Good day and welcome to the Federal Agricultural Mortgage Corporation Fourth Quarter and Fiscal Year 2012 Investor Conference Call. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note, this event is being recorded. I would now like to turn the conference over to Mr. Timothy Buzby, President and CEO. Mr. Buzby, the floor is yours, sir.

Thanks, Mike. Good morning. I am Tim Buzby, the President and CEO of Farmer Mac. The Farmer Mac management team and I are pleased to welcome you to our year end 2012, investor conference call. Before starting this morning, I'll ask Steve Mullery, Farmer Mac's General Counsel to comment on forward-looking statements that may be made today.

Thanks, Tim. Some of the statements made on this conference call may constitute forward-looking statements under the Securities laws. We make these statements based on our current expectations and assumptions about future events and business performance. We do not undertake any obligation to update these statements after the date of this call. We caution you that forward-looking statements are subject to a number of risks and uncertainties. Actual results may differ materially from results expressed or implied by the forward-looking statements. Evaluating Farmer Mac, you should consider these risks and uncertainties, including those described in our 2012 Annual Report on Form 10-K, which was filed with the SEC yesterday. Farmer Mac uses core earnings, a non-GAAP financial measure, to measure corporate performance and develop financial plans. In management’s view core earnings is a useful alternative measure for understanding Farmer Mac’s economic performance, transaction economics, and business trends. This non-GAAP financial measure may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac’s disclosure of core earnings is intended to supplement GAAP information and not to replace it. A recording of this call will be available on our website for two weeks starting later today.

We are pleased to report all time highs this year for core earnings and outstanding business volume as of year-end. New business from all of our product lines raised our aggregate outstanding volume to $13billion. Credit quality also remained strong with 90-day delinquencies reduced in both, dollar and percentage terms. Consistent with that trend, we are pleased that the recent drought has not negatively affected our portfolio and we believe that we are well positioned to handle any future stress in the agricultural economy. Core earnings were $11.6 million in fourth quarter 2012, and $49.6 million for the full year compared to $12.6 million and $42.9 million for the same periods in 2011, reflecting an annual increase of more than 15%. GAAP net income to common stockholders was $9.6 million for fourth quarter for 2012 and $43.9 million for the full year, compared to $13.3 million and $13.8 million for the same periods in 2011. In fourth quarter 2012, we added $0.9 billion of new business volume, reaching outstanding volume of $13 billion at year end. The net increase for the year of $1.1 billion is a 9.2% annual growth rate. Equally important is that the new business came from solid additions in all three of our lines of business and we expect that to continue. We are also continuing to see increased demand for longer term fixed rate agricultural loans as borrowers begin to consider the potential for increasing interest rates. Our credit quality remained strong. Our 90-day delinquencies were just $33 million, or 0.7% of the non-AgVantage Farm & Ranch loan portfolio as of year-end, down from $41 million, or 0.93% a year ago. As we analyze the overall credit quality of our business, we take into account more than just the Farm & Ranch loan delinquencies. The total business volume includes AgVantage securities and rural utilities loans, neither of which currently have any delinquencies, and also USDA Guaranteed Securities that are backed by the full faith and credit of the United States. When these were taken into consideration, the overall level of 90-day delinquencies was just 0.26% as of December 31, 2012, which is down from 0.34% as of December 31, 2011. With that as background, I would like to turn it to Dale Lynch, our Chief Financial Officer to cover our financial results in more detail. Dale?

Thanks, Tim. As mentioned, the fourth quarter core earnings were $11.6 million or $1.05 per diluted share, as compared to $12.6 million or $1.16 per diluted share a year earlier. For the full year of 2012, core earnings of $49.6 million, or $4.51 per diluted share, 15.7% increase over the $42.9 million or $3.97 per diluted common share for 2011. As Steve mentioned earlier, Farmer Mac uses core earnings as a supplement to GAAP net income not as its replacement. Core earnings for the year benefited from higher net effective spread of $106.6 million, or 95 basis points, compared to $89.4 million, or 96 basis points in 2011, driven by the growth in our business volume. Net effective spread for the fourth quarter of 2012 was $25.6 million, or 94 basis points. This higher net effective spread was partially offset by net provisions to the allowance for losses of $1.9 million for 2012, compared to net releases from the allowance for losses of $2.3 million in 2011. Our net provisions to the allowance for losses for the fourth quarter of 2012 was $1.2 million, driven primarily by our balance sheet growth. Both GAAP net income and core earnings for fourth quarter and full year of 2012 were negatively affected by severance payment made to Farmer Mac's former CEO, in connection with the termination of his employment in October of last year, which resulted in a net after-tax expense of $1 million for the quarter, in the fourth quarter. GAAP net income attributable to common shareholders was $9.6 million, or $0.87 per diluted share for the fourth quarter of 2012 and $43.9 million, or $3.98 per diluted share for the full year. This compares to $13.3 million or $1.23 per diluted common share and $13.8 million, or $1.28 per diluted common…

