2 0 1 5 ANNUAL REPORT P.O. Box 34390 Louisville, Kentucky ... · build a bright future for rural communities and agriculture. As agriculture continues to change, we bring knowledge,

2015 ANNUALREPORT

BUILDINGFOR THE NEXT100 YEARS

PRSRT STD

U.S. POSTAGE

PAID

PERMIT NO. 778

P.O. Box 34390

Louisville, Kentucky 40232

1-800-444-FARM

Visit us at e-farmcredit.com

For the past 100 years, we’ve stood committed to you and to agriculture. In the next 100, we look forward to a continued partnership and dedication to building an even brighter future for our industry and for rural America. To find a location near you, call 1-800-444-FARM or visit e-farmcredit.com

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PHOTO: As owners of Sweetwater Valley Farm (located

south of Knoxville, Tennessee), John and Celia Harrison,

and their daughter, Mary, know what success in farming

looks like today. They’ve started thinking about a plan for

the future, too, which includes transitioning their farm to

their children. For them, it’s about securing the future of

their farm so future generations can enjoy the way of life

that they’ve worked to achieve.

RESPONSIBLE PRINTING

• SFI Certified Sourcing

• Printed with Soy Ink

• Rainforest Alliance Certified

Together, we have worked to secure the future of agriculture and rural communities for the last 100 years. Together, we are laying the foundation for the next 100 years. We’re securing the future of rural America by investing in the next generation of leaders in agriculture and supporting young and beginning farmers. We are committed to making a positive impact on the communities where we — and our customers — live and work.

22015 ANN UAL REPORT

BUILDING FOR THE NEXT 100 YEARS 3

In 2015, we were reminded of the cyclical nature of our industry, where

farmers can experience as many down years as up. 2015 was also a year

that reinforced the importance of innovating and expanding as an orga-

nization, which is key to strengthening agriculture and rural commu-

nities today and in the future. In an ever-changing agriculture environ-

ment, we — and our customers — know that having the ability to adapt

to the marketplace is essential, as is cultivating a deep understanding of

our industry and demonstrating the capacity to build today what is need-

ed down the road. For Farm Credit Mid-America, operating as a steady,

predictable source of funds for our customers is core to our business.

STRONG TODAY, STRONGER TOMORROW

We operated with a long-term view and worked to improve the finan-

cial strength of the organization in 2015. Agriculture is coming off an

extended run of prosperity, but successive years of low grain prices and

some challenging events in the livestock sector have undermined that

position. The good news is our customers were more prepared going into

this cycle than they’ve ever been, and have shown resilience in a down

economy. Our business showed a similar resilience, and even performed

better than expected. We saw a healthy stream of new loan customers,

and the rural home market improved along with the general economy.

Total assets reached a record $22.1 billion, a 6.1 percent increase over

2014; while net income was $279 million, almost 7 percent over plan.

Moreover, the amount of acres insured through our crop insurance

program grew nearly 8.2 percent to more than 2.4 million acres.

ENHANCING THE CUSTOMER EXPERIENCE

In 2015, we created deeper, stronger connections with our customers,

while investing in the protection of their long-term interests. Service to

customers and the information and resources we provide became key

priorities. Implementing a more transparent and consistent approach to

serving customers, which leverages a team-based approach was crucial.

This means that regardless of an employee’s role in the organization,

whether it is conducting visits at the farm or contributing behind the

scenes, he or she is held accountable for the customer experience.

PRESIDENT’S LET TER

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

I’m also proud to report that efficiencies created internally by au-

tomation and simplified processes are allowing our employees to spend

more time with customers and listening to and understanding their

concerns. Improved technology platforms and tools empower employees

to give customers the knowledge and flexibility they need to adapt to in-

dustry and market changes. These changes are having a powerful impact

on customers, but they’re also creating an environment that attracts top

talent to our organization.

THE NEXT 100 YEARS

In 2016, the Farm Credit System celebrates a century of serving agricul-

ture. While agriculture is rooted in heritage and tradition, a financially

stable, well-informed, prepared younger generation is imperative to

achieving another century of success for our industry. This is why we’ve

proactively begun working with young farmers at all stages of develop-

ment to advance and sustain their financial knowledge.

Through our young and beginning farmer program, we’re not only

partnering with the next generation of farmers as a financial resource,

we are educating and preparing them through hands-on management

sessions and personalized education programs to foster a practical

learning environment. In 2015, more than 125 farm operations made up

largely of customers younger than 35 or with 10 or fewer years of farm-

ing experience benefited from special workshops and received interest

rate credits to reduce their operating costs. This program is expanding

in 2016.

The future of agriculture is bright, and its continued success comes

through commitment, stability and partnership. In the year ahead, we

remain committed to maintaining a strong financial position, hiring and

retaining the best people to understand our customers’ operations, chal-

lenges and opportunities. On behalf of the entire team at Farm Credit,

thank you for your business and the opportunity to work with you to

build a bright future for rural communities and agriculture.

As agriculture continues to change, we bring knowledge, resources and expertise to your operation, while equipping the next generation of farmers with the tools needed to succeed.

22015 ANN UAL REPORT

BUILDING FOR THE N EXT 100 YEARS 3

In 2015, we were reminded of the cyclical nature of our industry, where

farmers can experience as many down years as up. 2015 was also a year

that reinforced the importance of innovating and expanding as an orga-

nization, which is key to strengthening agriculture and rural commu-

nities today and in the future. In an ever-changing agriculture environ-

ment, we — and our customers — know that having the ability to adapt

to the marketplace is essential, as is cultivating a deep understanding of

our industry and demonstrating the capacity to build today what is need-

ed down the road. For Farm Credit Mid-America, operating as a steady,

predictable source of funds for our customers is core to our business.

STRONG TODAY, STRONGER TOMORROW

We operated with a long-term view and worked to improve the finan-

cial strength of the organization in 2015. Agriculture is coming off an

extended run of prosperity, but successive years of low grain prices and

some challenging events in the livestock sector have undermined that

position. The good news is our customers were more prepared going into

this cycle than they’ve ever been, and have shown resilience in a down

economy. Our business showed a similar resilience, and even performed

better than expected. We saw a healthy stream of new loan customers,

and the rural home market improved along with the general economy.

Total assets reached a record $22.1 billion, a 6.1 percent increase over

2014; while net income was $279 million, almost 7 percent over plan.

Moreover, the amount of acres insured through our crop insurance

program grew nearly 8.2 percent to more than 2.4 million acres.

ENHANCING THE CUSTOMER EXPERIENCE

In 2015, we created deeper, stronger connections with our customers,

while investing in the protection of their long-term interests. Service to

customers and the information and resources we provide became key

priorities. Implementing a more transparent and consistent approach to

serving customers, which leverages a team-based approach was crucial.

This means that regardless of an employee’s role in the organization,

whether it is conducting visits at the farm or contributing behind the

scenes, he or she is held accountable for the customer experience.

PRESIDENT’S LET TER

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

I’m also proud to report that efficiencies created internally by au-

tomation and simplified processes are allowing our employees to spend

more time with customers and listening to and understanding their

concerns. Improved technology platforms and tools empower employees

to give customers the knowledge and flexibility they need to adapt to in-

dustry and market changes. These changes are having a powerful impact

on customers, but they’re also creating an environment that attracts top

talent to our organization.

THE NEXT 100 YEARS

In 2016, the Farm Credit System celebrates a century of serving agricul-

ture. While agriculture is rooted in heritage and tradition, a financially

stable, well-informed, prepared younger generation is imperative to

achieving another century of success for our industry. This is why we’ve

proactively begun working with young farmers at all stages of develop-

ment to advance and sustain their financial knowledge.

Through our young and beginning farmer program, we’re not only

partnering with the next generation of farmers as a financial resource,

we are educating and preparing them through hands-on management

sessions and personalized education programs to foster a practical

learning environment. In 2015, more than 125 farm operations made up

largely of customers younger than 35 or with 10 or fewer years of farm-

ing experience benefited from special workshops and received interest

rate credits to reduce their operating costs. This program is expanding

in 2016.

The future of agriculture is bright, and its continued success comes

through commitment, stability and partnership. In the year ahead, we

remain committed to maintaining a strong financial position, hiring and

retaining the best people to understand our customers’ operations, chal-

lenges and opportunities. On behalf of the entire team at Farm Credit,

thank you for your business and the opportunity to work with you to

build a bright future for rural communities and agriculture.

As agriculture continues to change, we bring knowledge, resources and expertise to your operation, while equipping the next generation of farmers with the tools needed to succeed.

4 5

Building for the next 100 years requires a commitment to strengthening our local communities, advocating for our industry and investing in and developing future leaders of agriculture.

CHAIR ’S LET TER

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

2015 ANN UAL REPORT

BUILDING FOR THE NEXT 100 YEARS

One of the central strengths of Farm Credit Mid-America’s cooperative

structure is retaining a Board of Directors who are not only farmers, but

also Farm Credit customers. This means, day in and day out, we’re bring-

ing insights from the field to the organization to help it improve, and

we’re living out Farm Credit’s purpose, priorities and goals on our own

operations. With varying perspectives from Board members, we’re con-

fident our customers’ needs and concerns are being properly addressed,

and we’re actively helping lay a foundation for the future success of rural

communities and agriculture.

A TWO-WAY CONVERSATION

In 2015, we made significant gains in understanding our customers’

needs, and we weren’t shy about asking them about their expectations,

changes they’d like to see and opportunities where we can better engage

with them. In fact, customer research helped us make a number of organi-

zational decisions for 2015, from the types of community investments we

made to the affirmation of supporting the next generation of agriculture.

Building a strong future for our industry requires a shared purpose

with our customers, and our approach to developing strong, beneficial

relationships with you was at the top of the list. Cultivating relationships

is more than just face-to-face interactions. It’s about providing products

and services that are directly on point, verifying our employees are

equipped to help you grow and grow with you, and committing to securing

the future of rural communities and agriculture.

SECURING AGRICULTURE’S PRESENT AND FUTURE

Ushering in the next generation of agriculture is a top priority for Farm

Credit. In 2015, we focused energy on empowering future ag leaders and

equipping the next generation of farmers to run successful operations.

We invested in FFA and 4-H programs across our four-state territory and

hosted an FFA past state officer training at our headquarters in Louis-

ville. We also expanded our commitment to young and beginning farmers,

investing in training programs and offering financial workshops through

our Know to Grow events aimed at young and beginning farmers.

Making the commitment to advocate for agriculture was also a top

priority in 2015. Farm Credit is blessed with employees who see their oc-

cupation as more than a job, but a way of life. I’m proud to see our people

connecting with the communities where they live and work on behalf of

our association, and connecting the general public with farming and our

way of life. In 2015, for instance, we helped fund the Farms to Food Banks

program, which purchases surplus commodity products and distributes

them to food kitchens, churches and other emergency food providers. In

addition to our financial pledge with this program, Farm Credit employee

volunteers shared the value farmers provide in feeding our citizens, and

helped prevent unnecessary food waste.

PRIORITIES FOR THE COMING YEAR

For 2016, we will continue to focus on optimizing the customer experi-

ence. This means continuing to partner with farmers through industry

ups and downs, and preparing the next generation of agriculture with

helpful, targeted resources. We’re also committed to providing our

customers with the opportunity to have their voices heard, which can

be achieved through Board representation. Improvements made in the

Board election process last year drove a 27 percent gain in voter turnout,

and we hope you continue to take the time to express your opinions

through participation in electing Board and Nominating Committee

members. On page 78, you’ll see ways to get involved and provide your

input to the Board.

On behalf of the Farm Credit Mid-America Board, I’d like to reiterate

our commitment to the mission of securing the future of rural commu-

nities and agriculture, and our unwavering aim to provide you with the

resources and knowledge you need to succeed.

4 5

Building for the next 100 years requires a commitment to strengthening our local communities, advocating for our industry and investing in and developing future leaders of agriculture.

CHAIR ’S LET TER

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

2015 ANN UAL REPORT

BUILDING FOR THE N EXT 100 YEARS

One of the central strengths of Farm Credit Mid-America’s cooperative

structure is retaining a Board of Directors who are not only farmers, but

also Farm Credit customers. This means, day in and day out, we’re bring-

ing insights from the field to the organization to help it improve, and

we’re living out Farm Credit’s purpose, priorities and goals on our own

operations. With varying perspectives from Board members, we’re con-

fident our customers’ needs and concerns are being properly addressed,

and we’re actively helping lay a foundation for the future success of rural

communities and agriculture.

A TWO-WAY CONVERSATION

In 2015, we made significant gains in understanding our customers’

needs, and we weren’t shy about asking them about their expectations,

changes they’d like to see and opportunities where we can better engage

with them. In fact, customer research helped us make a number of organi-

zational decisions for 2015, from the types of community investments we

made to the affirmation of supporting the next generation of agriculture.

Building a strong future for our industry requires a shared purpose

with our customers, and our approach to developing strong, beneficial

relationships with you was at the top of the list. Cultivating relationships

is more than just face-to-face interactions. It’s about providing products

and services that are directly on point, verifying our employees are

equipped to help you grow and grow with you, and committing to securing

the future of rural communities and agriculture.

SECURING AGRICULTURE’S PRESENT AND FUTURE

Ushering in the next generation of agriculture is a top priority for Farm

Credit. In 2015, we focused energy on empowering future ag leaders and

equipping the next generation of farmers to run successful operations.

We invested in FFA and 4-H programs across our four-state territory and

hosted an FFA past state officer training at our headquarters in Louis-

ville. We also expanded our commitment to young and beginning farmers,

investing in training programs and offering financial workshops through

our Know to Grow events aimed at young and beginning farmers.

Making the commitment to advocate for agriculture was also a top

priority in 2015. Farm Credit is blessed with employees who see their oc-

cupation as more than a job, but a way of life. I’m proud to see our people

connecting with the communities where they live and work on behalf of

our association, and connecting the general public with farming and our

way of life. In 2015, for instance, we helped fund the Farms to Food Banks

program, which purchases surplus commodity products and distributes

them to food kitchens, churches and other emergency food providers. In

addition to our financial pledge with this program, Farm Credit employee

volunteers shared the value farmers provide in feeding our citizens, and

helped prevent unnecessary food waste.

PRIORITIES FOR THE COMING YEAR

For 2016, we will continue to focus on optimizing the customer experi-

ence. This means continuing to partner with farmers through industry

ups and downs, and preparing the next generation of agriculture with

helpful, targeted resources. We’re also committed to providing our

customers with the opportunity to have their voices heard, which can

be achieved through Board representation. Improvements made in the

Board election process last year drove a 27 percent gain in voter turnout,

and we hope you continue to take the time to express your opinions

through participation in electing Board and Nominating Committee

members. On page 78, you’ll see ways to get involved and provide your

input to the Board.

On behalf of the Farm Credit Mid-America Board, I’d like to reiterate

our commitment to the mission of securing the future of rural commu-

nities and agriculture, and our unwavering aim to provide you with the

resources and knowledge you need to succeed.

LAYING THE FOUNDATION FORFARMING’S CONTINUED SUCCESSProviding young and beginning farmers with the tools they need to develop skills that can help them grow.

SU PPORTING THE NEXT GENER ATION OF FARM ERS

6 7

GROWING KNOWLEDGE, EXPANDING ENTERPRISES

In 2013, Farm Credit created a strategy and developed prod-

ucts and programs specifically for its growing membership

of young and beginning farmers. We made several strategic

business decisions to facilitate serving and investing in this

vital, growing group of ag professionals who are shaping

the future of the industry.

Last year, Farm Credit unveiled its Know to Grow series.

These special workshops — aimed specifically at the next

generation of farmers — provided educational opportunities

and mentoring to young and beginning farmers throughout

Farm Credit’s four-state territory of Indiana, Ohio, Kentucky

and Tennessee. Farm Credit also allocated a portion of its

capital to provide loans to young and beginning farmers

that might not be available through other means.

In Know to Grow workshops, participants learned

to create business plans, accurately assess the financial

strengths and weaknesses of their operation and work

through the process of improving farm profitability and

financial performance. Young and beginning farmers with

more fully developed business plans received guidance

from Farm Credit professionals and universities to evaluate

their plans and benchmark them against those of others,

ultimately receiving a summary of performance.

More than 125 farmers graduated from Farm Credit’s

first Know to Grow series. Additional programming will

be offered in 2016.

LENDING STUDENTS A HAND

The University of Tennessee (UT) Farm Credit Scholars Program

is enhancing the learning experience of students and helping

prepare them for careers in agriculture, with an emphasis on ag

finance. Offered through the UT College of Agricultural Sciences

and Natural Resources, the program provides students with

Farm Credit scholarships, a summer internship at Farm Credit

and learning opportunities through classes and travel.

