[Appendix]
[Estimates for Government-Sponsored Enterprises]
[From the U.S. Government Printing Office, www.gpo.gov]
[[Page 1165]]
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 was 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. Pursuant to legislation
enacted in 1996, the association was fully privatized in 1997
and is no longer a Government-sponsored enterprise.
--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-, moderate-, and middle-income housing;
both are regulated for financial safety and soundness by the
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,
insurance companies, and credit unions in providing financing
for housing and community development 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 provided 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)
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Identification code 99-1500-0-3-502 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest expense................ 2,590 2,461 2,584
00.02 Administrative expenses and
taxes......................... 710 586 615
--------- --------- ----------
00.91 Total operating expenses...... 3,300 3,047 3,199
Capital investment:
01.01 Loans, etc...................... 10,019 8,224 8,106
01.02 Investments, dividends, and
other assets.................. 600 700 650
--------- --------- ----------
01.91 Total capital investment...... 10,619 8,924 8,756
--------- --------- ----------
10.00 Total obligations............... 13,919 11,971 11,955
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Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 13,919 11,971 11,955
23.95 New obligations................... -13,919 -11,971 -11,955
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. -4,294 -8,029 -6,045
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 18,213 20,000 18,000
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 13,919 11,971 11,955
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Change in unpaid obligations:
72.41 Unpaid obligations, start of year:
Obligated balance: U.S.
Securities: Par value, start of
year............................ 1,291 1,382 1,340
73.10 New obligations................... 13,919 11,971 11,955
73.20 Total outlays (gross)............. -13,828 -12,013 -11,888
74.41 Unpaid obligations, end of year:
Obligated balance: U.S.
Securities: Par value, end of
year............................ 1,382 1,340 1,407
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 13,828 12,013 11,888
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -18,213 -20,000 -18,000
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. -4,294 -8,029 -6,045
90.00 Outlays........................... -4,385 -7,987 -6,112
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Status of Direct Loans (in millions of dollars)
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Identification code 99-1500-0-3-502 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 10,019 8,224 8,106
--------- --------- ----------
1150 Total direct loan obligations... 10,019 8,224 8,106
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Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 37,391 34,259 28,857
1231 Disbursements: Direct loan
disbursements................... 10,019 8,224 8,106
Repayments:
1251 Repayments and prepayments...... -4,565 -3,670 -2,596
1252 Proceeds from loan asset sales
to the public or discounted... -8,626 -10,000 -10,000
[[Page 1166]]
1264 Write-offs for default: Other
adjustments, net................ 40 44 48
--------- --------- ----------
1290 Outstanding, end of year........ 34,259 28,857 24,415
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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]
1997 actual 1998 est. 1999 est.
Guaranteed student loans:
Stafford (formerly ``regular''):
Purchased....................... 7,288 6,622 6,587
Warehoused...................... 668
PLUS/SLS: Purchased............... 614 554 546
------------------------------------
Subtotal, Guaranteed student
loans....................... 8,570 7,176 7,133
Health professions loans: Purchased. 127 60 0
Other............................... 1,322 988 975
------------------------------------
Total......................... 10,019 8,224 8,108
====================================
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.
Restructuring.--Pursuant to authority enacted in the Student Loan
Marketing Association Act of 1996, Sallie Mae shareholders, on July 31,
1997, approved a plan to reorganize the corporation as a fully private,
State chartered entity. Under the reorganization, which became effective
on August 8, 1997, the shares of common stock of the GSE (Student Loan
Marketing Association) were converted on a one-for-one basis to shares
of the new Delaware chartered holding company (SLM Holding Corporation).
The GSE became a wholly owned subsidiary of SLM Holding Corporation.
The legal status of the GSE's debt obligations, including State tax
exemptions, are fully preserved. According to the authorizing
legislation, the GSE must wind down and be liquidated by September 30,
2008. All obligations of the GSE remaining upon liquidation must be
placed into a defeasance trust. The GSE's outstanding adjustable rate
cumulative preferred stock is required to be redeemed prior to such
date.
As required by legislation, the shareholders' approval of the
restructuring plan resulted in the transfer of resources from Sallie Mae
to the District of Columbia for school facility improvements. The
District received a total of $41.8 million, of which $36.8 million came
from the sale of Sallie Mae stock warrants issued to the District, and
$5 million was a payment from the Association for its decision to retain
``Sallie Mae'' as a tradename.
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.
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 3,808
0102 Expense........................... -3,300
------------ -------------- ------------ -------------
0109 Net income........................ 508
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-1500-0-3-502 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
Investments in US securities:
1102 Treasury securities, par...... 1,281 1,382 1,340 1,407
1104 Agency securities, par........ 10
1106 Receivables, net.............. 852 773 812 853
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 6,971 5,318 2,671 823
1206 Receivables, net................ 483 436 458 481
1207 Advances and prepayments........ 15 19 20 21
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 37,538 34,384 28,962 24,504
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -147 -125 -105 -89
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 37,391 34,259 28,857 24,415
Other Federal assets:
1801 Cash and other monetary assets.. 35 91 95 100
1803 Property, plant and equipment,
net........................... 246 211 221 232
1901 Other assets.................... 100 572 600 630
------------ -------------- ------------ -------------
1999 Total assets.................... 47,384 43,061 35,074 28,962
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable................ 472 468 491 516
2203 Debt............................ 45,252 40,230 32,642 26,582
2207 Other........................... 643 1,110 1,166 1,224
------------ -------------- ------------ -------------
2999 Total liabilities............... 46,367 41,808 34,299 28,322
NET POSITION:
3200 Invested capital.................. 1,017 1,253 775 640
------------ -------------- ------------ -------------
3999 Total net position.............. 1,017 1,253 775 640
------------ -------------- ------------ -------------
4999 Total liabilities and net position 47,384 43,061 35,074 28,962
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
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Identification code 99-1500-0-3-502 1997 actual 1998 est. 1999 est.
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11.1 Personnel compensation: Full-time
permanent....................... 63 46 41
[[Page 1167]]
12.1 Civilian personnel benefits....... 16 12 11
21.0 Travel and transportation of
persons......................... 5 4 4
23.3 Communications, utilities, and
miscellaneous charges........... 17 12 11
25.1 Advisory and assistance services.. 22 16 14
25.2 Other services.................... 357 256 230
31.0 Equipment......................... 4 3 3
33.0 Loans............................. 10,019 8,224 8,106
43.0 Interest, dividends, and taxes.... 3,416 3,398 3,535
--------- --------- ----------
99.9 Total obligations............... 13,919 11,971 11,955
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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 stated 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 was structured to operate as a private
corporation, subject to the same state laws and regulations as any other
insurance company. Accordingly, Connie Lee secured insurance licenses in
each of the various states in which it planned 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 the portion of fiscal
year 1997 ending February 27, 1997 (date of stock sale for
privatization), Connie Lee insured $390.2 million of debt service on
bonds benefitting colleges, universities and teaching hospitals. Connie
Lee also provided reinsurance on bonds representing $0.9 million of debt
service.
INSURANCE AND REINSURANCE ACTIVITY
[In thousands of
dollars]
1997 actual
Debt service insured:
Direct insurance................................. 390,209
Reinsurance...................................... 899
--------------------
Total.......................................... 391,108
Financing.--In order to provide capitalization, the Secretary of
Education, the Student Loan Marketing Association (Sallie Mae), and
other investors were 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.
Management.--Connie Lee was 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 was
required to be an administrator of a college or university.
Privatization.--Legislation was enacted in 1996 that privatized
Connie Lee by repealing its enabling legislation and requiring the
Federal Government to sell, and Connie Lee to purchase, the
corporation's federally owned stock. This sale was completed on February
27, 1997, and the $18.3 million of proceeds were used to finance public
elementary and secondary school facility construction and repair within
the District of Columbia. Data on the corporation's financial position
at the time of the stock sale is shown below.
The corporation will continue to insure debt of educational
institutions, including Historically Black Colleges and Universities and
academic institutions that have lower investment-grade credit ratings.
Without the Federal restrictions previously imposed by legislation, the
corporation will be able to guarantee bonds in other market sectors and
diversify into new products and services.
