financial Assistance Corporation, it shall be approved by majority of the shares of each class of stock affected by the preference, voting as a class, whether or not such classes are otherwise authorized to vote.

805 OWNERSHIP

Evidence of ownership of Capital Stock and Participation Certificates may be by book entry or in definitive form as pre-scribed by the Board.

In the event of an Authorization Event under Section 210 hereof, a borrower’s required investment in Association stock/participa-tion certificates (and the required conversion of such investment into a different class of equity) shall be determined by reference to the borrowing relationship with MidAm, PCA or MidAm, FLCA, as the case may be. Accordingly, upon an Authorization Event, all references to loans and outstanding loan balances in this Article shall refer to aggregate loans held or originated by Association, MidAm, PCA and MidAm, FLCA.

810 ISSUE, RIGHTS, PREFERENCES AND LIMITATIONS

OF CLASSES OF STOCK

810.1 CLASS A PREFERRED STOCK

a Issue: There shall be no Class A Preferred Stock issued other than those shares issued as a result of the conversion on Merger Date of PCA 4th’s Class A non-voting stock or a conversion in accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class A Preferred Stock shall have no voting rights.

c Rights: Rights of a holder to dividends, to patronage refunds, to transfer, to retirement, upon loss and upon impairment shall be subject to the Act, Regulations and in accordance with provisions of Section 815 (Application of Earnings and Losses), Section 830 (Dividends), Section 835 (Patronage Refunds),

ARTICLE VIII - CAPITALIZATION

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Section 840 (Transfer), Section 845 (Conversion), Section 850 (Retirement), Section 855 (Impairment) and Section 860 (Liquidation) of these Bylaws.

d Stock Protection: When retiring Class A Preferred Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class A Preferred Stock shall be issued or paid.

810.2 CLASS B COMMON STOCK

a Issue: There shall be no Class B Common Stock issued other than those shares issued as a result of the conversion of FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting rights.

c Rights: Rights of a holder to dividends, to patronage refunds, to transfer, to retirement, upon loss and upon impairment shall be subject to the Act, Regulations and in accordance with provisions of Section 815 (Application of Earnings and Losses), Section 830 (Dividends), Section 835 (Patronage Refunds), Section 840 (Transfer), Section 845 (Conversion), Section 850 (Retirement), Section 855 (Impairment) and Section 860 (Liquidation) of these Bylaws.

d Stock Protection: When retiring Class B Common Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class B Common Stock shall be issued or paid.

810.3 CLASS C PREFERRED STOCK

a Issue: This stock may be issued in accordance with the Act and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be permitted under a plan adopted by the Board;

3 | For allocated surplus distributions, dividend payments, and patronage distributions; and

4 | In accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class C Preferred Stock shall have no voting rights.

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Effective 01/01/03, the Board’s policy permits the retirement of customer equity only if the Association’s permanent capital percentage is above the Board’s stated minimum, established annually. The Board allows stock to be retired by management provided that retirements are in accordance with the Association’s capital plan; the Association’s permanent capital ratio will be in excess of 12 percent after any such retirements; the Association meets and maintains all applicable minimum surplus and collateral standards; and the aggregate amount of stock purchases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,– a non-borrower is no longer a purchaser of related services, or– the customer’s loan is sold into the secondary market without recourse, or – management approves a partial retirement when a customer’s loan is in

good standing and due to paydown, requests excess stock to be retired.

The retirement policy may be suspended or modified at any time at the discre-tion of the Board in order to protect the financial condition of the Association.

The Association is prohibited from retiring Stock or Certificates if such retirement results in the Association’s failure to satisfy the minimum cap-ital adequacy standards established by the FCA.

Of course, even though you may be given the opportunity to have your stock retired, you are not required to retire your Stock or Certificates after repaying your FLCA and/or PCA loan and may continue to hold this invest-ment. However, if you do not borrow from the FLCA and/or PCA during the following two years, your Class D Stock will be converted into non-voting Class C Stock.

IMPAIRMENT

Your ownership of Stock or Certificates in the Association is an investment and is subject to certain risks that could result in a partial or complete loss of investment. You are responsible for repayment of the entire amount of the FLCA and/or PCA loan, including the amount borrowed to pay for your Stock or Certificates, regardless of the value of your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of inadequate evaluation of credit risks or adverse trends in agriculture, such as loss of international markets, over-production, weather conditions or disease,

– increases in the amount of non-accrual FLCA and/or PCA loans and prop-erties acquired from borrowers that reduce revenues, and

– impairment of AgriBank (Bank) stock owned by the Association due to losses in other associations within the district, loan losses and operat-ing expenses of the Bank and the Bank’s joint and several liabilities on
















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Section 840 (Transfer), Section 845 (Conversion), Section 850 (Retirement), Section 855 (Impairment) and Section 860 (Liquidation) of these Bylaws.

d Stock Protection: When retiring Class A Preferred Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class A Preferred Stock shall be issued or paid.

810.2 CLASS B COMMON STOCK

a Issue: There shall be no Class B Common Stock issued other than those shares issued as a result of the conversion of FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting rights.


d Stock Protection: When retiring Class B Common Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class B Common Stock shall be issued or paid.