PREPARING FOR REAL-WORLD AG CAREERS

Farm Credit believes in supporting the next wave of farmers

and agriculturalists by providing scholarships to students pur-

suing careers in agriculture. Recipients are selected based on

academic and leadership accomplishments, and their ability to

demonstrate passion for agriculture. In 2015, Farm Credit also

endowed scholarships at each of Ivy Tech Community College’s

seven Indiana agriculture campuses. Most Ivy Tech graduates

either go back to the farm or transfer to one of Ivy Tech’s four-

year partners.

26$200,000UNIVERSITY OF TENNESSEE STUDENTS WHO HAVE COMPLETED OR ARE

CURRENTLY ENROLLED IN THE FARM CREDIT SCHOLARS PROGRAM

AMOUNT OF SCHOLARSHIPS AWARDED ANNUALLY

PHOTO: Farm Credit helps remove financial barriers and provides edu-

cational opportunities for young and beginning farmers as they pursue

their dreams of farming.

2015 ANN UAL REPORT


LAYING THE FOUNDATION FORFARMING’S CONTINUED SUCCESSProviding young and beginning farmers with the tools they need to develop skills that can help them grow.

SU PPORTING THE NEXT GENER ATION OF FARM ERS

6 7

GROWING KNOWLEDGE, EXPANDING ENTERPRISES

In 2013, Farm Credit created a strategy and developed prod-

ucts and programs specifically for its growing membership

of young and beginning farmers. We made several strategic

business decisions to facilitate serving and investing in this

vital, growing group of ag professionals who are shaping

the future of the industry.

Last year, Farm Credit unveiled its Know to Grow series.

These special workshops — aimed specifically at the next

generation of farmers — provided educational opportunities

and mentoring to young and beginning farmers throughout

Farm Credit’s four-state territory of Indiana, Ohio, Kentucky

and Tennessee. Farm Credit also allocated a portion of its

capital to provide loans to young and beginning farmers

that might not be available through other means.

In Know to Grow workshops, participants learned

to create business plans, accurately assess the financial

strengths and weaknesses of their operation and work

through the process of improving farm profitability and

financial performance. Young and beginning farmers with

more fully developed business plans received guidance

from Farm Credit professionals and universities to evaluate

their plans and benchmark them against those of others,

ultimately receiving a summary of performance.

More than 125 farmers graduated from Farm Credit’s

first Know to Grow series. Additional programming will

be offered in 2016.

LENDING STUDENTS A HAND

The University of Tennessee (UT) Farm Credit Scholars Program

is enhancing the learning experience of students and helping

prepare them for careers in agriculture, with an emphasis on ag

finance. Offered through the UT College of Agricultural Sciences

and Natural Resources, the program provides students with

Farm Credit scholarships, a summer internship at Farm Credit

and learning opportunities through classes and travel.

PREPARING FOR REAL-WORLD AG CAREERS

Farm Credit believes in supporting the next wave of farmers

and agriculturalists by providing scholarships to students pur-

suing careers in agriculture. Recipients are selected based on

academic and leadership accomplishments, and their ability to

demonstrate passion for agriculture. In 2015, Farm Credit also

endowed scholarships at each of Ivy Tech Community College’s

seven Indiana agriculture campuses. Most Ivy Tech graduates

either go back to the farm or transfer to one of Ivy Tech’s four-

year partners.

26$200,000UNIVERSITY OF TENNESSEE STUDENTS WHO HAVE COMPLETED OR ARE

CURRENTLY ENROLLED IN THE FARM CREDIT SCHOLARS PROGRAM

AMOUNT OF SCHOLARSHIPS AWARDED ANNUALLY

PHOTO: Farm Credit helps remove financial barriers and provides edu-

cational opportunities for young and beginning farmers as they pursue

their dreams of farming.

2015 ANN UAL REPORT


PREPARING TODAY’S YOUTH TO BECOME TOMORROW’S LEADERSEquipping youth with skills to help them transition from student leaders to business professionals.

SOLID PARTNERSHIPS THAT DELIVER

The long-standing relationships Farm Credit has with FFA

and 4-H are based on decades of mutual trust and goodwill.

Throughout its history, Farm Credit has taken its core value

of developing future agricultural leaders seriously, working

closely with youth organizations to both educate and ad-

vance young talent — for the future ag business workforce at

large and as potential Farm Credit employees.

Farm Credit has been a perennial sponsor of the State

FFA Degree programs across our four-state territory.

Through this program, honors are given to top FFA members

annually at state conventions. To receive a state degree,

members must fulfill certain criteria, such as delivering

speeches and presentations, serving as an officer or member

of a standing committee, participating in community

service projects and maintaining a satisfactory record of

scholarship. All of these activities serve to develop and hone

leadership skills.

Farm Credit also believes in making capital improve-

ments to youth learning centers. The latest example is our

investment in a new 4-H camp and conference center at

Lone Oaks Farm in Hardeman County, Tennessee. Helped

in part by a donation from Farm Credit, the West Tennessee

4-H Leadership Center will offer young people the oppor-

tunity to learn skills to help them succeed and lead. The

facility will be used to teach them about agriculture, natural

resources and science.

A major part of our mission is to secure the future of

agriculture and rural America. Helping prepare the next

generation of agriculture leaders is important in realizing

that mission.

DEVELOPING FUTU RE LEADERS IN AGRICU LTU RE

8 9

THINK GLOBALLY, LEARN LOCALLY

Founded in 2013, Global Impact STEM Academy in Springfield,

Ohio, offers high school students science, technology, engineering

and math (STEM) curriculum focused on agriculture, energy and

the environment. Farm Credit donated $25,000 to help the school

move from temporary quarters to a permanent location.

TAKING THE NEXT STEP

Farm Credit hosted FFA Past State Officers from each of our

four states at a three-day training held in late July. Through

a mix of guest facilitators, panels and workshop sessions,

students sharpened their presentation skills, learned about

transitioning to the real world and heard from professionals

about how the skills they learn in FFA will enhance their post-

graduation careers.

57432STUDENTS ENROLLED AT GLOBAL IMPACT STEM ACADEMYFFA PAST STATE OFFICERS WHO ATTENDED POST-GRADUATE TRAINING

HOSTED BY FARM CREDIT

PHOTO: Through various scholarship opportunities, educational expe-

riences and capital investments, Farm Credit helps prepare students to

take the reins and transition themselves into stewards of our industry.

2015 ANN UAL REPORT


PREPARING TODAY’S YOUTH TO BECOME TOMORROW’S LEADERSEquipping youth with skills to help them transition from student leaders to business professionals.

SOLID PARTNERSHIPS THAT DELIVER

The long-standing relationships Farm Credit has with FFA

and 4-H are based on decades of mutual trust and goodwill.

Throughout its history, Farm Credit has taken its core value

of developing future agricultural leaders seriously, working

closely with youth organizations to both educate and ad-

vance young talent — for the future ag business workforce at

large and as potential Farm Credit employees.

Farm Credit has been a perennial sponsor of the State

FFA Degree programs across our four-state territory.

Through this program, honors are given to top FFA members

annually at state conventions. To receive a state degree,

members must fulfill certain criteria, such as delivering

speeches and presentations, serving as an officer or member

of a standing committee, participating in community

service projects and maintaining a satisfactory record of

scholarship. All of these activities serve to develop and hone

leadership skills.

Farm Credit also believes in making capital improve-

ments to youth learning centers. The latest example is our

investment in a new 4-H camp and conference center at

Lone Oaks Farm in Hardeman County, Tennessee. Helped

in part by a donation from Farm Credit, the West Tennessee

4-H Leadership Center will offer young people the oppor-

tunity to learn skills to help them succeed and lead. The

facility will be used to teach them about agriculture, natural

resources and science.

A major part of our mission is to secure the future of

agriculture and rural America. Helping prepare the next

generation of agriculture leaders is important in realizing

that mission.

DEVELOPING FUTU RE LEADERS IN AGRICU LTU RE

8 9

THINK GLOBALLY, LEARN LOCALLY

Founded in 2013, Global Impact STEM Academy in Springfield,

Ohio, offers high school students science, technology, engineering

and math (STEM) curriculum focused on agriculture, energy and

the environment. Farm Credit donated $25,000 to help the school

move from temporary quarters to a permanent location.

TAKING THE NEXT STEP

Farm Credit hosted FFA Past State Officers from each of our

four states at a three-day training held in late July. Through

a mix of guest facilitators, panels and workshop sessions,

students sharpened their presentation skills, learned about

transitioning to the real world and heard from professionals

about how the skills they learn in FFA will enhance their post-

graduation careers.

57432STUDENTS ENROLLED AT GLOBAL IMPACT STEM ACADEMYFFA PAST STATE OFFICERS WHO ATTENDED POST-GRADUATE TRAINING

HOSTED BY FARM CREDIT

PHOTO: Through various scholarship opportunities, educational expe-

riences and capital investments, Farm Credit helps prepare students to

take the reins and transition themselves into stewards of our industry.

2015 ANN UAL REPORT


TELLING AGRICULTURE’S STORYConnecting the value of farming with the non-agricultural world.

A FAIR PRICE FOR FARMERS, FRESH FOOD FOR

THOSE IN NEED

At food banks around the region and around the country, the

greatest need is almost universally the same: fresh produce.

People who rely on food banks to feed their families or to

fill in the occasional gap in a monthly budget crave ripe

tomatoes in season; sharp peppers to dress up healthy soups;

and crisp, fresh salads.

Farmers near these food banks have a common need as

well: steady markets for their surplus produce to keep their

businesses financially strong.

The Farms to Food Banks program is the bridge connect-

ing the people who grow our food with the people who need

it most. It pays a fair market price for local produce while

putting more nutrition and variety on family tables.

MAKING A FARM FIELD TRIP MORE FEASIBLE

Fair Oaks Farms, in northwest Indiana, is a modern agricul-

tural education and entertainment complex, designed to open

a dialogue between consumers and farmers. More than 50,000

visitors come to the farm each year, many of whom come with

school groups and need a place to gather for lunch and snacks.

In the fall of 2016, the Youth Café will open, made possible in

part by a donation from Farm Credit and our industry partners.

A NUTRITIOUS BRIDGE TO AGRICULTURE

Students at Unicoi High School in northeast Tennessee learn

how to grow crops and run a business by working at a greenhouse

on property donated by Farm Credit. The greenhouse not only

provides fresh produce for the school cafeteria, which allows

students to enjoy the fruits of their labors, it gives them a new-

found appreciation of the efforts and contributions of farmers.

Building connections is what Farm Credit does, too.

We’re proud to have made a financial commitment to food

banks across Indiana, Ohio, Kentucky and Tennessee. This

gift not only strengthens communities in need, it is a highly

visible connection between farmers and the non-agricultural

world, reaching well beyond food bank clients.

It’s also an opportunity for our Farm Credit team to roll

up their sleeves and serve their communities. Last fall, more

than 75 employees spent a day gleaning peppers, kale and

other vegetables from a local farm and then packaging and

distributing that produce at a senior care facility. Together,

they sent more than a ton of produce to the Dare to Care

Food Bank in Louisville.

ADVOCATING FOR AGRICU LTU RE

10 11

50,000+749YOUNG PEOPLE WHO VISIT FAIR OAKS FARMS AS PART OF SCHOOL

GROUPS ANNUALLY

STUDENTS WHO BENEFIT FROM FRESH PRODUCE SERVED AT

UNICOI COUNTY HIGH SCHOOL

PHOTO: By helping Unicoi High School students plant produce that will

eventually be served in their school cafeteria, Farm Credit employees

are demonstrating the value agriculture brings to our communities.

2015 ANN UAL REPORT


TELLING AGRICULTURE’S STORYConnecting the value of farming with the non-agricultural world.

A FAIR PRICE FOR FARMERS, FRESH FOOD FOR

THOSE IN NEED

At food banks around the region and around the country, the

greatest need is almost universally the same: fresh produce.

People who rely on food banks to feed their families or to

fill in the occasional gap in a monthly budget crave ripe

tomatoes in season; sharp peppers to dress up healthy soups;

and crisp, fresh salads.

Farmers near these food banks have a common need as

well: steady markets for their surplus produce to keep their

businesses financially strong.

The Farms to Food Banks program is the bridge connect-

ing the people who grow our food with the people who need

it most. It pays a fair market price for local produce while

putting more nutrition and variety on family tables.

MAKING A FARM FIELD TRIP MORE FEASIBLE

Fair Oaks Farms, in northwest Indiana, is a modern agricul-

tural education and entertainment complex, designed to open

a dialogue between consumers and farmers. More than 50,000

visitors come to the farm each year, many of whom come with

school groups and need a place to gather for lunch and snacks.

In the fall of 2016, the Youth Café will open, made possible in

part by a donation from Farm Credit and our industry partners.

A NUTRITIOUS BRIDGE TO AGRICULTURE

Students at Unicoi High School in northeast Tennessee learn

how to grow crops and run a business by working at a greenhouse

on property donated by Farm Credit. The greenhouse not only

provides fresh produce for the school cafeteria, which allows

students to enjoy the fruits of their labors, it gives them a new-

found appreciation of the efforts and contributions of farmers.

Building connections is what Farm Credit does, too.

We’re proud to have made a financial commitment to food

banks across Indiana, Ohio, Kentucky and Tennessee. This

gift not only strengthens communities in need, it is a highly

visible connection between farmers and the non-agricultural

world, reaching well beyond food bank clients.

It’s also an opportunity for our Farm Credit team to roll

up their sleeves and serve their communities. Last fall, more

than 75 employees spent a day gleaning peppers, kale and

other vegetables from a local farm and then packaging and

distributing that produce at a senior care facility. Together,

they sent more than a ton of produce to the Dare to Care

Food Bank in Louisville.

ADVOCATING FOR AGRICU LTU RE

10 11

50,000+749YOUNG PEOPLE WHO VISIT FAIR OAKS FARMS AS PART OF SCHOOL

GROUPS ANNUALLY

STUDENTS WHO BENEFIT FROM FRESH PRODUCE SERVED AT

UNICOI COUNTY HIGH SCHOOL

PHOTO: By helping Unicoi High School students plant produce that will

eventually be served in their school cafeteria, Farm Credit employees

are demonstrating the value agriculture brings to our communities.

2015 ANN UAL REPORT


12 13

LEADERSHIP

BOARD OF DIRECTORS

ANN UAL REPORT

LOANS (OWNED ONLY)

PERMANENT CAPITAL R ATIO

TOTAL (OWNED AND MANAGED) ASSETS

RETU RN ON AVER AGE ASSETS (AF TER TA X)

EXECUTIVE LEADERSHIP TEAM

DO LL ARS IN BILLIO NS

PERCENTAGE


PERCENTAGE

*Appointed Directors

For additional information on the Board of Directors and the Executive Leadership team, see page 78.

Kevin Cox, Chair 10345 S 1100 E Brazil, IN47834

David Bates 894 Pecan LaneShepherdsville, KY 40165

Hugh Adams 2298 Lower Sharon RdDresden, TN 38225

Donald Blankenship 6319 Halls Hill PikeMurfreesboro, TN 37130

Brandon Robbins, Secretary 2702 Old Walton RdCookeville, TN 38506

George Stebbins 7883 N Montgomery County Line RdEnglewood, OH 45322

Duain “Doc” Cottingham 5190 E 550 N Attica, IN 47918

Mary Courtney 6843 Vigo Rd Bagdad, KY 40003

Lowell Hill 462 Co Rd 24 S DeGraff, OH 43318

Jimmy Mays 199 Cemetery Rd Scottsville, KY 42164

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

Bill Patterson 11380 Caves RdChesterland, OH 44026

Andrew Wilson,Vice Chair 3485 Wilson RdSomerset, OH 43783

Dale Tucker 3835 Horton HwyGreeneville, TN 37745

David Hahn* 3967 Shattuck AveColumbus, OH 43220

Tony Wolfe 2197 E John Ford Rd Hazleton, IN 47640

Barney Barnett* 1175 McMakin RdShelbyville, KY 40065

Bill Johnson President & Chief Executive Officer

Steve Allard Senior Vice President –Chief Credit Officer

Gordon Hanson Senior Vice President – Chief Risk Officer

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

Heather Vidourek Senior Vice President – Human Capital

Dick Poe Senior Vice President – Financial Services

Keith Lane Senior Vice President – Agribusiness

Jill Marchant Senior Vice President,General Counsel &Corporate Secretary

Dan WagnerSenior Vice President –Chief Information Officer

2015 ANN UAL REPORT


$22.6

2012 2013 2014 2015

$19.7 $20.7 $21.4 $22.6

$20.0

2012 2013 2014 2015

$16.5 $17.7 $18.8 $20.0

17.0%

2012 2013 2014 2015

15.5% 15.9% 16.8% 17.0%

1.3%

2012 2013 2014 2015

1.6% 1.6% 1.6% 1.3%

12 13

LEADERSHIP

BOARD OF DIRECTORS

ANN UAL REPORT

LOANS (OWNED ONLY)

PERMANENT CAPITAL R ATIO

TOTAL (OWNED AND MANAGED) ASSETS

RETU RN ON AVER AGE ASSETS (AF TER TA X)

EXECUTIVE LEADERSHIP TEAM


PERCENTAGE


PERCENTAGE

*Appointed Directors

For additional information on the Board of Directors and the Executive Leadership team, see page 78.