Balance Sheet (in millions of dollars)
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Identification code 99-9931-0-3-502 1996 actual 1997 actual* 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
Investments in US securities:
1102 Treasury securities, par...... 42 47
1104 Agency securities, par........ 21 10
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 155 166
1206 Receivables, net................ 9
1207 Advances and prepayments........ 37 39
Other Federal assets:
1801 Cash and other monetary assets.. 3 3
1803 Property, plant and equipment,
net........................... 1 1
------------ -------------- ------------ -------------
1999 Total assets.................... 268 266
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 9 28
2201 Non-Federal liabilities: Accounts
payable......................... 94 86
------------ -------------- ------------ -------------
2999 Total liabilities............... 103 114
NET POSITION:
3200 Invested capital.................. 165 152
------------ -------------- ------------ -------------
3999 Total net position.............. 165 152
------------ -------------- ------------ -------------
4999 Total liabilities and net position 268 266
-----------------------------------------------------------------------------------------------
* Data reflects financial position on February 27, 1997.
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 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest on borrowings from the
public........................ 21,847 24,348 27,592
00.02 Other costs..................... 3,172 3,018 3,053
--------- --------- ----------
00.91 Total operating expenses...... 25,019 27,366 30,645
Capital investment:
01.01 Mortgage purchases and loans.... 65,206 80,123 87,593
01.02 Lease-Purchase Discounts........ 302
--------- --------- ----------
01.91 Total capital investment...... 65,508 80,123 87,593
--------- --------- ----------
10.00 Total obligations............... 90,528 107,489 118,238
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Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 464,644 498,942 509,435
22.00 New budget authority (gross)...... 124,826 117,982 152,589
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 589,470 616,924 662,024
23.95 New obligations................... -90,528 -107,489 -118,238
24.40 Unobligated balance available, end
of year: Uninvested............. 498,942 509,435 543,786
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New budget authority (gross), detail:
67.10 Authority to borrow............... 61,390 76,295 118,069
[[Page 1168]]
67.15 Net increase or decrease in
unlimited borrowing authorities. -4
--------- --------- ----------
67.90 Authority to borrow (total)..... 61,386 76,295 118,069
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 63,440 41,687 34,520
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 124,826 117,982 152,589
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Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Total........ 6,866 9,057 4,684
73.10 New obligations................... 90,528 107,489 118,238
73.20 Total outlays (gross)............. -88,337 -111,862 -117,601
74.40 Unpaid obligations, end of year:
Obligated balance: Total........ 9,057 4,684 5,321
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 63,440 41,687 34,520
86.98 Outlays from permanent balances... 24,897 70,175 83,081
--------- --------- ----------
87.00 Total outlays (gross)........... 88,337 111,862 117,601
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
Offsetting collections (cash)
from:
88.00 Federal sources............... -130 -130 -130
88.40 Non-Federal sources........... -63,310 -41,557 -34,390
--------- --------- ----------
88.90 Total, offsetting
collections (cash)........ -63,440 -41,687 -34,520
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 61,386 76,295 118,069
90.00 Outlays........................... 24,897 70,175 83,081
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 60,971 80,344 88,484
--------- --------- ----------
1150 Total direct loan obligations... 60,971 80,344 88,484
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 293,037 321,711 366,030
Disbursements:
1231 Direct loan disbursements....... 60,290 79,623 87,093
1232 Purchase of loans assets from
the public.................... 4,916 500 500
1251 Repayments: Repayments and
prepayments..................... -34,478 -35,804 -45,355
1264 Write-offs for default: Other
adjustments, net................ -2,054
--------- --------- ----------
1290 Outstanding, end of year........ 321,711 366,030 408,268
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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. As of September 30, 1997, Fannie Mae
held a net mortgage portfolio totaling $307 billion and had net
outstanding guaranteed mortgage-backed securities of over $566 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 Plow-, moderate-, and middle-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; its earnings as of third quarter suggest the company
will pay approximately $1.2 billion for 1997. 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.''
Fannie Mae's primary customers are low-, moderate-, and middle-
income families. In March of 1994, the company established its ``$1
Trillion Initiative'' to provide mortgage financing for low- and
moderate-income families in underserved markets, and passed the halfway
mark in 1997. The company's 28 Partnership Offices have delivered over
$40 billion in targeted investments by tailoring Fannie Mae's products
and services to meet the unique needs of the communities in which they
are located. In addition, enhancements to the company's automated
underwriting system (Desktop Underwriter 4.0) will lower underwriting
costs, speed the approval process, and expand the availability of
secondary market financing.
On December 1, 1995, the U.S. Department of Housing and Urban
Development issued a final rule that sets the levels of the affordable
housing goals for 1996-1999 and es- tablishes the requirements for
counting mortgage purchases to low- and moderate-income families and
families living in underserved areas with specific census tract and
minority concentration requirements. Under the regulations, the low- and
moderate-income target is 42 percent; the underserved area goal is 24
percent for the 1997-1999 period. In addition, the special affordable
housing goal requires the corporation to target 14 percent of its
conventional mortgage business in 1997-1999 to very low-income families
or low-income families in low-income areas; those amounts must include
qualifying special affordable purchases on multifamily units totaling
not less than $1.29 billion for each year. Fannie Mae exceeded
[[Page 1169]]
its housing goals for 1994, 1995, and 1996 and expects to meet or exceed
all of its goals for 1997.
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 has statutory
responsibility 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 September 1997 was $14.1
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. Through the third quarter of 1997, it earned $2.26
billion.
The forecast data contained in this material has been developed
based on certain general economic assumptions prevalent in the third
quarter of 1997 and should not be construed as an official forecast for
Fannie Mae.
Income and retained earnings for the years ended September 30, 1996
and 1997 follow (in thousands of dollars):
1996 actual 1997 actual
Gross revenue........................... 24,404,500 27,065,400
Gross expenses.......................... 21,008,700 22,931,500
------------- --------------
Income before Federal income tax...... 3,395,800 4,133,900
Federal income tax...................... 1,000,300 1,225,000
------------- --------------
Net income............................ 2,395,500 2,908,900
Retained earnings, beginning of year.... 9,123,000 10,718,300
Dividends on common stock............... -800,200 -862,300
------------- --------------
Retained earnings, end of year........ 10,718,300 12,764,900
------------- --------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Federal assets:
1101 Fund balances with Treasury..... 650 124 11 20
Investments in US securities:
1102 Treasury securities, par...... 21 26
1104 Other......................... 53,933 64,364 71,475 77,004
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Public: direct loans (net of
discount)..................... 267,105 294,402 340,175 381,502
1602 Federal Agencies................ 10,164 12,635 4,473 4,441
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -253 -281 279 275
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 277,016 306,756 344,927 386,218
Other Federal assets:
1801 Cash and other monetary assets.. 6,725 7,750 7,151 7,546
1803 Property, plant and equipment,
net........................... 190 205
------------ -------------- ------------ -------------
1999 Total assets.................... 338,534 379,225 423,564 470,788
LIABILITIES:
Federal liabilities:
2101 Accounts payable................ 550 511
2102 Accrued interest payable........ 4,429 4,622 5,710 6,079
2105 Other........................... 6 9
Non-Federal liabilities:
2203 Debt............................ 319,153 358,003 401,216 446,884
2204 Estimated Federal liability for
loan guarantees, credit reform 1,936 2,330 2,573 2,508
2206 Pension and other actuarial
liabilities................... 178 202
2207 Subtotal, Federal taxes payable. 15 190
------------ -------------- ------------ -------------
2999 Total liabilities............... 326,267 365,867 409,499 455,471
NET POSITION:
3300 Cumulative results of operations.. 10,718 12,765 15,023 17,422
3600 Change In Stockholder Equity...... 1,549 593 -958 -2,105
------------ -------------- ------------ -------------
3999 Total net position.............. 12,267 13,358 14,065 15,317
