[Appendix]
[Estimates for Government-Sponsored Enterprises]
[From the U.S. Government Publishing Office, www.gpo.gov]
[[Page 1129]]
GOVERNMENT-SPONSORED ENTERPRISES
This chapter contains descriptions of and data on the Government-
sponsored enterprises listed below. These enterprises were established
and chartered by the Federal Government. They are not included in the
Federal budget because they are classified as being private. However,
because of their relationship to the Government, detailed statements of
financial operations and condition are presented, to the extent such
information is available, on a basis that is as consistent as
practicable with the basis for the budget data of Government agencies.
These statements are not reviewed by the President; they are presented
as submitted by the enterprises.
--The Student Loan Marketing Association is a for-profit financial
corporation chartered by Congress in 1972 under the Higher
Education Act (HEA) to help increase the availability of student
loans. Sallie Mae carries out secondary market and other
functions.
--The College Construction Loan Insurance Association is organized
as a private, for-profit insurance corporation to guarantee and
insure bonds and loans made for construction and renovation of
college and university facilities. The Corporation was
established by, but was not chartered by, the Federal
Government.
--The Federal National Mortgage Association provides supplementary
assistance to the secondary market for home mortgages. The
Federal Home Loan Mortgage Corporation provides a secondary
market for mortgage lenders. Both are supervised by the
Department of Housing and Urban Development for their roles in
helping to finance low- and moderate-income housing; both are
regulated for financial safety and soundness by the newly
established Office of Federal Housing Enterprise Oversight.
--The Banks for Cooperatives, Agricultural Credit Bank, and Farm
Credit Banks provide financial assistance to agriculture. They
are supervised by the Farm Credit Administration.
--The Federal Agricultural Mortgage Corporation, under the
supervision of the Farm Credit Administration, provides a
secondary mortgage market for agricultural real estate and
certain rural housing loans as well as for farm and business
loans guaranteed by the U.S. Department of Agriculture.
--The Federal Home Loan Banks assist thrift institutions, banks, and
credit unions and are supervised by the Federal Housing Finance
Board.
--The Financing Corporation functions as a financing vehicle for the
FSLIC Resolution Fund. It operates under the supervision and
control of the Federal Housing Finance Board.
--The Resolution Funding Corporation provides financing for the
Resolution Trust Corporation (RTC) and is subject to the general
oversight and direction of the Thrift Depositor Protection
Oversight Board.
The Board of Governors of the Federal Reserve System is not a
Government-sponsored enterprise, but its transactions also are not
included in the budget because of its unique status in the conduct of
monetary policy. The Board provides data on its administrative budget on
a calendar year basis, which is included here for information. Its
budget schedules and statements are not subject to review by the
President.
DEPARTMENT OF EDUCATION
Student Loan Marketing Association
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest expense................ 2,973 2,825 2,966
00.02 Administrative expenses and
taxes......................... 507 496 536
--------- --------- ----------
00.91 Total operating expenses...... 3,480 3,321 3,502
Capital investment:
01.01 Loans, etc...................... 11,021 10,553 10,441
01.02 Investments, dividends, and
other assets.................. 888 700 750
--------- --------- ----------
01.91 Total capital investment...... 11,909 11,253 11,191
--------- --------- ----------
10.00 Total obligations............... 15,389 14,574 14,693
----------------------------------------------------------------------------
Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 15,389 14,573 14,693
23.95 New obligations................... -15,389 -14,574 -14,693
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. -466 -6,982 -2,492
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 15,855 21,555 17,185
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 15,389 14,573 14,693
----------------------------------------------------------------------------
Change in unpaid obligations:
Unpaid obligations, start of year:
72.91 Obligated balance: U.S.
Securities: Par value......... 1,240 1,201 1,167
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 1,240 1,201 1,167
73.10 New obligations................... 15,389 14,574 14,693
73.20 Total outlays (gross)............. -15,428 -14,608 -14,636
Unpaid obligations, end of year:
74.91 Obligated balance: Fund balance:
U.S. Securities: Par value.... 1,201 1,167 1,224
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 1,201 1,167 1,224
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 15,419 14,608 14,636
86.98 Outlays from permanent balances... 9
--------- --------- ----------
87.00 Total outlays (gross)........... 15,428 14,608 14,636
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -15,855 -21,555 -17,185
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. -466 -6,982 -2,492
90.00 Outlays........................... -427 -6,947 -2,549
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 11,021 10,553 10,441
--------- --------- ----------
1150 Total direct loan obligations... 11,021 10,553 10,441
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 38,071 41,636 38,202
[[Page 1130]]
1231 Disbursements: Direct loan
disbursements................... 11,021 10,553 10,441
Repayments:
1251 Repayments and prepayments...... -7,723 -9,034 -6,359
1252 Proceeds from loan asset sales
to the public or discounted... -5,000 -6,000
1264 Write-offs for default: Other
adjustments, net................ 267 47 52
--------- --------- ----------
1290 Outstanding, end of year........ 41,636 38,202 36,336
---------------------------------------------------------------------------
The Student Loan Marketing Association (Sallie Mae), a shareholder-
owned corporation, was created by the Education Amendments of 1972 to
expand funds available for student loans by providing liquidity to
lenders engaged in the Federal Family Education Loan Program (FFELP),
formerly the guaranteed student loan program (GSLP).
Sallie Mae provides liquidity through direct purchase of insured
student loans from eligible lenders and through warehousing advances,
which are loans to lenders secured by insured student loans, Government
or agency securities, or other acceptable collateral. In capital
shortage areas, Sallie Mae is authorized, at the request of Federal
officials, to make insured loans directly to students. Sallie Mae is
authorized to advance funds to State agencies that will provide loans to
students. Sallie Mae is also authorized to provide a secondary market
for noninsured loans; to serve as a guarantee agency in support of loan
availability at the request of the Secretary of Education; to purchase
and underwrite student loan revenue bonds; to provide certain additional
services as determined by its board of directors to be supportive of the
credit needs of students generally; and to provide financing for
academic facilities and equipment.
Sallie Mae is authorized by the Health Professions Educational
Assistance Act of 1976 to provide a secondary market for federally
insured loans to graduate health professions students.
Operations.--The forecast data with respect to operations are based
on certain general economic and specific FFELP loan volume assumptions
and should not be relied upon as an official forecast of the
corporation's future business.
ANNUAL LOAN ACTIVITY
[In millions of
dollars]
Guaranteed student loans: 1995 actual 1996 est. 1997 est.
Stafford (formerly ``regular''):
Purchased....................... 6,441 6,700 6,750
Warehoused...................... 2,358 1,500 1,285
PLUS/SLS: Purchased............... 998 830 865
------------------------------------
Subtotal, Guaranteed student
loans....................... 9,797 9,030 8,900
Health professions loans: Purchased. 291 303 305
Other............................... 933 1,220 1,236
------------------------------------
Total......................... 11,021 10,553 10,441
====================================
Financing.--Between 1974 and early 1982, Sallie Mae borrowed through
the Federal Financing Bank. The Secretary of Education was authorized by
the Education Amendments of 1980 to guarantee principal and interest on
such obligations issued prior to October 1, 1985. Under an agreement
with the Department of the Treasury reached in early 1981, Sallie Mae
began borrowing directly in the private capital markets. Its last
borrowing through the FFB and its last issuance of federally guaranteed
obligations occurred in January 1982. During the first quarter of 1994,
Sallie Mae prepaid all of the outstanding FFB debt. Its obligations
today have certain characteristics, provided by charter, which give them
``agency'' status, but they are not federally insured or guaranteed.
Management.--At its annual meeting in May 1995, the shareholders of
Sallie Mae elected 14 members to its board of directors to serve until
May 1996. The shareholders of Sallie Mae are entitled to elect 14
members to the board. Pursuant to the Education Amendments of 1972,
seven public directors are appointed by the President, who also names
the chairman from among the 21 members.
Restructuring.--Because of the transition from the guaranteed
student loan program to the program of Federal Direct Student Loans and
other reasons, the Administration has proposed legislation to
restructure Sallie Mae into a fully private company. In any such
restructuring, currently outstanding Sallie Mae debt would retain the
characteristics of government sponsored enterprise debt, and customers
having agreements with the GSE would be fully protected. Any new debt
issued by a private company successor to Sallie Mae would not possess
the characteristics of government sponsored enterprise debt.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 2,827 3,959
0102 Expense........................... -2,399 -3,481
------------ -------------- ------------ -------------
0109 Net income........................ 428 478
-----------------------------------------------------------------------------------------------
Note.--The Sallie Mae Board of Directors does not consider it
appropriate to forecast corporate revenue in a public document since
such forecasts could be used for speculative purposes.
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
Investments in US securities:
1102 Treasury securities, par...... 1,192 1,173 1,138 1,195
1104 Agency securities, par........ 48 29 29 29
1106 Receivables, net.............. 592 855 897 942
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 11,720 9,907 7,517 7,824
1206 Receivables, net................ 240 326 342 359
1207 Advances and prepayments........ 22 13 13 14
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 38,172 41,739 38,297 36,426
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -100 -103 -95 -90
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 38,072 41,636 38,202 36,336
Other Federal assets:
1801 Cash and other monetary assets.. 101 37 39 41
1803 Property, plant and equipment,
net........................... 149 179 188 197
1901 Other assets.................... 38 144 151 159
------------ -------------- ------------ -------------
1999 Total assets.................... 52,174 54,299 48,516 47,096
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable................ 401 582 611 642
2203 Debt............................ 49,692 51,672 45,757 44,199
2206 Pension and other actuarial
liabilities................... 9 14 15 16
2207 Other........................... 560 746 784 823
------------ -------------- ------------ -------------
2999 Total liabilities............... 50,662 53,014 47,167 45,680
NET POSITION:
3200 Invested capital.................. 1,511 1,284 1,349 1,416
------------ -------------- ------------ -------------
3999 Total net position.............. 1,511 1,284 1,349 1,416
------------ -------------- ------------ -------------
4999 Total liabilities and net position 52,173 54,298 48,516 47,096
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 60 53 56
12.1 Civilian personnel benefits....... 16 17 18
21.0 Travel and transportation of
persons......................... 6 6 6
[[Page 1131]]
23.3 Communications, utilities, and
miscellaneous charges........... 6 6 6
25.1 Advisory and assistance services.. 33 15 16
25.2 Other services.................... 260 268 281
31.0 Equipment......................... 2 2 2
33.0 Loans............................. 11,022 10,553 10,441
43.0 Interest, dividends, and taxes.... 3,984 3,654 3,867
--------- --------- ----------
99.9 Total obligations............... 15,389 14,574 14,693
---------------------------------------------------------------------------
College Construction Loan Insurance Association
The College Construction Loan Insurance Association (Connie Lee) was
authorized by Public Law 99-498 on October 17, 1986. The Corporation was
created to insure and reinsure bonds and loans of educational
institutions which borrow funds to finance the acquisition,
construction, or renovation of their facilities. The Association was
incorporated in February 1987, under the District of Columbia Business
Corporation Act.