810.3 CLASS C PREFERRED STOCK

a Issue: This stock may be issued in accordance with the Act and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be permitted under a plan adopted by the Board;

3 | For allocated surplus distributions, dividend payments, and patronage distributions; and

4 | In accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class C Preferred Stock shall have no voting rights.

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d Fractional Shares: No fractional shares of Class C Preferred Stock shall be issued or paid.

810.4 CLASS D COMMON STOCK

a Issue: Class D Common Stock may only be issued to borrowers who are farmers, ranchers or producers or harvesters of aquatic products and other requirements of such borrowers as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting rights.


d Fractional Shares: No fractional shares of Class D Common Stock shall be issued or paid.

e Condition to Borrowing:

1 | Any borrower who is entitled to own Class D Common Stock shall acquire voting stock in the Association as a condition for obtaining a loan from the Association, MidAm, PCA or MidAm, FLCA. The amount of Class D Common Stock which a borrower shall be required to acquire shall be two (2) percent of the loan amount or $1,000, whichever is less. The Board shall establish from time to time whether the stock require-ment shall apply to each loan to a borrower or apply to a bor-rower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum permanent cap-ital standards the Class D Common Stock shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of bor-rowing from the Association, MidAm, PCA or MidAm, FLCA as the Board from time to time may determine.

f Condition to Lease: As a condition of obtaining a lease from Association, MidAm, PCA or MidAm, FLCA any lessee who is entitled to own Class D Common Stock shall be required to acquire Class D Common Stock in an amount as determined by the Board from time to time. The equity requirement to be not less than one share or the minimum requirement as set out in the Act and Regulations, if any, and not to exceed the equity requirement for obtaining a loan.

810.5 CLASS A PARTICIPATION CERTIFICATES

a Issue: There shall be no Class A Participation Certificates issued other than those units issued as a result of the conver-sion of FLBA 4th, FLBA B, FLBA M and PCA 4th’s Participation Certificates as of the Merger Date.

b Voting Rights: Class A Participation Certificates shall have no voting rights.


d Protection of Participation Certificates: When retiring Class A Participation Certificates in accordance with the Act, Regulations and these Bylaws, the units shall be retired at par value.

e Fractional Units: No fractional units of Class A Participation Certificates shall be issued or paid.

CAPITALIZATION BYLAWS (CONT)

810.6 CLASS B PARTICIPATION CERTIFICATES

a Issue: Class B Participation Certificates may be issued in accor-dance with the Act and Regulations:

1 | To borrowers who are rural residents to capitalize their rural housing loans.

2 | To borrowers who are persons or organizations furnishing to farmers and ranchers farm related services directly related to their agricultural production, to capitalize their loans.

3 | To other persons or organizations who are eligible to borrow or participate in loans from Association, MidAm, PCA or MidAm, FLCA but are not eligible to hold voting stock.

4 | For allocated surplus distributions, dividend payments, and patronage distributions.

5 | To any person who is not a stockholder but who is eligible to borrow from Association, MidAm, PCA or MidAm, FLCA for the purpose of qualifying such person for technical assistance, financially related services, and leasing services offered by Association, MidAm, PCA or MidAm, FLCA.

b Voting Rights: Class B Participation Certificates shall have no voting rights.


d Fractional Units: No fractional units of Class B Participation Certificates shall be issued or paid.


1 | Any borrower who is entitled to own Class B Participation Certificates shall acquire Participation Certificates as a condition for obtaining a loan from Association, MidAm, PCA or MidAm, FLCA. The amount of Class B Participation Certificates which a borrower shall acquire shall be two (2) percent of the loan amount or $1,000, whichever is less. The Board shall establish from time to time whether the certif-icate requirement shall apply to each loan to a borrower or apply to a borrower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).


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2 | If the Association fails to meet the minimum permanent cap-ital standards, the Class B Participation Certificates shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of bor-rowing as the Board from time to time may determine.

f Condition to Lease or Purchase of Financially Related Services: As a condition of obtaining a lease or purchasing financially related services from Association, MidAm, PCA or MidAm, FLCA any lessee or purchaser of financially related services who is enti-tled to own Class B Participation Certificates shall be required to acquire Class B Participation Certificates in an amount as deter-mined by the Board from time to time. The equity requirement to be not less than one share or the minimum requirement as set out in the Act and Regulations, if any, and not to exceed the equity requirement for obtaining a loan.

815 APPLICATION OF EARNINGS OR LOSSES

815.1 At the end of each fiscal year, the Association shall apply its earn-ings (including patronage allocations and refunds received from the FCB) for such fiscal year in the following order:

a to cover operating expenses, including additions to loan valu-ation reserves as provided by law;

b to restore the amount of any impairment of Stock and Participation Certificates as prescribed in Section 855.2 of these Bylaws;

c to restore the amount of any impairment of allocated surplus;

d to restore the amount of any impairment of paid-in surplus;

e to create and maintain an unallocated surplus account as provided in Section 820 of these Bylaws;

f to pay dividends on Stock of the Association if authorized pur-suant to Section 830 of these Bylaws;

g to make patronage distributions if authorized pursuant to Section 835 of these Bylaws; and

h to tra nsfer a ny rema i n i ng ea rn i ngs to the reser ved surplus account.

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d Fractional Shares: No fractional shares of Class C Preferred Stock shall be issued or paid.