------------ -------------- ------------ -------------
4999 Total liabilities and net position 338,534 379,225 423,564 470,788
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2500-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
21.0 Travel and transportation of
persons......................... 18 16 17
23.3 Communications, utilities, and
miscellaneous charges........... 12 13 14
24.0 Printing and reproduction......... 6
25.1 Advisory and assistance services.. 92 99 109
Other services:
25.2 Other services--Non-Federal
employment compensation....... 351 397 434
25.2 Other services.................. 1,680 1,459 1,339
26.0 Supplies and materials............ 4
31.0 Equipment......................... 80 79 87
33.0 Investments and loans............. 65,508 80,123 87,593
43.0 Interest and dividends............ 22,777 25,303 28,645
--------- --------- ----------
99.9 Total obligations............... 90,528 107,489 118,238
---------------------------------------------------------------------------
mortgage-backed securities
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2501-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Capital investment: Commitments to
issue MBS....................... 279,880 160,817 156,883
--------- --------- ----------
10.00 Total obligations (object class
33.0)......................... 279,880 160,817 156,883
----------------------------------------------------------------------------
Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 279,880 160,817 156,883
23.95 New obligations................... -279,880 -160,817 -156,883
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Corporate borrowing authority..... 200,734 64,156 59,419
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 79,146 96,661 97,463
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 279,880 160,817 156,883
----------------------------------------------------------------------------
Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Uninvested... 155,523 301,700 255,245
73.10 New obligations................... 279,880 160,817 156,883
73.20 Total outlays (gross)............. -133,703 -207,272 -156,883
74.40 Unpaid obligations, end of year:
Obligated balance: Uninvested... 301,700 255,245 255,245
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 79,146 96,661 97,463
86.98 Outlays from permanent balances... 54,557 110,611 59,420
--------- --------- ----------
87.00 Total outlays (gross)........... 133,703 207,272 156,883
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -79,146 -96,661 -97,463
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 200,734 64,156 59,420
90.00 Outlays........................... 54,557 110,611 59,420
---------------------------------------------------------------------------
[[Page 1170]]
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-2501-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 279,880 160,817 156,883
--------- --------- ----------
1150 Total direct loan obligations... 279,880 160,817 156,883
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 636,362 690,919 801,530
1231 Disbursements: Direct loan
disbursements................... 133,703 207,272 156,883
1251 Repayments: Repayments and
prepayments..................... -79,146 -96,661 -97,463
--------- --------- ----------
1290 Outstanding, end of year........ 690,919 801,530 860,950
---------------------------------------------------------------------------
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 the third
quarter of 1997 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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 636,883 691,438 802,051 861,476
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -521 -519 -521 -526
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 636,362 690,919 801,530 860,950
------------ -------------- ------------ -------------
1999 Total assets.................... 636,362 690,919 801,530 860,950
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 636,362 690,919 801,530 860,950
------------ -------------- ------------ -------------
2999 Total liabilities............... 636,362 690,919 801,530 860,950
-----------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation
portfolio programs
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Interest expense and provision
for loan loss................. 11,011 13,531 16,628
00.02 Administration.................. 483 549 624
--------- --------- ----------
00.91 Total operating expenses...... 11,494 14,080 17,252
01.01 Capital investment: Mortgage
purchases for portfolio......... 36,040 39,644 43,608
--------- --------- ----------
10.00 Total obligations............... 47,534 53,724 60,860
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 23,815 13,654 7,828
22.00 New budget authority (gross)...... 45,263 54,854 63,653
22.60 Redemption of debt................ -7,890 -6,956 -6,133
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 61,188 61,552 65,348
23.95 New obligations................... -47,534 -53,724 -60,860
24.40 Unobligated balance available, end
of year: Uninvested............. 13,654 7,828 4,488
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Net change in borrowing
authorities..................... 23,216 33,927 43,789
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 22,047 20,927 19,864
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 45,263 54,854 63,653
----------------------------------------------------------------------------
Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Uninvested... 548 3,101 9,923
73.10 New obligations................... 47,534 53,724 60,860
73.20 Total outlays (gross)............. -44,981 -46,902 -52,672
74.40 Unpaid obligations, end of year:
Obligated balance: Uninvested... 3,101 9,923 18,111
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 23,906 30,147 40,026
86.98 Outlays from permanent balances... 21,075 16,755 12,646
--------- --------- ----------
87.00 Total outlays (gross)........... 44,981 46,902 52,672
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -22,047 -20,927 -19,864
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 23,216 33,927 43,789
90.00 Outlays........................... 22,934 25,975 32,808
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 36,040 39,644 43,608
--------- --------- ----------
1150 Total direct loan obligations... 36,040 39,644 43,608
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 129,427 157,165 190,848
1231 Disbursements: Direct loan
disbursements................... 36,040 39,644 43,608
1251 Repayments: Repayments and
prepayments..................... -8,302 -5,961 -2,706
--------- --------- ----------
1290 Outstanding, end of year........ 157,165 190,848 231,750
---------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation (Freddie Mac), is a
federally-charted, private shareholder-owned company with a public
mission to provide stability and increase the liquidity of the
residential mortgage market, and to help increase the availability of
mortgage credit to low- and moderate-income families and in underserved
areas. 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 1996,
Freddie Mac held a net mortgage portfolio totaling nearly $138 billion
and had outstanding guaranteed mortgage-backed securities of more than
$554 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
[[Page 1171]]
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 explicitly 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; and 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. The Federal Housing Enterprise Financial
Safety and Soundness Act of 1992 (``The Act'') added to Freddie Mac's
public mission the promotion of ``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 Act also established 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. The goals provide that, of the total number of
dwelling units financed by Freddie Mac's mortgage purchases, 40 percent
meet the low- and moderate-income goal in 1996 and 42 percent in each of
1997, 1998, and 1999; 21 percent meet the special affordable goal in
1996 and 24 percent in each of 1997, 1998 and 1999; and 12 percent meet
the special affordable goals in 1996 and 14 percent in each of 1997,
1998 and 1999, including at least $988 million in qualifying multifamily
mortgage purchases in each year from 1996 through 1999.
In 1996, Freddie Mac met the low- and moderate-income goal of 40
percent with purchases of 41 percent, the underserved area goal of 21
percent with purchases of 25 percent, the special affordable goal of 12
percent with purchases of 14 percent, and the multifamily portion of the
special affordable goal of $988 million with purchases of more than $1
billion in qualifying multifamily mortgages.
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 appointed by the
President. 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 $1.24 billion in 1996, a 14 percent increase over 1995
earnings of $1.091 billion. While accepting and managing higher interest
rate risk, Freddie Mac has expanded its investments in retained
mortgages from only $34 billion in 1992 to nearly $138 billion at the
end of 1996 in an effort to generate higher overall returns.
The financial data contained in this material relating to future
periods represent estimates that have been prepared specifically for
inclusion in the President's budget. These data should not be viewed as
an official forecast of the corporation's future position, nor should
they be used as a basis for making financial or investment decisions
relating to the corporation. The data have been developed on the basis
of certain economic assumptions that are subject to periodic review and
revision. Consequently, the estimates are subject to forecast error and
actual results from future business operations are likely to differ from
these data.
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.