Connie Lee's authorizing statute states that ``no obligation which
is insured, guaranteed, or otherwise backed by the corporation, shall be
deemed to be an obligation which is guaranteed by the full faith and
credit of the United States.''
Operations.--Connie Lee is structured to operate as a private
corporation, subject to the same state laws and regulations as any other
insurance company. Accordingly, Connie Lee secures insurance licenses in
each of the various states in which it expects to conduct its insurance
activities.
The Board of Directors authorized management to begin activities as
a reinsuror of educational facilities bonds in 1988. Connie Lee
reinsured its first bonds in December 1988. In fiscal year 1995, Connie
Lee insured $913 million of debt service on bonds benefitting colleges,
universities and teaching hospitals.
Connie Lee also provided reinsurance on bonds representing $43
million of debt service.
The forecast data contained in this material are based on certain
general economic assumptions and should not be construed as an official
forecast of the Corporation's position.
INSURANCE AND REINSURANCE ACTIVITY
[In thousands of
dollars]
1995 actual
Debt service insured:
Direct insurance................................. 912,662
Reinsurance...................................... 43,479
--------------------
Total.......................................... 956,141
Financing.--In order to provide capitalization, the Secretary of
Education, the Student Loan Marketing Association (Sallie Mae), and
other investors are authorized to purchase stock in the corporation.
Sallie Mae made an initial investment of $2 million in Connie Lee stock
in fiscal year 1987. The Secretary of Education purchased $19.1 million
in Connie Lee stock with funds appropriated for this purpose in fiscal
year 1988. Subsequently, the corporation sold an additional $50.9
million of equity securities to Sallie Mae, increasing total capital of
the corporation to $72.0 million. At the end of 1991, Connie Lee placed
equity securities with private investors, providing sufficient
incremental capital to obtain a triple-A credit rating necessary to
engage in the financial guaranty business as a direct writer of
insurance.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-9931-0-3-502 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 19 19 22 25
0102 Expense........................... -11 -11 -11 -12
------------ -------------- ------------ -------------
0109 Net income........................ 8 8 11 13
-----------------------------------------------------------------------------------------------
Management.--Connie Lee is governed by an eleven-member board of
directors comprised of two directors appointed by the Secretary of the
Treasury; two directors appointed by the Secretary of Education; three
directors appointed by the Student Loan Marketing Association; and four
directors elected by the corporation's shareholders, one of whom must be
an administrator of a college or university.
The Administration has submitted legislation to the Congress which
would fully privatize Connie Lee by divesting the Secretary of
Education's stock ownership in the Corporation and repealing the
Corporation's enabling legislation. Similar legislation has passed both
the House and Senate and a compromise version is expected to be enacted
this year.
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-9931-0-3-502 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
Investments in US securities:
1102 Treasury securities, par...... 21 21 25 25
1104 Agency securities, par........ 25 22 22 22
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 134 154 171 189
1206 Receivables, net................ 9 8 8 9
1207 Advances and prepayments........ 25 34 37 42
Other Federal assets:
1801 Cash and other monetary assets.. 3 5 5 6
1803 Property, plant and equipment,
net........................... 1 1 1 1
------------ -------------- ------------ -------------
1999 Total assets.................... 218 245 269 293
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 4 8 11 13
2201 Non-Federal liabilities: Accounts
payable......................... 70 80 87 96
------------ -------------- ------------ -------------
2999 Total liabilities............... 74 88 98 109
NET POSITION:
3200 Invested capital.................. 144 157 171 184
------------ -------------- ------------ -------------
3999 Total net position.............. 144 157 171 184
------------ -------------- ------------ -------------
4999 Total liabilities and net position 218 245 269 293
-----------------------------------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Federal National Mortgage Association
portfolio programs
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest on borrowings from the
public........................ 17,309 19,274 21,336
00.02 Other costs..................... 2,528 2,650 2,966
--------- --------- ----------
00.91 Total operating expenses...... 19,837 21,924 24,302
Capital investment:
01.01 Mortgage purchases and loans.... 48,715 64,644 68,737
01.02 Lease-Purchase Discounts........ -386
--------- --------- ----------
01.91 Total capital investment...... 48,329 64,644 68,737
--------- --------- ----------
10.00 Total obligations............... 68,166 86,568 93,039
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 339,930 406,170 484,780
22.00 New budget authority (gross)...... 134,406 165,178 177,664
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 474,336 571,348 662,444
23.95 New obligations................... -68,166 -86,568 -93,039
24.47 Unobligated balance available, end
of year: Authority to borrow.... 406,170 484,780 569,405
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.10 Authority to borrow............... 96,335 144,115 153,791
67.15 Net increase or decrease in
unlimited borrowing authorities. -2,950 -3,000 -3,000
--------- --------- ----------
[[Page 1132]]
67.90 Authority to borrow (total)..... 93,385 141,115 150,791
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 41,021 24,063 26,873
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 134,406 165,178 177,664
----------------------------------------------------------------------------
Change in unpaid obligations:
Unpaid obligations, start of year:
Obligated balance:
72.47 Corporate borrowing authority. 28,031 39,959 46,572
72.90 Fund balance.................. 35,687 24,215 13,431
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 63,718 64,174 60,003
73.10 New obligations................... 68,166 86,568 93,039
73.20 Total outlays (gross)............. -67,710 -90,739 -91,470
Unpaid obligations, end of year:
Obligated balance:
74.47 Corporate borrowing authority. 39,959 46,572 49,527
74.90 Fund balance: Uninvested
balance..................... 24,215 13,431 12,045
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 64,174 60,003 61,572
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 41,021 24,063 26,813
86.98 Outlays from permanent balances... 26,689 66,676 64,657
--------- --------- ----------
87.00 Total outlays (gross)........... 67,710 90,739 91,470
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash)
from:
88.00 Federal sources............... -130 -130 -130
88.40 Non-Federal sources........... -40,897 -23,806 -26,616
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -41,027 -23,936 -26,746
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 93,379 141,242 150,918
90.00 Outlays........................... 26,683 66,803 64,724
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 44,501 64,526 69,773
--------- --------- ----------
1150 Total direct loan obligations... 44,501 64,526 69,773
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 221,766 250,374 282,065
Disbursements:
1231 Direct loan disbursements....... 44,574 63,686 67,815
1232 Purchase of loans assets from
the public.................... 4,141 957 923
1251 Repayments: Repayments and
prepayments..................... -18,418 -32,952 -35,536
1264 Write-offs for default: Other
adjustments, net................ -1,689
--------- --------- ----------
1290 Outstanding, end of year........ 250,374 282,065 315,267
---------------------------------------------------------------------------
The Federal National Mortgage Association, (Fannie Mae) is a
federally-chartered, privately-owned company with a public mission to
play a leadership role in mortgage finance, to improve the liquidity of
the residential mortgage market and increase the availability of
mortgage credit to low-and moderate income families and areas
underserved by private lending institutions. In carrying out its
mission, Fannie Mae engages primarily in two forms of business:
investing in portfolios of residential mortgages and guaranteeing
residential mortgage securities. At the end of 1995, Fannie Mae held a
net mortgage portfolio totaling over $250 billion and had outstanding
guaranteed mortgage-backed securities of over $580 billion. Fannie Mae's
portfolio purchases and MBS finance about one of every five mortgages in
the country.
Through a federal charter, Congress has equipped Fannie Mae with
certain attributes to help it carry out its public mission and help
lower the cost of homeownership for low- and moderate-income homebuyers.
These include an exemption from state and local taxes (except real
property taxes), an exemption of its debt and mortgage securities from
Securities and Exchange Commission registration requirements, and
potential access to U.S. Treasury funds. Fannie Mae's charter also
prohibits the imposition of user fees. Fannie Mae pays federal income
tax, however, over $1 billion in 1994. Securities guaranteed by Fannie
Mae and debt issued by the company are solely the corporation's
obligations and are not backed by the full faith and credit of the U.S.
Government. The common stock of the corporation is owned by the public,
if fully transferable, and trades on the New York, Midwest, and Pacific
stock exchanges.
Fannie Mae was established in 1938 to assist private markets in
providing a steady supply of funds for housing. Fannie Mae was
originally a subsidiary of the Reconstruction Finance Corporation and
was permitted to purchase only loans insured by the Federal Housing
Administration (FHA). In 1954, Fannie Mae was restructured as a mixed
ownership (part government, part private) corporation. Congress sold the
government's remaining interest in Fannie Mae in 1968 and completed the
transformation to private shareholder ownership in 1970. Using the
proceeds from the sale of subordinated debentures, Fannie Mae paid the
Treasury $216 million for the government's preferred stock, which was
retired, and for the Treasury's interest in the corporation's earned
surplus. As a result, the corporation was taken off the federal budget.
In 1992, Congress reaffirmed and clarified Fannie Mae's role in the
housing finance system through charter act amendments included in the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
(``The Act''). Fannie Mae's charter purposes, as amended by the Act,
are: ``to provide stability in the secondary market for residential
mortgages; respond appropriately to the private capital market; provide
ongoing assistance to the secondary market for residential mortgages
(including activities relating to mortgages on housing for low- and
moderate-income families involving a reasonable economic return that may
be less than the return earned on other activities); and promote access
to mortgage credit throughout the Nation (including central cities,
rural areas, and underserved areas) by increasing the liquidity of
mortgage investments and improving the distribution of investment
capital for residential mortgage financing.''
Overall, Fannie Mae's primary customers are low-, moderate-, or
middle-income families. In 1995, over 26 percent of the one- to four-
unit mortgages purchased had balances of $60,000 or less and the average
mortgage purchased was about $95,000. Also, about 40 percent of the
single-family mortgages and close to 97 percent of the multifamily
mortgages purchased by Fannie Mae served families with incomes below the
area median income. Over the last five years, Fannie Mae has directed
almost $23 billion to local housing markets for financing multi-family
housing.
Nevertheless, the Act subjected Fannie Mae to specific affordable
housing goals designed to improve the flow of mortgage funds to low- and
moderate-income families in central cities, rural areas, and other
underserved areas. On December 1, 1995, the U.S. Department of Housing
and Urban Development (HUD) issued a final rule that sets the levels of
the goals for 1996-2000 and establishes the requirements for counting
mortgage purchases for meeting these goals. During the transition period
prior to the issuance of the final regulation, Fannie Mae was subject to
interim affordable housing goals. These interim goals required Fannie
Mae to have 30 percent of the units it finances serve low-and moderate-
income families and 30 percent of the units it finances in central
cities. In 1995, Fannie Mae exceeded these goals with
[[Page 1133]]
about 45 percent of its financings made to low-and moderate-income
families and 30.5 percent of its business located in central cities.
Under the interim goals, Fannie Mae also was required to dedicate $4.6
billion in financings for households with very low incomes or with low
incomes living in low-income areas. Fannie Mae surpassed this goal with
$8.2 billion of such loans in 1995.