Kevin Cox, Chair 10345 S 1100 E Brazil, IN47834

David Bates 894 Pecan LaneShepherdsville, KY 40165

Hugh Adams 2298 Lower Sharon RdDresden, TN 38225

Donald Blankenship 6319 Halls Hill PikeMurfreesboro, TN 37130

Brandon Robbins, Secretary 2702 Old Walton RdCookeville, TN 38506

George Stebbins 7883 N Montgomery County Line RdEnglewood, OH 45322

Duain “Doc” Cottingham 5190 E 550 N Attica, IN 47918

Mary Courtney 6843 Vigo Rd Bagdad, KY 40003

Lowell Hill 462 Co Rd 24 S DeGraff, OH 43318

Jimmy Mays 199 Cemetery Rd Scottsville, KY 42164

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

Bill Patterson 11380 Caves RdChesterland, OH 44026

Andrew Wilson,Vice Chair 3485 Wilson RdSomerset, OH 43783

Dale Tucker 3835 Horton HwyGreeneville, TN 37745

David Hahn* 3967 Shattuck AveColumbus, OH 43220

Tony Wolfe 2197 E John Ford Rd Hazleton, IN 47640

Barney Barnett* 1175 McMakin RdShelbyville, KY 40065

Bill Johnson President & Chief Executive Officer

Steve Allard Senior Vice President –Chief Credit Officer

Gordon Hanson Senior Vice President – Chief Risk Officer

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

Heather Vidourek Senior Vice President – Human Capital

Dick Poe Senior Vice President – Financial Services

Keith Lane Senior Vice President – Agribusiness

Jill Marchant Senior Vice President,General Counsel &Corporate Secretary

Dan WagnerSenior Vice President –Chief Information Officer

2015 ANN UAL REPORT


$22.6

2012 2013 2014 2015

$19.7 $20.7 $21.4 $22.6

$20.0

2012 2013 2014 2015

$16.5 $17.7 $18.8 $20.0

17.0%

2012 2013 2014 2015

15.5% 15.9% 16.8% 17.0%

1.3%

2012 2013 2014 2015

1.6% 1.6% 1.6% 1.3%

9FEB201611463788 9FEB201611463644 9FEB201611463478 9FEB201611463326 9FEB201611463169

FINANCIAL OVERVIEW

CONSOLIDATED FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

(DOLLARS IN THOUSANDS)

STATEMENT OF CONDITION DATA

2015 2014 2013 2012 2011

Loans $20,003,514 $18,775,989 $17,669,775 $16,526,875 $15,010,650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 62,881 47,661 46,810 60,650 80,734

Net loans 19,940,633 18,728,328 17,622,965 16,466,225 14,929,916. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment in AgriBank, FCB 430,198 409,076 448,181 440,925 422,124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,087,001 1,038,343 1,227,018 1,450,877 1,410,903. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 7,367 9,322 10,495 14,350 30,309. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 639,686 645,654 723,716 684,663 712,020

Total assets $22,104,885 $20,830,723 $20,032,375 $19,057,040 $17,505,272

Obligations with maturities of one year or less $18,199,211 $17,204,330 $16,717,120 $16,051,081 $14,790,190. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Obligations with maturities greater than one year 1,335 1,593 1,818 2,073 2,317

Total liabilities 18,200,546 17,205,923 16,718,938 16,053,154 14,792,507

Capital stock and participation certificates 86,504 85,982 85,693 84,541 82,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,817,835 3,538,818 3,227,744 2,919,345 2,630,765

Total members’ equity 3,904,339 3,624,800 3,313,437 3,003,886 2,712,765

Total liabilities and members’ equity $22,104,885 $20,830,723 $20,032,375 $19,057,040 $17,505,272

STATEMENT OF INCOME DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net interest income $432,403 $416,622 $391,875 $353,779 $316,475. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) credit losses 30,548 10,328 (3,031) 2,791 (10,416). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expense, net (122,838) (95,220) (86,507) (62,408) (48,300)

Net income $279,017 $311,074 $308,399 $288,580 $278,591

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

Return on average assets 1.3% 1.6% 1.6% 1.6% 1.7%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average members’ equity 7.4% 9.0% 9.8% 10.1% 10.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net interest income as a percentage of average earning assets 2.2% 2.2% 2.1% 2.1% 2.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Members’ equity as a percentage of total assets 17.7% 17.4% 16.5% 15.8% 15.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Permanent capital ratio 17.0% 16.8% 15.9% 15.5% 14.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 16.6% 16.3% 15.4% 15.0% 14.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 16.6% 16.3% 15.4% 15.0% 14.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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


MANAGEMENT’S DISCUSSION AND ANALYSIS

The following commentary reviews the consolidated financial condition – Economic fluctuations in the agricultural and farm-related business

and consolidated results of operations of Farm Credit Mid-America, sectors

ACA (the Association) and its subsidiaries, Farm Credit Mid-America, – Unfavorable weather, disease, and other adverse climatic or biologi-

FLCA and Farm Credit Mid-America, PCA (subsidiaries) and provides cal conditions that periodically occur and impact agricultural pro-

additional specific information. The accompanying Consolidated Finan- ductivity and income

cial Statements and Notes to the Consolidated Financial Statements – Changes in U.S. government support of the agricultural industry and

also contain important information about our financial condition and the System as a government-sponsored enterprise, as well as inves-

results of operations. tor and rating agency actions relating to events involving the U.S.

The Farm Credit System (System) is a nationwide system of coopera- government, other government-sponsored enterprises, and other

tively owned banks and associations established by Congress to meet financial institutions

the credit needs of American agriculture. As of January 1, 2016, the – Actions taken by the Federal Reserve System in implementing mon-

System consisted of three Farm Credit Banks (FCB), one Agricultural etary policy

Credit Bank (ACB), and 74 customer-owned cooperative lending institu- – Credit, interest rate, and liquidity risks inherent in our lending

tions (associations). The System serves all 50 states, Washington D.C., activities

and Puerto Rico. This network of financial cooperatives is owned and – Changes in our assumptions for determining the allowance for loan

governed by the rural customers the System serves. losses, other-than-temporary impairment, and fair value

AgriBank, FCB (AgriBank), a System bank, and its affiliated Associa- measurements

tions are collectively referred to as the AgriBank Farm Credit District

(AgriBank District or the District). Farm Credit Mid-America, ACA is AGRICULTURAL AND ECONOMIC CONDITIONS

one of the affiliated Associations in the District. The United States Department of Agriculture (USDA) forecasts net farm

The Farm Credit Administration (FCA) is authorized by Congress to income to decline in 2015 for the second consecutive year after reach-

regulate the System. The Farm Credit System Insurance Corporation ing recent highs in 2013. Net farm income is expected to decline by

(FCSIC) ensures the timely payment of principal and interest on Sys- 38.2% in 2015 when compared to 2014. Crop receipts are expected to

temwide debt obligations and the retirement of protected borrower cap- decline by 8.7% and livestock receipts are expected to decline by 12%.

ital at par or stated value. Production expenses are expected to decline by 2.3% but not enough to

offset the much larger declines in gross receipts. This is the first

FORWARD-LOOKING INFORMATION decline in production expenses since 2009 with energy inputs and feed

This Annual Report includes forward-looking statements. These state- expected to have the largest declines. Farm assets and equity are both

ments are not guarantees of future performance and involve certain expected to fall in 2015 compared to 2014, while farm debt continues to

risks, uncertainties, and assumptions that are difficult to predict. Words rise. The value of farm assets is expected to decrease by 2.8% in 2015.

such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘estimate,’’ ‘‘may,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘out- In contrast, farm debt is expected to grow by 6.3%. Given the drop in

look,’’ and similar expressions are used to identify such forward-looking farm sector assets and increase in debt, farm equity is forecast to fall

statements. These statements reflect our current views with respect to by 4.0%. Also, a 1.6% expected decline in the value of farm real estate

future events. However, actual results may differ materially from our drives the projected decline in farm sector asset values in 2015. In our

expectations due to a number of risks and uncertainties which may be service area producers experienced a wide range of crop yields with

beyond our control. These risks and uncertainties include, but are not some yields well below historical averages while others had near record

limited to: yields. The general economy continues to improve at a modest rate

– Political, legal, regulatory, financial markets, international, and eco- with declining unemployment and slight gains in off-farm wages.

nomic conditions and developments in the United States (U.S.) and

abroad

15 2015 ANNUAL REPORT


LOAN PORTFOLIO PORTFOLIO DISTRIBUTION

Total loans were $20.0 billion at December 31, 2015, an increase of Geographical Distribution:

$1.2 billion from December 31, 2014. AS OF DECEMBER 31 2015 2014 2013

Indiana 25.9% 26.0% 25.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Components of Loans Ohio 24.1% 24.1% 24.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(IN THOUSANDS) Tennessee 18.5% 18.9% 19.4%AS OF DECEMBER 31 2015 2014 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kentucky 14.6% 14.4% 14.5%Accrual loans: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other 16.9% 16.6% 15.7%Real estate mortgage $13,381,652 $12,643,528 $11,931,139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total 100.0% 100.0% 100.0%Production andintermediate term 3,577,335 3,262,576 2,937,804

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

Agricultural Commodities:Agribusiness 1,344,959 1,196,010 1,106,231. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AS OF DECEMBER 31 2015 2014 2013Rural residential realestate 998,263 1,001,520 992,875 Corn and soybeans 29.2% 28.9% 29.8%

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

Finance leases and other 502,820 479,490 490,205 Other crops 17.5% 17.7% 17.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Non-accrual loans 198,485 192,865 211,521 Cattle 12.5% 12.5% 12.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total loans $20,003,514 $18,775,989 $17,669,775 Landlords 8.4% 8.6% 8.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other livestock 6.4% 6.1% 6.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The finance leases and other category is comprised of finance leases,Processing and marketing 5.1% 4.8% 4.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .communication, international, energy, and water and waste disposalRural home 4.8% 5.1% 5.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .related loans as well as certain assets originated under our missionTimber 4.6% 4.2% 4.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .related investment authority.Dairy 4.1% 3.8% 4.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The increase in total loans from December 31, 2014 was due toPoultry and eggs 2.8% 2.9% 2.8%strong activity for real estate mortgage and production and intermedi- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other 4.6% 5.4% 3.0%ate term loans.Total 100.0% 100.0% 100.0%Our production and intermediate term loan portfolio shows some

seasonality. Borrowings increase throughout the planting and growingConsistent with prior years, interest rates for the majority of our loanseasons to meet farmers’ operating and capital needs. These loans areportfolio are fixed with original terms greater than five years.normally at their lowest levels following the harvest and then increase

in the spring and throughout the rest of the year as borrowers fundPORTFOLIO CREDIT QUALITY

operating needs.The credit quality of our portfolio remained stable from December 31,

We offer variable, fixed, capped, indexed, and adjustable interest2014. Adversely classified loans increased to 2.4% of the portfolio at

rate loan and variable and fixed lease programs to our borrowers. WeDecember 31, 2015, from 2.2% of the portfolio at December 31, 2014.

determine interest margins charged on each lending program based onAdversely classified loans are loans we have identified as showing some

cost of funds, credit risk, market conditions, and the need to generatecredit weakness outside our credit standards. We have considered port-

sufficient earnings.folio credit quality in assessing the reasonableness of our allowance for

As part of the AgriBank Asset Pool program, we have sold participa-loan losses.

tion interests in real estate loans to AgriBank. The total participation

interests in this program were $352.9 million, $441.6 million, andRISK ASSETS

$544.0 million at December 31, 2015, 2014, and 2013, respectively.Risk assets are comprised of non-accrual loans, accruing restructured

loans, accruing loans 90 days or more past due (accruing loans include

accrued interest receivable), and other property owned.


Components of Risk Assets Allowance Coverage Ratios

(DOLLARS IN THOUSANDS) AS OF DECEMBER 31 2015 2014 2013AS OF DECEMBER 31 2015 2014 2013

Allowance as a percentage of:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Loans:

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loans 0.3% 0.3% 0.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Non-accrual $198,485 $192,865 $211,521

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-accrual loans 31.7% 24.7% 22.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accruing restructured 15,319 15,968 12,434

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total risk loans 29.4% 22.8% 20.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Accruing loans 90 days or moreNet charge-offs as a percentage ofpast due — — —average loans 0.1% 0.1% 0.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total risk loans 213,804 208,833 223,955

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adverse assets to risk funds 13.8% 12.9% 15.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other property owned 7,367 9,322 10,495

Total risk assets $221,171 $218,155 $234,450 The Allowance for loan losses increased $15.2 million from 2014, prima-Total risk loans as a percentage of rily due to the establishment of a reserve for grain cropland loanstotal loans 1.1% 1.1% 1.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . within our portfolio based on a portfolio analysis assessing the impactNon-accrual loans as a percentage of of lower commodity prices. Additionally, the allowance for loan lossestotal loans 1.0% 1.0% 1.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . increased due to increased overall loan volume and changes in loss esti-Total delinquencies as a percentage

mates. In our opinion, the allowance for loan losses was reasonable inof total loans 0.5% 0.9% 0.7%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

relation to the risk in our loan portfolio at December 31, 2015.

Additional loan information is included in Notes 3, 12, 13, and 14 toOur risk assets have not changed significantly from December 31, 2014the accompanying Consolidated Financial Statements.and remain at acceptable levels. Total risk loans as a percentage of

total loans remains well within our established risk managementINVESTMENT SECURITIESguidelines.In addition to loans, we hold investment securities. Investment securi-The increase in non-accrual loans resulted from a more challengingties totaled $1.1 billion, $1.0 billion, and $1.2 billion, at December 31,environment in the agriculture economy given declining net farm2015, 2014, and 2013, respectively. Our investment securities primarilyincomes. Non-accrual loans remained at an acceptable level at Decem-consisted of securities containing loans guaranteed by the Small Busi-ber 31, 2015, 2014, and 2013 and 63.2%, 64.8%, and 56.6% of non-ness Administration, as well as Farm Services Administration securitiesaccrual loans were current at December 31, 2015, 2014, and 2013,and securities issued by the USDA.respectively.

The investment portfolio is evaluated for other-than-temporaryThe decrease in other property owned was due to focused salesimpairment. To date, we have not recognized any impairment on ourefforts of properties and a decline in the number of properties acquiredinvestment portfolio.during the year ended December 31, 2015.

Additional investment securities information is included in Note 5 to

the accompanying Consolidated Financial Statements.ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is an estimate of losses on loans in ourOTHER INVESTMENTSportfolio as of the financial statement date. We determine the appropri-Other earning assets resulted from successor-in-interest contracts fromate level of allowance for loan losses based on the periodic evaluationour involvement with the federal government’s tobacco buy-out pro-of factors such as loan loss history, estimated probability of default,gram. The volume was $74.0 million at December 31, 2013. The finalestimated loss severity, portfolio quality, and current economic andpayments were received in January 2014. These amounts included bothenvironmental conditions.principal and interest income receivable.

We and other Farm Credit Institutions are among the forming lim-

ited partners for a $154.5 million Rural Business Investment Company

(RBIC) established on October 3, 2014. The RBIC facilitates equity and

debt investments in agriculture-related businesses that create growth

and job opportunities in rural America. Our total commitment is

$20.0 million through October 2019. The RBIC increased due to capital

calls to fund new investments during 2015. Our investment in the RBIC



totaled $4.2 million and $757 thousand at December 31, 2015 and 2014, RESULTS OF OPERATIONS

respectively. Profitability Information

The investment was evaluated for impairment. No impairments were (DOLLARS IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013recognized on this investment during 2015 or 2014. We have notNet income $279,017 $311,074 $308,399received any distributions from the RBIC during the years ended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average assets 1.3% 1.6% 1.6%December 31, 2015 or 2014.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average members’ equity 7.4% 9.0% 9.8%Additional other investment information is included in Note 6 to the. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

accompanying Consolidated Financial Statements.Changes in these ratios relate directly to:

– Changes in income as discussed below

– Changes in assets as discussed in the Loan Portfolio, Investment

Securities, and Other Investments sections

– Changes in members’ equity as discussed in the Capital Adequacy

section

Changes in Significant Components of Net Income

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

2015 2014 2013 2015 vs 2014 2014 vs 2013

Net interest income $432,403 $416,622 $391,875 $15,781 $24,747. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) credit losses 30,548 10,328 (3,031) (20,220) (13,359). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patronage income 52,861 65,105 67,877 (12,244) (2,772). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other income, net 56,392 57,631 46,513 (1,239) 11,118. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses 224,884 205,426 186,399 (19,458) (19,027). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 7,207 12,530 14,498 5,323 1,968

Net income $279,017 $311,074 $308,399 $(32,057) $2,675

NET INTEREST INCOME PROVISION FOR (REVERSAL OF) CREDIT LOSSES

Changes in Net Interest Income The fluctuation in the provision for (reversal of) credit losses is related

to our estimate of losses in our portfolio for the applicable years. The(IN THOUSANDS) 2015 vs 2014 2014 vs 2013

increase in the provision for (reversal of) credit losses was primarilyChanges in volume $27,497 $25,053. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

related to the establishment of a reserve for grain cropland loansChanges in interest rates (12,466) (1,015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . within our portfolio as well as establishment of a reserve for unfundedChanges in non-accrual income and other 750 709

loan commitments. Additional discussion is included in Note 3 to theNet change $15,781 $24,747

accompanying Consolidated Financial Statements.