810.4 CLASS D COMMON STOCK

a Issue: Class D Common Stock may only be issued to borrowers who are farmers, ranchers or producers or harvesters of aquatic products and other requirements of such borrowers as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting rights.


d Fractional Shares: No fractional shares of Class D Common Stock shall be issued or paid.


1 | Any borrower who is entitled to own Class D Common Stock shall acquire voting stock in the Association as a condition for obtaining a loan from the Association, MidAm, PCA or MidAm, FLCA. The amount of Class D Common Stock which a borrower shall be required to acquire shall be two (2) percent of the loan amount or $1,000, whichever is less. The Board shall establish from time to time whether the stock require-ment shall apply to each loan to a borrower or apply to a bor-rower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum permanent cap-ital standards the Class D Common Stock shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of bor-rowing from the Association, MidAm, PCA or MidAm, FLCA as the Board from time to time may determine.






















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2 | If the Association fails to meet the minimum permanent cap-ital standards, the Class B Participation Certificates shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of bor-rowing as the Board from time to time may determine.

f Condition to Lease or Purchase of Financially Related Services: As a condition of obtaining a lease or purchasing financially related services from Association, MidAm, PCA or MidAm, FLCA any lessee or purchaser of financially related services who is enti-tled to own Class B Participation Certificates shall be required to acquire Class B Participation Certificates in an amount as deter-mined by the Board from time to time. The equity requirement to be not less than one share or the minimum requirement as set out in the Act and Regulations, if any, and not to exceed the equity requirement for obtaining a loan.

815 APPLICATION OF EARNINGS OR LOSSES

815.1 At the end of each fiscal year, the Association shall apply its earn-ings (including patronage allocations and refunds received from the FCB) for such fiscal year in the following order:

a to cover operating expenses, including additions to loan valu-ation reserves as provided by law;

b to restore the amount of any impairment of Stock and Participation Certificates as prescribed in Section 855.2 of these Bylaws;

c to restore the amount of any impairment of allocated surplus;

d to restore the amount of any impairment of paid-in surplus;

e to create and maintain an unallocated surplus account as provided in Section 820 of these Bylaws;

f to pay dividends on Stock of the Association if authorized pur-suant to Section 830 of these Bylaws;

g to make patronage distributions if authorized pursuant to Section 835 of these Bylaws; and

h to tra nsfer a ny rema i n i ng ea rn i ngs to the reser ved surplus account.

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815.2 In the event of a net loss for any fiscal year, after applying earn-ings for such fiscal year as provided in Section 815.1 above, such loss shall be absorbed by, first, charges to the unallocated surplus account; second, impairment of paid-in surplus; third, impairment of the allocated surplus account; fourth, impairment of Class B Common Stock, Class D Common Stock, Class A Participation Certificates, Class B Participation Certificates, concurrently; and fifth, impairment of Class A Preferred Stock and Class C Preferred Stock, concurrently. Notwithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in accordance with Section 4.9A of the Act.

820 SURPLUS ACCOUNTS

The Association shall create and maintain an unallocated surplus account and may maintain an allocated surplus account. Except as provided in Section 815, the unallocated surplus account may not be reduced and no part thereof may be transferred to the allocated surplus account.

825 ALLOCATED SURPLUS ACCOUNTS

825.1 The Association may, subject to the Act and the Regulations, create and maintain an allocated surplus account consisting of earnings held therein and allocated to borrowers on a patron-age basis in accordance with Section 835 of these Bylaws. In the event of a net loss for any fiscal year, such allocated sur-plus account shall be subject to impairment in the order speci-fied in Section 815.2 of these Bylaws, and on the basis of latest allocations first.

825.2 Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all surplus account allocations owned by any borrower, and all distributions thereof, as additional collateral for such borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be.

825.3 When the debt of a borrower is in default or is in the process of final liquidation, the Association may, upon notice to the bor-rower, order any and all surplus account allocations owned by such borrower to be applied against the indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retirement and application against indebtedness of surplus account allocations shall be before similar retirement and application of Stock or Participation Certificates owned by the borrower.

825.4 At the Board’s discretion and subject to the Act, Regulations, and any other restrictions, when all of the Stock and Participation Certificates of the Association owned by a borrower are retired or otherwise disposed of, any surplus account allocations owned by such borrower may also be retired, upon request by the bor-rower and subject to the approval of the Board, and the proceeds paid to the borrower. Alternatively, if the Board so directs, upon notice to the borrower such surplus account applications may be applied against any of the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. As a condition, however, to the approval of a former borrower’s application for an advance within two (2) years after retirement hereunder, the applicant must first repay any allocated surplus proceeds resulting from such retirement which would not otherwise have been paid through normal distributions.

825.5 Subject to the Act and the Regulations, allocated surplus may be distributed, oldest allocations first, in Class C Preferred Stock of the Association or in cash. The cash proceeds may be applied against the indebtedness of the borrower to the Association. In no event shall such distributions reduce the surplus account below the minimum amount prescribed by the Act and the Regulations. Distributions of less than the full amount of all allocations issued as of the same date shall be on a pro rata basis. If any part of a dis-tribution in Class C Preferred Stock to one borrower is less than $5, such distribution may be held by the Association and accumulated with subsequent partial distributions to equal one whole share of Class A Preferred Stock or Class C Preferred Stock.