Thanks, Dale. Farmer Mac continues to achieve strong core earnings as we have added new volume across all three of our business lines. These results have helped us continue to build capital, which provides long-term strength and positions us to meet growth opportunities as they arise. We believe our growth over the next several years will be driven by several factors, including certain regulatory trends facing lenders, the increase in borrower preferences for longer term fixed rate loans and the potential for a broader economic recovery. We believe this is a good opportunity to add high quality eligible loan assets to our portfolio. Farmer Mac continues to build on a positive 2012 results and believes that our financial condition and earnings outlook remained strong. Consistent with this outlook, 2013 is off to a good start. As previously announced in January, we issued a new series of preferred stock, which allowed us to reduce our overall cost of capital over the long-term and we increased our common stock dividend from $0.10 a quarter to $0.12. Both actions underscore our confidence for the future and we look forward to reporting future results to you. At this time, we would be glad to take any questions you may have.

Thank you, sir. (Operator Instructions). The first question we have comes from Mike Turner with Compass Point. Please go ahead.

Hi. Good morning, everyone, and a solid quarter. On the increased in origination, I don't know if, Tim, you could add any more color. Is the increase sort of broad-based? Can you talk about it? Is it people switching into longer term loans and originators not wanting to hold that term? Any color on that in the capital requirements I guess would be helpful.

Well, with respect to the business volume, we are seeing our ongoing loan purchases increase. In our press release, we did talk about how during 2012, in the Farm & Ranch portfolio and the USDA guarantee portfolio. During 2012, we purchased more than $1 billion worth of loans during 2012, compared to just five years ago when that number was just half that. Part of that is the borrower preferences for longer term fixed rate loans and the fact that many small banks aren't able to provide long-term fixed rates to their borrowers, so they then turn to Farmer Mac. We have signed up many new lenders during 2012. It's an ongoing marketing effort to increase our business volume. With respect to capital requirements, I presume you are talking to our reference to sort of the regulatory framework in Basel III that bankers are going to facing, and what we see there is the potential of there, Basel III is a bit ambiguous, if not silent on the capital treatment for agricultural loans. Many bankers are concerned that in fact they could get wrapped up with other commercial types of loans with much higher capital requirements. So, again, as regulatory pressure comes in on lenders, we seek to contact those lenders and talk to them about ways that Farmer Mac can help them manage their business and the risks they face.

Okay. Great. Thanks. Then is there any reason to believe, I guess what's your booking in the fourth quarter, it seems like your net effective spread always has historically remained in that 90 to 100-basis point range give or take I know it bounces around it, is what you put on the fourth quarter still in that range or is there any migration in that?

Yes. I think overall, the net effective spread that we reported is the entire balance sheet, so it includes all of our program assets. Also, our non-program assets in our liquidity portfolio some of which those quite frankly were negative spread, the U.S. Treasury Securities that we own for instance. I think, I would kind of repeat what I said in the past that in the low to mid 90s is where we would project the overall net effective spread.

Okay. Thanks. Then, I am sorry. Dale, I don't know, you could comment or Tim, on what was the pre-tax amount of the severance charge in the fourth quarter. Just trying to get at what the comp and benefits kind of what a core number was in the fourth quarter.

Sure, Mike. So, essentially what we accrued in the fourth quarter, we booked in the fourth quarter was a gross expense of about $2.3 million before some recaptures on options expense et cetera. When you net out the recapture, which is about, call it, $830,000, you get to a gross comp number of about, or net comp of 1.5 before tax and then about $1 million, just under $1 million after-tax.

Okay.

Mike, this is Tim. So, if you are thinking about what to expect in terms of comp and benefits expense on a quarterly basis going forward, if you back out that $1 million you get down to about $4.75 million, but that's probably not a bad number. Somewhere between $4.5 million and $4.75 million for a quarter.

Okay. So, pretty stable with the last few quarters, a little uptick, I guess, going forward.

Yes. No significant changes.

Okay. All right. Thanks very much.

Thanks, Mike.

(Operator Instructions). Sir, it appears that we have no further questions at this time. We will go ahead and conclude our question and answer session. I would now like to turn the conference back over to management for any closing remarks. Gentlemen?

Thanks, everyone, for participating today. We appreciate your interest in Farmer Mac. We're now bringing the call to a close. Thanks for joining us today.

And, we thank you sir and the rest of the management for your time. The conference is now concluded. We thank you all for attending today's presentation. At this time, you may disconnect your lines. Thank you and have a great day.