Net interest income included income on non-accrual loans that totaledPATRONAGE INCOME

$11.4 million, $10.7 million, and $10.0 million in 2015, 2014, and 2013,We received patronage income based on the average balance of our

respectively. Non-accrual income is recognized when received in cash,note payable to AgriBank. The patronage rates were 26 basis points,

collection of the recorded investment is fully expected, and prior33.5 basis points, and 34.5 basis points in 2015, 2014, and 2013, respec-

charge-offs have been recovered.tively. We recorded patronage income of $44.3 million, $54.5 million,

Net interest margin (net interest income as a percentage of averageand $54.5 million in 2015, 2014, and 2013, respectively.

earning assets) was 2.2%, 2.2%, and 2.1% in 2015, 2014, and 2013,Since 2008, we have participated in the AgriBank Asset Pool pro-

respectively. We expect margins to further compress in the future ifgram in which we sell participation interests in certain real estate

interest rates continue to rise and competition increases.loans to AgriBank. As part of this program, we received patronage

income in an amount that approximated the net earnings of the loans.

Net earnings represents the net interest income associated with these


loans adjusted for certain fees and costs specific to the related loans as decreased due to lower income attributable to our taxable entity. Addi-

well as adjustments deemed appropriate by AgriBank related to the tional discussion is included in Note 10 to the accompanying Consoli-

credit performance of the loans, as applicable. In addition, we received dated Financial Statements.

patronage income in an amount that approximated the wholesale

patronage had we retained the volume. We recorded asset pool FUNDING AND LIQUIDITY

patronage income of $8.2 million, $10.4 million, and $13.2 million in We borrow from AgriBank, under a note payable, in the form of a line

2015, 2014, and 2013, respectively. of credit, as described in Note 8 to the accompanying Consolidated

Patronage distributions for the programs discussed above are Financial Statements. This line of credit is our primary source of liquid-

declared solely at the discretion of AgriBank’s Board of Directors. ity and is used to fund operations and meet current obligations. At

December 31, 2015, we had $1.5 billion available under our line of credit.

OTHER INCOME We generally apply excess cash to this line of credit.

The decrease in other income was primarily due to increased expenses

related to other property owned, and lower income on our operating Note Payable Information

lease portfolio. These decreases were partially offset by increased (DOLLARS IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013financially related services income and fee income.Average balance $17,032,390 $16,265,741 $15,808,474. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Average interest rate 2.0% 1.9% 2.0%OPERATING EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Components of Operating ExpensesThe repricing attributes of our line of credit generally correspond to

(DOLLARS IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013 the repricing attributes of our loan portfolio which significantly

Salaries and employee benefits $140,773 $127,540 $119,503 reduces our market interest rate risk. Due to the cooperative structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

of the Farm Credit System and as we are a stockholder of AgriBank, wePurchased and vendor services 12,045 9,054 8,467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

expect this borrowing relationship to continue into the foreseeableCommunications 4,741 3,252 3,094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

future. Our other source of lendable funds is from unallocated surplus.Occupancy and equipment 15,456 15,101 11,611. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advertising and promotion 11,506 11,548 9,887. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CAPITAL ADEQUACYExamination 2,864 2,795 2,752. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total members’ equity increased $279.5 million from December 31, 2014,Farm Credit System insurance 22,097 19,212 15,170. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . primarily due to net income for the year.Other 15,402 16,924 15,915

Total operating expenses $224,884 $205,426 $186,399Members’ Equity Position Information

Operating rate 1.1% 1.1% 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (DOLLARS IN THOUSANDS) Regulatory

AS OF DECEMBER 31 Minimums 2015 2014 2013

The change in operating expenses was primarily due to increased Members’ equity $3,904,339 $3,624,800 $3,313,437. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

employee benefits expenses related to retirement benefits and medical Surplus as a percentageinsurance along with increased purchased services costs related to of members’ equity 97.8% 97.6% 97.4%

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

investment in our strategic initiatives. Permanent capital ratio 7.0% 17.0% 16.8% 15.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FCSIC insurance expense increased in 2015 primarily due to an Total surplus ratio 7.0% 16.6% 16.3% 15.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

increase in the premium rate charged on accrual loans by FCSIC from Core surplus ratio 3.5% 16.6% 16.3% 15.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12 basis points in 2014 to 13 basis points in 2015. The Insurance Corpo-

ration has announced premiums will increase to 16 basis points for the Our capital plan is designed to maintain an adequate amount of surplusfirst half and 18 basis points for the second half of 2016. and allowance for loan losses which represents our reserve for adver-

sity prior to impairment of stock. We manage our capital to allow us toPROVISION FOR INCOME TAXES meet member needs and protect member interests, both now and in theThe variance in provision for income taxes is related to our estimate of future.taxes based on taxable income. The provision for income taxes



Additional discussion of these regulatory ratios is included in the additional 1.0% on growth that exceeded a targeted rate. AgriBank’s

Regulatory Matters section and in Note 9 to the accompanying Consoli- current bylaws allow AgriBank to increase the required investment to

dated Financial Statements. 4.0%. However, AgriBank currently has not communicated a plan to

In addition to these regulatory requirements, we establish an opti- increase the required investment.

mum permanent capital target range. This target allows us to maintain In addition, we are required to hold AgriBank stock equal to 8.0% of

a capital base adequate for future growth and investment in new prod- the quarter end balance in the AgriBank Asset Pool program.

ucts and services. The target is subject to revision as circumstances At December 31, 2015, $338.1 million of our investment in AgriBank

change. As of December 31, 2015, our optimum permanent capital target consisted of stock representing distributed AgriBank surplus and

range was 13% to 18%. $92.1 million consisted of purchased investment. For the periods

The changes in our capital ratios reflect changes in capital and presented in this report, we have received no dividend income on this

assets. Refer to the Loan Portfolio, Investment Securities, and Other stock investment and we do not anticipate any in future years.

Investments sections for further discussion of the changes in assets. As an AgDirect, LLP partnering association, we are required to

Additional members’ equity information is included in Note 9 to the purchase stock in AgDirect, which purchases an equivalent amount of

accompanying Consolidated Financial Statements. stock in AgriBank. Specifically, the AgDirect trade credit financing pro-

gram is required to own stock in AgriBank in the amount of 6.0% of

RELATIONSHIP WITH AGRIBANK the AgDirect program’s outstanding participation loan balance at quar-

BORROWING ter end plus 6.0% of the expected balance to be originated during the

We borrow from AgriBank to fund our lending operations in accordance following quarter.

with the Farm Credit Act. Approval from AgriBank is required for us to

borrow elsewhere. A General Financing Agreement (GFA), as discussed PATRONAGE

in Note 8 to the accompanying Consolidated Financial Statements, gov- We receive different types of discretionary patronage from AgriBank.

erns this lending relationship. AgriBank’s Board of Directors sets the level of:

Cost of funds under the GFA includes a marginal cost of debt com- – Patronage on our note payable with AgriBank

ponent, a spread component, which includes cost of servicing, cost of – Patronage based on the balance and net earnings of loans in the

liquidity, bank profit, and, if applicable, a risk premium component. AgriBank Asset Pool program

However, in the periods presented, we were not subject to the risk – Partnership distribution based on our share of the net earnings of

premium component. Certain factors may impact our cost of funds, the loans in the AgDirect trade credit financing program, adjusted

which primarily includes market interest rate changes impacting margi- for required return on capital and servicing and origination fees

nal cost of debt as well as changes to pricing methodologies impacting Patronage income for 2013 on our note payable with AgriBank was

the spread components described above. paid in the form of cash and AgriBank stock. Beginning in 2014,

The marginal cost of debt approach simulates matching the cost of patronage income earned on our note payable with AgriBank is paid in

underlying debt with similar terms as the anticipated terms of our cash. All patronage income earned as part of the AgriBank Asset Pool

loans to borrowers. This approach substantially protects us from mar- program is paid in cash.

ket interest rate risk. We may occasionally engage in funding strategies

that result in limited interest rate risk with approval by AgriBank’s PURCHASED SERVICES

Asset Liability Committee. We purchase various services from AgriBank including certain financial

and retail systems, financial reporting services, tax reporting services,

INVESTMENT technology services, and insurance services.

We are required to invest in AgriBank capital stock as a condition of The total cost of services we purchased from AgriBank was $4.8 mil-

borrowing. This investment may be in the form of purchased stock or lion, $5.3 million, and $5.3 million in 2015, 2014, and 2013, respectively.

stock representing distributed AgriBank surplus. As of December 31,

2015, we were required by AgriBank to maintain an investment equal to IMPACT ON MEMBERS’ INVESTMENT

2.25% of the average quarterly balance of our note payable to AgriBank Due to the nature of our financial relationship with AgriBank, the

plus an additional 1.0% on growth that exceeded a targeted rate. Prior financial condition and results of operations of AgriBank materially

to March 31, 2014, the required investment was equal to 2.5% plus an impact our members’ investment. To request free copies of the


AgriBank and the combined AgriBank and affiliated Associations’ finan- Rural Business Investment Company: We and other Farm Credit Institu-

cial reports contact us at: tions are among the forming limited partners for a $154.5 million RBIC

established on October 3, 2014. Refer to the Other Investments section

Farm Credit Mid-America, ACA for further discussion.

P.O. Box 34390

Louisville, KY 40232 UNINCORPORATED BUSINESS ENTITIES (UBEs)

(800) 444-FARM AgDirect, LLP: We participate in the AgDirect trade credit financing

www.e-farmcredit.com program, which includes origination and refinancing of agriculture

equipment loans through independent equipment dealers. The program

AgriBank, FCB is facilitated by another AgriBank District association through a limited

30 East 7th Street, Suite 1600 liability partnership in which we are a partial owner. Our investment in

St. Paul, MN 55101 AgDirect, LLP, was $22.4 million, $14.9 million, and $1.6 million at

(651) 282-8800 December 31, 2015, 2014, and 2013, respectively.

www.agribank.com RBF Acquisition VIII, LLC: We received an equity interest in RBF Acqui-

[email protected] sition VIII, LLC, which was formed to facilitate the acquisition, manage-

ment, and liquidation of assets acquired in 2009 from a troubled etha-

The Annual Report is available on our website no later than 75 days nol borrower. As of December 31, 2014, all assets of and subsequently

after the end of the calendar year and members are provided a copy of our equity interest in RBF Acquisition VIII, LLC were liquidated and

such report no later than 90 days after the end of the calendar year. dissolved.

The Quarterly Reports are available on our website no later than

40 days after the end of each calendar quarter. To request free copies PROGRAMS

of the Annual or Quarterly Reports contact us as stated above. We are involved in a number of programs designed to improve our

credit delivery, related services, and marketplace presence.

OTHER RELATIONSHIPS AND PROGRAMS AgriHedge: We offer the AgriHedge product to eligible association

RELATIONSHIPS WITH OTHER FARM CREDIT INSTITUTIONS borrowers. The AgriHedge product is a simple, effective way for farm-

Farm Credit Leasing: We have an agreement with Farm Credit Leasing ers to hedge their crop revenue. Farmers are able to establish a hedge

(FCL), a System entity specializing in leasing products and providing price on various commodities including, but not limited to: corn, soy-

industry expertise. Leases are originated and serviced by FCL and we beans, wheat, certain livestock, or class III milk by combining an oper-

purchase a participation interest in the cash flows of the transaction. ating loan with a third-party commodity swap product. This product

This arrangement provides our members with a broad selection of prod- combination enables the farmer to hedge commodity price risk without

uct offerings and enhanced lease expertise. the typical upfront cash flows for fees and on-going margin calls

CoBank, ACB: We have a relationship with CoBank, ACB (CoBank), a (including costs of borrowing) of a traditional swap product. Fees

System bank, which involves purchasing or selling participation inter- incurred are paid by the farmer when the contract is settled and cash

ests in loans. As part of this relationship, our equity investment in is received or paid. Eligible participants must meet certain credit crite-

CoBank was $155 thousand at December 31, 2015, and $18 thousand at ria and the hedges must be for their own crop. The net impact to our

December 31, 2014, and 2013. CoBank provides direct loan funds to consolidated financial statements was negligible for the year ended

associations in its chartered territory and makes loans to cooperatives December 31, 2015.

and other eligible borrowers. AgDirect: We participate in the AgDirect trade credit financing pro-

Farm Credit Foundations: We have a relationship with Farm Credit gram. Refer to the UBE section for further discussion on this program.

Foundations (Foundations) which involves purchasing human resource Farm Cash Management: We offer Farm Cash Management to our mem-

information systems, benefit, payroll, and workforce management ser- bers. Farm Cash Management links members’ revolving lines of credit

vices. As of December 31, 2015, 2014, and 2013, our investment in Foun- with an AgriBank investment bond to optimize members’ use of funds.

dations was $113 thousand. The total cost of services we purchased

from Foundations was $778 thousand, $708 thousand, and $658 thou-

sand in 2015, 2014, and 2013, respectively.



REGULATORY MATTERS On June 12, 2014, the FCA Board approved a proposed rule to revise

On May 8, 2014, the FCA Board approved a proposed rule to modify the the requirements governing the eligibility of investments for System

regulatory capital requirements for System Banks and Associations. The Banks and Associations. The stated objectives of the proposed rule

stated objectives of the proposed rule are to: are to:

– Modernize capital requirements while ensuring that institutions con- – Strengthen the safety and soundness of System Banks and

tinue to hold sufficient regulatory capital to fulfill their mission as a Associations

government-sponsored enterprise – Ensure that System Banks hold sufficient liquidity to continue oper-

– Ensure that the System’s capital requirements are comparable to the ations and pay maturing obligations in the event of market

Basel III framework and the standardized approach that the federal disruption

banking regulatory agencies have adopted, but also to ensure that – Enhance the ability of the System Banks to supply credit to agricul-

the rules recognize the cooperative structure and the organization tural and aquatic producers

of the System – Comply with the requirements of section 939A of the Dodd-Frank

– Make System regulatory capital requirements more transparent Act

– Meet the requirements of section 939A of the Dodd-Frank Wall – Modernize the investment eligibility criteria for System Banks

Street Reform and Consumer Protection Act – Revise the investment regulation for System Associations to

The most recent comment period closed July 10, 2015. The initial improve their investment management practices so they are more

comment period on the proposed rule, after extension, closed Febru- resilient to risk

ary 16, 2015. The public comment period ended on October 23, 2014.


9FEB201612553657

28FEB201419395466

21FEB201316121069

21FEB201316115276

REPORT OF MANAGEMENT

We prepare the Consolidated Financial Statements of Farm Credit Mid-America, ACA (the Association) and are responsible for their integrity and

objectivity, including amounts that must necessarily be based on judgments and estimates. The Consolidated Financial Statements have been

prepared in conformity with accounting principles generally accepted in the United States of America. The Consolidated Financial Statements, in our

opinion, fairly present the financial condition of the Association. Other financial information included in the Annual Report is consistent with that

in the Consolidated Financial Statements.

To meet our responsibility for reliable financial information, we depend on accounting and internal control systems designed to provide reasona-

ble, but not absolute assurance that assets are safeguarded and transactions are properly authorized and recorded. Costs must be reasonable in

relation to the benefits derived when designing accounting and internal control systems. Financial operations audits are performed to monitor

compliance. PricewaterhouseCoopers LLP, our independent auditors, audit the Consolidated Financial Statements. They also conduct a review of

internal controls to the extent necessary to comply with auditing standards generally accepted in the United States of America. The Farm Credit

Administration also performs examinations for safety and soundness as well as compliance with applicable laws and regulations.

The Board of Directors has overall responsibility for our system of internal control and financial reporting. The Board of Directors and its Audit

Committee consults regularly with us and meets periodically with the independent auditors and other auditors to review the scope and results of

their work. The independent auditors have direct access to the Board of Directors, which is composed solely of directors who are not officers or

employees of the Association.

The undersigned certify we have reviewed the Association’s Annual Report, which has been prepared in accordance with all applicable statutory

or regulatory requirements. The information contained herein is true, accurate, and complete to the best of our knowledge and belief.