830 DIVIDENDS

830.1 In accordance with the Act and the Regulations, the Board may declare dividends on the Stock and Participation Certificates of the Association. Such dividends may be paid on Class A Preferred Stock and Class C Preferred Stock alone or on all classes of Stock and Participation Certificates. No dividends may be paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates during any fiscal year with respect to which the Association has obligated itself to distribute earnings on a patronage basis pursuant to Section 835 of these Bylaws. The rate of dividends paid on Class A Preferred Stock and Class C Preferred Stock for any fiscal year may not be less than the rate of dividends paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates for such year and, similarly, the rate of dividends on Class B Common Stock and Class D Common Stock may not be less than the rate paid on Class A Participation Certificates and Class B Participation Certificates.


830.2 Dividends may be paid to holders of record on the effective date of the declaration, provided the Stock or Participation Certificates were outstanding for at least sixty (60) calendar days prior to the effective date of the declaration.

830.3 Dividends on Stock and Participation Certificates may be paid in cash, Class C Preferred Stock, or partly in cash and partly in Stock, except that dividends on Stock held by the FCB shall be paid in cash. If any part of such dividends payable in Stock to one borrower are less than $5, the dividends may be distributed in cash or held by the Association and accumulated with subsequent dividends until the retained dividends equal $5, so that the dividends may be distrib-uted as one whole share of Class C Preferred Stock.

830.4 Dividends shall be noncumulative.

835 PATRONAGE REFUNDS

835.1 Prior to the beginning of any fiscal year, the Board may adopt a resolution in accordance with the Act and the Regulations, so as to obligate the Association to distribute to borrowers on a patronage basis all or any portion of available net earnings of Association for such fiscal year, or for that and subsequent fiscal years. However, no patronage distribution will be paid if the earnings available for distribution do not exceed $500,000.

835.2 All patronage distributions shall be in the proportion that the amount of interest earned by Association, MidAm, PCA or MidAm, FLCA on its loans to each borrower bears to the total interest earned by Association, MidAm, PCA or MidAm, FLCA on all such loans outstanding during the fiscal year, except that another pro-portionate patronage basis may be used upon approval by the Board in accordance with the Act and the Regulations.


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835.3 Net earnings of any fiscal year shall be available for patronage distribution only after making the applications as required in (a) through (e) of Section 815 and paying dividends on Class A Preferred Stock and Class C Preferred Stock. Patronage allocations and refunds received from the FCB in the form of stock shall be excluded from net earnings available for patronage distributions and dividends. The amount available for patronage distributions for any fiscal year shall in no event exceed the net earnings from patronage from Association, MidAm, PCA and MidAm, FLCA bor-rowers and from the patronage received from the FCB in the form of cash for such year.

835.4 Patronage distributions may be in cash, Class C Preferred Stock, allocations of earnings retained in an allocated surplus account, or any one or more of such forms of distribution, except that at least twenty percent of the total patronage distributions to any borrower for any fiscal year shall always be in cash. Cash distribu-tions may not exceed twenty percent of the patronage distribution if such distribution would cause the surplus account at the end of the fiscal year for which the distribution is paid to be less than the minimum amount prescribed by the Act and the Regulations. Any part of a patronage distribution in Class C Preferred Stock to one borrower that is not a multiple of $5 may be distributed in cash or held by the Association for the borrower and included in a subse-quent distribution.

835.5 Each holder of Class B Common Stock or Class D Common Stock of this Association shall, by such act alone, consent that the amount of any distributions with respect to patronage which are made in written notices of allocation, as defined in 26 U.S.C. 1388 (i.e. patronage allocations of surplus account and patronage refunds paid in Class C Preferred Stock of the Association, and which are received by him or her from the Association), will be taken into account as income by such person at the stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. Such holder of Class B Common Stock or Class D Common Stock also consents by such act alone, to take into account as income in the same man-ner the amount of any distributions with respect to patronage provided he or she receives written notice from the Association that such amount has been applied on his or her indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be.

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815.2 In the event of a net loss for any fiscal year, after applying earn-ings for such fiscal year as provided in Section 815.1 above, such loss shall be absorbed by, first, charges to the unallocated surplus account; second, impairment of paid-in surplus; third, impairment of the allocated surplus account; fourth, impairment of Class B Common Stock, Class D Common Stock, Class A Participation Certificates, Class B Participation Certificates, concurrently; and fifth, impairment of Class A Preferred Stock and Class C Preferred Stock, concurrently. Notwithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in accordance with Section 4.9A of the Act.

820 SURPLUS ACCOUNTS

The Association shall create and maintain an unallocated surplus account and may maintain an allocated surplus account. Except as provided in Section 815, the unallocated surplus account may not be reduced and no part thereof may be transferred to the allocated surplus account.

825 ALLOCATED SURPLUS ACCOUNTS

825.1 The Association may, subject to the Act and the Regulations, create and maintain an allocated surplus account consisting of earnings held therein and allocated to borrowers on a patron-age basis in accordance with Section 835 of these Bylaws. In the event of a net loss for any fiscal year, such allocated sur-plus account shall be subject to impairment in the order speci-fied in Section 815.2 of these Bylaws, and on the basis of latest allocations first.