To help achieve these affordable housing goals, in 1994 Fannie Mae
established its ``Showing America A New Way Home'' initiative designed
to provide $1 trillion through the end of the decade to support
affordable housing for families and communities most in need. In
addition, the company selected 21 of the planned 25 Fannie Mae
partnership offices around the country, which are working with lenders,
local governments, nonprofit organizations, and neighborhood leaders to
tailor affordable housing programs to each community's needs.
The Act also established the Office of Federal Housing Enterprise
Oversight (OFHEO), an independent office within HUD, headed by a
Director who reports directly to the Congress. OFHEO is responsible for
ensuring that Fannie Mae is adequately capitalized and operating in a
safe and sound manner. Included among the express statutory authorities
of the Director is the authority to conduct examinations of the
financial health of the company and to issue minimum and risk-based
capital standards. The minimum capital requirements are computed from
statutorily established ratios that are applied to the assets and off-
balance sheet risks of Fannie Mae. The risk-based capital standard
determines the amount of capital that Fannie Mae must hold to withstand
the impact of simultaneous adverse credit and interest rate stresses
over a 10-year period, plus an additional amount to cover management and
operations risk. Total capital (shareholder's equity plus allowance for
loan losses) at the end of December 1995 was $11.8 billion. The company
has continued to remain in compliance with applicable capital standards
and has been deemed adequately capitalized by OFHEO since its first
classification in June 1993.
Fannie Mae has pursued its housing mission vigorously and
productively while continuing to maintain its financial strength. It
provides liquidity and stability to the mortgage market. It also passes
on reduced mortgage interest rates to homebuyers--according to some
studies between 25 and 50 basis points. Meanwhile, Fannie Mae has
remained profitable. It earned net income of $2.14 billion in 1995, up
slightly from the $2.13 billion earned a year earlier. Also, Fannie
Mae's earnings included a special one-time charge for a financial
restructuring plan that included stock repurchase plans totaling $1
billion and a $350 million contribution to the Fannie Mae foundation for
expanding homeownership. Absent this restructuring package, Fannie Mae's
1995 earnings would have been just under $2.4 billion, with most of the
increase coming from a $224 million increase net interest income on the
Enterprise's retained portfolio.
The forecast data contained in this material has been developed
based on certain general economic assumptions prevalent in the fourth
quarter of 1995 and should not be construed as an official forecast for
Fannie Mae.
Income and retained earnings for the years ended September 30, 1994
and 1995 follow (in thousands of dollars):
1994 actual 1995 actual
Gross revenue........................... 17,756,900 21,408,700
Gross expenses.......................... 14,660,800 18,190,200
------------- --------------
Income before Federal income tax...... 3,096,100 3,218,500
Federal income tax...................... 1,023,400 930,100
------------- --------------
Net income............................ 2,072,700 2,288,400
Retained earnings, beginning of year.... 6,117,800 7,545,000
Dividends on common stock............... (645,500) (710,400)
------------- --------------
Retained earnings, end of year........ 7,545,000 9,123,000
------------- --------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
1101 Fund balances with Treasury..... 620 221
Investments in US securities:
1102 Treasury securities, par...... 25 22
1104 Other......................... 35,043 47,828 50,469 54,990
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Public: direct loans (net of
discount)..................... 206,555 231,960 265,119 298,730
1602 Federal Agencies................ 7,728 8,545 7,404 7,052
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -280 -287 -274 -277
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 214,003 240,218 272,249 305,505
Other Federal assets:
1801 Cash and other monetary assets.. 4,943 5,763 7,124 7,821
1803 Property, plant and equipment,
net........................... 172 177
------------ -------------- ------------ -------------
1999 Total assets.................... 254,806 294,229 329,842 368,316
LIABILITIES:
Federal liabilities:
2101 Accounts payable................ 602 349
2102 Accrued interest payable........ 3,214 3,712 3,833 4,221
2105 Other........................... 5 5
Non-Federal liabilities:
2203 Debt............................ 239,320 277,192 309,896 345,761
2204 Estimated Federal liability for
loan guarantees, credit reform 2,304 2,028 3,342 3,607
2206 Pension and other actuarial
liabilities................... 199 157
2207 Subtotal, Federal taxes payable. -24 65
------------ -------------- ------------ -------------
2999 Total liabilities............... 245,620 283,508 317,071 353,589
NET POSITION:
3300 Cumulative results of operations.. 9,186 10,721 12,771 14,727
------------ -------------- ------------ -------------
3999 Total net position.............. 9,186 10,721 12,771 14,727
------------ -------------- ------------ -------------
4999 Total liabilities and net position 254,806 294,229 329,842 368,316
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 198 335 354
12.1 Civilian personnel benefits....... 92
21.0 Travel and transportation of
persons......................... 12 10 11
23.3 Communications, utilities, and
miscellaneous charges........... 11 12 12
24.0 Printing and reproduction......... 6
25.1 Advisory and assistance services.. 99 104 110
25.2 Other services.................... 1,320 1,295 1,472
26.0 Supplies and materials............ 3
31.0 Equipment......................... 67 70 74
33.0 Investments and loans............. 48,329 64,644 68,737
43.0 Interest and dividends............ 18,029 20,098 22,269
--------- --------- ----------
99.9 Total obligations............... 68,166 86,568 93,039
---------------------------------------------------------------------------
mortgage-backed securities
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2501-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Capital investment: Commitments to
issue MBS....................... -51,497 129,045 129,247
--------- --------- ----------
10.00 Total obligations............... -51,497 129,045 129,247
----------------------------------------------------------------------------
Budgetary resources available for obligation:
22.00 New budget authority (gross)...... -51,497 129,045 129,247
23.95 New obligations................... 51,497 -129,045 -129,247
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Corporate borrowing authority..... -104,554 58,802 54,203
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 53,057 70,243 75,043
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... -51,497 129,045 129,247
----------------------------------------------------------------------------
[[Page 1134]]
Change in unpaid obligations:
72.47 Unpaid obligations, start of year:
Obligated balance: Corporate
borrowing authority............. 255,245 114,618 114,618
73.10 New obligations................... -51,497 129,045 129,247
73.20 Total outlays (gross)............. -89,130 -129,045 -129,247
74.47 Unpaid obligations, end of year:
Obligated balance: Corporate
borrowing authority............. 114,618 114,618 114,618
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 53,057 70,243 75,043
86.98 Outlays from permanent balances... 36,073 58,802 54,203
--------- --------- ----------
87.00 Total outlays (gross)........... 89,130 129,045 129,247
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -53,057 -70,243 -75,043
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. -104,554 58,802 54,204
90.00 Outlays........................... 36,073 58,802 54,204
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2501-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. -51,497 129,045 129,247
--------- --------- ----------
1150 Total direct loan obligations... -51,497 129,045 129,247
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 523,512 559,585 618,387
1231 Disbursements: Direct loan
disbursements................... 89,130 129,045 129,247
1251 Repayments: Repayments and
prepayments..................... -53,057 -70,243 -75,043
--------- --------- ----------
1290 Outstanding, end of year........ 559,585 618,387 672,591
---------------------------------------------------------------------------
According to accounting practices for private corporations, the
mortgages in the pools of loans supporting the mortgage-backed
securities are considered to be owned by the holders of these
securities. Consequently, on the books of the Federal National Mortgage
Association (Fannie Mae), these mortgages are not considered assets and
the securities outstanding are not considered liabilities. However, the
concepts of the budget of the U.S. Government consider these mortgages
and mortgage-backed securities to be assets and liabilities,
respectively, of Fannie Mae. For the purposes of this document,
therefore, they are presented as assets and liabilities in the
accompanying schedules. On the schedule of Status of direct loans for
mortgage-backed securities, the items labeled ``New loans'' and
``Recoveries: Repayments and prepayments'' are budgetary terms. However,
from the Corporation's perspective, these items are ``Amounts issued''
and ``Amounts passed through to the holders of securities'',
respectively.
The forecast data contained in this material has been developed
based on certain general economic assumptions prevalent in November 1993
and should not be construed as an official forecast of the Corporation's
position.
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-2501-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 524,052 560,107 618,887 673,092
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -540 -522 -500 -502
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 523,512 559,585 618,387 672,590
------------ -------------- ------------ -------------
1999 Total assets.................... 523,512 559,585 618,387 672,590
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 523,512 559,585 618,387 672,590
------------ -------------- ------------ -------------
2999 Total liabilities............... 523,512 559,585 618,387 672,590
-----------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
portfolio programs
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest expense and provision
for loan loss................. 6,702 7,698 9,755
00.02 Administration.................. 390 424 461
--------- --------- ----------
00.91 Total operating expenses...... 7,092 8,122 10,216
01.01 Capital investment: Mortgage
purchases for portfolio......... 37,389 48,876 41,615
--------- --------- ----------
10.00 Total obligations............... 44,481 56,998 51,831
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 21,957 21,989 18,642
22.00 New budget authority (gross)...... 48,607 65,547 72,335
22.60 Redemption of debt................ -4,094 -11,896 -12,162
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 66,470 75,640 78,815
23.95 New obligations................... -44,481 -56,998 -51,831
24.47 Unobligated balance available, end
of year: Authority to borrow.... 21,989 18,642 26,984
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Net change in borrowing
authorities..................... 30,740 33,143 41,254
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 17,867 32,404 31,081
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 48,607 65,547 72,335
----------------------------------------------------------------------------
Change in unpaid obligations:
72.47 Unpaid obligations, start of year:
Obligated balance: Authority to
borrow.......................... 5,281 6,897 2,605
73.10 New obligations................... 44,481 56,998 51,831
73.20 Total outlays (gross)............. -42,865 -61,290 -52,327
74.47 Unpaid obligations, end of year:
Obligated balance: Authority to
borrow.......................... 6,897 2,605 2,109
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 17,867 32,404 31,081
86.98 Outlays from permanent balances... 24,998 28,886 21,247
--------- --------- ----------
87.00 Total outlays (gross)........... 42,865 61,290 52,327
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -17,867 -26,421 -29,007
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 30,740 39,126 43,328
90.00 Outlays........................... 24,998 34,869 23,320
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 37,389 48,876 41,615
--------- --------- ----------
1150 Total direct loan obligations... 37,389 48,876 41,615
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 66,679 95,052 127,554
[[Page 1135]]
1231 Disbursements: Direct loan
disbursements................... 37,389 48,876 41,615
1251 Repayments: Repayments and
prepayments..................... -9,016 -16,374 -16,761
--------- --------- ----------
1290 Outstanding, end of year........ 95,052 127,554 152,408
---------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation, (Freddie Mac) is a
federally-charted, private shareholder-owned company with a public
mission to improve the liquidity of the residential mortgage market and
increase the availability of mortgage credit to low- and moderate-income
families and areas underserved by private lending institutions. In
carrying out its mission, Freddie Mac engages primarily in two forms of
business: investing in portfolios of residential mortgages and
guaranteeing residential mortgage securities. At the end of 1995,
Freddie Mac held a net mortgage portfolio totaling over $107 billion and
had outstanding guaranteed mortgage-backed securities of just under $460
billion.