D. KEVIN COX

Chair of the Board

Farm Credit Mid-America, ACA

WILLIAM L. JOHNSON

President and Chief Executive Officer


PAUL BRUCE

Senior Vice President — Financial Operations and

Chief Financial Officer


March 11, 2016


9FEB201612553657

21FEB201316121069

21FEB201316115276

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Farm Credit Mid-America, ACA (the Association) principal executives and principal financial officers, or persons performing similar functions,

are responsible for establishing and maintaining adequate internal control over financial reporting for the Association’s Consolidated Financial

Statements. For purposes of this report, ‘‘internal control over financial reporting’’ is defined as a process designed by, or under the supervision of

the Association’s principal executives and principal financial officers, or persons performing similar functions, and effected by its Board of Directors,

management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting information and the preparation of

the Consolidated Financial Statements for external purposes in accordance with accounting principles generally accepted in the United States of

America and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly

reflect the transactions and dispositions of the assets of the Association, (2) provide reasonable assurance that transactions are recorded as

necessary to permit preparation of financial information in accordance with accounting principles generally accepted in the United States of

America, and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Association,

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Association’s

assets that could have a material effect on its Consolidated Financial Statements.

The Association’s management has completed an assessment of the effectiveness of internal control over financial reporting as of December 31,

2015. In making the assessment, management used the 2013 framework in Internal Control — Integrated Framework, promulgated by the Committee

of Sponsoring Organizations of the Treadway Commission, commonly referred to as the ‘COSO‘ criteria.

Based on the assessment performed, the Association concluded that as of December 31, 2015, the internal control over financial reporting was

effective based upon the COSO criteria. Additionally, based on this assessment, the Association determined that there were no material weaknesses

in the internal control over financial reporting as of December 31, 2015.

WILLIAM L. JOHNSON

President and Chief Executive Officer


PAUL BRUCE

Senior Vice President — Financial Operations and

Chief Financial Officer


March 11, 2016


9FEB201612553657

11FEB201610340392

REPORT OF AUDIT COMMITTEE

The Consolidated Financial Statements were prepared under the oversight of the Audit Committee. The Audit Committee is composed of a subset of

the Board of Directors of Farm Credit Mid-America, ACA (the Association). The Audit Committee oversees the scope of the Association’s internal

audit program, the approval, and independence of PricewaterhouseCoopers LLP (PwC) as independent auditors, the adequacy of the Association’s

system of internal controls and procedures, and the adequacy of management’s actions with respect to recommendations arising from those auditing

activities. The Audit Committee’s responsibilities are described more fully in the Internal Control Policy and the Audit Committee Charter.

Management is responsible for internal controls and the preparation of the Consolidated Financial Statements in accordance with accounting

principles generally accepted in the United States of America. PwC is responsible for performing an independent audit of the Consolidated Financial

Statements in accordance with auditing standards generally accepted in the United States of America and to issue their report based on their audit.

The Audit Committee’s responsibilities include monitoring and overseeing these processes.

In this context, the Audit Committee reviewed and discussed the audited Consolidated Financial Statements for the year ended December 31,

2015, with management. The Audit Committee also reviewed with PwC the matters required to be discussed by Statement on Auditing Stan-

dards AU-C 260, The Auditor’s Communication with Those Charged with Governance, and both PwC and the internal auditors directly provided

reports on any significant matters to the Audit Committee.

The Audit Committee had discussions with and received written disclosures from PwC confirming its independence. The Audit Committee also

reviewed the non-audit services provided by PwC, if any, and concluded these services were not incompatible with maintaining PwC’s independence.

The Audit Committee discussed with management and PwC any other matters and received any assurances from them as the Audit Committee

deemed appropriate.

Based on the foregoing review and discussions, and relying thereon, the Audit Committee recommended that the Board of Directors include the

audited Consolidated Financial Statements in the Annual Report for the year ended December 31, 2015.

BARNEY BARNETT

Chair of the Audit Committee


Audit Committee Members:

James William Patterson

George E. Stebbins

Dwain Cottingham

March 11, 2016


7MAR201319572341

8MAR201416103157

INDEPENDENT AUDITOR’S REPORT

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

We have audited the accompanying Consolidated Financial Statements of Farm Credit Mid-America, ACA (the Association) and its

subsidiaries, which comprise the consolidated statements of condition as of December 31, 2015, 2014 and 2013, and the related

consolidated statements of income, changes in members’ equity and cash flows for the years then ended.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the Consolidated Financial Statements in accordance with

accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance

of internal control relevant to the preparation and fair presentation of Consolidated Financial Statements that are free from

material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Consolidated Financial Statements based on our audits. We conducted our audits

in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Consolidated

Financial Statements. The procedures selected depend on our judgment, including the assessment of the risks of material

misstatement of the Consolidated Financial Statements, whether due to fraud or error. In making those risk assessments, we

consider internal control relevant to the Association’s preparation and fair presentation of the Consolidated Financial Statements in

order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Association’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as

well as evaluating the overall presentation of the Consolidated Financial Statements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Consolidated Financial Statements referred to above present fairly, in all material respects, the financial position

of Farm Credit Mid-America, ACA and its subsidiaries as of December 31, 2015, 2014 and 2013, and the results of its operations and

its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

March 11, 2016

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... PricewaterhouseCoopers LLP, 225 South Sixth Street, Suite 1400, Minneapolis, MN 55402..T: (612) 596 6000, www.pwc.com/us


CONSOLIDATED STATEMENTS OF CONDITION

(IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013

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

Loans $20,003,514 $18,775,989 $17,669,775. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 62,881 47,661 46,810

Net loans 19,940,633 18,728,328 17,622,965. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment in AgriBank, FCB 430,198 409,076 448,181. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,087,001 1,038,343 1,227,018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest receivable 155,738 145,002 132,836. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets — — 74,048. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 7,367 9,322 10,495. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assets held for lease, net 322,818 345,985 398,005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 161,130 154,667 118,827

Total assets $22,104,885 $20,830,723 $20,032,375

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

Note payable to AgriBank, FCB $17,939,263 $16,956,038 $16,479,097. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest payable 86,296 81,410 78,645. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax liabilities, net 103,049 109,657 115,774. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities 71,938 58,818 45,422

Total liabilities 18,200,546 17,205,923 16,718,938

Contingencies and commitments (Note 13)

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

Capital stock and participation certificates 86,504 85,982 85,693. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,817,835 3,538,818 3,227,744

Total members’ equity 3,904,339 3,624,800 3,313,437

Total liabilities and members’ equity $22,104,885 $20,830,723 $20,032,375

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


CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013

Interest income $764,724 $733,574 $701,389. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense 332,321 316,952 309,514

Net interest income 432,403 416,622 391,875. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) credit losses 30,548 10,328 (3,031)

Net interest income after provision for (reversal of) credit losses 401,855 406,294 394,906

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

Patronage income 52,861 65,105 67,877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financially related services income 9,874 8,732 6,403. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fee income 37,972 37,298 30,127. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating lease income 10,465 11,238 11,248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned losses, net (2,521) (1,161) (2,141). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous income, net 602 1,524 876

Total other income 109,253 122,736 114,390

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

Salaries and employee benefits 140,773 127,540 119,503. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other operating expenses 84,111 77,886 66,896

Total operating expenses 224,884 205,426 186,399

Income before income taxes 286,224 323,604 322,897. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 7,207 12,530 14,498

Net income $279,017 $311,074 $308,399



CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

CapitalStock and Total

Participation Unallocated Members’(IN THOUSANDS) Certificates Surplus Equity

Balance as of December 31, 2012 $84,541 $2,919,345 $3,003,886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income — 308,399 308,399. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates issued 6,556 — 6,556. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates retired (5,404) — (5,404)

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

Net income — 311,074 311,074. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Balance as of December 31, 2014 85,982 3,538,818 3,624,800. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income — 279,017 279,017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Balance as of December 31, 2015 $86,504 $3,817,835 $3,904,339



CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013

Cash flows from operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income $279,017 $311,074 $308,399. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation on premises and equipment 7,911 6,474 4,248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss (gain) on sale of premises and equipment 29 (428) (87). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation on assets held for lease 61,005 61,112 57,455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss (gain) on disposal of assets held for lease 625 (512) (679). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of premiums on investment securities 11,452 11,416 15,913. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) credit losses 30,548 10,328 (3,031). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock patronage received from AgriBank, FCB — (11,985) (25,360). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss on other property owned 2,247 806 1,741. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in operating assets and liabilities:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase in accrued interest receivable (25,224) (17,813) (10,868). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Decrease (increase) in other assets 9,268 (5,485) (2,135). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase (decrease) in accrued interest payable 4,886 2,765 (3,000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase in other liabilities 6,512 7,277 8,290

Net cash provided by operating activities 388,276 375,029 350,886

Cash flows from investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase in loans, net (1,232,798) (1,114,301) (1,151,388). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Purchases) redemptions of investment in AgriBank, FCB, net (21,123) 51,090 18,104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of investment in other Farm Credit Institutions, net (7,674) (13,293) (1,612). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Increase) decrease in investment securities, net (60,110) 177,259 207,946. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Decrease in other earning assets, net — 74,048 70,151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of assets held for lease, net (38,463) (8,580) (131,716). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proceeds from sales of other property owned 5,902 6,068 8,971. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of premises and equipment, net (15,996) (23,110) (31,541)

Net cash used in investing activities (1,370,262) (850,819) (1,011,085)

Cash flows from financing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase in note payable to AgriBank, FCB, net 983,225 476,943 660,494. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates retired, net (1,239) (1,153) (295)

Net cash provided by financing activities 981,986 475,790 660,199

Net change in cash — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Cash at beginning of year — — —

Cash at end of year $— $— $—

Supplemental schedule of non-cash activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock financed by loan activities $6,216 $5,470 $5,524. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock applied against loan principal 4,435 4,012 4,064. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock applied against interest 20 16 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest transferred to loans 14,468 5,631 7,718. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans transferred to other property owned 6,586 6,768 8,877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financed sales of other property owned 392 1,067 2,020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplemental information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest paid $327,435 $314,187 $312,514. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxes paid 9,762 25,151 2,419. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1ORGANIZATION AND OPERATIONS (Insurance Fund). The Insurance Fund is used to ensure the timely pay-

ment of principal and interest on Farm Credit Systemwide debt obliga-

FARM CREDIT SYSTEM AND DISTRICT tions, to ensure the retirement of protected borrower capital at par or

The Farm Credit System (System) is a nationwide system of coopera- stated value, and for other specified purposes.

tively owned banks and associations established by Congress to meet At the discretion of the FCSIC, the Insurance Fund is also available

the credit needs of American agriculture. As of January 1, 2016, the to provide assistance to certain troubled System institutions and for

System consisted of three Farm Credit Banks (FCB), one Agricultural the operating expenses of the FCSIC. Each System bank is required to

Credit Bank (ACB), and 74 customer-owned cooperative lending institu- pay premiums into the Insurance Fund until the assets in the Insurance

tions (associations). AgriBank, FCB (AgriBank), a System bank, and its Fund equal 2.0% of the aggregated insured obligations adjusted to

affiliated Associations are collectively referred to as the AgriBank Farm reflect the reduced risk on loans or investments guaranteed by federal

Credit District (AgriBank District or the District). At January 1, 2016, the or state governments. This percentage of aggregate obligations can be

District consisted of 17 Agricultural Credit Associations (ACA) that each changed by the FCSIC, at its sole discretion, to a percentage it deter-

have wholly-owned Federal Land Credit Association (FLCA) and Produc- mines to be actuarially sound. The basis for assessing premiums is debt

tion Credit Association (PCA) subsidiaries. outstanding with adjustments made for non-accrual loans and impaired

FLCAs are authorized to originate long-term real estate mortgage investment securities which are assessed a surcharge while guaranteed

loans. PCAs are authorized to originate short-term and intermediate- loans and investment securities are deductions from the premium base.

term loans. ACAs are authorized to originate long-term real estate AgriBank, in turn, assesses premiums to District associations each year

mortgage loans and short-term and intermediate-term loans either based on similar factors.

directly or through their subsidiaries. Associations are authorized to

provide lease financing options for agricultural purposes and are also ASSOCIATION

authorized to purchase and hold certain types of investments. AgriBank Farm Credit Mid-America, ACA (the Association) and its subsidiaries,

provides funding to all associations chartered within the District. Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCA

Associations are authorized to provide, either directly or in partici- (subsidiaries) are lending institutions of the System. We are a member-

pation with other lenders, credit and related services to eligible borrow- owned cooperative providing credit and credit-related services to, or for

ers. Eligible borrowers may include farmers, ranchers, producers or har- the benefit of, eligible members for qualified agricultural purposes in

vesters of aquatic products, rural residents, and farm-related service all counties in Indiana; all counties in Ohio, with the exception of

businesses. In addition, associations can participate with other lenders Marion, Crawford, Wyandot, Hancock, Seneca, Wood, Ottawa, Lucas, and

in loans to similar entities. Similar entities are parties that are not Sandusky; all counties in Kentucky, with the exception of Graves, Hick-

eligible for a loan from a System lending institution, but have opera- man, Carlisle, Fulton, Ballard, McCracken, Calloway, and Marshall; and

tions that are functionally similar to the activities of eligible borrowers. all counties in Tennessee.

The Farm Credit Administration (FCA) is authorized by Congress to We borrow from AgriBank and provide financing and related ser-

regulate the System banks and associations. We are examined by the vices to our members. Our ACA holds all the stock of the FLCA and PCA

FCA and certain association actions are subject to the prior approval of subsidiaries.

the FCA and/or AgriBank. We offer crop insurance to borrowers and those eligible to borrow.

The Farm Credit Act established the Farm Credit System Insurance We also offer fee appraisals, and access to commodity price hedging to

Corporation (FCSIC) to administer the Farm Credit Insurance Fund our members.



2SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES applied to reduce the recorded investment in the loan, except in those

cases where the collection of the recorded investment is fully expected

ACCOUNTING PRINCIPLES AND REPORTING POLICIES and the loan does not have any unrecovered prior charge-offs. In these

Our accounting and reporting policies conform to accounting principles circumstances interest is credited to income when cash is received.

generally accepted in the United States of America (GAAP) and the pre- Loans are charged-off at the time they are determined to be uncollecti-

vailing practices within the financial services industry. Preparing finan- ble. Non-accrual loans may be returned to accrual status when principal

cial statements in conformity with GAAP requires us to make estimates and interest are current, prior charge-offs have been recovered, the

and assumptions that affect the reported amounts of assets and liabili- ability of the borrower to fulfill the contractual repayment terms is

ties and disclosure of contingent assets and liabilities at the date of the fully expected, the borrower has demonstrated payment performance,

Consolidated Financial Statements and the reported amounts of reve- and the loan is not classified as doubtful or loss.

nues and expenses during the period. Actual results could differ from In situations where, for economic or legal reasons related to the

those estimates. borrower’s financial difficulties, we grant a concession for other than

Certain amounts in prior years’ financial statements have been an insignificant period of time to the borrower that we would not oth-

reclassified to conform to the current year’s presentation. erwise consider, the related loan is classified as a troubled debt restruc-

turing, also known as a formally restructured loan for regulatory pur-

PRINCIPLES OF CONSOLIDATION poses. A concession is generally granted in order to minimize economic

The Consolidated Financial Statements present the consolidated finan- loss and avoid foreclosure. Concessions vary by program and borrower

cial results of Farm Credit Mid-America, ACA and its subsidiaries. All and may include interest rate reductions, term extensions, payment

material intercompany transactions and balances have been eliminated deferrals, or an acceptance of additional collateral in lieu of payments.

in consolidation. In limited circumstances, principal may be forgiven. Loans classified as

troubled debt restructurings are considered risk loans (as defined

SIGNIFICANT ACCOUNTING POLICIES below).

LOANS: Loans are carried at their principal amount outstanding net Loans that are sold as participations are transferred as entire finan-

of any unearned income, cumulative charge-offs, unamortized deferred cial assets, groups of entire financial assets, or participating interests in

fees and costs on originated loans, and unamortized premiums or dis- the loans. The transfers of such assets or participating interests are

counts on purchased loans. Loan interest is accrued and credited to structured such that control over the transferred assets, or participat-

interest income based upon the daily principal amount outstanding. ing interests have been surrendered and that all of the conditions have

Origination fees, net of related costs, are deferred and recognized over been met to be accounted for as a sale.

the life of the loan as an adjustment to net interest income. The net ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is an

amount of loan fees and related origination costs are not material to estimate of losses in our loan portfolio as of the financial statement

the Consolidated Financial Statements taken as a whole. date. We determine the appropriate level of allowance for loan losses

Generally we place loans in non-accrual status when principal or based on periodic evaluation of factors such as loan loss history, esti-

interest is delinquent for 90 days or more (unless the loan is well mated probability of default, estimated loss severity, portfolio quality,

secured and in the process of collection) or circumstances indicate that and current economic and environmental conditions.

full collection is not expected. Loans in our portfolio that are considered impaired are analyzed

When a loan is placed in non-accrual status, we reverse current year individually to establish a specific allowance. A loan is impaired when it

accrued interest to the extent principal plus accrued interest before the is probable that all amounts due will not be collected according to the

transfer exceeds the net realizable value of the collateral. Any unpaid contractual terms of the loan agreement. We generally measure impair-

interest accrued in a prior year is capitalized to the recorded investment based on the net realizable value of the collateral. Risk loans

ment of the loan, unless the net realizable value is less than the include non-accrual loans, accruing restructured loans, and accruing

recorded investment in the loan, then it is charged-off against the loans 90 days or more past due. All risk loans are considered to be

allowance for loan losses. Any cash received on non-accrual loans is impaired loans.