825.2 Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all surplus account allocations owned by any borrower, and all distributions thereof, as additional collateral for such borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be.

825.3 When the debt of a borrower is in default or is in the process of final liquidation, the Association may, upon notice to the bor-rower, order any and all surplus account allocations owned by such borrower to be applied against the indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retirement and application against indebtedness of surplus account allocations shall be before similar retirement and application of Stock or Participation Certificates owned by the borrower.



830 DIVIDENDS










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835.3 Net earnings of any fiscal year shall be available for patronage distribution only after making the applications as required in (a) through (e) of Section 815 and paying dividends on Class A Preferred Stock and Class C Preferred Stock. Patronage allocations and refunds received from the FCB in the form of stock shall be excluded from net earnings available for patronage distributions and dividends. The amount available for patronage distributions for any fiscal year shall in no event exceed the net earnings from patronage from Association, MidAm, PCA and MidAm, FLCA bor-rowers and from the patronage received from the FCB in the form of cash for such year.

835.4 Patronage distributions may be in cash, Class C Preferred Stock, allocations of earnings retained in an allocated surplus account, or any one or more of such forms of distribution, except that at least twenty percent of the total patronage distributions to any borrower for any fiscal year shall always be in cash. Cash distribu-tions may not exceed twenty percent of the patronage distribution if such distribution would cause the surplus account at the end of the fiscal year for which the distribution is paid to be less than the minimum amount prescribed by the Act and the Regulations. Any part of a patronage distribution in Class C Preferred Stock to one borrower that is not a multiple of $5 may be distributed in cash or held by the Association for the borrower and included in a subse-quent distribution.

835.5 Each holder of Class B Common Stock or Class D Common Stock of this Association shall, by such act alone, consent that the amount of any distributions with respect to patronage which are made in written notices of allocation, as defined in 26 U.S.C. 1388 (i.e. patronage allocations of surplus account and patronage refunds paid in Class C Preferred Stock of the Association, and which are received by him or her from the Association), will be taken into account as income by such person at the stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. Such holder of Class B Common Stock or Class D Common Stock also consents by such act alone, to take into account as income in the same man-ner the amount of any distributions with respect to patronage provided he or she receives written notice from the Association that such amount has been applied on his or her indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be.

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835.6 The Association shall obtain the written consent of each holder of Class A Participation Certificates or Class B Participation Certificates that the amount of any distributions with respect to the holder’s patronage, which are made in written notices of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allocations of surplus account, patronage refunds paid in Class C Preferred Stock, or distributions with respect to patronage that have been applied to the holder’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be, and for which the holder has received written notice), will be taken into account as income by the holder at the stated dollar amounts in the manner provided for in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. The form of consent shall be prescribed by the Board, except that it shall be continuing in effect until revoked by the Class A Participation Certificate or Class B Participation Certificate holder, and it may be included as part of the loan application or other appropriate form signed by borrow-ers. Consent may also be obtained by use of a qualified check in the manner provided for in 26 U.S.C. 1388.

835.7 In the event of an Authorization Event under Section 210 hereof, the Association’s net earnings for purposes of computing and paying patronage dividends shall include the net earnings of MidAm, PCA and MidAm, FLCA (computed on a consolidated basis).

840 TRANSFER

840.1 Stock and Participation Certificates may be transferred to persons or organizations eligible to receive or to hold such Stock or Participation Certificates as provided in Section 810 of these Bylaws.

840.2 The Association shall be its own transfer agent in all matters relat-ing to its Stock and Participation Certificates.

845 CONVERSION

8 45.1 Each class of Stock and Participation Certificates may be converted into any other class of Stock or Participation Certificates for which the holder is eligible as provided in Section 810.

845.2 Class B Common Stock shall be converted into Class A Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA. Class D Common Stock shall be converted into Class C Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA.

850 RETIREMENT

850.1 CLASS A PREFERRED STOCK, CLASS B COMMON STOCK, AND CLASS A

PARTICIPATION CERTIFICATES

Retirement may be upon repayment of a loan or under a retirement plan in effect prior to January 6, 1988, and for such equities issued after that date, a retirement plan in effect at the time the loan was made. Such equities shall be retired at par, even if book value is less than par. Such equities may also be retired under other conditions approved by the Board with prior approval of the FCA.

850.2 CLASS C PREFERRED STOCK, CLASS D COMMON STOCK AND CLASS B


Subject to the Act, Regulations and any other restrictions, such equities shall be retireable only at the discretion of the Board and not on a date certain or upon the happening of an event such as repayment of a loan or pursuant to an automatic retirement or revolvement plan. Such equities shall be retired at their book value and shall not exceed their par value. No such equities shall be retired unless after the retirement the institution would continue to meet the minimum permanent capital standards or the interim permanent capital standards, as the case may be.

850.3 MANDATORY RETIREMENT

At the Board’s discretion and subject to the Act, Regulations and any other restrictions (including minimum permanent capital standards), the Board may order the retirement of such amounts of Class A Preferred Stock or Class C Preferred Stock as it may determine in accordance with procedures which assure equita-ble treatment of all holders of Class A Preferred Stock or Class C Preferred Stock.