Through a federal charter, Congress has equipped Freddie Mac with
certain advantages over wholly private firms in carrying out these
activities. These advantages include an exemption from state and local
taxes (except real property taxes), an exemption for their debt and
mortgage securities from SEC filing registration requirements, and a
potential access to U.S. Treasury funds. Freddie Mac does pay federal
income tax, however, and securities guaranteed by Freddie Mac and debt
issued by the company are not backed by the full faith and credit of the
U.S. Government. The common stock of the corporation is owned by the
public, is fully transferable, and trades on the New York and Pacific
stock exchanges.
Freddie Mac was established in 1970 under the Emergency Home Finance
Act. Congress chartered Freddie Mac to provide mortgage lenders with an
organized national secondary market enabling them to manage their
conventional mortgage portfolio more effectively and gain indirect
access to a ready source of additional funds to meet new demands for
mortgages. Freddie Mac served as a conduit facilitating the flow of
investment dollars from the capital markets to mortgage lenders, and
ultimately, to homebuyers increasing the amount of mortgage credit
available and making it more affordable.
The Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (FIRREA) significantly changed the corporate governance of Freddie
Mac. The company's three member Board of Directors, which had
corresponded with the Federal Home Loan Bank Board, was replaced with an
eighteen member Board of Directors. Thirteen board members are elected
annually by shareholders and five are annually appointed by the
President of the United States. In addition, FIRREA converted Freddie
Mac's 60 million shares of non-voting, senior participating preferred
stock into voting common stock. As a result, the corporation was taken
off the federal budget.
FIRREA also clarified Freddie Mac's role in the housing finance
delivery system through amendments to its charter act. Specifically,
FIRREA established Freddie Mac's public mission: ``to provide stability
in the secondary market for residential mortgages; respond appropriately
to the private capital market; provide ongoing assistance to the
secondary market for residential mortgages (including activities
relating to mortgages on housing for low- and moderate-income families
involving a reasonable economic return that may be less than the return
earned on other activities); and promote access to mortgage credit
throughout the Nation (including central cities, rural areas, and
underserved areas) by increasing the liquidity of mortgage investments
and improving the distribution of investment capital for residential
mortgage financing.''
The Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (``The Act'') added to Freddie Mac's public mission by
introducing new affordable housing goals that are designed to improve
the flow of mortgage funds to low- and moderate-income families in
central cities, rural areas, and other underserved areas. On December 1,
1995, the U.S. Department of Housing and Urban Development (HUD) issued
a final rule that sets the levels of the goals for 1996-1999 and
establishes the requirements for counting mortgage purchases for meeting
these goals. During the transition period prior to the issuance of the
final regulation, Freddie Mac was subject to interim affordable housing
goals. These interim goals required Freddie Mac to have 30 percent of
the units it finances serve low- and moderate-income families and 30
percent of the units it finances in central cities. In 1995, Freddie Mac
purchased about 39 percent of its financings from low- and moderate-
income families and 23 percent of its business was located in central
cities. Under the interim goals, Freddie Mae also was required to
dedicate $3.357 billion in financings for households with very low
incomes or with low incomes living in low-income areas. Freddie Mac
achieved this goal with $5.426 billion of such loans in 1995.
The Act also enhanced the regulatory oversight of Freddie Mac by
establishing the Office of Federal Housing Enterprise Oversight (OFHEO),
an independent office within HUD, headed by a Director who reports
directly to the Congress. OFHEO is responsible for ensuring that Freddie
Mac is adequately capitalized and operating in a safe and sound manner.
Included among the express statutory authorities of the Director is the
authority to conduct examinations of the financial health of the company
and to issue minimum and risk-based capital standards. The minimum
capital requirements are computed from statutorily established ratios
that are applied to the assets and off-balance sheet risks of Freddie
Mac. The risk-based capital standard determines the amount of capital
that Freddie Mac must hold to withstand the impact of simultaneous
adverse credit and interest rate stresses over a 10-year period, plus an
additional amount to cover management and operations risk.
Meanwhile, Freddie Mac has remained profitable. Freddie Mac recorded
net income of $1.09 billion in 1995, an 11 percent increase over 1994
earnings of $983 million. Most of Freddie's increased earnings in 1995
came from a $284 million increase in net interest income as Freddie's
retained portfolio surged by almost 50 percent during the year to pass
the $100 billion mark in the fourth quarter. While accepting and
managing higher interest rate risk, Freddie Mac has expanded its
investments in retained mortgages from only $34 billion in 1992 to $107
billion at the end of 1995 in an effort to generate higher overall
returns.
The forecast data contained in this material represent estimates and
should not be construed as an official forecast of the corporation's
future position. The data have been developed on the basis of certain
economic assumptions that are reviewed and revised periodically.
Consequently, the estimates are subject to forecast error and will
normally differ from actual data when these become available.
According to generally accepted accounting principles utilized by
private corporations, the mortgages in the pools of loans supporting PCs
are considered to be owned by the holder of these securities. Therefore,
Freddie Mac does not show these mortgages as assets. However, the budget
philosophy of the United States Government includes these mortgages and
mortgages pass-through securities as assets and liabilities,
respectively, of Freddie Mac. For the purpose of this document,
therefore, they are presented as assets and liabilities in the
accompanying schedules. On the Status of Direct Loans schedule for
mortgage pass-through securities, the items labeled ``Disbursements''
and ``Repayments'' are budgetary terms. However, from Freddie Mac's
perspective, these amounts represent ``Sales of PCs'' and ``Amounts
passed through to PC holders,'' respectively.
[[Page 1136]]
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 6,439 8,623
0102 Expense........................... -5,504 -7,571
------------ -------------- ------------ -------------
0109 Net income........................ 935 1,052
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 11,688 2,820 4,001 2,983
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 2,443 2,150 2,630 2,700
1206 Receivables, net................ 2,720 3,680 6,986 7,420
Other Federal assets:
1801 Cash and other monetary assets.. 13,095 23,916 14,616 23,409
1802 Inventories and related
properties.................... 66,393 94,875 126,718 151,297
1803 Property, plant and equipment,
net........................... 1,368 1,212 1,174 1,181
------------ -------------- ------------ -------------
1999 Total assets.................... 97,707 128,653 156,125 188,990
LIABILITIES:
2101 Federal liabilities: Accounts
payable......................... 95 73
Non-Federal liabilities:
2201 Accounts payable................ 437 452
2202 Interest payable................ 734 1,090
2203 Debt............................ 83,946 111,610 141,129 173,085
2207 Other........................... 7,516 9,725 8,547 8,484
------------ -------------- ------------ -------------
2999 Total liabilities............... 92,728 122,950 149,676 181,569
NET POSITION:
3200 Invested capital.................. 4,979 5,703 6,448 7,420
------------ -------------- ------------ -------------
3999 Total net position.............. 4,979 5,703 6,448 7,420
------------ -------------- ------------ -------------
4999 Total liabilities and net position 97,707 128,653 156,124 188,989
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 184 200 219
12.1 Civilian personnel benefits....... 59 64 70
21.0 Travel and transportation of
persons......................... 9 10 11
23.3 Communications, utilities, and
other rent...................... 32 35 38
24.0 Printing and reproduction......... 3 3 4
25.2 Other services.................... 91 99 105
26.0 Supplies and materials............ 12 13 14
33.0 Mortgage purchases for portfolio.. 37,389 48,876 41,615
43.0 Interest and provision for loan
losses.......................... 6,702 7,698 9,755
--------- --------- ----------
99.9 Total obligations............... 44,481 56,998 51,831
---------------------------------------------------------------------------
mortgage-backed securities
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Capital investment: Issue (sales)
of participation certification.. 70,071 110,877 108,540
--------- --------- ----------
10.00 Total obligations............... 70,071 110,877 108,540
----------------------------------------------------------------------------
Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 70,071 110,877 108,540
23.95 New obligations................... -70,071 -110,877 -108,540
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Corporate borrowing authority (net
PC pool change)................. -6,626 21,017 30,493
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 76,697 89,860 78,047
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 70,071 110,877 108,540
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 70,071 110,877 108,540
73.20 Total outlays (gross)............. -70,071 -110,877 -108,540
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 70,071 110,877 108,540
--------- --------- ----------
87.00 Total outlays (gross)........... 70,071 110,877 108,540
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -76,697 -89,860 -78,047
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. -6,626 21,017 30,493
90.00 Outlays........................... -6,626 21,017 30,493
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 70,071 110,877 108,540
--------- --------- ----------
1150 Total direct loan obligations... 70,071 110,877 108,540
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 463,672 457,046 478,063
1231 Disbursements: Direct loan
disbursements................... 70,071 110,877 108,540
1251 Repayments: Repayments and
prepayments..................... -76,697 -89,860 -78,047
--------- --------- ----------
1290 Outstanding, end of year........ 457,046 478,063 508,556
---------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1901 Other Federal assets: Other assets 463,672 457,046 478,063 508,556
------------ -------------- ------------ -------------
1999 Total assets.................... 463,672 457,046 478,063 508,556
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 463,672 457,046 478,063 508,556
------------ -------------- ------------ -------------
2999 Total liabilities............... 463,672 457,046 478,063 508,556
-----------------------------------------------------------------------------------------------
FARM CREDIT SYSTEM
The Farm Credit System is a government sponsored enterprise that
provides privately financed credit to agricultural and rural
communities. The major functional entities of the system are: (1) Banks
for Cooperatives (BC), (2) Agricultural Credit Bank (ACB), (3) Farm
Credit Banks (FCB), and (4) direct lender associations. The history and
specific functions of the bank entities are discussed after the
presentation of financial schedules for each bank entity. As part of the
Farm Credit System (FCS), these entities are regulated and examined by
the Farm Credit Administration (FCA), an independent Federal agency. The
administrative costs of FCA are currently financed by assessments of
system institutions. System banks finance loans primarily from sales of
bonds to the public and their own capital funds. The system bonds issued
by the banks are not guaranteed by the U.S. Government either as to
principal or interest. The bonds are backed by an insurance fund,
administered by the Farm Credit System Insurance Corporation (FCSIC), an
independent Federal agency that collects insurance premiums from member
banks to pay its administrative expenses and fund insurance reserves.
All of the banks' current operating expenses are paid from their own
income and do not require budgetary resources from the Federal
Government. Limited Federal assistance is provided to support interest
payments on special FCS Finan
[[Page 1137]]
cial Assistance Corporation (FAC) debt obligations (see discussion of
FAC elsewhere in this document).