We record a specific allowance to reduce the carrying amount of the of Income in the year of impairment. Income on the investment is lim-

risk loan by the amount the recorded investment exceeds the net real- ited to distributions received. In circumstances when distributions

izable value of collateral. When we deem a loan to be uncollectible, we exceed our share of earnings after the date of the investment, these

charge the loan principal and prior year(s) accrued interest against the distributions are applied to reduce the carrying value of the investment

allowance for loan losses. Subsequent recoveries, if any, are added to and are not recognized as income.

the allowance for loan losses. PREMISES AND EQUIPMENT: The carrying amount of premises and

An allowance is recorded for probable and estimable credit losses as equipment is at cost, less accumulated depreciation and is included in

of the financial statement date for loans that are not individually ‘‘Other assets’’ in the Consolidated Statements of Condition. Calculation

assessed as impaired. We use a two-dimensional loan risk rating model of depreciation is generally on the straight-line method over the esti-

that incorporates a 14-point rating scale to identify and track the mated useful lives of the assets. Gains or losses on disposition are

probability of borrower default and a separate 6-point scale addressing included in ‘‘Miscellaneous income, net’’ in the Consolidated Statements

the loss severity. The combination of estimated default probability and of Income. Depreciation and maintenance and repair expenses are

loss severity is the primary basis for recognition and measurement of included in ‘‘Other operating expenses’’ in the Consolidated Statements

loan collectability of these pools of loans. These estimated losses may of Income and improvements are capitalized.

be adjusted for relevant current environmental factors. OTHER PROPERTY OWNED: Other property owned, consisting of real

Changes in the allowance for loan losses consist of provision activ- and personal property acquired through foreclosure or deed in lieu of

ity, recorded in ‘‘Provision for (reversal of) credit losses’’ in the Consoli- foreclosure, is recorded at the fair value less estimated selling costs

dated Statements of Income, recoveries, and charge-offs. upon acquisition. Any initial reduction in the carrying amount of a loan

INVESTMENT IN AGRIBANK: Our stock investment in AgriBank is on a to the fair value of the collateral received is charged to the allowance

cost plus allocated equities basis. for loan losses. Revised estimates to the fair value less costs to sell are

INVESTMENT SECURITIES: We are authorized to purchase and hold cer- reported as adjustments to the carrying amount of the asset, provided

tain types of investments. As we have the positive intent and ability to that such adjusted value is not in excess of the carrying amount at

hold these investments to maturity, they have been classified as held- acquisition. Related income, expenses, and gains or losses from opera-

to-maturity and are carried at cost adjusted for the amortization of tions and carrying value adjustments are included in ‘‘Miscellaneous

premiums and accretion of discounts. If an investment is determined to income, net’’ in the Consolidated Statements of Income.

be other-than-temporarily impaired, the carrying value of the security LEASES: We have finance and operating leases. Under finance leases,

is written down to fair value. The impairment loss is separated into unearned income from lease contracts represents the excess of gross

credit related and non-credit related components. The credit related lease receivables plus residual receivables over the cost of leased equip-

component is expensed through ‘‘Miscellaneous income, net’’ in the Con- ment. We amortize net unearned finance lease income to earnings

solidated Statements of Income in the period of impairment. The non- using the interest method. The carrying amount of finance leases is

credit related component is recognized in other comprehensive income. included in ‘‘Loans’’ in the Consolidated Statements of Condition and

Purchased premiums and discounts are amortized or accreted using the represents lease rent receivables net of the unearned income plus the

straight-line method, which approximates the interest method, over the residual receivable. Under operating leases, property is recorded at cost

terms of the respective securities. Realized gains and losses are deter- and depreciated on a straight-line basis over the lease term to an esti-

mined using specific identification method and are recognized in cur- mated residual value. We recognize operating lease revenue evenly over

rent operations. the term of the lease and charge depreciation and other expenses

OTHER INVESTMENTS: The carrying amount of the investment in the against revenue as incurred in ‘‘Operating lease income’’ in the Consoli-

Rural Business Investment Company, for which we are a limited part- dated Statements of Income. The amortized cost of operating leases is

ner and hold a non-controlling interest, is at cost and is included in included in ‘‘Assets held for lease, net’’ in the Consolidated Statements

‘‘Other assets’’ in the Consolidated Statements of Condition. The invest- of Condition and represents the asset cost net of accumulated

ment is assessed for impairment. If impairment exists, losses are depreciation.

included in ‘‘Miscellaneous income, net’’ in the Consolidated Statements



POST-EMPLOYMENT BENEFIT PLANS: The District has various post- expiration dates or other termination clauses. Standby letters of credit

employment benefit plans in which our employees participate. Expenses are agreements to pay a beneficiary if there is a default on a contrac-

related to these plans are included in ‘‘Salaries and employee benefits’’ tual arrangement. Any reserve for unfunded lending commitments and

in the Consolidated Statements of Income. unexercised letters of credit is based on management’s best estimate of

Certain employees participate in the AgriBank District Retirement losses inherent in these instruments, but the commitments have not yet

Plan. The plan is comprised of two benefit formulas. At their option, disbursed. Factors such as likelihood of disbursal and likelihood of

employees hired prior to October 1, 2001 are on the cash balance losses given disbursement are utilized in determining a reserve, if

formula or on the final average pay formula. Benefits eligible employ- needed. Based on management’s assessment, any reserve is recorded in

ees hired between October 1, 2001 and December 31, 2006 are on the ‘‘Other liabilities’’ in the Consolidated Statements of Condition and a

cash balance formula. Effective January 1, 2007, the AgriBank District corresponding loss is recorded in ‘‘Provision for (reversal of) credit

Retirement Plan was closed to new employees. The AgriBank District losses’’ in the Consolidated Statements of Income.

Retirement Plan utilizes the ‘‘Projected Unit Credit’’ actuarial method CASH: For purposes of reporting cash flow, cash includes cash on

for financial reporting and funding purposes. hand.

Certain employees also participate in the AgriBank District Pension FAIR VALUE MEASUREMENT: The accounting guidance describes three

Restoration Plan. This plan restores retirement benefits to certain levels of inputs that may be used to measure fair value.

highly compensated eligible employees that would have been provided Level 1 — Unadjusted quoted prices in active markets for identical

under the qualified plan if such benefits were not above the Internal assets or liabilities that the reporting entity has the ability to access at

Revenue Code compensation or other limits. the measurement date.

We also provide certain health insurance benefits to eligible retired Level 2 — Observable inputs other than quoted prices included

employees according to the terms of those benefit plans. The antici- within Level 1 that are observable for the asset or liability either

pated cost of these benefits is accrued during the employees’ active directly or indirectly. Level 2 inputs include:

service period. – Quoted prices for similar assets or liabilities in active markets

The defined contribution plan allows eligible employees to save for – Quoted prices for identical or similar assets or liabilities in markets

their retirement either pre-tax, post-tax, or both, with an employer that are not active so that they are traded less frequently than

match on a percentage of the employee’s contributions. We provide ben- exchange-traded instruments, quoted prices that are not current, or

efits under this plan for those employees that do not participate in the principal market information that is not released publicly

AgriBank District Retirement Plan in the form of a fixed percentage of – Inputs that are observable such as interest rates and yield curves,

salary contribution in addition to the employer match. Employer contri- prepayment speeds, credit risks, and default rates

butions are expensed when incurred. – Inputs derived principally from or corroborated by observable mar-

INCOME TAXES: The ACA and PCA accrue federal and state income ket data by correlation or other means

taxes. Deferred tax assets and liabilities are recognized for future tax Level 3 — Unobservable inputs that are supported by little or no

consequences of temporary differences between the carrying amounts market activity and that are significant to the fair value of the assets

and tax basis of assets and liabilities. Deferred tax assets are recorded or liabilities. These unobservable inputs reflect the reporting entity’s

if the deferred tax asset is more likely than not to be realized. If the own assumptions about assumptions that market participants would

realization test cannot be met, the deferred tax asset is reduced by a use in pricing the asset or liability. Level 3 assets and liabilities include

valuation allowance. The expected future tax consequences of uncer- financial instruments whose value is determined using pricing models,

tain income tax positions are accrued. discounted cash flow methodologies, or similar techniques, as well as

The FLCA is exempt from federal and other taxes to the extent instruments for which the determination of fair value requires signifi-

provided in the Farm Credit Act. cant management judgment or estimation.

OFF-BALANCE SHEET CREDIT EXPOSURES: Commitments to extend

credit are agreements to lend to customers, generally having fixed


RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTS beginning after December 15, 2017 for other applicable sections of the

We have assessed the potential impact of accounting standards that guidance. We are currently evaluating the impact of the remaining gui-

have been issued, but are not yet effective, and have determined that dance on our financial condition, results of operations, cash flows, or

no such standards are expected to have a material impact to our Con- financial statement disclosures.

solidated Financial Statements. Except as noted below, no accounting In August 2014, the FASB issued guidance, ‘‘Presentation of Financial

pronouncements were adopted during 2015. Statements — Going Concern.’’ The guidance requires management to

In February 2016, the FASB issued guidance entitled, ‘‘Leases.’’ The perform interim and annual assessments of an entity’s ability to con-

guidance modifies the recognition and accounting for lessees and les- tinue as a going concern within one year after the date the financial

sors and requires expanded disclosures regarding assumptions used to statements are issued or within one year after the Financial Statements

recognize revenue and expenses related to leases. The guidance is are available to be issued, when applicable. Substantial doubt to con-

effective for nonpublic entities for annual reporting periods beginning tinue as a going concern exists if it is probable that the entity will be

after December 15, 2019 and interim periods the subsequent year. Early unable to meet its obligations for the assessed period. This guidance

adoption is permitted and modified retrospective adoption is required. becomes effective for all entities for interim and annual periods ending

We are currently evaluating the impact of the guidance on our financial after December 15, 2016, and early application is permitted. We do not

condition, results of operations, cash flows, and financial statement expect the adoption of this guidance to have an effect on our financial

disclosures. condition, results of operations, cash flows, or financial statement

In January 2016, the FASB issued guidance entitled, ‘‘Recognition and disclosures.

Measurement of Financial Assets and Financial Liabilities.’’ The gui- In May 2014, the FASB issued guidance entitled, ‘‘Revenue from Con-

dance is intended to enhance the reporting model for financial instru- tracts with Customers.’’ The guidance governs revenue recognition from

ments to provide users of financial statements with more decision-use- contracts with customers and requires an entity to recognize revenue

ful information. The amendments address certain aspects of to depict the transfer of promised goods or services to customers in an

recognition, measurement, presentation, and disclosure of financial amount that reflects the consideration to which the entity expects to

statements. The guidance is effective for nonpublic entities for annual be entitled in exchange for those goods or services. Financial instru-

reporting periods beginning after December 15, 2018 and interim peri- ments and other contractual rights within the scope of other guidance

ods with annual periods beginning after December 15, 2019. Certain dis- issued by the FASB are excluded from the scope of this new revenue

closure changes are permitted to be immediately adopted for annual recognition guidance. In this regard, a majority of our contracts would

reporting periods that have not yet been made available for issuance. be excluded from the scope of this new guidance. The guidance is effec-

Nonpublic entities are no longer required to include certain fair value tive for nonpublic entities for annual reporting periods beginning after

of financial instruments disclosures as part of these disclosure changes. December 15, 2017 and interim periods within annual periods beginning

We have immediately adopted this guidance and have excluded such after December 15, 2018. We are in the process of reviewing contracts

disclosures from our Notes to Consolidated Financial Statements. Early to determine the effect, if any, on our financial condition or our results

adoption is only permitted for interim and annual reporting periods of operations.



3LOANS AND ALLOWANCE FOR LOAN LOSSES

(IN THOUSANDS) As PreviouslyWe identified loans that required reclassification among the various AS OF DECEMBER 31, 2014 Reported Adjustment As Revised

loan type categories that are used to report disaggregated loan infor- Production and intermediate term $3,282,508 $11,887 $3,294,395. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

mation in 2014 and 2013. We have evaluated the impact on the loan Agribusiness 1,207,921 (11,887) 1,196,034footnote disclosures and have concluded that these errors did not, indi-

Total $4,490,429 $— $4,490,429vidually or in the aggregate, result in a material misstatement of our

previously issued consolidated financial statements. We concluded that (IN THOUSANDS) As PreviouslyAS OF DECEMBER 31, 2013 Reported Adjustment As Revised

a revision of loan type information for all years presented in the 2015Production and intermediate term $2,964,868 $6,658 $2,971,526Annual Report was appropriate. As such, the revisions are reflected in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,113,251 (6,658) 1,106,593the financial information of the applicable prior periods. The revisionsTotal $4,078,119 $— $4,078,119had no impact on our financial position, results of operations, or regula-

tory capital ratios as of December 31, 2014, and 2013.

The following tables present the effect of these revisions of the

disclosure of the summary of loans outstanding as of December 31, 2014

and 2013. Other disclosures in the 2015 Annual Report have also been

revised to consistently present the changes in classification.

Loans by Type

(DOLLARS IN THOUSANDS) 2015 2014 2013

AS OF DECEMBER 31 Amount % Amount % Amount %

Real estate mortgage $13,515,473 67.6% $12,776,369 68.0% $12,077,663 68.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,613,415 18.1% 3,294,395 17.5% 2,971,526 16.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,345,455 6.7% 1,196,034 6.4% 1,106,593 6.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,026,350 5.1% 1,029,707 5.5% 1,023,348 5.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 502,821 2.5% 479,484 2.6% 490,645 2.7%

Total $20,003,514 100.0% $18,775,989 100.0% $17,669,775 100.0%

The finance leases and other category is comprised of finance leases, Our portfolio is concentrated primarily in the following states at

communication, international, energy, and water and waste disposal December 31, 2015: Indiana 25.9%, Ohio 24.1%, Tennessee 18.5%, and

related loans as well as certain assets originated under our mission Kentucky 14.6%.

related investment authority. While these concentrations represent our maximum potential credit

risk, as it relates to recorded loan principal, a substantial portion of our

PORTFOLIO CONCENTRATIONS lending activities are collateralized. This reduces our exposure to credit

We have borrower, agricultural, and geographic concentrations. loss associated with our lending activities. The amount of collateral

As of December 31, 2015, volume plus commitments to our ten larg- obtained, if deemed necessary upon extension of credit, is based on

est borrowers totaled 3.4% of total loans and commitments. management’s credit evaluation of the borrower. Collateral held varies,

Our agricultural commodity concentrations at December 31, 2015, but typically includes farmland and income-producing property, such as

included: Corn and soybeans 29.2%, other crops 17.5%, cattle 12.5%, crops and livestock. Long-term real estate loans are secured by the first

landlords 8.4%, other livestock 6.4%, and processing and marketing liens on the underlying real property. FCA regulations state that long-

5.1%. term real estate loans are not to exceed 85 percent (97 percent if guar-

anteed by a government agency) of the property’s appraised value at

origination and our underwriting standards generally limit agricultural


lending to no more than 65 percent at origination. However, a decline database which uses market data to estimate market values of collat-

in a property’s market value subsequent to loan origination or eral for a significant portion of the real estate mortgage portfolio. We

advances, or other actions necessary to protect the financial interest of consider credit risk exposure in establishing the allowance for loan

the lender in the collateral, may result in loan-to-value ratios in excess losses.

of the regulatory maximum. The District has an internally maintained

PARTICIPATIONS

We may purchase or sell participation interests with other parties in order to diversify risk, manage loan volume, or comply with the FCA

Regulations or General Financing Agreement (GFA) limitations.