850.4 RETIREMENT IN THE EVENT OF DEFAULT

When the debt of a borrower is in default, the Association may, upon notice to such borrower, order the retirement of any Stock or Participation Certificates held by the borrower and the proceeds thereof applied against the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retire-ment and application of Stock or Participation Certificates shall be after similar retirement and application of surplus account allocations owned by the borrower.

855 IMPAIRMENT

855.1 Any losses which result in an impairment of the Association’s capital shall be borne ratably by, first, each share of Class B Common Stock and Class D Common Stock, and each unit of Class A Participation Certificates and Class B Participation Certificates outstanding; and second, each share of Class A Preferred Stock and Class C Preferred Stock outstanding. Notwithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in accordance with Section 4.9A of the Act.

855.2 Impaired Stock and Participation Certificates shall be restored in the reverse of the sequence set forth in Section 855.1 until each share of Stock and unit of Participation Certificates has a book value equal to the par value or face value, respectively.

860 LIQUIDATION

In the event of a voluntary or involuntary liquidation of the Association, following the payment of all claims in accordance with the Act and Regulations, the remainder of the assets of the Association shall be distributed to the holders of Stock and Participation Certificates. In the event there are insufficient funds to pay the holders of Stock and Participation Certificates at par value, then distribution should be made in accordance with the priorities for impairment set forth in Section 855.1 of these Bylaws. In the event funds are sufficient to pay all holders of Stock and Participation Certificates at par value, any excess funds shall be distributed, insofar as practicable, to the holders of Class B Common Stock, Class D Common Stock, Class A Participation Certificates and Class B Participation Certificates in the propor-tion that the aggregate interest paid by each holder over the prior two years bears to the total interest paid by all holders of stock and participation certificates.


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865 LIEN

Except with respect to Stock or Participation Certificates held by other System institutions, each of Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all Stock and Participation Certificates in the Association owned by its borrowers as addi-tional collateral for any indebtedness of such borrower. Upon an Authorization Event, all Stock and Participation Certificates shall be pledged to MidAm, PCA or MidAm, FLCA, as the case may be, as additional collateral for any indebtedness of the borrower to MidAm, PCA or MidAm, FLCA, respectively. Stock and Participation Certificates may not be pledged or hypothecated to third parties.

870 PAID-IN SURPLUS

The Association is authorized to receive paid-in surplus from the FCB in accordance with the Act and the Regulations.

875 SECONDARY MARKET LOANS

875.1 EQUITY RETIREMENT

On or after 12-01-96 no stock or participation certificate is required to be purchased as a condition for obtaining a loan which is designated, at the time the loan is made, for sale to a secondary market. Designated loans not sold within the 180 day period shall be subject to the equity requirement for loans as stated in bylaw 810.4(e) or 810.6(e).

875.2 RETIREMENT

The Board is authorized to retire stock or participation certificates on those loans sold to a secondary market prior to 12-01-96 and on those loans designated for sale to the secondary market but not sold within the 180 day time period, provided however that the Association shall not retire such stock or participation certificates if the action would result in the failure of the Association to meet the minimum permanent capital adequacy standard established in the FCA regulations.

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835.6 The Association shall obtain the written consent of each holder of Class A Participation Certificates or Class B Participation Certificates that the amount of any distributions with respect to the holder’s patronage, which are made in written notices of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allocations of surplus account, patronage refunds paid in Class C Preferred Stock, or distributions with respect to patronage that have been applied to the holder’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be, and for which the holder has received written notice), will be taken into account as income by the holder at the stated dollar amounts in the manner provided for in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. The form of consent shall be prescribed by the Board, except that it shall be continuing in effect until revoked by the Class A Participation Certificate or Class B Participation Certificate holder, and it may be included as part of the loan application or other appropriate form signed by borrow-ers. Consent may also be obtained by use of a qualified check in the manner provided for in 26 U.S.C. 1388.

835.7 In the event of an Authorization Event under Section 210 hereof, the Association’s net earnings for purposes of computing and paying patronage dividends shall include the net earnings of MidAm, PCA and MidAm, FLCA (computed on a consolidated basis).

840 TRANSFER

840.1 Stock and Participation Certificates may be transferred to persons or organizations eligible to receive or to hold such Stock or Participation Certificates as provided in Section 810 of these Bylaws.

840.2 The Association shall be its own transfer agent in all matters relat-ing to its Stock and Participation Certificates.

845 CONVERSION

8 45.1 Each class of Stock and Participation Certificates may be converted into any other class of Stock or Participation Certificates for which the holder is eligible as provided in Section 810.


850 RETIREMENT












855 IMPAIRMENT



860 LIQUIDATION



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865 LIEN

Except with respect to Stock or Participation Certificates held by other System institutions, each of Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all Stock and Participation Certificates in the Association owned by its borrowers as addi-tional collateral for any indebtedness of such borrower. Upon an Authorization Event, all Stock and Participation Certificates shall be pledged to MidAm, PCA or MidAm, FLCA, as the case may be, as additional collateral for any indebtedness of the borrower to MidAm, PCA or MidAm, FLCA, respectively. Stock and Participation Certificates may not be pledged or hypothecated to third parties.

870 PAID-IN SURPLUS

The Association is authorized to receive paid-in surplus from the FCB in accordance with the Act and the Regulations.