Banks for Cooperatives
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 5 6 7
00.02 Interest on borrowings.......... 126 148 141
00.03 Insurance premiums.............. 3 3 3
00.04 Provision for loan losses....... 3 3 3
00.06 Income tax expense.............. 4 4 5
00.07 Other expenses.................. 7 8 9
--------- --------- ----------
00.91 Total operating expenses...... 148 172 168
01.01 Capital investment: Direct loans.. 8,690 9,976 10,076
--------- --------- ----------
10.00 Total obligations............... 8,838 10,148 10,244
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 2,130 2,309 2,100
22.00 New budget authority (gross)...... 9,017 9,983 10,082
22.60 Redemption of debt................ -44 -32
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 11,147 12,248 12,150
23.95 New obligations................... -8,838 -10,148 -10,244
24.47 Unobligated balance available, end
of year: Authority to borrow.... 2,309 2,100 1,906
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Net borrowing..................... 759
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 8,258 9,983 10,082
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 9,017 9,983 10,082
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 8,838 10,148 10,244
73.20 Total outlays (gross)............. -8,838 -10,148 -10,244
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 8,838 9,983 10,082
86.98 Outlays from permanent balances... 165 162
--------- --------- ----------
87.00 Total outlays (gross)........... 8,838 10,148 10,244
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -8,258 -9,983 -10,082
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 759
90.00 Outlays........................... 580 165 162
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 8,690 9,976 10,076
--------- --------- ----------
1150 Total direct loan obligations... 8,690 9,976 10,076
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 1,654 2,273 2,478
1231 Disbursements: Direct loan
disbursements................... 8,690 9,976 10,076
1251 Repayments: Repayments and
prepayments..................... -8,071 -9,771 -9,868
--------- --------- ----------
1290 Outstanding, end of year........ 2,273 2,478 2,686
---------------------------------------------------------------------------
Note.--Direct loan balances exclude nonaccrual loans and sales
contracts.
Pursuant to the Agricultural Credit Act of 1987, stockholders in 11
of 13 Banks for Cooperatives voted in 1988 to merge into a single
National Bank for Cooperatives. On January 1, 1995, the Springfield Bank
for Cooperatives also merged with other entities, as discussed below, to
form the first Agricultural Credit Bank. The remaining Cooperative
entity, the St. Paul Bank for Cooperatives, is independently chartered
to provide credit and related services, nationwide, to eligible
cooperatives primarily engaged in farm supply, grain, marketing and
processing (including sugar and dairy.) Loans are also made to rural
utilities, including telecommunications companies. The financial
schedules below reflect the operations of the St. Paul Bank for
Cooperatives. Loans are made for both seasonal and long-term needs.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 120 177 205 201
0102 Total interest expense............ -80 -127 -148 -141
------------ -------------- ------------ -------------
0109 Net interest income............... 40 50 57 60
0111 Other income...................... 8 10 8 13
0112 Other expenses.................... -19 -21 -24 -27
------------ -------------- ------------ -------------
0119 Net income........................ -11 -11 -16 -14
------------ -------------- ------------ -------------
0191 Total revenues.................... 128 187 213 214
------------ -------------- ------------ -------------
0192 Total expenses.................... -99 -148 -172 -168
------------ -------------- ------------ -------------
0199 Net income or loss................ 29 39 41 46
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 236 394 397 428
1206 Accrued interest receivable on
loans......................... 27 40 44 49
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 1,687 2,305 2,320 2,271
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -21 -24 -25 -29
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 1,666 2,281 2,295 2,242
1803 Other Federal assets: Property,
plant and equipment, net........ 68 71 70 79
------------ -------------- ------------ -------------
1999 Total assets.................... 1,997 2,786 2,806 2,798
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 26 28 49 36
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 1,093 1,329 1,194 1,175
2201 Consolidated systemwide notes. 643 1,166 1,257 1,244
2201 Notes payable and other
interest-bearing liabilities
2202 Accrued interest payable........ 12 17 31 31
------------ -------------- ------------ -------------
2999 Total liabilities............... 1,774 2,540 2,531 2,486
NET POSITION:
3300 Cumulative results of operations.. 223 246 275 312
------------ -------------- ------------ -------------
3999 Total net position.............. 223 246 275 312
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,997 2,786 2,806 2,798
-----------------------------------------------------------------------------------------------
Note.--Loans to cooperatives include nonaccrual loans and sales
contracts.
Statement of Changes in Net Worth (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 208 224 246 275
============ ============== ============ =============
Capital stock and participations
issued.............................. 8 4 9 10
Capital stock and participations
retired............................. -14 -11 -11 -8
Surplus retired.......................
Net income............................ 30 39 40 46
Cash/Dividends/Patronage Distributions -7 -10 -9 -10
Other, net............................ -1
------------ -------------- ------------ -------------
Ending balance of net worth............. 224 246 275 313
-----------------------------------------------------------------------------------------------
[[Page 1138]]
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4120-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligation............................ 1,573 1,699 2,458 2,451
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 1,186 1,524 2,213 2,206
Consolidated systemwide and other bank
bonds retired....................... -1,141 -1,287 -2,312 -2,226
Consolidated systemwide notes, net.... 81 523 92 -14
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 1,699 2,458 2,451 2,419
-------------------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Personnel compensation:
11.1 Personnel compensation and
benefits...................... 4 5 6
--------- --------- ----------
11.9 Total personnel compensation.. 4 5 6
23.2 Cost of space occupied and
equipment....................... 1 1 1
25.2 Other services.................... 3 3 3
33.0 Investments and loans............. 8,690 9,976 10,075
43.0 Interest and dividends............ 127 148 142
92.0 Undistributed expenses............ 13 15 17
--------- --------- ----------
99.9 Total obligations............... 8,838 10,148 10,244
---------------------------------------------------------------------------
Agricultural Credit Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 49 37 39
00.02 Interest on borrowings.......... 902 1,097 1,148
00.03 Insurance premiums.............. 14 14 15
00.04 Provision for loan losses....... 14 11 10
00.06 Income tax expense.............. 9 24 25
00.07 Other expenses.................. 89 63 66
--------- --------- ----------
00.91 Total operating expenses...... 1,077 1,246 1,303
01.01 Capital investment: direct loans.. 42,644 44,000 45,000
--------- --------- ----------
10.00 Total obligations............... 43,721 45,246 46,303
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 2,211 2,548 2,571
22.00 New budget authority (gross)...... 44,058 45,269 46,531
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 46,269 47,817 49,102
23.95 New obligations................... -43,721 -45,246 -46,303
24.47 Unobligated balance available, end
of year: Authority to borrow.... 2,548 2,571 2,799
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Net borrowing..................... 1,584 464 884
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 42,474 44,805 45,647
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 44,058 45,269 46,531
----------------------------------------------------------------------------
Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 326 332 332
73.10 New obligations................... 43,721 45,246 46,303
73.20 Total outlays (gross)............. -43,715 -45,246 -46,303
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance:
Uninvested balance.............. 332 332 332
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 43,715 45,245 46,303
--------- --------- ----------
87.00 Total outlays (gross)........... 43,715 45,246 46,303
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -42,474 -44,805 -45,647
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 1,584 464 884
90.00 Outlays........................... 1,241 441 656
---------------------------------------------------------------------------
On January 1, 1995, the National Bank for Cooperatives, the
Springfield Bank for Cooperatives, and the Farm Credit Bank of
Springfield consolidated to form on Agricultural Credit Bank (ACB),
known as CoBank ACB. This bank is headquartered in Denver, Colorado and
serves eligible cooperatives nationwide, and provides funding to
Agricultural Credit Associations (ACAs) in one of its regions. An ACB
operates under statutory authority that combines the authorities of a
FCB and a BC. In exercising its FCB authority, CoBank ACB's charter
limits its lending to ACAs located in the region previously served by
the Farm Credit Bank of Springfield. As an entity lending to
Cooperatives, CoBank engages in the same business activities as the St.
Paul Bank and it provides international loans for the financing of
agricultural exports.
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 42,644 44,000 45,000
--------- --------- ----------
1150 Total direct loan obligations... 42,644 44,000 45,000
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 12,874 14,231 14,800
1231 Disbursements: Direct loan
disbursements................... 42,638 44,000 45,000
1251 Repayments: Repayments and
prepayments..................... -41,281 -43,427 -44,196
1263 Write-offs for default: Direct
loans........................... -4 -4
--------- --------- ----------
1290 Outstanding, end of year........ 14,231 14,800 15,600
---------------------------------------------------------------------------
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 1,171 1,368 1,441
0102 Total interest expense............ -902 -1,097 -1,148
------------ -------------- ------------ -------------
0109 Net interest income............... 269 271 293
0111 Other income...................... 23 10 9
0112 Other expense..................... -175 -148 -155
------------ -------------- ------------ -------------
0119 Net income........................ -152 -138 -146
------------ -------------- ------------ -------------
0191 Total revenues.................... 1,194 1,378 1,450
------------ -------------- ------------ -------------
0192 Total expenses.................... -1,077 -1,245 -1,303
------------ -------------- ------------ -------------
0199 Net income or loss................ 117 133 147
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 2,301 2,652 2,600 2,750
1206 Accrued interest receivable on
loans......................... 139 165 172 181
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 12,878 14,237 14,800 15,600
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -154 -170 -175 -181
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 12,724 14,067 14,625 15,419
1803 Other Federal assets: Property,
plant and equipment, net........ 244 131 159 159
------------ -------------- ------------ -------------
1999 Total assets.................... 15,408 17,015 17,556 18,509
[[Page 1139]]
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 128 142 145 145
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 8,567 10,805 10,882 11,045
2201 Consolidated systemwide notes. 5,401 4,717 5,110 5,837
2201 Notes payable and other
interest-bearing liabilities 24 12 20 20
2202 Accrued interest payable........ 77 126 126 127
------------ -------------- ------------ -------------
2999 Total liabilities............... 14,197 15,802 16,283 17,174
NET POSITION:
3200 Invested capital.................. 1,211 1,213 1,273 1,335
------------ -------------- ------------ -------------
3999 Total net position.............. 1,211 1,213 1,273 1,335
------------ -------------- ------------ -------------
4999 Total liabilities and net position 15,408 17,015 17,556 18,509
-----------------------------------------------------------------------------------------------
Statement of Changes in Net Worth (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 1,174 1,210 1,213 1,273
============ ============== ============ =============
Capital stock and participations
issued.............................. 28 7 25 25
Capital stock and participations
retired............................. -62 -52 -65 -75
Surplus retired.......................