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1101 Federal assets: Fund balances with
Treasury........................ 2,689
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 3,158 713 161 36
1206 Receivables, net................ 8,801 9,004 9,602 15,746
1207 Advances and prepayments........ 583 482 398 328
Other Federal assets:
1801 Cash and other monetary assets.. 17,420 5,992 13,352 29,752
1802 Inventories and related
properties.................... 129,427 157,165 190,848 231,750
1803 Property, plant and equipment,
net........................... 906 869 860 866
1901 Other assets.................... 10,050 5,798 3,345
------------ -------------- ------------ -------------
1999 Total assets.................... 162,984 184,275 221,019 281,823
LIABILITIES:
2101 Federal liabilities: Accounts
payable......................... 1 84 84 84
Non-Federal liabilities:
2201 Accounts payable................ 764 856 959 1,074
[[Page 1172]]
2202 Interest payable................ 1,492 1,719 1,981 2,283
2203 Debt............................ 146,954 160,051 190,848 243,338
2206 Pension and other actuarial
liabilities................... 7,233 7 16 37
Other:
2207 Accrued payroll and benefits.. 38 45 53 62
2207 Accrued annual leave (funded
or unfunded)................ 2 2 2 2
2207 Other Liabilities............. 14,363 19,215 26,298
------------ -------------- ------------ -------------
2999 Total liabilities............... 156,484 177,127 213,158 273,178
NET POSITION:
3200 Invested capital.................. 6,500 7,148 7,861 8,645
------------ -------------- ------------ -------------
3999 Total net position.............. 6,500 7,148 7,861 8,645
------------ -------------- ------------ -------------
4999 Total liabilities and net position 162,984 184,275 221,019 281,823
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4420-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
21.0 Travel and transportation of
persons......................... 11 13 15
23.3 Communications, utilities, and
other rent...................... 33 34 35
24.0 Printing and reproduction......... 4 5 6
Other services:
25.2 Other services--Non-Federal
employment compensation....... 289 325 366
25.2 Other services.................. 133 158 187
26.0 Supplies and materials............ 13 14 15
33.0 Mortgage purchases for portfolio.. 36,040 39,644 43,608
43.0 Interest and provision for loan
losses.......................... 11,011 13,531 16,628
--------- --------- ----------
99.9 Total obligations............... 47,534 53,724 60,860
---------------------------------------------------------------------------
mortgage-backed securities
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Capital investment: Issue (sales)
of participation certification.. 103,600 106,708 109,909
--------- --------- ----------
10.00 Total obligations (object class
33.0)......................... 103,600 106,708 109,909
----------------------------------------------------------------------------
Budgetary resources available for obligation:
22.00 New budget authority (gross)...... 103,600 106,708 109,909
23.95 New obligations................... -103,600 -106,708 -109,909
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Corporate borrowing authority (net
PC pool change)................. -1,295 -1,291 -1,287
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 104,895 107,999 111,196
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 103,600 106,708 109,909
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 103,600 106,708 109,909
73.20 Total outlays (gross)............. -103,600 -106,708 -109,909
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 103,600 106,708 109,909
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -104,895 -107,999 -111,196
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. -1,295 -1,291 -1,287
90.00 Outlays........................... -1,295 -1,291 -1,287
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 103,600 106,708 109,909
--------- --------- ----------
1150 Total direct loan obligations... 103,600 106,708 109,909
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 471,310 470,015 468,724
1231 Disbursements: Direct loan
disbursements................... 103,600 106,708 109,909
1251 Repayments: Repayments and
prepayments..................... -104,895 -107,999 -111,196
--------- --------- ----------
1290 Outstanding, end of year........ 470,015 468,724 467,437
---------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4440-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
1901 Other Federal assets: Underlying
Mortgages....................... 471,310 470,015 468,724 467,437
------------ -------------- ------------ -------------
1999 Total assets.................... 471,310 470,015 468,724 467,437
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 471,310 470,015 468,724 467,437
------------ -------------- ------------ -------------
2999 Total liabilities............... 471,310 470,015 468,724 467,437
-----------------------------------------------------------------------------------------------
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 Financial 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 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 6 7 7
00.02 Interest on borrowings.......... 135 137 149
00.03 Insurance premiums.............. 3 1
00.04 Provision for loan losses....... 49
00.06 Income tax expense.............. 1 7 7
00.07 Other expenses.................. 10 11 12
--------- --------- ----------
00.91 Total operating expenses...... 204 163 175
[[Page 1173]]
01.01 Capital investment: Direct loans.. 14,942 15,523 16,026
--------- --------- ----------
10.00 Total obligations............... 15,146 15,686 16,201
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 2,281 2,171 2,191
22.00 New budget authority (gross)...... 15,306 15,706 16,280
22.60 Redemption of debt................ -270
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 17,317 17,877 18,471
23.95 New obligations................... -15,146 -15,686 -16,201
24.40 Unobligated balance available, end
of year: Uninvested............. 2,171 2,191 2,270
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Net borrowing..................... 15 106
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 15,306 15,691 16,174
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 15,306 15,706 16,280
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 15,146 15,686 16,201
73.20 Total outlays (gross)............. -15,146 -15,686 -16,201
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 15,146 15,686 16,201
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -15,306 -15,691 -16,174
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 15 106
90.00 Outlays........................... -160 -5 27
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 14,942 15,523 16,026
--------- --------- ----------
1150 Total direct loan obligations... 14,942 15,523 16,026
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 2,222 2,026 2,065
1231 Disbursements: Direct loan
disbursements................... 14,941 15,523 16,026
1251 Repayments: Repayments and
prepayments..................... -15,098 -15,482 -15,950
1263 Write-offs for default: Direct
loans........................... -39 -2 -2
--------- --------- ----------
1290 Outstanding, end of year........ 2,026 2,065 2,139
---------------------------------------------------------------------------
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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 200 192 196 212
0102 Total interest expense............ -137 -135 -137 -149
------------ -------------- ------------ -------------
0109 Net interest income............... 63 57 59 63
0111 Other income...................... 13 16 13 12
0112 Other expenses.................... -32 -68 -25 -26
------------ -------------- ------------ -------------
0119 Net income........................ -19 -52 -12 -14
------------ -------------- ------------ -------------
0191 Total revenues.................... 213 208 209 224
------------ -------------- ------------ -------------
0192 Total expenses.................... -169 -202 -162 -175
------------ -------------- ------------ -------------
0199 Net income or loss................ 44 6 47 49
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 356 306 308 340
1206 Accrued interest receivable on
loans......................... 41 36 47 50
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 2,222 2,027 2,066 2,140
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -34 -64 -60 -58
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 2,188 1,963 2,006 2,082
1803 Other Federal assets: Property,
plant and equipment, net........ 119 132 125 132
------------ -------------- ------------ -------------
1999 Total assets.................... 2,704 2,437 2,486 2,604
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 34 23 22 23
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 2,336 2,067 2,080 2,157
2201 Notes payable and other
interest-bearing liabilities 35 37 37 37
2202 Accrued interest payable........ 20 21 21 22
------------ -------------- ------------ -------------
2999 Total liabilities............... 2,425 2,148 2,160 2,239
NET POSITION:
3300 Cumulative results of operations.. 279 290 326 365
------------ -------------- ------------ -------------
3999 Total net position.............. 279 290 326 365
------------ -------------- ------------ -------------
4999 Total liabilities and net position 2,704 2,438 2,486 2,604
-----------------------------------------------------------------------------------------------
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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 246 279 290 326
============ ============== ============ =============
Capital stock and participations
issued.............................. 11 6 5 7
Capital stock and participations
retired............................. -8 -3
Surplus retired.......................
Net income............................ 44 6 47 49
Cash/Dividends/Patronage Distributions -14 -1 -16 -14
Other, net............................
------------ -------------- ------------ -------------
Ending balance of net worth............. 279 290 326 365
-----------------------------------------------------------------------------------------------
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4120-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligation............................ 2,452 2,364 2,094 2,109
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 2,662 2,622 2,600 2,637
Consolidated systemwide and other bank
bonds retired....................... -2,603 -2,696 -2,683 -2,587
Consolidated systemwide notes, net.... -147 -196 98 27
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 2,364 2,094 2,109 2,186
-------------------------------------------------------------------------------------------------------