875 SECONDARY MARKET LOANS

875.1 EQUITY RETIREMENT

On or after 12-01-96 no stock or participation certificate is required to be purchased as a condition for obtaining a loan which is designated, at the time the loan is made, for sale to a secondary market. Designated loans not sold within the 180 day period shall be subject to the equity requirement for loans as stated in bylaw 810.4(e) or 810.6(e).

875.2 RETIREMENT

The Board is authorized to retire stock or participation certificates on those loans sold to a secondary market prior to 12-01-96 and on those loans designated for sale to the secondary market but not sold within the 180 day time period, provided however that the Association shall not retire such stock or participation certificates if the action would result in the failure of the Association to meet the minimum permanent capital adequacy standard established in the FCA regulations.

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GETTING INVOLVED

As a member-owned cooperative, we rely on the time and talent of members like you. Becoming involved in Farm Credit keeps agriculture strong in your region, while ensuring the future of farming for generations to come. Strengthen your skills, build relationships, and expand your personal network by becoming involved in one of the three Farm Credit leadership groups outlined here.

BOARD OF DIRECTORS

Our Board of Directors includes 16 member-elected directors, each on a four-year term. It also includes two directors appointed by the board. The board is responsible for specific areas of governance, including an Executive, Audit, Human Resources, Risk Management and Governance Committees. Candidates are nominated annually for open positions based on skills, experience, and eligibility, with Farm Credit’s voting members making the final selection each fall.

The board is entrusted to use sound and ethical business principles when making decisions and representing member interests. They are responsible for maintaining financial strength, while ensuring a structure is in place to provide superior service.

Directors receive a monthly retainer for attending board meetings and other special events. If you are a Farm Credit member holding voting stock and reside or farm in our service territory—and you combine visionary thinking, leadership experience, and strong communication skills with a passion to serve—you are eligible to be nominated for this position. Other qualifications and eligibility requirements apply.

NOMINATING COMMITTEE

Voting Farm Credit members elect five members in each state’s service ter-ritory to serve as the Nominating Committee every year. This committee meets in June to nominate candidates for open director and Nominating Committee positions for the consideration of voting members. Any holder of Farm Credit voting stock is eligible to be nominated for a position on the Nominating Committee (other qualifications and eligibility requirements apply). Members are compensated for their time and travel.

ADVISORY COMMITTEE

The 1,000+ person Farm Credit Advisory Committee serves as grassroots advisors to the Board of Directors. Acting at the local level, members meet regularly to provide input and make the concerns of the general member-ship known to its elected officials.

WANT TO FIND OUT MORE?

Call your local office or our office in Louisville at 1-800-333-3276, extension 153728. We will be happy to provide you with more information. We appreciate your interest and look forward to your involvement!

Your privacy is important to us. We want you to know that we hold your financial and other personal information in strict confidence. Since 1972, Farm Credit Administration regulations have forbidden the directors and employees of Farm Credit institutions from disclosing personal borrower information to others without your consent. We do not sell or trade our mem-bers’ personal information to marketing companies or information brokers.

FCA rules allow us to disclose customer information to others only in these situations:

– We may give it to another Farm Credit institution that you do business with.

– We can be a credit reference for you with other lenders and provide infor-mation to a credit bureau or other consumer reporting agency.

– We can provide information in certain types of legal or law enforcement proceedings.

– FCA and bank examiners may review loan files during regular examina-tions of our association.

– If one of our employees applies to become a licensed real estate appraiser, we may give copies of real estate appraisal reports to the State agency that licenses appraisers when required. We will first remove as much personal information from the appraisal as possible.

As a member-owner of this institution, your privacy and the security of your personal information are vital to our continued ability to serve your ongoing credit needs.

BORROWER PRIVACYHOW TO SUPPORT YOUR COOPERATIVE

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Laws_v9.indd

Proof #:

Page #:

9

88





AM

/ A

PP

RO

VE


GETTING INVOLVED

As a member-owned cooperative, we rely on the time and talent of members like you. Becoming involved in Farm Credit keeps agriculture strong in your region, while ensuring the future of farming for generations to come. Strengthen your skills, build relationships, and expand your personal network by becoming involved in one of the three Farm Credit leadership groups outlined here.

BOARD OF DIRECTORS

Our Board of Directors includes 16 member-elected directors, each on a four-year term. It also includes two directors appointed by the board. The board is responsible for specific areas of governance, including an Executive, Audit, Human Resources, Risk Management and Governance Committees. Candidates are nominated annually for open positions based on skills, experience, and eligibility, with Farm Credit’s voting members making the final selection each fall.

The board is entrusted to use sound and ethical business principles when making decisions and representing member interests. They are responsible for maintaining financial strength, while ensuring a structure is in place to provide superior service.

Directors receive a monthly retainer for attending board meetings and other special events. If you are a Farm Credit member holding voting stock and reside or farm in our service territory—and you combine visionary thinking, leadership experience, and strong communication skills with a passion to serve—you are eligible to be nominated for this position. Other qualifications and eligibility requirements apply.