Net income............................ 119 117 132 148
Cash/Dividends/Patronage Distributions -25 -32 -33 -35
Other, net............................ -23 -36
------------ -------------- ------------ -------------
Ending balance of net worth............. 1,210 1,213 1,273 1,336
-----------------------------------------------------------------------------------------------
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4130-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligations........................... 13,567 13,736
15,319 15,784
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 6,945 7,768 7,700 7,900
Consolidated systemwide and other bank
bonds retired....................... -6,562 -5,505 -7,626 -7,741
Consolidated systemwide notes, net.... -214 -679 390 725
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 13,736 15,319
15,784 16,668
-------------------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
12.1 Personnel compensation and
benefits........................ 42 31 33
23.2 Cost of space occupied and
equipment....................... 7 6 6
25.2 Other services.................... 14 14 15
33.0 Investments and loans............. 42,644 44,000 45,000
43.0 Interest and dividends............ 902 1,098 1,148
92.0 Undistributed expenses............ 112 97 101
--------- --------- ----------
99.9 Total obligations............... 43,721 45,246 46,303
---------------------------------------------------------------------------
Farm Credit Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 107 105 105
00.02 Interest on borrowings.......... 2,302 2,387 2,490
00.03 Insurance premiums.............. 13 12 11
00.04 Provision for loan losses....... -25 4 4
00.05 Losses/gains on property........ -7 -2
00.06 Other expenses.................. 273 195 169
--------- --------- ----------
00.91 Total operating expenses...... 2,663 2,701 2,779
01.01 Capital investment: Direct loans.. 22,036 22,103 22,437
--------- --------- ----------
10.00 Total obligations............... 24,699 24,804 25,216
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 6,660 6,161 6,083
22.00 New budget authority (gross)...... 24,744 24,986 25,482
22.60 Redemption of debt................ -544 -260 -562
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 30,860 30,887 31,003
23.95 New obligations................... -24,699 -24,804 -25,216
24.47 Unobligated balance available, end
of year: Authority to borrow.... 6,161 6,083 5,787
----------------------------------------------------------------------------
New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 24,744 24,986 25,482
----------------------------------------------------------------------------
Change in unpaid obligations:
72.90 Unpaid obligations, start of year:
Obligated balance: Fund balance. 382 771 825
73.10 New obligations................... 24,699 24,804 25,216
73.20 Total outlays (gross)............. -24,310 -24,750 -25,091
74.90 Unpaid obligations, end of year:
Obligated balance: Fund balance:
Uninvested balance.............. 771 825 950
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 24,310 24,750 25,091
--------- --------- ----------
87.00 Total outlays (gross)........... 24,310 24,750 25,091
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -24,744 -24,986 -25,482
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -434 -236 -391
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 22,036 22,103 22,436
--------- --------- ----------
1150 Total direct loan obligations... 22,036 22,103 22,436
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 36,190 36,535 37,103
1231 Disbursements: Direct loan
disbursements................... 22,036 22,492 22,880
1251 Repayments: Repayments and
prepayments..................... -21,689 -21,930 -22,340
1263 Write-offs for default: Direct
loans........................... -2 6 2
--------- --------- ----------
1290 Outstanding, end of year........ 36,535 37,103 37,645
---------------------------------------------------------------------------
Note.--Loans outstanding at end of year do not include nonaccrual
loans and sales contracts.
The Agricultural Credit Act of 1987 (1987 Act) required the Federal
Land Banks (FLBs) and Federal Intermediate Credit Banks (FICBs) to merge
into a Farm Credit Bank (FCB) in each of the 12 Farm Credit districts.
The FCBs operate under statutory authority that combines the prior
authorities of the FLB and the FICB. No merger occurred in the Jackson
district in 1988 because the FLB was in receivership. Pursuant to
section 410(e) of the 1987 Act, as amended by the Farm Credit Banks
Safety and Soundness Act of 1992, the FICB of Jackson merged with the
FCB of Columbia on October 1, 1993. Mergers and consolidations of FCBs
across district lines, that began in 1992 continued through mid-1995. As
a result of this restructuring activity, 6 FCBs headquartered in the
following cities, remain: AgFirst FCB, Columbia, South Carolina;
AgAmerica FCB, Spokane, Washington; AgriBank FCB, St. Paul, Minnesota;
FCB of Wichita, Wichita, Kansas; FCB of Texas, Austin, Texas; and
Western FCB, Sacramento, California.
The FCBs serve as discount banks and as of January 1, 1996 provided
funds to 32 Federal Land Credit Associations (FLCA), 66 Production
Credit Associations (PCAs), and 60 Agricultural Credit Associations
(ACAs). These direct lender associations, in turn, make short-term
production loans (PCAs
[[Page 1140]]
and ACAs) and long-term real estate loans (FLCAs and ACAs) to eligible
farmers and ranchers. Also, as of January 1, 1996, 70 Federal Land Bank
Associations originated and serviced long-term real estate loans for 2
of the 6 FCBs that have no affiliated FLCAs. FCBs can also lend to local
financing institutions, including commercial banks, as authorized by the
Farm Credit Act of 1971, as amended.
All the capital stock of the FICB's, from organization in 1923 to
December 31, 1956, was held by the U.S. Government. The 1956 Act
provided a long-range plan for the eventual ownership of the credit
banks by the production credit associations and the gradual retirement
of the Government's investment in the banks. This retirement was
accomplished in full on December 31, 1968. The last of the Government
capital that had been invested in the FLB's was repaid in 1947.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 2,547 3,011 3,041 3,126
0102 Total interest expense............ -1,731 -2,302 -2,387 -2,490
------------ -------------- ------------ -------------
0109 Net interest income............... 816 709 654 636
0111 Other income...................... 50 44 15 16
0112 Other expenses.................... -531 -361 -313 -289
------------ -------------- ------------ -------------
0119 Net income........................ -481 -317 -298 -273
------------ -------------- ------------ -------------
0191 Total revenues.................... 2,597 3,055 3,056 3,142
------------ -------------- ------------ -------------
0192 Total expenses.................... -2,262 -2,663 -2,700 -2,779
------------ -------------- ------------ -------------
0199 Net income or loss................ 335 392 356 363
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 6,300 6,708 6,804 7,080
1206 Accrued Interest Receivable..... 731 810 685 707
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 36,366 36,659 37,080 37,602
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -627 -548 -477 -477
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 35,739 36,111 36,603 37,125
1803 Other Federal assets: Property,
plant and equipment, net........ 464 402 384 406
------------ -------------- ------------ -------------
1999 Total assets.................... 43,234 44,031 44,476 45,318
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 273 276 243 258
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 27,706 28,532 28,702 29,851
2201 Consolidated systemwide notes. 10,342 10,060 10,150 9,563
2201 Notes payable and other
interest-bearing liabilities 567 597 704 811
2202 Accrued interest payable........ 382 437 465 479
------------ -------------- ------------ -------------
2999 Total liabilities............... 39,270 39,902 40,264 40,962
NET POSITION:
3200 Invested capital.................. 3,964 4,129 4,212 4,356
------------ -------------- ------------ -------------
3999 Total net position.............. 3,964 4,129 4,212 4,356
------------ -------------- ------------ -------------
4999 Total liabilities and net position 43,234 44,031 44,476 45,318
-----------------------------------------------------------------------------------------------
Statement of Changes in Net Worth (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 4,007 3,964 4,129 4,212
============ ============== ============ =============
Capital stock and participations
issued.............................. 128 37 295 64
Capital stock and participations
retired............................. 409 121 104 48
Surplus retired.......................
Net income............................ 336 392 356 362
Cash/Dividends/Patronage Distributions -65 -146 -463 -235
Other, net............................ -33 3
------------ -------------- ------------ -------------
Ending balance of net worth............. 3,964 4,129 4,212 4,356
-----------------------------------------------------------------------------------------------
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4160-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligations........................... 37,377 38,119
39,041 39,775
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 29,655 53,468 36,089 36,435
Consolidated systemwide and other bank
bonds retired....................... -28,861 -52,831 -33,634 -34,696
Consolidated systemwide notes, net.... -93 143 -1,721 -655
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 38,119 39,041
39,775 40,858
-------------------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 85 83 84
23.2 Cost of space occupied and
equipment....................... 22 22 21
25.2 Other services.................... 13 12 11
33.0 Investments and loans............. 22,036 22,103 22,437
43.0 Interest and dividends............ 2,302 2,387 2,490
92.0 Undistributed expenses............ 241 196 172
99.5 Below reporting threshold......... 1 1
--------- --------- ----------
99.9 Total obligations............... 24,699 24,804 25,216
---------------------------------------------------------------------------
Federal Agricultural Mortgage Corporation
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Administrative expenses and taxes. 3 5 6
--------- --------- ----------
10.00 Total obligations............... 3 5 6
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.47 Unobligated balance available,
start of year: Authority to
borrow.......................... 12 11 10
22.00 New budget authority (gross)...... 3 4 7
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 15 15 17
23.95 New obligations................... -3 -5 -6
24.47 Unobligated balance available, end
of year: Authority to borrow.... 11 10 11
----------------------------------------------------------------------------
New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 3 4 7
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 3 5 6
73.20 Total outlays (gross)............. -3 -5 -6
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 3 4 6
86.98 Outlays from permanent balances... 1
--------- --------- ----------
87.00 Total outlays (gross)........... 3 5 6
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -3 -4 -7
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... 1 -1
---------------------------------------------------------------------------
[[Page 1141]]
Farmer Mac was established by the Agricultural Credit Act of 1987
(the Act) to facilitate creation of a secondary market for farm and
rural housing mortgage loans that meet minimum credit standards. As
authorized by the Act, Farmer Mac guarantees securities formed by
certified loan pooling institutions. In addition, the Farmer Mac title
of the Act was amended by the 1990 farm bill to authorize Farmer Mac to
purchase, pool, and securitize the guaranteed portions of Farmers Home
Administration (FmHA) guaranteed farmer program loans. These two areas
of secondary market authority have been organized by Farmer Mac into two
distinct programs designated as ``Farmer Mac I'' and ``Farmer Mac II,''
respectively. The Farmer Mac title was further amended in 1991 to
clarify Farmer Mac's authority to issue debt obligations, to provide for
the establishment of minimum capital standards for Farmer Mac, and to
expand rulemaking authority for the Farm Credit Administration. The Farm
Credit System Reform Act of 1996 significantly expanded the activities
of Farmer Mac by allowing it to directly purchase mortgages and to form
loan pools.
In general, the agricultural secondary market is intended to attract
new capital for financing agricultural real estate, including rural
housing, foster increased long-term fixed-rate lending, and provide
greater liquidity to agricultural lenders. Increased competition among
agricultural lenders, stimulated by access to the secondary market,
should result in more favorable rates and terms for agricultural
borrowers.
Farmer Mac is governed by a 15 member Board of Directors. Ten Board
members are elected by stockholders, including five by the Farm Credit
System, and five are appointed by the President subject to Senate
confirmation.
Financing
Funding for Farmer Mac comes from four sources: common and preferred
stock; debt obligations; guarantee fees and a $1.5 billion line of
credit with the U.S. Treasury.
The actuarial soundness of the guarantee fee is reviewed annually by
the Comptroller General in a report to Congress. The soundness of Farmer
Mac I pools will be determined through a multi-stage process. First,
loans must comply with the credit underwriting and appraisal standards.
Second, pools of eligible loans must meet Farmer Mac's standards for
geographic and commodity diversification and be subjected to economic
stress analysis to determine pool performance characteristics. In the
case of Farmer Mac II, only the FmHA guaranteed portions of the loans
will be pooled by Farmer Mac.
Available funds of Farmer Mac are invested in U.S. agency securities
or other high-grade commercial paper. No stock dividends are allowed
under the Act until the Board determines that an adequate loss reserve
has been funded to back Farmer Mac guarantees.
Guarantees
Farmer Mac provides a guarantee of timely payment of principal and
interest on securities backed by pools of eligible loans. These
securities are not guaranteed by the United States, and are not
``government securities''. In 1996 Congress removed requirements that
loan originators or poolers maintain cash reserves or subordinated
securities.