[[Page 1174]]
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4120-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Personnel
compensation and benefits....... 5 6 7
23.2 Cost of space occupied and
equipment....................... 1 1 1
25.2 Other services.................... 3 1
33.0 Investments and loans............. 14,942 15,523 16,026
43.0 Interest and dividends............ 135 137 149
92.0 Undistributed expenses............ 60 18 18
--------- --------- ----------
99.9 Total obligations............... 15,146 15,686 16,201
---------------------------------------------------------------------------
Agricultural Credit Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 39 41 45
00.02 Interest on borrowings.......... 970 998 1,097
00.03 Insurance premiums.............. 14 14 16
00.04 Provision for loan losses....... 22 23 25
00.06 Income tax expense.............. 33 34 38
00.07 Other expenses.................. 69 71 78
--------- --------- ----------
00.91 Total operating expenses...... 1,147 1,181 1,299
01.01 Capital investment: direct loans.. 40,668 48,000 49,000
--------- --------- ----------
10.00 Total obligations............... 41,815 49,181 50,299
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 2,796 3,412 3,302
22.00 New budget authority (gross)...... 42,431 49,071 50,449
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 45,227 52,483 53,751
23.95 New obligations................... -41,815 -49,181 -50,299
24.40 Unobligated balance available, end
of year: Uninvested............. 3,412 3,302 3,452
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. 523 494 890
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 41,908 48,577 49,559
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 42,431 49,071 50,449
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 41,815 49,181 50,299
73.20 Total outlays (gross)............. -41,815 -49,181 -50,299
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 41,815 49,071 50,299
86.98 Outlays from permanent balances... 110
--------- --------- ----------
87.00 Total outlays (gross)........... 41,815 49,181 50,299
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -41,908 -48,577 -49,559
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 523 494 890
90.00 Outlays........................... -93 604 740
---------------------------------------------------------------------------
On January 1, 1995, the National Bank for Cooperatives, the
Springfield Bank for Cooperatives, and the Farm Credit Bank of
Springfield consolidated to form an 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 for Cooperatives 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 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 40,670 48,000 49,000
--------- --------- ----------
1150 Total direct loan obligations... 40,670 48,000 49,000
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 14,914 14,961 15,710
1231 Disbursements: Direct loan
disbursements................... 40,668 48,000 49,000
1251 Repayments: Repayments and
prepayments..................... -40,617 -47,246 -48,097
1263 Write-offs for default: Direct
loans........................... -3 -5 -5
--------- --------- ----------
1290 Outstanding, end of year........ 14,961 15,710 16,608
---------------------------------------------------------------------------
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 1,317 1,268 1,306 1,436
0102 Total interest expense............ -1,008 -970 -999 -1,099
------------ -------------- ------------ -------------
0109 Net interest income............... 309 298 307 337
0111 Other income...................... 26 23 24 26
0112 Other expense..................... -198 -178 -183 -201
------------ -------------- ------------ -------------
0119 Net income........................ -172 -155 -159 -175
------------ -------------- ------------ -------------
0191 Total revenues.................... 1,343 1,291 1,330 1,462
------------ -------------- ------------ -------------
0192 Total expenses.................... -1,206 -1,148 -1,182 -1,300
------------ -------------- ------------ -------------
0199 Net income or loss................ 137 143 148 162
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 2,915 3,452 3,250 3,350
1206 Accrued interest receivable on
loans......................... 167 170 178 188
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 14,914 14,962 15,710 16,608
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -208 -228 -233 -245
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 14,706 14,734 15,477 16,363
1803 Other Federal assets: Property,
plant and equipment, net........ 139 124 118 129
------------ -------------- ------------ -------------
1999 Total assets.................... 17,927 18,480 19,023 20,030
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 129 122 126 125
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 15,946 16,469 16,963 17,853
2201 Notes payable and other
interest-bearing liabilities 391 362 373 392
2202 Accrued interest payable........ 180 161 166 175
------------ -------------- ------------ -------------
2999 Total liabilities............... 16,646 17,114 17,628 18,545
NET POSITION:
3200 Invested capital.................. 1,281 1,366 1,395 1,485
------------ -------------- ------------ -------------
3999 Total net position.............. 1,281 1,366 1,395 1,485
------------ -------------- ------------ -------------
4999 Total liabilities and net position 17,927 18,480 19,023 20,030
-----------------------------------------------------------------------------------------------
[[Page 1175]]
Statement of Changes in Net Worth (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 1,213 1,281 1,365 1,395
============ ============== ============ =============
Capital stock and participations
issued.............................. 1 1
Capital stock and participations
retired............................. -38 -39 -84 -39
Net income............................ 138 144 148 163
Cash/Dividends/Patronage Distributions -32 -34 -35 -35
Other, net............................ 13
------------ -------------- ------------ -------------
Ending balance of net worth............. 1,281 1,365 1,395 1,485
-----------------------------------------------------------------------------------------------
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4130-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligations........................... 15,264 15,946
16,469 16,963
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 10,663 7,548 8,200 8,300
Consolidated systemwide and other bank
bonds retired....................... -7,041 -8,420 -8,106 -7,910
Consolidated systemwide notes, net.... -2,940 1,395 400 500
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 15,946 16,469
16,963 17,853
-------------------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4130-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
12.1 Personnel compensation and
benefits........................ 34 35 39
23.2 Cost of space occupied and
equipment....................... 5 5 6
25.2 Other services.................... 14 14 16
33.0 Investments and loans............. 40,668 48,000 49,000
43.0 Interest and dividends............ 970 999 1,099
92.0 Undistributed expenses............ 124 128 139
--------- --------- ----------
99.9 Total obligations............... 41,815 49,181 50,299
---------------------------------------------------------------------------
Farm Credit Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses......... 106 97 101
00.02 Interest on borrowings.......... 2,482 2,607 2,749
00.03 Insurance premiums.............. 8 10 8
00.04 Provision for loan losses....... 8 -3 -4
00.05 Losses/gains on property........ -2 -1 1
00.06 Other expenses.................. 185 149 171
--------- --------- ----------
00.91 Total operating expenses...... 2,787 2,858 3,026
01.01 Capital investment: Direct loans.. 43,441 38,985 40,492
--------- --------- ----------
10.00 Total obligations............... 46,228 41,843 43,518
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 7,125 7,445 7,857
22.00 New budget authority (gross)...... 46,548 42,255 45,680
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 53,673 49,700 53,537
23.95 New obligations................... -46,228 -41,843 -43,518
24.40 Unobligated balance available, end
of year: Uninvested............. 7,445 7,857 10,019
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. 1,646 1,353 3,252
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 44,902 40,902 42,428
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 46,548 42,255 45,680
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 46,228 41,843 43,518
73.20 Total outlays (gross)............. -46,228 -41,843 -43,518
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 46,228 41,843 43,518
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -44,902 -40,902 -42,428
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 1,646 1,353 3,252
90.00 Outlays........................... 1,326 941 1,090
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 43,481 38,358 39,759
--------- --------- ----------
1150 Total direct loan obligations... 43,481 38,358 39,759
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 39,216 41,025 42,421
1231 Disbursements: Direct loan
disbursements................... 43,441 38,985 40,492
1251 Repayments: Repayments and
prepayments..................... -41,632 -37,589 -38,982
--------- --------- ----------
1290 Outstanding, end of year........ 41,025 42,421 43,931
---------------------------------------------------------------------------
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 October 1, 1997 provided
funds to 31 Federal Land Credit Associations (FLCA), 64 Production
Credit Associations (PCAs), and 60 Agricultural Credit Associations
(ACAs). These direct lender associations, in turn, make short-term
production loans (PCAs and ACAs) and long-term real estate loans (FLCAs
and ACAs) to eligible farmers and ranchers. Also, as of January 1, 1996,
51 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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Total interest income............. 3,111 3,207 3,292 3,424
[[Page 1176]]
0102 Total interest expense............ -2,356 -2,482 -2,607 -2,749
------------ -------------- ------------ -------------
0109 Net interest income............... 755 725 685 675
0111 Other income...................... 47 53 21 22
0112 Other expenses.................... -314 -304 -252 -277
------------ -------------- ------------ -------------
0119 Net income........................ -267 -251 -231 -255
------------ -------------- ------------ -------------
0191 Total revenues.................... 3,158 3,260 3,313 3,446
------------ -------------- ------------ -------------
0192 Total expenses.................... -2,670 -2,786 -2,859 -3,026