Participations Purchased and Sold

Other Farm Credit Non-Farm Credit(IN THOUSANDS) AgriBank Institutions Institutions Total

Participations Participations Participations ParticipationsPurchased Sold Purchased Sold Purchased Sold Purchased Sold

As of December 31, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $— $(369,507) $201,781 $(12,763) $1,160,954 $(12,113) $1,362,735 $(394,383). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — — 394,742 (15,640) 191,569 (899) 586,311 (16,539). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (376) 999,700 (195,036) 77,255 (196) 1,076,955 (195,608). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — (10) 91 — 8,958 (373) 9,049 (383). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — 254,035 0 192,787 — 446,822 0

Total $— $(369,893) $1,850,349 $(223,439) $1,631,523 $(13,581) $3,481,872 $(606,913)

As of December 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $— $(458,577) $210,065 $(13,258) $1,149,419 $(9,705) $1,359,484 $(481,540). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — — 283,540 (7,609) 136,577 (974) 420,117 (8,583). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (2,957) 895,103 (140,481) 89,650 (211) 984,753 (143,649). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate — (23) 98 — 11,322 (401) 11,420 (424). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — 232,939 — 62,966 — 295,905 —

Total $— $(461,557) $1,621,745 $(161,348) $1,449,934 $(11,291) $3,071,679 $(634,196)

As of December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Production and intermediate term — — 79,667 — 132,474 (87) 212,141 (87). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness — (2,118) 813,837 (132,043) 116,398 — 930,235 (134,161). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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



CREDIT QUALITY AND DELINQUENCY – Doubtful: loans exhibit similar weaknesses to substandard loans;

One credit quality indicator we utilize is the FCA Uniform Classification however, doubtful loans have additional weaknesses in existing fac-

System that categorizes loans into five categories. The categories are tors, conditions, and values that make collection in full highly

defined as follows: questionable

– Acceptable: loans are expected to be fully collectible and represent – Loss: loans are considered uncollectible

the highest quality We had no loans categorized as loss at December 31, 2015, 2014,

– Other assets especially mentioned (OAEM): loans are currently col- or 2013.

lectible but exhibit some potential weakness

– Substandard: loans exhibit some serious weakness in repayment

capacity, equity, and/or collateral pledged on the loan

Credit Quality of LoansSubstandard/

(DOLLARS IN THOUSANDS) Acceptable OAEM Doubtful Total

Amount % Amount % Amount % Amount %

As of December 31, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $13,167,266 96.7% $166,137 1.2% $284,591 2.1% $13,617,994 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,435,016 94.1% 70,542 1.9% 146,091 4.0% 3,651,649 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,334,114 98.7% 16,496 1.2% 691 0.1% 1,351,301 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 981,236 95.3% 4,713 0.5% 43,079 4.2% 1,029,028 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 488,035 97.0% 14,732 2.9% 375 0.1% 503,142 100.0%

Total $19,405,667 96.2% $272,620 1.4% $474,827 2.4% $20,153,114 100.0%

As of December 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 1,186,451 98.8% 11,854 1.0% 2,627 0.2% 1,200,932 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other 464,114 96.8% 15,105 3.1% 612 0.1% 479,831 100.0%

Total $18,179,530 96.1% $325,097 1.7% $410,090 2.2% $18,914,717 100.0%

As of December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 1,067,757 96.1% 40,961 3.7% 2,626 0.2% 1,111,344 100.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other 485,275 98.8% 4,297 0.9% 1,475 0.3% 491,047 100.0%

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

Note: Accruing loans include accrued interest receivable.


Aging Analysis of LoansNot Past Due

90 Days or Less than30–89 Days or More Total 30 Days Total

(IN THOUSANDS) Past Due Past Due Past Due Past Due Loans

As of December 31, 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $42,335 $27,532 $69,867 $13,548,127 $13,617,994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 4,752 9,689 14,441 3,637,208 3,651,649. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 39 127 166 1,351,135 1,351,301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 12,570 6,589 19,159 1,009,869 1,029,028. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 271 — 271 502,871 503,142

Total $59,967 $43,937 $103,904 $20,049,210 $20,153,114

As of December 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 3,754 — 3,754 1,197,178 1,200,932. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other 45 1 46 479,785 479,831

Total $125,901 $39,343 $165,244 $18,749,473 $18,914,717

As of December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Agribusiness 144 37 181 1,111,163 1,111,344. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Finance leases and other — 223 223 490,824 491,047

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

There were no loans 90 days or more past due and still accruing interest at December 31, 2015, 2014, and 2013.



RISK LOANS

Risk loans (accruing loans include accrued interest receivable) are loans Non-accrual Loans by Loan Type

for which it is probable that all principal and interest will not be col- (IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013lected according to the contractual terms. Interest income recognizedReal estate mortgage $133,822 $132,834 $146,524and cash payments received on non-accrual risk loans are applied as . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 36,080 31,820 33,721described in Note 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 496 24 362. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Risk Loan Information Rural residential real estate 28,087 28,187 30,473. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — 441(IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013

Total $198,485 $192,865 $211,521Non-accrual loans:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current as to principal and interest $125,464 $124,985 $119,695 The increase in non-accrual loans resulted from a more challenging. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Past due 73,021 67,880 91,826 environment in the agriculture economy given declining net farmTotal non-accrual loans 198,485 192,865 211,521 incomes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured loans 15,319 15,968 12,434. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more pastdue — — —

Total risk loans $213,804 $208,833 $223,955

Volume with specific reserves $17,308 $16,883 $22,172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Volume without specific reserves 196,496 191,950 201,783

Total risk loans $213,804 $208,833 $223,955

Total specific reserves $4,096 $4,413 $4,931

FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013

Income on accrual risk loans $756 $918 $758. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income on non-accrual loans 11,443 10,693 9,985

Total income on risk loans $12,199 $11,611 $10,743

Average recorded risk loans $219,166 $220,848 $240,184. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Additional Impaired Loan Information by Loan TypeFor the year ended

(IN THOUSANDS) As of December 31, 2015 December 31, 2015

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

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

Real estate mortgage $10,857 $13,976 $1,516 $11,108 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 4,489 5,513 1,833 4,737 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 461 452 461 44 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,501 2,045 286 1,512 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — — —

Total $17,308 $21,986 $4,096 $17,401 $—

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

Real estate mortgage $136,753 $161,211 $— $139,915 $8,421. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 32,647 46,858 — 34,450 2,266. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 126 126 — 200 51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 26,970 32,690 — 27,165 1,460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — 35 —

Total $196,496 $240,885 $— $201,765 $12,198

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

Real estate mortgage $147,610 $175,187 $1,516 $151,023 $8,421. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 37,136 52,371 1,833 39,187 2,266. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 587 578 461 244 51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 28,471 34,735 286 28,677 1,460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Total $213,804 $262,871 $4,096 $219,166 $12,198



For the year endedAs of December 31, 2014 December 31, 2014





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



Total $16,883 $20,818 $4,413 $17,706 $—




Agribusiness 239 244 — 1,713 159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Total $191,950 $236,319 $— $203,142 $11,611




Agribusiness 239 244 — 1,713 159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Total $208,833 $257,137 $4,413 $220,848 $11,611


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





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



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




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


Finance leases and other 442 440 — 461 —

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




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


Finance leases and other 442 440 — 461 —

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

The recorded investment in the loan is the face amount increased or TROUBLED DEBT RESTRUCTURINGS

decreased by applicable accrued interest and unamortized premium, Included within our loans are troubled debt restructurings (TDRs).

discount, finance charges, and acquisition costs and may also reflect a These loans have been modified by granting a concession in order to

previous direct charge-off of the investment. maximize the collection of amounts due when a borrower is experienc-

Unpaid principal balance represents the contractual principal bal- ing financial difficulties. All risk loans, including TDRs, are analyzed

ance of the loan. within our allowance for loan losses.

We did not have any material commitments to lend additional

money to borrowers whose loans were at risk at December 31, 2015.



TDR Activity

(IN THOUSANDS) 2015 2014 2013

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

Real estate mortgage $1,343 $1,350 $3,092 $3,549 $8,464 $9,102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 1,689 1,049 549 344 24,377 23,871. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Rural residential real estate 680 573 399 342 1,433 1,241

Total $3,712 $2,972 $4,040 $4,235 $34,551 $34,492

Pre-modification represents the outstanding recorded investment of the TDRs Outstanding

loan just prior to restructuring and post-modification represents the (IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013outstanding recorded investment of the loan immediately following theAccrual status:restructuring. The recorded investment of the loan is the face amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $13,790 $13,441 $11,763of the receivable increased or decreased by applicable accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 1,055 1,917 585and unamortized premium, discount, finance charges, and acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

costs and may also reflect a previous direct charge-off. Agribusiness 91 221 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The primary types of modification included forgiveness of interest Rural residential real estate 383 389 86or principal, and interest rate reduction below market. Total TDRs in accrual status $15,319 $15,968 $12,434

Non-accrual status:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TDRs that Subsequently Defaulted within the Previous 12 MonthsReal estate mortgage $11,977 $13,232 $14,854

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

(IN THOUSANDS) 2015 2014 2013 Production and intermediate term 6,238 4,740 7,017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $163 $952 $588 Agribusiness — — 263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 228 — 243 Rural residential real estate 2,250 1,997 2,435. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 247 118 — Total TDRs in non-accrual status $20,465 $19,969 $24,569Total $638 $1,070 $831 Total TDRs:

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

Real estate mortgage $25,767 $26,673 $26,617. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 7,293 6,657 7,602. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 91 221 263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 2,633 2,386 2,521

Total TDRs $35,784 $35,937 $37,003

There were no additional commitments to lend to borrowers whose

loans have been modified in a TDR at December 31, 2015.


ALLOWANCE FOR LOAN LOSSES

Changes in Allowance for Loan Losses The ‘‘Provision for (reversal of) credit losses’’ in the Consolidated

Statements of Income includes a provision for loan losses as presented(IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013 in the previous chart as well as a provision for unfunded loan commit-Balance at beginning of year $47,661 $46,810 $60,650 ments totaling $4.3 million during the year ended December 31, 2015.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 26,202 10,328 (3,031) The accrued credit losses of $4.3 million as of December 31, 2015 are. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 4,693 6,249 10,361 recorded in ‘‘Other liabilities’’ in the Consolidated Statements of Condi-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

tion. There were no accrued credit losses related to unfunded loan com-Loan charge-offs (15,675) (15,726) (21,170)

mitments as of December 31, 2014 or 2013.Balance at end of year $62,881 $47,661 $46,810

Allowance for Loan Losses increased $15.2 million from 2014 primarily

due to the establishment of a reserve for grain cropland loans within

our portfolio based on a portfolio analysis determining the impact of

lower commodity prices. Additionally, the allowance for loan losses

increased due to overall increased loan volume and changes in loss

estimates.

Changes in Allowance for Loan Losses and Year End Recorded Investments by Loan TypeProduction

and Rural FinanceReal Estate Intermediate Residential Leases

(IN THOUSANDS) Mortgage Term Agribusiness Real Estate and Other Total

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

Balance as of December 31, 2014 $20,923 $14,848 $5,094 $4,535 $2,261 $47,661. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 14,152 11,725 99 465 (239) 26,202. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 2,451 1,657 — 585 — 4,693. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (7,120) (6,576) — (1,979) — (15,675)

Balance as of December 31, 2015 $30,406 $21,654 $5,193 $3,606 $2,022 $62,881

Ending balance: individually evaluated for impairment $1,516 $1,833 $461 $286 $— $4,096

Ending balance: collectively evaluated for impairment $28,890 $19,821 $4,732 $3,320 $2,022 $58,785

Recorded investment in loans outstanding:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance as of December 31, 2015 $13,617,994 $3,651,649 $1,351,301 $1,029,028 $503,142 $20,153,114

Ending balance: individually evaluated for impairment $147,610 $37,136 $587 $28,471 $— $213,804

Ending balance: collectively evaluated for impairment $13,470,384 $3,614,513 $1,350,714 $1,000,557 $503,142 $19,939,310



Productionand Rural Finance

Real Estate Intermediate Residential LeasesMortgage Term Agribusiness Real Estate and Other Total



(Reversal of) provision for loan losses (1,646) 5,560 (246) 2,256 4,404 10,328. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 3,940 1,680 — 629 — 6,249. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (6,505) (2,553) (3) (2,105) (4,560) (15,726)


Ending balance: individually evaluated for impairment $2,736 $1,075 $— $602 $— $4,413




Ending balance: individually evaluated for impairment $146,281 $33,737 $239 $28,576 $— $208,833

Ending balance: collectively evaluated for impairment $12,722,699 $3,298,919 $1,200,693 $1,003,742 $479,831 $18,705,884



Provision for (reversal of) loan losses 3,415 (5,087) (4,278) 3,001 (82) (3,031). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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


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




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

Ending balance: collectively evaluated for impairment $12,004,297 $2,970,526 $1,110,982 $995,261 $490,605 $17,571,671

The recorded investment in the loan is the face amount increased or decreased by applicable accrued interest and unamortized premium, discount,

finance charges, and acquisition costs and may also reflect a previous direct charge-off of the investment.


4 5INVESTMENT IN AGRIBANK INVESTMENT SECURITIES

As of December 31, 2015, we were required by AgriBank to maintain an We held investment securities of $1.1 billion, $1.0 billion, and $1.2 billion

investment equal to 2.25% of the average quarterly balance of our note at December 31, 2015, 2014, and 2013, respectively. Our investment

payable to AgriBank plus an additional 1.0% on growth that exceeded a securities primarily consisted of:

targeted rate. Prior to March 31, 2014, the required investment was – Securities containing loans guaranteed by the Small Business

equal to 2.5% plus an additional 1.0% on growth that exceeded a Administration (SBA)

targeted rate. – Investment securities made up of Farm Service Agency securities

As of December 31, 2015, we were also required by AgriBank to (FSA)

maintain an investment equal to 8.0% of the quarter end balance of the – Securities issued by the United States Department of Agriculture

participation interests in real estate loans sold to AgriBank under the (USDA)

AgriBank Asset Pool program. All of our investment securities, except for $7.9 million, were fully

Our investment in AgriBank, all required stock, was $430.2 million, guaranteed by the SBA, FSA or USDA at December 31, 2015. All of our

$409.1 million, and $448.2 million at December 31, 2015, 2014, and 2013, investment securities were fully guaranteed as of December 31, 2014

respectively. and 2013.

The investment securities have been classified as held-to-maturity.

The investment portfolio is evaluated for other-than-temporary impair-

ment. To date, we have not recognized any impairment on our invest-

ment portfolio.

Our investments are either mortgage-back securities (MBS), which

are generally longer-term investments, or asset-backed securities (ABS),

which are generally shorter-term investments. Farmer Mac guaranteed

investments are typically MBS while SBA, FSA, and USDA guaranteed

investments may be comprised of either MBS or ABS.



Additional Investment Securities Information Contractual Maturities of Investment Securities

(DOLLARS IN THOUSANDS) (IN THOUSANDS)AS OF Weighted AS OF DECEMBER 31, 2015 Amortized CostDECEMBER 31, Average Amortized Unrealized Unrealized Fair

Less than one year $9672015 Yield Cost Gains Losses Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

One to five years 75,923MBS 2.6% $949,410 $5,499 $28,006 $926,903. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Five to ten years 145,774ABS 1.9% 137,591 1,967 5,496 134,062. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

More than ten years 864,337Total 2.5% $1,087,001 $7,466 $33,502 $1,060,965

Total $1,087,001AS OF WeightedDECEMBER 31, Average Amortized Unrealized Unrealized Fair

A summary of investments in an unrealized loss position presented by2014 Yield Cost Gains Losses Value

the length of time the investments have been in continuous unrealizedMBS 2.7% $935,124 $6,104 $14,151 $927,077. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

loss position follows:ABS 2.7% 103,219 3,110 218 106,111

Total 2.7% $1,038,343 $9,214 $14,369 $1,033,188 Less than 12 months Greater than 12 months

(IN THOUSANDS) Unrealized UnrealizedAS OF DECEMBER 31, 2015 Fair Value Losses Fair Value LossesAS OF Weighted

DECEMBER 31, Average Amortized Unrealized Unrealized Fair MBS $218,960 $20,056 $464,688 $7,9502013 Yield Cost Gains Losses Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS 61,530 5,376 6,721 120MBS 2.7% $1,086,943 $7,498 $19,671 $1,074,770. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total $280,490 $25,432 $471,409 $8,070ABS 2.4% 140,075 4,439 411 144,103

Total 2.6% $1,227,018 $11,937 $20,082 $1,218,873Unrealized losses associated with investment securities are not consid-

ered to be other-than-temporary due to the 100% guarantee of theInvestment income is recorded in ‘‘Interest income’’ in the Consolidatedprincipal by the U.S. government. However, the premiums paid toStatements of Income and totaled $24.3 million, $29.0 million, andpurchase the investment are not guaranteed and are amortized over$32.5 million in 2015, 2014, and 2013, respectively.the weighted average maturity of each loan as a reduction of interest

income. Repayment of principal is assessed at least quarterly, and any

remaining unamortized premium is taken as a reduction to interest

income if principal repayment is unlikely, or when a demand for pay-

ment is made for the guarantee. At December 31, 2015, the majority of

the $33.5 million unrealized loss represents unamortized premium.


6 7OTHER INVESTMENTS ASSETS HELD FOR LEASE, NET

Other earning assets resulted from successor-in-interest contracts from We hold property for the purpose of agricultural leasing, primarily farm

our involvement with the federal government’s tobacco buy-out pro- equipment and livestock facilities. Net operating lease income totaled

gram. The volume was $74.0 million at December 31, 2013. The final $10.5 million, $11.2 million, and $11.2 million in 2015, 2014, and 2013,

payments were received in January 2014. These amounts include both respectively. Net operating lease assets totaled $322.8 million,

principal and interest income receivable. These assets were 100% guar- $346.0 million, and $398.0 million at December 31, 2015, 2014, and 2013,

anteed by the U.S. government. respectively.