Farmer Mac guaranteed mortgage-backed securities are subject to
registration requirements established by the Securities and Exchange
Commission under the 1933 and 1934 Securities Acts.
Regulation
Farmer Mac is federally regulated by the Farm Credit Administration
(FCA). Under 1991 amendments to the Act, regulation is performed by the
FCA's Office of Secondary Market Oversight. The Office is responsible
for examination of and rulemaking for Farmer Mac (after a transition
period), including the determination of the stress test for Farmer Mac's
risk-based capital. The 1991 amendments also clarified FCA's regulatory
authority, including enforcement of Farmer Mac's regulatory capital
standards.
Status of Guaranteed Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2131 Guaranteed loan commitments exempt
from limitation................. 155 392 715
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 155 392 715
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 463 506 795
2231 Disbursements of new guaranteed
loans........................... 155 392 715
2251 Repayments and prepayments........ -112 -103 -167
--------- --------- ----------
2290 Outstanding, end of year........ 506 795 1,343
----------------------------------------------------------------------------
Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 506 795 1,343
---------------------------------------------------------------------------
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 3 3 4 7
0102 Expense........................... -4 -3 -5 -6
------------ -------------- ------------ -------------
0109 Net loss.......................... -1 -1 1
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1201 Non-Federal assets: Investment in
securities...................... 474 619 592 915
------------ -------------- ------------ -------------
1999 Total assets.................... 474 619 592 915
LIABILITIES:
2203 Non-Federal liabilities: Debt..... 461 607 581 898
------------ -------------- ------------ -------------
2999 Total liabilities............... 461 607 581 898
NET POSITION:
3200 Invested capital.................. 12 12 11 17
------------ -------------- ------------ -------------
3999 Total net position.............. 12 12 11 17
------------ -------------- ------------ -------------
4999 Total liabilities and net position 473 619 592 915
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Personnel
compensation and benefits....... 2 2 3
25.2 Other services.................... 1 3 3
--------- --------- ----------
99.9 Total obligations............... 3 5 6
---------------------------------------------------------------------------
FEDERAL HOME LOAN BANK SYSTEM
Federal Home Loan Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses
including FHFB assessments.... 234 243 243
00.02 Affordable Housing program...... 102 100 100
00.03 Interest on consolidated
obligations and loss on debt
retirement.................... 11,941 10,000 10,000
00.04 Interest on members' deposits
and other borrowings.......... 1,093 1,000 1,000
00.05 Payment to REFCORP.............. 300 300 300
00.06 Cash dividends on capital stock. 547 500 500
--------- --------- ----------
[[Page 1142]]
00.91 Total operating expenses...... 14,217 12,143 12,143
Capital investment:
01.01 Investment in bank premises..... 11 12 9
01.04 Net increase in advances and
non-Treasury securities....... 55,757
01.05 Repurchase of capital stock..... 4,005 5,074 5,400
--------- --------- ----------
01.91 Total capital investment...... 59,773 5,086 5,409
--------- --------- ----------
10.00 Total obligations............... 73,990 17,229 17,552
----------------------------------------------------------------------------
Budgetary resources available for obligation:
Unobligated balance available, start of year:
21.41 U.S. Securities: Par value...... 910 148 1,248
21.90 Fund balance.................... 448
--------- --------- ----------
21.99 Total unobligated balance,
start of year............... 1,358 148 1,248
22.00 New budget authority (gross)...... 72,780 31,173 17,552
22.60 Redemption of debt................ -12,843
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 74,138 18,478 18,800
23.95 New obligations................... -73,990 -17,229 -17,552
24.41 Unobligated balance available, end
of year: U.S. Securities: Par
value........................... 148 1,248 1,248
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. 52,798
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 19,982 31,173 17,552
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 72,780 31,173 17,552
----------------------------------------------------------------------------
Change in unpaid obligations:
Unpaid obligations, start of year:
Obligated balance:
72.41 U.S. Securities: Par value.... 3,329 2,482 2,752
72.47 Authority to borrow (obligated
balance net of U.S. Treasury
and agency securities held). 2,379 1,048
72.90 Fund balance.................. 449 400
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 3,329 5,310 4,200
73.10 New obligations................... 73,990 17,229 17,552
73.20 Total outlays (gross)............. -72,009 -18,340 -17,552
Unpaid obligations, end of year:
Obligated balance:
74.41 U.S. Securities: Par value.... 2,482 2,752 2,752
74.47 Authority to borrow........... 2,379 1,048 1,048
74.90 Fund balance: Uninvested
balance..................... 449 400 400
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 5,310 4,200 4,200
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 72,009 18,340 17,552
--------- --------- ----------
87.00 Total outlays (gross)........... 72,009 18,340 17,552
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash)
from:
Non-Federal sources:
88.40 Net decrease in advances and
non-Treasury investments.. -13,618
88.40 Other collections from non-
Federal sources........... -19,982 -17,555 -17,552
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -19,982 -31,173 -17,552
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 52,798
90.00 Outlays........................... 52,027 -12,833
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 724,349 725,000 725,000
--------- --------- ----------
1150 Total direct loan obligations... 724,349 725,000 725,000
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 116,567 122,128 120,500
1231 Disbursements: Direct loan
disbursements................... 724,349 725,000 725,000
1251 Repayments: Repayments and
prepayments..................... -718,788 -726,628 -725,000
--------- --------- ----------
1290 Outstanding, end of year........ 122,128 120,500 120,500
---------------------------------------------------------------------------
The 12 Federal Home Loan Banks were chartered by the Federal Home
Loan Bank Board under the authority of the Federal Home Loan Bank Act of
1932. Subsequent to the passage of the Financial Institutions Reform,
Recovery, and Enforcement Act (FIRREA) of 1989, the FHLBanks are under
the supervision of the Federal Housing Finance Board. The common mission
of the FHLBanks is to facilitate the extension of credit through their
members in order to provide access to housing for all Americans and to
improve the quality of their communities. To accomplish this mission,
the FHLBanks make loans, called advances, and provide other credit
products such as letters of credit to member institutions. Advances and
letters of credit must be fully secured by eligible collateral and long-
term advances may be made only for the purpose of providing funds for
residential housing finance. Additionally, specialized community-related
advance programs provide funds for community reinvestment and affordable
housing programs. All regulated financial depositories and insurance
companies engaged in residential housing finance are eligible for
membership. Each FHLBank operates in a geographic district designated by
the Board and together the FHLBanks cover all of the United States as
well as Puerto Rico, the Virgin Islands, and Guam.
Advances outstanding on September 30, 1995 totaled approximately
$122.1 billion, a net increase of approximately $5.9 billion from the
September 30, 1994 level of $116.2 billion.
The principal source of funds for the lending operation is the sale
of consolidated obligations to the public. On September 30, 1995, $226.4
billion of these obligations were outstanding. The consolidated
obligations are not guaranteed by the U.S. Government as to principal or
interest. Other sources of lendable funds include a portion of members'
deposits as determined by Board policy. Deposits totaled $16.9 billion
and total capital amounted to $14.7 billion as of September 30, 1995.
Funds not immediately used for advances to members are invested until
such times as needed.
The capital stock of the Federal Home Loan Banks is owned entirely
by the members. Initially the U.S. Government purchased stock of the
banks in the amount of $125 million. The banks had repurchased the
Government's investment in full by mid-1951.
The entire operating expenses of the FHLBanks are paid from their
own income and are not included in the budget of the United States.
Included in these expenses is the assessment by the Federal Housing
Finance Board to cover the Board's administrative and other costs.
FIRREA contains provisions for the establishment of an Affordable
Housing Program (AHP) by each FHLBank. Each FHLBank has developed its
AHP to enhance the availability of housing for very low-, low- and
moderate-income families by providing direct subsidies or subsidized
advances for members who use the funds for qualifying housing projects.
The FHLBank system sets aside for its AHPs a total of $100 million
annually.
The forecast data for 1996 and 1997 contained in this material
represents estimates and should not be construed as an official forecast
of the FHLBanks System's future position.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 8,985 14,568 12,543 12,543
0102 Expense (excludes payments to
REFCORP)........................ -8,051 -13,370 -11,343 -11,343
------------ -------------- ------------ -------------
[[Page 1143]]
0109 Net income........................ 934 1,198 1,200 1,200
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Treasury
securities, net............... 4,239 2,630 4,000 4,000
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 84,794 134,990 123,000 123,000
1206 Accounts receivable............. 2,053 3,532 3,000 3,000
1401 Net value of assets related to
direct loans receivable: Direct
loans receivable, gross......... 116,567 122,128 120,500 120,500
Other Federal assets:
1801 Cash and other monetary assets.. 448 449 400 400
1803 Property, plant and equipment,
net........................... 156 157 140 140
1901 Other assets.................... 43 941 100 100
------------ -------------- ------------ -------------
1999 Total assets.................... 208,300 264,828 251,140 251,140
LIABILITIES:
2101 Federal liabilities: REFCORP and
AHP............................. 308 347 380 380
Non-Federal liabilities:
2201 Accounts payable................ 196 185 100 100
2202 Interest payable................ 2,522 3,946 3,000 3,000
2203 Debt............................ 168,379 226,406 217,000 217,000
Other:
2207 Deposit funds and other
borrowings.................. 23,666 18,437 15,000 15,000
2207 Other......................... 302 832 720 720
------------ -------------- ------------ -------------
2999 Total liabilities............... 195,374 250,154 236,200 236,200
NET POSITION:
3200 Invested capital.................. 12,926 14,674 14,940 14,940
------------ -------------- ------------ -------------
3999 Total net position.............. 12,926 14,674 14,940 14,940
------------ -------------- ------------ -------------
4999 Total liabilities and net position 208,300 264,828 251,140 251,140
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1995 actual 1996 est. 1997 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 92 95 95
12.1 Civilian personnel benefits....... 26 26 26
21.0 Travel and transportation of
persons......................... 6 8 8
23.3 Communications, utilities, and
other rent...................... 22 22 22
24.0 Printing and reproduction......... 7 9 9
25.2 Other services.................... 73 75 75
31.0 Equipment......................... 7 8 8
32.0 Land and structures............... 11 12 9
33.0 Net increase in advances and
securities...................... 55,757
41.0 Subsidies (Affordable Housing
Program)........................ 102 100 100
Interest and dividends:
43.0 Interest and changes in other
assets........................ 13,581 11,500 11,500
43.0 REFCORP interest................ 300 300 300
92.0 Repurchase of capital stock
(gross)......................... 4,005 5,074 5,400
--------- --------- ----------
99.9 Total obligations............... 73,990 17,229 17,552
---------------------------------------------------------------------------
Financing Corporation
The Financing Corporation (FICO) is a mixed-ownership government
corporation, chartered by the Federal Home Loan Bank Board pursuant to
the Federal Savings and Loan Insurance Corporation Recapitalization Act
of 1987, as amended (the ``Act''). FICO's sole purpose was to function
as a financing vehicle for the FSLIC Resolution Fund, formerly the
Federal Savings and Loan Insurance Corporation (FSLIC). FICO operates
under the supervision and control of the Federal Housing Finance Board
(the ``Finance Board''). Pursuant to the Act, FICO was authorized to
issue debentures, bonds and other obligations subject to limitations
contained in the Act, the net proceeds of which were to be used solely
to purchase capital certificates issued by the FSLIC Resolution Fund, or
to refund any previously issued obligations. The Resolution Trust
Corporation Refinancing, Restructuring, and Improvement Act of 1991
terminated the FICO's borrowing authority.