------------ -------------- ------------ -------------
0199 Net income or loss................ 488 474 454 420
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Cash and investment securities.. 7,487 7,627 7,714 7,651
1206 Accrued Interest Receivable..... 781 781 793 817
Net value of assets related to
direct loans receivable and
acquired defaulted guaranteed
loans receivable:
1601 Direct loans, gross............. 39,198 40,998 42,394 43,904
1603 Allowance for estimated
uncollectible loans and
interest (-).................. -494 -484 -459 -452
------------ -------------- ------------ -------------
1699 Value of assets related to
direct loans................ 38,704 40,514 41,935 43,452
1803 Other Federal assets: Property,
plant and equipment, net........ 653 613 592 590
------------ -------------- ------------ -------------
1999 Total assets.................... 47,625 49,535 51,034 52,510
LIABILITIES:
2104 Federal liabilities: Resources
payable to Treasury............. 272 239 239 237
Non-Federal liabilities:
Accounts payable:
2201 Consolidated systemwide and
other bank bonds............ 41,941 43,588 44,942 46,242
2201 Notes payable and other
interest-bearing liabilities 667 821 930 1,037
2202 Accrued interest payable........ 455 483 485 501
------------ -------------- ------------ -------------
2999 Total liabilities............... 43,335 45,131 46,596 48,017
NET POSITION:
3200 Invested capital.................. 4,290 4,404 4,438 4,494
------------ -------------- ------------ -------------
3999 Total net position.............. 4,290 4,404 4,438 4,494
------------ -------------- ------------ -------------
4999 Total liabilities and net position 47,625 49,535 51,034 52,511
-----------------------------------------------------------------------------------------------
Statement of Changes in Net Worth (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
Beginning balance of net worth.......... 4,129 4,290 4,414 4,448
============ ============== ============ =============
Capital stock and participations
issued.............................. 77 43 31 29
Capital stock and participations
retired............................. -99 -41 -52 -36
Net income............................ 432 474 454 421
Cash/Dividends/Patronage Distributions -251 -365 -393 -362
Other, net............................ 2 13 -6 4
------------ -------------- ------------ -------------
Ending balance of net worth............. 4,290 4,414 4,448 4,504
-----------------------------------------------------------------------------------------------
Financing Activities (in millions of dollars)
--------------------------------------------------------------------
Identification code 99-4160-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
--------------------------------------------------------------------
Beginning balance of outstanding system
obligations........................... 38,585 41,940
43,587 44,940
============== ============== ============= ==============
Consolidated systemwide and other bank
bonds issued........................ 40,400 41,162 43,839 45,358
Consolidated systemwide and other bank
bonds retired....................... -38,437 -39,344 -43,403 -44,858
Consolidated systemwide notes, net.... 1,392 -171 917 797
-------------- -------------- ------------- --------------
Ending balance of outstanding system
obligations........................... 41,940 43,587
44,940 46,237
-------------------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4160-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 88 79 82
23.2 Cost of space occupied and
equipment....................... 18 19 19
25.2 Other services.................... 8 10 8
33.0 Investments and loans............. 43,441 38,985 40,492
43.0 Interest and dividends............ 2,482 2,607 2,749
92.0 Undistributed expenses............ 191 143 168
--------- --------- ----------
99.9 Total obligations............... 46,228 41,843 43,518
---------------------------------------------------------------------------
Federal Agricultural Mortgage Corporation
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
00.01 Administrative expenses........... 7 10 13
00.02 Federal Income Taxes.............. 1 3
--------- --------- ----------
10.00 Total obligations............... 7 11 16
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... 12 16 20
22.00 New budget authority (gross)...... 11 15 22
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 23 31 42
23.95 New obligations................... -7 -11 -16
24.40 Unobligated balance available, end
of year: Uninvested............. 16 20 26
----------------------------------------------------------------------------
New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 11 15 22
----------------------------------------------------------------------------
Change in unpaid obligations:
73.10 New obligations................... 7 11 16
73.20 Total outlays (gross)............. -7 -11 -16
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 7 11 16
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -11 -15 -22
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -4 -4 -6
---------------------------------------------------------------------------
Farmer Mac is authorized under the Farm Credit Act of 1971 (the
Act), as amended by the Agricultural Credit Act of 1987, to create a
secondary market for agricultural real estate and rural home mortgages
that meet minimum credit standards (qualified loans). 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 farmer
program, rural business and community development loans guaranteed by
the USDA. The Farmer Mac title was further amended in 1991 to clarify
Farmer Mac's authority to issue debt obligations, provide for the
establishment of minimum capital standards, and establish the Office of
Secondary Market Oversight at the Farm Credit Administration (FCA) and
expand the agency's rulemaking authority. Most recently, the Farm Credit
System Reform Act of 1996 amended the Farmer Mac title to allow Farmer
Mac to purchase loans directly from lenders and to issue and guarantee
mortgage-backed securities without requiring that a minimum cash reserve
or subordinated (first loss) interest be maintained by the lenders,
poolers or investors as had been re-
[[Page 1177]]
quired under its original authority. The 1996 Act also increased Farmer
Mac's capital requirements over time and expanded the regulatory
authorities of the FCA.
Farmer Mac operates through two programs, ``Farmer Mac I,'' which
involves qualified loans, and ``Farmer Mac II,'' which involves
guaranteed portions of USDA guaranteed loans. Farmer Mac operates by:
(i) purchasing newly originated or existing qualified loans or
guaranteed portions from lenders; and (ii) exchanging qualified loans or
guaranteed portions for guaranteed securities. Loans purchased by Farmer
Mac are aggregated into pools that back Farmer Mac guaranteed securities
which are held by Farmer Mac or sold into the capital markets. Farmer
Mac is intended to attract new capital for financing qualified loans and
guaranteed portions, foster increased long-term, fixed-rate lending, and
provide greater liquidity to agricultural and rural 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 by commercial lenders. Five are appointed by the
President, subject to Senate confirmation.
Financing
Financial support and funding for Farmer Mac's operations comes from
several sources: sale of common and preferred stock; issuance of debt
obligations; gain on sale of guaranteed loan-backed securities;
guarantee fees; and income from investments. Under procedures specified
in the Act, Farmer Mac may issue obligations to the U.S. Treasury in a
cumulative amount not to exceed $1.5 billion to fulfill its guarantee
obligations.
The Act provides for the actuarial soundness of the guarantee fee to
be reviewed annually by the Comptroller General in a report to Congress.
The soundness of the Farmer Mac I program is maintained through the
application of multiple procedures. First, all loans are screened
against Farmer Mac's credit underwriting and appraisal standards.
Second, Farmer Mac assesses annual guarantee fees set at levels
determined, with the assistance of computer modeling tools to evaluate
Farmer Mac's portfolio under conditions of economic stress, to be
adequate for potential risks undertaken. Third, Farmer Mac controls
interest rate risk through matched funding and requirement of yield
maintenance provisions for mortgages that prepay. Fourth, Farmer Mac's
portfolio of loans and guaranteed securities must conform to geographic
and commodity diversification standards set by the Board. Fifth, Farmer
Mac maintains an allowance for loan losses determined to be adequate to
cover anticipated losses. Lastly, Farmer Mac must maintain core and risk
based capital as provided in the Act and FCA regulations. In the Farmer
Mac II program, the risks are minimal because only the USDA guaranteed
portions of loans are purchased and funding is matched to effectively
eliminate interest rate risk.
Available funds of Farmer Mac are invested in U.S. agency securities
or other high-grade commercial investments. 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 qualified loans or pools of qualified
loans. These securities are not guaranteed by the United States, and are
not ``government securities''. The 1996 Act removed requirements that
loan originators or other third parties maintain cash reserves or
subordinated securities in connection with the issuance of Farmer Mac's
guaranteed securities.
Farmer Mac is subject to reporting requirements under securities
laws and its guaranteed mortgage-backed securities are subject to
registration with the Securities and Exchange Commission under the 1933
and 1934 Securities Acts.
Regulation
Farmer Mac is federally regulated by the FCA's Office of Secondary
Market Oversight (OSMO). OSMO is responsible for examination of and
rulemaking for Farmer Mac, including the determination of the stress
test to evaluate the adequacy of Farmer Mac's capital and the
establishment of risk-based capital requirements after February 1999.
The 1996 amendments to the Farmer Mac title expanded FCA's regulatory
authority to include provisions for establishing a conservatorship or
receivership, if necessary, and provided for increased levels of core
capital phased in over three years. As of September 30, 1997, Farmer
Mac's total capital exceeds regulatory and statutory requirements.
Lastly, during the capital phase-in period the U.S. Treasury and FCA
jointly monitor Farmer Mac's financial condition and report to Congress
biannually, as requested by Congress in connection with the enactment of
the 1996 Act.
Status of Guaranteed Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on commitments:
2111 Limitation on guaranteed loans
made by private lenders.........