NOMINATING COMMITTEE

Voting Farm Credit members elect five members in each state’s service ter-ritory to serve as the Nominating Committee every year. This committee meets in June to nominate candidates for open director and Nominating Committee positions for the consideration of voting members. Any holder of Farm Credit voting stock is eligible to be nominated for a position on the Nominating Committee (other qualifications and eligibility requirements apply). Members are compensated for their time and travel.

ADVISORY COMMITTEE

The 1,000+ person Farm Credit Advisory Committee serves as grassroots advisors to the Board of Directors. Acting at the local level, members meet regularly to provide input and make the concerns of the general member-ship known to its elected officials.

WANT TO FIND OUT MORE?

Call your local office or our office in Louisville at 1-800-333-3276, extension 153728. We will be happy to provide you with more information. We appreciate your interest and look forward to your involvement!

Your privacy is important to us. We want you to know that we hold your financial and other personal information in strict confidence. Since 1972, Farm Credit Administration regulations have forbidden the directors and employees of Farm Credit institutions from disclosing personal borrower information to others without your consent. We do not sell or trade our mem-bers’ personal information to marketing companies or information brokers.

FCA rules allow us to disclose customer information to others only in these situations:

– We may give it to another Farm Credit institution that you do business with.

– We can be a credit reference for you with other lenders and provide infor-mation to a credit bureau or other consumer reporting agency.

– We can provide information in certain types of legal or law enforcement proceedings.

– FCA and bank examiners may review loan files during regular examina-tions of our association.

– If one of our employees applies to become a licensed real estate appraiser, we may give copies of real estate appraisal reports to the State agency that licenses appraisers when required. We will first remove as much personal information from the appraisal as possible.

As a member-owner of this institution, your privacy and the security of your personal information are vital to our continued ability to serve your ongoing credit needs.

BORROWER PRIVACYHOW TO SUPPORT YOUR COOPERATIVE

T:9”

T:11.125”

B:9.5”

B:11.625”RESPONSIBLE PRINTING

Printed with soy ink using 10% post-consumer waste recycled paper.

This helped us save: 107 mature trees 48,856 gallons of water 43.5 million BTUs of energ y

The cover and interior pages are produced from Forest Stewardship Council™ certified manufacturers,

using processes that meet responsible environmental certifications. FSC is not responsible for any

calculations on saving resources by choosing the paper.

PRSRT STD

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PERMIT NO. 778

P.O. Box 34390

Louisville, Kentucky 40232

1-800-444-FARM

Visit us at e-farmcredit.com

OFFICE LOCATIONS

Celina

1-800-953-8330

Circleville

1-888-515-5626

Coshocton

1-855-861-4412

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Eaton

1-800-686-4146

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1-855-431-2803

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Washington

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Williamsport

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OHIOAlliance

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Archbold

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Baltimore

1-855-838-9965

Bellefontaine

1-800-589-6118

Cambridge

1-888-713-4293

Versailles

1-800-206-3001

Washington CH

1-800-334-9325

Wooster

1-800-216-9651

KENTUCKYBardstown

1-855-631-9924

Bowling Green

1-800-264-0310

Campbellsville

1-800-880-2396

Danville

1-800-880-1114

Dry Ridge

1-800-880-6785

Elizabethtown

1-800-880-7288

Glasgow

1-800-880-9425

Grayson

1-800-880-6453

Hardinsburg

1-877-212-8616

Henderson

1-800-783-9776

Hopkinsville

1-800-489-5626

Lexington

1-800-880-2741

London

1-800-880-6598

Maysville

1-800-880-5931

Mt. Sterling

1-800-261-3071

Owensboro

1-800-844-1148

Richmond

1-800-880-2741

Russellville

1-855-507-6415

Shelbyville

1-800-880-1420

Somerset

1-800-880-4311

TENNESSEEAthens

1-800-444-3276

Chattanooga

1-877-633-2399

Columbia

1-800-665-9242

Cookeville

1-800-346-2190

Crossville

1-800-444-3276

Dandridge

1-800-524-0932

Dickson

1-800-227-7414

Dresden

1-800-346-2191

Fayetteville

1-855-631-9921

Greeneville

1-800-218-1040

Johnson City

1-800-444-3276

Knoxville

1-800-524-0931

Lawrenceburg

1-800-273-0260

Lebanon

1-800-765-7172

McMinnville

1-855-838-9955

Murfreesboro

1-800-444-3276

Oneida

1-800-226-7017

Ripley

1-800-635-5003

Shelbyville

1-855-631-9922

Somerville

1-800-469-2794

Springfield

1-800-894-9998

Tazewell

1-866-630-5017

Three Way

1-888-855-0631

INDIANAAnderson 1-800-878-0195

Bluffton1-800-477-4737

Columbia City 1-888-823-2719

Columbus 1-800-231-2747

Corydon 1-800-835-2501

Crawfordsville 1-800-875-5531

Evansville 1-800-345-2835

Franklin 1-800-327-5099

Greencastle 1-800-446-0306

Greensburg 1-877-850-6488

Hagerstown 1-800-647-0299

Huntingburg 1-800-752-7429

Kokomo 1-888-956-5666

Lafayette 1-888-232-9000

LaGrange 1-888-823-2718

Marion 1-800-327-9887

Documents

2013 ANNUAL REPORT - Farm Credit Mid-America...The farm’s original tractor was eventually sold, but before his father died, Ray and four of his brothers, who farm together today,