The Act provided formulas pursuant to which the Federal Home Loan
Banks made capital contributions to FICO at the direction of the Finance
Board for the purchase of FICO capital stock. FICO used the proceeds
received from the sales of such capital stock to purchase non-interest
bearing securities for deposit in a segregated account as required by
the Act. The non-interest bearing securities held in the segregated
account will be the primary source of repayment of the principal of the
FICO obligations. Securities in the segregated account are kept separate
from other FICO accounts and funds but are not specifically pledged as
collateral for the payment of obligations. The primary source of payment
of interest on the obligations will be the receipt of assessments
imposed on and collected from institutions' accounts which are insured
by the Savings Association Insurance Fund (the ``SAIF'').
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4033-0-3-373 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 888 897 906 916
0102 Expense........................... -795 -795 -795 -795
------------ -------------- ------------ -------------
0109 Net income........................ 93 102 111 121
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4033-0-3-373 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Segregated
accounts investment, net...... 1,143 1,244 1,354 1,475
Other Federal assets:
1801 Cash, cash equivalents, and
interest receivable........... 344 279 279 279
1901 Other assets.................... 13 13 12 12
------------ -------------- ------------ -------------
1999 Total assets.................... 1,500 1,536 1,645 1,766
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable................ 236 236 236 236
2203 Debt............................ 8,140 8,141 8,142 8,144
2207 Other........................... 152 85 83 81
------------ -------------- ------------ -------------
2999 Total liabilities............... 8,528 8,462 8,461 8,461
NET POSITION:
3100 FICO capital stock purchased by
FHLBanks........................ 680 680 680 680
3300 Cumulative results of operations.. 463 565 675 796
Other:
3600 Other........................... -7,568 -7,568 -7,568 -7,568
3600 Other........................... -603 -603 -603 -603
------------ -------------- ------------ -------------
3999 Total net position.............. -7,028 -6,926 -6,816 -6,695
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,500 1,536 1,645 1,766
-----------------------------------------------------------------------------------------------
Resolution Funding Corporation
The Resolution Funding Corporation (the ``REFCORP'') is a mixed-
ownership government corporation established by Title V of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The
sole purpose of REFCORP was to provide financing for the Resolution
Trust Corporation (the ``RTC''). Pursuant to FIRREA, REFCORP was
authorized to issue debentures, bonds, and other obligations, subject to
limitations contained in the Act and regulations established by the
Thrift Depositor Protection Oversight Board. The proceeds of the debt
(less any discount, plus any premium, net of issuance cost) were used
solely to purchase nonredeemable capital certificates of the RTC or to
refund any previously issued obligations.
REFCORP is subject to the general oversight and direction of the
Thrift Depositor Protection Oversight Board. The day-to-day operations
of REFCORP are under the management of a three-member Directorate
comprised of the Director of
[[Page 1144]]
the Office of Finance of the Federal Home Loan Banks and two members
selected by the Oversight Board from among the presidents of the twelve
Federal Home Loan Banks (``the FHLBanks''). Members of the Directorate
serve without compensation, and REFCORP is not permitted to have any
paid employees. REFCORP and its Directorate are subject to regulations,
orders and directions of the Thrift Depositor Protection Oversight
Board.
FIRREA and the regulations adopted by the Thrift Depositor
Protection Oversight Board provide formulas pursuant to which the
Federal Home Loan Banks made capital contributions to REFCORP's
Principal Fund and continue to make interest payments on outstanding
REFCORP obligations. FIRREA also provides that the U.S. Treasury cover
any interest shortfall. Funds designated for the Principal Funds were
used to purchase zero-coupon bonds. The zero-coupon bonds will be held
in the Principal Fund and are the primary source of repayment of the
principal of the obligations at maturity.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4029-0-3-373 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 2,875 2,895 2,920 2,942
0102 Expense........................... -2,626 -2,626 -2,626 -2,626
------------ -------------- ------------ -------------
0109 Net income........................ 249 269 294 316
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4029-0-3-373 1994 actual 1995 actual 1996 est. 1997 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Principal fund
account investment, net....... 3,301 3,567 3,856 4,169
1206 Non-Federal assets: Assessments
receivable for interest expense. 881 881 881 881
1901 Other Federal assets: Other assets 1 1 1
------------ -------------- ------------ -------------
1999 Total assets.................... 4,183 4,449 4,738 5,050
LIABILITIES:
Non-Federal liabilities:
2202 Accrued interest payable on
long-term obligations......... 881 881 881 881
2203 Debt............................ 30,079 30,076 30,074 30,072
------------ -------------- ------------ -------------
2999 Total liabilities............... 30,960 30,957 30,955 30,953
NET POSITION:
3100 Nonvoting capital stock issued to
FHLBanks........................ 2,513 2,513 2,513 2,513
3200 RTC nonredeemable capital
certificates.................... -31,286 -31,286 -31,286 -31,286
3300 Cumulative results of operations.. 939 1,208 1,499 1,813
3600 Other............................. 1,057 1,057 1,057 1,057
------------ -------------- ------------ -------------
3999 Total net position.............. -26,777 -26,508 -26,217 -25,903
------------ -------------- ------------ -------------
4999 Total liabilities and net position 4,183 4,449 4,738 5,050
-----------------------------------------------------------------------------------------------
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1994 actual 1995 est. 1996 est.
----------------------------------------------------------------------------
Obligations by program activity:
Board operating expenses:
00.01 Monetary and economic policy.... 65 73 74
00.02 Services to financial
institutions and the public... 3 3 3
00.03 Supervision and regulation of
financial institutions........ 57 64 65
00.04 System policy direction and
oversight..................... 28 31 32
--------- --------- ----------
00.91 Subtotal: Board operating
expenses.................... 153 171 174
01.01 Office of Inspector General
operating expenses.............. 3 3 3
--------- --------- ----------
10.00 Total obligations............... 156 174 177
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested
balance......................... -1 -3 -6
22.00 New budget authority (gross)...... 154 171 177
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 153 168 171
23.95 New obligations................... -156 -174 -177
24.40 Unobligated balance available, end
of year: Uninvested balance..... -3 -6 -7
----------------------------------------------------------------------------
New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 154 171 177
----------------------------------------------------------------------------
Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Appropriation 13 18 21
73.10 New obligations................... 156 174 177
73.20 Total outlays (gross)............. -152 -171 -175
74.40 Unpaid obligations, end of year:
Obligated balance: Appropriation 18 21 23
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 140 157 161
86.98 Outlays from permanent balances... 12 14 14
--------- --------- ----------
87.00 Total outlays (gross)........... 152 171 175
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -154 -171 -177
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -3 -2
---------------------------------------------------------------------------
The figures presented may differ from other Board financial material
because they are prepared in accordance with OMB guidelines which vary
from the Board's budget and accounting procedures.
The Federal Reserve System operates under the provisions of the
Federal Reserve Act of 1913, as amended, and other acts of Congress.
Program.--To carry out its responsibilities under the Act, the Board
determines general monetary, credit, and operating policies for the
System as a whole and formulates the rules and regulations necessary to
carry out the purposes of the Federal Reserve Act. The Board's principal
duties consist of exerting an influence over credit conditions and
supervising the Federal Reserve banks and member banks.
Financing.--Under the provisions of section 10 of the Federal
Reserve Act, the Board of Governors levies upon the Federal Reserve
banks, in proportion to their capital and surplus, an assessment
sufficient to pay its estimated expenses. The Board, under the Act,
determines and prescribes the manner in which its obligations are
incurred and its expenses paid. Funds derived from assessments are
deposited in the Federal Reserve Bank of Richmond, and the Act provides
that such funds ``shall not be construed to be Government funds or
appropriated moneys.'' No Government appropriation is required to
support operations of the Board.
The information presented pertains to Board operations only.
Expenditures made on behalf of the Federal Reserve banks for production,
issuance, retirement, and shipment of Federal Reserve notes are not
included, since they are reimbursed in full by the Federal Reserve
banks.
Statement of Operations (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1994 actual 1995 est. 1996 est.
----------------------------------------------------------------------------
0101 Revenue........................... 154 171 177
0102 Expense........................... -156 -174 -177
--------- --------- ----------
0109 Net income or loss (-)............ -2 -3
---------------------------------------------------------------------------
[[Page 1145]]
Balance Sheet (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1994 actual 1995 est. 1996 est.
----------------------------------------------------------------------------
ASSETS:
1206 Non-Federal assets: Receivables,
net............................. 4 3 2
Other Federal assets:
1801 Cash in bank.................... 15 15 17
1803 Property, plant and equipment,
net........................... 112 125 135
--------- --------- ----------
1999 Total assets.................... 131 143 154
LIABILITIES:
2201 Non-Federal liabilities: Accounts
payable and accrued liabilities. 22 24 25
--------- --------- ----------
2999 Total liabilities............... 22 24 25
NET POSITION:
3100 Appropriated capital.............. -3 -6 -7
3200 Invested capital.................. 112 125 136
--------- --------- ----------
3999 Total net position.............. 109 119 129
--------- --------- ----------
4999 Total liabilities and net position 131 143 154
---------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1994 actual 1995 est. 1996 est.
----------------------------------------------------------------------------
Direct obligations:
Personnel compensation:
11.1 Full-time permanent........... 89 95 100
11.3 Other than full-time permanent 1 1 1
11.5 Other personnel compensation.. 2 2 2
--------- --------- ----------
11.9 Total personnel compensation 92 98 103
12.1 Civilian personnel benefits..... 16 16 16
13.0 Benefits for former personnel... 1
21.0 Travel and transportation of
persons....................... 4 5 5
23.3 Communications, utilities, and
other rent.................... 9 9 10
24.0 Printing and reproduction....... 3 3 3
25.1 Advisory and assistance services 1 2 3
25.2 Other services.................. 13 18 16
26.0 Supplies and materials.......... 5 6 7
31.0 Equipment....................... 10 14 11
--------- --------- ----------
99.0 Subtotal, direct obligations.. 154 171 174
25.2 Allocation Account--Direct
Obligations: Other services..... 3 3 3
99.5 Below reporting threshold......... -1
--------- --------- ----------
99.9 Total obligations............... 156 174 177
---------------------------------------------------------------------------
Personnel Summary
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1994 actual 1995 est. 1996 est.
----------------------------------------------------------------------------
Total compensable workyears:
1005 Full-time equivalent of overtime
and holiday hours............... 38 38 38
1011 Exempt Full-time equivalent
employment...................... 1,650 1,659 1,665
---------------------------------------------------------------------------
\1\ Includes 32, 32, and 31 positions respectively for the Office of
Inspector General.