2131 Guaranteed loan commitments exempt
from limitation................. 302 528 924
--------- --------- ----------
2150 Total guaranteed loan
commitments................... 302 528 924
----------------------------------------------------------------------------
Cumulative balance of guaranteed loans
outstanding:
2210 Outstanding, start of year........ 598 814 1,208
2231 Disbursements of new guaranteed
loans........................... 302 528 924
2251 Repayments and prepayments........ -86 -134 -213
--------- --------- ----------
2290 Outstanding, end of year........ 814 1,208 1,919
----------------------------------------------------------------------------
Memorandum:
2299 Guaranteed amount of guaranteed
loans outstanding, end of year.. 814 1,208 1,919
---------------------------------------------------------------------------
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
Revenue:
0101 Net Interest Income............... 3 6 7 7
0101 Guarantee Fee Income.............. 1 2 4 7
0101 Gain on Security Issuance......... 1 2 4 7
0101 Other Income...................... 1 1
0102 Expense........................... -5 -7 -11 -16
------------ -------------- ------------ -------------
0109 Net income or loss (-)............ 1 3 4 6
------------ -------------- ------------ -------------
0199 Net income or loss................ 1 3 4 6
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Non-Federal assets:
1201 Investment in securities........ 502 647 717 804
1206 Receivables, net................ 3 3 3 3
1207 Advances and prepayments........ 1 2 2 2
Net value of assets related to
direct loans receivable:
1401 Direct loans receivable, gross.. 13 461 529 593
1402 Interest receivable............. 15 15 15 15
------------ -------------- ------------ -------------
1499 Net present value of assets
related to direct loans..... 28 476 544 608
1801 Other Federal assets: Cash and
other monetary assets........... 69 246 246 246
------------ -------------- ------------ -------------
1999 Total assets.................... 603 1,374 1,512 1,663
[[Page 1178]]
LIABILITIES:
Non-Federal liabilities:
2201 Accounts payable................ 2 2 2 2
2202 Interest payable................ 7 8 8 8
2203 Debt............................ 546 1,313 1,426 1,571
2204 Liabilities for loan guarantees. 1 1 1 1
------------ -------------- ------------ -------------
2999 Total liabilities............... 556 1,324 1,437 1,582
NET POSITION:
3200 Invested capital.................. 47 50 75 81
------------ -------------- ------------ -------------
3999 Total net position.............. 47 50 75 81
------------ -------------- ------------ -------------
4999 Total liabilities and net position 603 1,374 1,512 1,663
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4180-0-3-351 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Personnel
compensation and benefits....... 3 5 6
25.2 Other services.................... 4 5 7
92.0 Undistributed..................... 1 3
--------- --------- ----------
99.9 Total obligations............... 7 11 16
---------------------------------------------------------------------------
FEDERAL HOME LOAN BANK SYSTEM
Federal Home Loan Banks
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Obligations by program activity:
Operating expenses:
00.01 Administrative expenses
including FHFB assessments.... 237 237 237
00.02 Affordable Housing program...... 131 131 131
00.03 Interest on consolidated
obligations and loss on debt
retirement.................... 14,585 14,486 14,486
00.04 Interest on members' deposits
and other borrowings.......... 846 846 846
00.05 Payment to REFCORP.............. 300 300 300
00.06 Cash dividends on capital stock. 638 638 638
--------- --------- ----------
00.91 Total operating expenses...... 16,737 16,638 16,638
Capital investment:
01.01 Investment in bank premises..... 11 11 11
01.04 Net increase in advances........ 28,526 10,910 11,564
01.05 Net increase in investments..... 13,856 4,760 4,219
01.06 Repurchase of capital stock..... 2,584 2,600 2,600
--------- --------- ----------
01.91 Total capital investment...... 44,978 18,281 18,394
--------- --------- ----------
10.00 Total obligations............... 61,714 34,918 35,031
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Authority to
borrow.......................... 381 473
22.00 New budget authority (gross)...... 62,095 35,011 35,127
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 62,095 35,392 35,600
23.95 New obligations................... -61,714 -34,918 -35,031
24.40 Unobligated balance available, end
of year: Authority to borrow.... 381 473 568
----------------------------------------------------------------------------
New budget authority (gross), detail:
67.15 Authority to borrow (indefinite).. 40,650 15,165 15,247
68.00 Spending authority from offsetting
collections: Offsetting
collections (cash).............. 21,445 19,846 19,880
--------- --------- ----------
70.00 Total new budget authority
(gross)....................... 62,095 35,011 35,127
----------------------------------------------------------------------------
Change in unpaid obligations:
Unpaid obligations, start of year:
Obligated balance:
Uninvested:
72.40 Uninvested.................. 358 457 457
72.40 Authority to borrow......... 3,648 4,107 4,205
72.41 U.S. Securities: Par value.... 1,695 1,739 1,791
--------- --------- ----------
72.99 Total unpaid obligations,
start of year............... 5,701 6,303 6,453
73.10 New obligations................... 61,714 34,918 35,031
73.20 Total outlays (gross)............. -61,112 -34,768 -34,878
Unpaid obligations, end of year:
Obligated balance:
Uninvested:
74.40 Uninvested.................. 457 457 457
74.40 Authority to borrow......... 4,107 4,205 4,305
74.41 U.S. Securities: Par value.... 1,739 1,791 1,844
--------- --------- ----------
74.99 Total unpaid obligations, end
of year..................... 6,303 6,453 6,606
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 61,112 34,768 34,878
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Collections from non-
Federal sources............... -21,445 -19,846 -19,880
----------------------------------------------------------------------------
Net budget authority and outlays:
89.00 Budget authority.................. 40,650 15,165 15,247
90.00 Outlays........................... 39,667 14,922 14,998
---------------------------------------------------------------------------
Status of Direct Loans (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
Position with respect to appropriations act
limitation on obligations:
1111 Limitation on direct loans........
1131 Direct loan obligations exempt
from limitation................. 980,417 1,039,240 1,101,600
--------- --------- ----------
1150 Total direct loan obligations... 980,417 1,039,240 1,101,600
----------------------------------------------------------------------------
Cumulative balance of direct loans
outstanding:
1210 Outstanding, start of year........ 153,302 181,828 192,738
1231 Disbursements: Direct loan
disbursements................... 980,417 1,039,240 1,101,600
1251 Repayments: Repayments and
prepayments..................... -951,891 -1,028,330 -1,090,036
--------- --------- ----------
1290 Outstanding, end of year........ 181,828 192,738 204,302
---------------------------------------------------------------------------
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 (the Act). 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 and services
to their nearly 6,418 member commercial banks, savings associations,
insurance companies, and credit unions. 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 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 the District of Columbia,
Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern
Mariana Islands.
Advances outstanding on September 30, 1997 totaled approximately
$181.8 billion, a net increase of approximately $28.5 billion from the
September 30, 1996 level of $153.3 billion.
The principal source of funds for the lending operation is the sale
of consolidated obligations to the public. On September 30, 1997, $284.5
billion of these obligations were outstanding. The consolidated
obligations are not guaranteed by the U.S. Government as to principal or
interest. Other sources
[[Page 1179]]
of lendable funds include members' deposits and capital. Deposits
totaled $15.3 billion and total capital amounted to $18.4 billion as of
September 30, 1997. Funds not immediately needed for advances to members
are invested.
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 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 are the assessments by the Finance Board to cover its
administrative and other costs. The Finance Board's budget and
expenditures, however, are included in the budget of the United States.
The Act, as amended in 1989, requires each FHLBank to operate an
Affordable Housing Program (AHP). Each FHLBank provides subsidies in the
form of direct grants or below-market rate advances for members that use
the funds for qualifying affordable housing projects. The FHLBank system
sets aside for its AHPs a minimum of $100 million annually. The Act also
requires that the FHLBanks contribute $300 million annually to assist in
the payment of interest on bonds issued by the Resolution Funding
Corportion.
The forecast data for 1998 and 1999 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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 15,712 17,286 17,184 17,184
0102 Expense (excludes payments to
REFCORP)........................ -14,364 -15,799 -15,699 -15,699
------------ -------------- ------------ -------------
0109 Net income........................ 1,348 1,487 1,485 1,485
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Treasury
securities, net............... 1,695 1,739 1,791 1,844
Non-Federal assets:
1201 Investments in non-Federal
securities, net............... 121,996 135,852 140,612 144,831
1206 Accounts receivable............. 3,883 4,604 4,742 4,884
1401 Net value of assets related to
direct loans receivable: Direct
loans receivable, gross......... 153,302 181,828 192,738 204,302
Other Federal assets:
1801 Cash and other monetary assets.. 358 457 457 457
1803 Property, plant and equipment,
net........................... 156 149 149 149
1901 Other assets.................... 339 304 304 304
------------ -------------- ------------ -------------
1999 Total assets.................... 281,728 324,933 340,793 356,771
LIABILITIES:
2101 Federal liabilities: REFCORP and
AHP............................. 388 439 440 440
Non-Federal liabilities:
2201 Accounts payable................ 234 205 205 205
2202 Interest payable................ 4,259 4,970 5,119 5,272
2203 Debt............................ 243,533 284,545 299,710 314,957
Other:
2207 Deposit funds and other
borrowings.................. 16,038 15,676 15,676 15,676
2207 Other......................... 820 689 689 689
------------ -------------- ------------ -------------
2999 Total liabilities............... 265,272 306,524 321,839 337,239
NET POSITION:
3200 Invested capital.................. 16,456 18,408 18,954 19,532
------------ -------------- ------------ -------------
3999 Total net position.............. 16,456 18,408 18,954 19,532
------------ -------------- ------------ -------------
4999 Total liabilities and net position 281,728 324,933 340,793 356,771
-----------------------------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4200-0-3-371 1997 actual 1998 est. 1999 est.
----------------------------------------------------------------------------
11.1 Personnel compensation: Full-time
permanent....................... 100 100 100
12.1 Civilian personnel benefits....... 22 22 22
21.0 Travel and transportation of
persons......................... 6 6 6
23.3 Communications, utilities, and
other rent...................... 16 16 16
24.0 Printing and reproduction......... 7 7 7
25.2 Other services.................... 86 86 86
31.0 Equipment......................... 7 7 7
32.0 Land and structures............... 4 4 4
Investments and loans:
33.0 Net increase in advances........ 28,526 10,910 11,564
33.0 Net increase in investments..... 13,856 4,760 4,219
41.0 Subsidies (Affordable Housing
Program)........................ 131 131 131
Interest and dividends:
43.0 Interest and cash dividends..... 16,069 15,969 15,969
43.0 REFCORP interest................ 300 300 300
92.0 Repurchase of capital stock
(gross)......................... 2,584 2,600 2,600
--------- --------- ----------
99.9 Total obligations............... 61,714 34,918 35,031
---------------------------------------------------------------------------
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 is the receipt of assessments imposed on
and collected from institutions' accounts which are insured by the Bank
Insurance Fund (the ``BIF'') and the Savings Association Insurance Fund
(the ``SAIF'').
Statement of Operations (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4033-0-3-373 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 906 915 926 938
0102 Expense........................... -795 -795 -795 -795
------------ -------------- ------------ -------------
0109 Net income........................ 111 120 131 143
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4033-0-3-373 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Segregated
accounts investment, net...... 1,355 1,475 1,606 1,749
Other Federal assets:
1801 Cash, cash equivalents, and
interest receivable........... 281 266 266 266
[[Page 1180]]
1901 Other assets.................... 12 12 11 11
------------ -------------- ------------ -------------
1999 Total assets.................... 1,648 1,753 1,883 2,026
LIABILITIES:
Non-Federal liabilities:
2202 Interest payable................ 236 236 236 236
2203 Debt............................ 8,142 8,144 8,145 8,146
2207 Other........................... 85 69 67 65
------------ -------------- ------------ -------------
2999 Total liabilities............... 8,463 8,449 8,448 8,447
NET POSITION:
3100 FICO capital stock purchased by
FHLBanks........................ 680 680 680 680
Invested capital:
3200 FSLIC capital certificates...... -7,568 -7,568 -7,568 -7,568
3200 FSLIC nonvoting capital stock... -603 -603 -603 -603
3300 Cumulative results of operations.. 675 796 927 1,069
------------ -------------- ------------ -------------
3999 Total net position.............. -6,816 -6,695 -6,564 -6,422
------------ -------------- ------------ -------------
4999 Total liabilities and net position 1,647 1,754 1,884 2,025
-----------------------------------------------------------------------------------------------
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 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.
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 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
0101 Revenue........................... 2,925 2,940 2,967 2,995
0102 Expense........................... -2,633 -2,626 -2,626 -2,626
------------ -------------- ------------ -------------
0109 Net income........................ 292 314 341 369
-----------------------------------------------------------------------------------------------
Balance Sheet (in millions of dollars)
-----------------------------------------------------------------------------------------------
Identification code 99-4029-0-3-373 1996 actual 1997 actual 1998 est. 1999 est.
-----------------------------------------------------------------------------------------------
ASSETS:
Investments in US securities:
1102 Federal assets: Principal fund
account investment, net....... 3,856 4,168 4,504 4,868
1206 Non-Federal assets: Assessments
receivable for interest expense. 888 888 881 881
1901 Other Federal assets: Other assets 1
------------ -------------- ------------ -------------
1999 Total assets.................... 4,745 5,056 5,385 5,749
LIABILITIES:
Non-Federal liabilities:
2202 Accrued interest payable on
long-term obligations......... 888 888 881 881
2203 Debt............................ 30,074 30,072 30,069 30,067
------------ -------------- ------------ -------------
2999 Total liabilities............... 30,962 30,960 30,950 30,948
NET POSITION:
3100 Nonvoting capital stock issued to
FHLBanks........................ 2,513 2,513 2,513 2,513
Invested capital:
3200 RTC nonredeemable capital
certificates.................. -31,286 -31,286 -31,286 -31,286
3200 Contributed capital--principal
fund assessments.............. 1,057 1,057 1,057 1,057
3300 Cumulative results of operations.. 1,499 1,813 2,152 2,519
------------ -------------- ------------ -------------
3999 Total net position.............. -26,217 -25,903 -25,564 -25,197
------------ -------------- ------------ -------------
4999 Total liabilities and net position 4,745 5,057 5,386 5,751
-----------------------------------------------------------------------------------------------
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Program and Financing (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Obligations by program activity:
09.01 Monetary and economic policy...... 73 74 81
09.02 Services to financial institutions
and the public.................. 4 4 4
09.03 Supervision and regulation of
financial institutions.......... 66 67 71
09.04 System policy direction and
oversight....................... 32 33 35
--------- --------- ----------
09.09 Subtotal: Board operating
expenses...................... 175 178 191
09.10 Office of Inspector General
operating expenses.............. 3 3 3
--------- --------- ----------
10.00 Total obligations............... 178 181 194
----------------------------------------------------------------------------
Budgetary resources available for obligation:
21.40 Unobligated balance available,
start of year: Uninvested....... -2
22.00 New budget authority (gross)...... 180 181 194
--------- --------- ----------
23.90 Total budgetary resources
available for obligation...... 178 181 194
23.95 New obligations................... -178 -181 -194
----------------------------------------------------------------------------
New budget authority (gross), detail:
68.00 Spending authority from offsetting
collections (gross): Offsetting
collections (cash).............. 180 181 194
----------------------------------------------------------------------------
Change in unpaid obligations:
72.40 Unpaid obligations, start of year:
Obligated balance: Uninvested... 18 26 26
73.10 New obligations................... 178 181 194
73.20 Total outlays (gross)............. -170 -181 -194
74.40 Unpaid obligations, end of year:
Obligated balance: Uninvested... 26 26 26
----------------------------------------------------------------------------
Outlays (gross), detail:
86.97 Outlays from new permanent
authority....................... 155 165 179
86.98 Outlays from permanent balances... 15 16 15
--------- --------- ----------
87.00 Total outlays (gross)........... 170 181 194
----------------------------------------------------------------------------
Offsets:
Against gross budget authority and outlays:
88.40 Offsetting collections (cash)
from: Non-Federal sources..... -180 -181 -194
----------------------------------------------------------------------------
[[Page 1181]]
Net budget authority and outlays:
89.00 Budget authority..................
90.00 Outlays........................... -10
---------------------------------------------------------------------------
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.
Balance Sheet (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
ASSETS:
1206 Non-Federal assets: Receivables,
net............................. 5 7 7
Other Federal assets:
1801 Cash in bank.................... 16 15 15
1803 Property, plant and equipment,
net........................... 121 123 123
--------- --------- ----------
1999 Total assets.................... 142 145 145
LIABILITIES:
Non-Federal liabilities:
2201 Accounts payable and accrued
liabilities................... 26 26 26
2206 Pension and other actuarial
liabilities................... 20 21 21
--------- --------- ----------
2999 Total liabilities............... 46 47 47
NET POSITION:
3200 Invested capital.................. 121 123 123
3300 Cumulative results of operations.. -25 -25 -25
--------- --------- ----------
3999 Total net position.............. 96 98 98
--------- --------- ----------
4999 Total liabilities and net position 142 145 145
---------------------------------------------------------------------------
Object Classification (in millions of dollars)
----------------------------------------------------------------------------
Identification code 99-4450-0-3-803 1996 actual 1997 est. 1998 est.
----------------------------------------------------------------------------
Reimbursable obligations:
Personnel compensation:
11.1 Full-time permanent........... 100 102 106
11.3 Other than full-time permanent 2 2 2
11.5 Other personnel compensation.. 2 2 2
--------- --------- ----------
11.9 Total personnel compensation 104 106 110
12.1 Civilian personnel benefits..... 17 18 16
21.0 Travel and transportation of
persons....................... 5 5 5
23.3 Communications, utilities, and
miscellaneous charges......... 10 10 10
24.0 Printing and reproduction....... 3 3 3
25.1 Advisory and assistance services 3 2 2
25.2 Other services.................. 16 16 22
26.0 Supplies and materials.......... 6 6 8
31.0 Equipment....................... 11 12 15
--------- --------- ----------
99.0 Subtotal, reimbursable
obligations................. 175 178 191
25.2 Allocation Account: Other services 3 3 3
--------- --------- ----------
99.9 Total obligations............... 178 181 194
---------------------------------------------------------------------------