We and other Farm Credit Institutions are among the forming lim-

ited partners for a $154.5 million Rural Business Investment Company

(RBIC) established on October 3, 2014. The RBIC facilitates equity and

debt investments in agriculture-related businesses that create growth

and job opportunities in rural America. Our total commitment is

$20.0 million through October 2019. The RBIC increased due to capital

calls to fund new investments during 2015. Our investment in the RBIC

totaled $4.2 million and $757 thousand at December 31, 2015 and 2014,

respectively.

The investments were evaluated for impairment. No impairments

were recognized on this investment during 2015 or 2014. We have not

received any distributions from the funds during the years ended

December 31, 2015 or 2014.



8 9NOTE PAYABLE TO AGRIBANK MEMBERS’ EQUITY

Our note payable to AgriBank represents borrowings, in the form of a CAPITALIZATION REQUIREMENTS

line of credit, to fund our loan portfolio. The line of credit is governed In accordance with the Farm Credit Act, each borrower is required to

by a GFA and our assets serve as collateral. invest in the Association as a condition of obtaining a loan. As author-

ized by the Agricultural Credit Act and our capital bylaws, the Board of

Note Payable Information Directors has adopted a capital plan that establishes a stock or partici-

pation certificate purchase requirement for obtaining a loan of 2.0% of(DOLLARS IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013 the customer’s total loan(s) or one thousand dollars, whichever is less.Line of credit $19,500,000 $19,100,000 $18,600,000 The stock purchase requirement for obtaining a lease is one share of. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding principal under Class D common stock for those eligible to hold such stock or onethe line of credit 17,939,263 16,956,038 16,479,097. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Class B participation certificate for those not eligible to hold suchInterest rate 2.0% 1.9% 1.9% stock. In addition, the purchase of one Class B participation certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

is required of all customers who purchase financial services and are notOur note payable matures April 30, 2016, at which time the note will be a stockholder. The Board of Directors may increase the amount ofrenegotiated. required investment to the extent authorized in the capital bylaws. The

The GFA provides for limitations on our ability to borrow funds borrower acquires ownership of the capital stock at the time the loanbased on specified factors or formulas relating primarily to outstanding or lease is made. The aggregate par value of the stock is added to thebalances, credit quality, and financial condition. At December 31, 2015, principal amount of the related obligation. We retain a first lien on theand throughout the year, we materially complied with the GFA terms stock or participation certificates owned by customers.and were not declared in default under any GFA covenants or

provisions.REGULATORY CAPITALIZATION REQUIREMENTS

Select Capital Ratios

RegulatoryAS OF DECEMBER 31 Minimums 2015 2014 2013

Permanent capital ratio 7.0% 17.0% 16.8% 15.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 7.0% 16.6% 16.3% 15.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 3.5% 16.6% 16.3% 15.4%


The permanent capital ratio is average at-risk capital divided by aver- In the event of our liquidation or dissolution, according to our

age risk-adjusted assets. The total surplus ratio is average unallocated bylaws, any remaining assets after payment or retirement of all liabili-

surplus less any deductions made in the computation of permanent cap- ties will be distributed in the following order of priority:

ital divided by average risk-adjusted assets. The core surplus ratio is – First, to holders of Class C preferred stock

average unallocated surplus less any deductions made in the computa- – Second, to holders of Class D common stock and Class B participa-

tion of total surplus and less any excess stock investment in AgriBank tion certificates in proportion that the aggregate interest paid by

divided by average risk-adjusted assets. each holder over the prior two years bears to the total interest paid

Regulatory capital includes any investment in AgriBank that is in by all holders of stock and participation certificates

excess of the required investment under an allotment agreement with In the event of impairment, losses will be absorbed pro rata by

AgriBank. We had no excess stock at December 31, 2015, 2014, or 2013. impairment based on the following order of priority:

– First, to holders of Class D common stock and Class B participation

DESCRIPTION OF EQUITIES certificates

The following represents information regarding classes and number of – Second, to holders of Class C preferred stock

shares of stock and participation certificates outstanding. All shares All classes of stock are transferable to other customers who are

and participation certificates are stated at a $5.00 par value. eligible to hold such class as long as we meet the regulatory minimum

capital requirements.Number of Shares

AS OF DECEMBER 31 2015 2014 2013PATRONAGE DISTRIBUTIONS

Class D common stock (at-risk) 14,311,611 14,164,745 14,090,756. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The FCA Regulations prohibit patronage distributions to the extentClass B participation certificates they would reduce our permanent capital ratio below the minimum per-(at-risk) 2,989,102 3,031,711 3,047,832. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . manent capital adequacy standards. We do not foresee any events that

would result in this prohibition in 2016. During December 2015 theUnder our bylaws, we are also authorized to issue Class C preferredBoard of Directors approved an obligating resolution to distribute 2016stock. This stock is at-risk and nonvoting with a $5.00 par value perearnings as patronage, after the accumulation of necessary and appro-share. Currently, no stock of this class has been issued.priate amounts of unallocated surplus as deemed prudent for soundOnly holders of Class D common stock have voting rights. Ourcapital accumulation. The distributions will be made during the subse-bylaws do not prohibit us from paying dividends on any classes ofquent year to those stock and participation certificate holders eligiblestock. However, no dividends have been declared to date.to receive such distributions.Our bylaws generally permit stock and participation certificates to

be retired at the discretion of our Board of Directors and in accordance

with our capitalization plans, provided prescribed capital standards

have been met. At December 31, 2015, we exceeded the prescribed stan-

dards. We do not anticipate any significant changes in capital that

would affect the normal retirement of stock.



10INCOME TAXES Deferred Tax Assets and Liabilities

(IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013PROVISION FOR INCOME TAXESAllowance for loan losses $8,106 $4,114 $3,555Provision for Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Postretirement benefit accrual 260 293 325(DOLLARS IN THOUSANDS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013 Previously taxed non-accrualinterest 1,243 1,290 1,247Current:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net operating loss carryforward — — 3,456Federal $13,265 $17,811 $17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Leasing related, net (108,458) (111,367) (121,248)State 550 836 465. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank 2002 allocated stock (2,877) (2,897) (2,918)Total current $13,815 $18,647 $482. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued pension asset (1,678) (1,715) (1,432)Deferred:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 355 625 1,241Federal $(5,207) $(5,183) $13,443. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred tax liabilities, net $(103,049) $(109,657) $(115,774)State (1,401) (934) 573

Gross deferred tax assets $9,964 $6,322 $9,824Total deferred (6,608) (6,117) 14,016

Gross deferred tax liabilities $(113,013) $(115,979) $(125,598)Provision for income taxes $7,207 $12,530 $14,498

Effective tax rate 2.5% 3.9% 4.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A valuation allowance for the deferred tax assets was not necessary at

December 31, 2015, 2014, or 2013.Reconciliation of Taxes at Federal Statutory Rate to Provision for Income TaxesWe have not provided for deferred income taxes on patronage allo-

(IN THOUSANDS)FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013 cations received from AgriBank prior to 1993. Such allocations, distrib-

Federal tax at statutory rates $100,179 $113,261 $113,014 uted in the form of stock, are subject to tax only upon conversion to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

cash. Our intent is to permanently maintain this investment inState tax, net 249 494 614. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank. Our total permanent investment in AgriBank is $188.8 mil-Effect of non-taxable entity (FLCA) (92,607) (100,944) (99,241). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

lion. Additionally, we have not provided deferred income taxes on accu-Other (614) (281) 111mulated FLCA earnings of $2.8 billion as it is our intent to permanentlyProvision for income taxes $7,207 $12,530 $14,498maintain this equity in the FLCA or to distribute the earnings to mem-

bers in a manner that results in no additional tax liability to us.DEFERRED INCOME TAXESOur income tax returns are subject to review by various UnitedTax laws require certain items to be included in our tax returns at

States taxing authorities. We record accruals for items that we believedifferent times than the items are reflected on our Consolidated State-may be challenged by these taxing authorities. However, we had noments of Income. Some of these items are temporary differences thatuncertain income tax positions at December 31, 2015. In addition, wewill reverse over time. We record the tax effect of temporary differ-believe we are no longer subject to income tax examinations for yearsences as deferred tax assets and liabilities netted on our Consolidatedprior to 2012.Statements of Condition.


11EMPLOYEE BENEFIT PLANS AgriBank District Retirement Plan Information

(IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013PENSION AND POST-EMPLOYMENT BENEFIT PLANSUnfunded liability $453,825 $423,881 $255,187Complete financial information for the pension and post-employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Projected benefit obligation 1,255,259 1,234,960 1,014,649benefit plans may be found in the Combined AgriBank and affiliated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fair value of plan assets 801,434 811,079 759,462Associations 2015 Annual Report (District financial statements).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Farm Credit Foundations Plan Sponsor and Trust Committees Accumulated benefit obligation 1,064,133 1,051,801 864,202. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

provide oversight of the benefit plans. These governance committees

FOR THE YEAR ENDED DECEMBER 31 2015 2014 2013are comprised of elected or appointed representatives (senior leader-

ship and/or Board of Director members) from the participating organi- Total plan expense $63,800 $45,827 $63,270. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

zations. The Coordinating Committee (a subset of the Plan Sponsor Our allocated share of plan expenses 12,510 8,912 12,311. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Committee comprised of AgriBank District representatives) is responsi- Contributions by participatingemployers 62,722 52,032 59,046ble for decisions regarding retirement benefits at the direction of the. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank District participating employers. The Trust Committee is Our allocated share of contributions 12,304 10,087 11,508. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

responsible for fiduciary and plan administrative functions.

The unfunded liability reflects the net of the fair value of the planPENSION PLAN: Certain employees participate in the AgriBank District

assets and the projected benefit obligation at the date of these Consoli-Retirement Plan, a District-wide multiple-employer defined benefit

dated Financial Statements. The projected benefit obligation is theretirement plan. The Department of Labor has determined the plan to

actuarial present value of all benefits attributed by the pension benefitbe a governmental plan; therefore, the plan is not subject to the provi-

formula to employee service rendered prior to the measurement datesions of the Employee Retirement Income Security Act of 1974, as

based on assumed future compensation levels. The accumulated benefitamended (ERISA). As the plan is not subject to ERISA, the plan’s bene-

obligation is the actuarial present value of the benefits attributed tofits are not insured by the Pension Benefit Guaranty Corporation.

employee service rendered before the measurement date and based onAccordingly, the amount of accumulated benefits that participants

current employee service and compensation. The funding status is sub-would receive in the event of the plan’s termination is contingent on

ject to many variables including performance of plan assets and inter-the sufficiency of the plan’s net assets to provide benefits at that time.

est rate levels. Therefore, changes in assumptions could significantlyThis Plan is noncontributory and covers certain eligible District employ-

affect these estimates.ees. The assets, liabilities, and costs of the plan are not segregated by

Costs are determined for each individual employer based on costsparticipating entities. As such, plan assets are available for any of the

directly related to their current employees as well as an allocation ofparticipating employers’ retirees at any point in time. Additionally, if a

the remaining costs based proportionately on the estimated projectedparticipating employer stops contributing to the plan, the unfunded

liability of the employer under this plan. We recognize our proportionalobligations of the plan may be borne by the remaining participating

share of expense and contribute a proportional share of funding. Ouremployers. Further, if we choose to stop participating in the plan, we

allocated share of plan expenses is included in ‘‘Salaries and employeemay be required to pay an amount based on the underfunded status of

benefits’’ in the Consolidated Statements of Income.the plan. Because of the nature of the plan, any individual employer is

The plan expense for participating employers in 2015 increased tonot able to unilaterally change the provisions of the plan. If an

levels more consistent with 2013 primarily due to changes in discountemployee transfers to another employer within the same plan, the

rate and mortality assumptions. Benefits paid to participants in theemployee benefits under the plan transfer. Benefits are based on salary

District were $56.2 million in 2015. While the plan is a governmentaland years of service. There is no collective bargaining agreement in

plan and is not subject to minimum funding requirements, the employ-place as part of this plan.

ers contribute amounts necessary on an actuarial basis to provide the

plan with sufficient assets to meet the benefits to be paid to partici-

pants. The amount of the total District employer contributions expected



to be paid into the pension plans during 2016 is $57.9 million. Our allo- Pension Restoration Plan Information

cated share of these pension contributions is expected to be $11.4 mil- (IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013lion. The amount ultimately to be contributed and the amount ulti-Postretirement benefit (income) expense $(236) $(200) $(230)mately recognized as expense as well as the timing of those . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our cash contributions 22 24 26contributions and expenses, are subject to many variables including. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

performance of plan assets and interest rate levels. These variablesPostretirement benefit costs are included in ‘‘Salaries and employeecould result in actual contributions and expenses being greater than orbenefits’’ in the Consolidated Statements of Income. During the yearsless than the amounts reflected in the District financial statements.ended December 31, 2015, 2014, and 2013 we recognized income relatedNONQUALIFIED RETIREMENT PLAN: We also participate in the District-to amortization of actuarial gains in excess of current service costs andwide nonqualified defined benefit Pension Restoration Plan. This planinterest. Our cash contributions are equal to the benefits paid.restores retirement benefits to certain highly compensated eligible employ-

ees that would have been provided under the qualified plan if such benefitsDEFINED CONTRIBUTION PLANSwere not above the Internal Revenue Code compensation or other limits.We participate in a District-wide defined contribution plan. For employ-

ees hired before January 1, 2007, employee contributions are matchedPension Restoration Plan Informationdollar for dollar up to 2.0% and 50 cents on the dollar on the next 4.0%

(IN THOUSANDS)AS OF DECEMBER 31 2015 2014 2013 on both pre-tax and post-tax contributions. The maximum employer

Unfunded liability $31,650 $27,695 $25,263 match is 4.0%. For employees hired after December 31, 2006, we contrib-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ute 3.0% of the employee’s compensation and will match employee con-Projected benefit obligation 31,650 27,695 25,263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

tributions dollar for dollar up to a maximum of 6.0% on both pre-tax andAccumulated benefit obligation 26,323 22,959 19,799. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

post-tax contributions. The maximum employer contribution is 9.0%.

We also participate in a District-wide Nonqualified Deferred CompensationFOR THE YEAR ENDED DECEMBER 31 2015 2014 2013

Plan. Eligible participants must meet one of the following criteria: certainTotal plan expense $3,776 $3,652 $3,577. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

salary thresholds as determined by the IRS, are either a Chief ExecutiveOur allocated share of plan expenses 372 309 284. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Officer or President of a participating employer, or have previously electedOur cash contributions 331 331 331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pre-tax deferrals in 2006 under predecessor nonqualified deferred compensa-

tion plans. Under this plan the employee may defer a portion of his/her salary,The nonqualified plan is funded as the benefits are paid; therefore,bonus, and other compensation. Additionally, the plan provides for supplemen-there are no assets in the plan and the unfunded liability is equal total employer matching contributions related to any compensation deferred bythe projected benefit obligation. The amount of the pension benefitsthe employee that would have been eligible for a matching contribution underfunding status is subject to many variables including interest ratethe defined contribution plan if it were not for certain IRS limitations.levels. Therefore, changes in assumptions could significantly affect

Employer contribution expenses for the defined contribution plan,these estimates.included in ‘‘Salaries and employee benefits’’ in the Consolidated State-Costs are determined for each individual employer based on costsments of Income, were $6.8 million, $5.2 million, and $4.8 million indirectly related to their participants in the plan. Our allocated share of2015, 2014, and 2013, respectively. These expenses were equal to ourplan expenses is included in ‘‘Salaries and employee benefits’’ in thecash contributions for each year.Consolidated Statements of Income. The Pension Restoration Plan is

Additionally, we participate in a District-wide Pre-409A Frozen Non-unfunded and we make annual contributions to fund benefits paid toqualified Deferred Compensation Plan. This plan serves the same purposeour retirees covered by the plan.as the Nonqualified Deferred Compensation Plan. However, the plan wasRETIREE MEDICAL PLANS: District employers also provide certainfrozen effective January 1, 2007. As such, no additional participants arehealth insurance benefits to eligible retired employees according to theeligible to enter the plan and no additional employer contributions will beterms of the benefit plans. The anticipated costs of these benefits aremade to the plan.accrued during the period of the employee’s active status.


12RELATED PARTY TRANSACTIONS The related parties can be different each year end primarily due to

changes in the composition of the Board of Directors and the mix of

In the ordinary course of business, we may enter into loan transactions organizations with which such persons may be associated. Advances and

with our officers, directors, their immediate family members, and other repayments on loans and leases in the preceding chart are related to

organizations with which such persons may be associated. Such transac- those considered related parties at year end.

tions may be subject to special approval requirements contained in the Additional transactions other than loans in the ordinary course of

FCA Regulations and are made on the same terms, including interest business involving directors and senior officers include AgDirect, LLP,

rates, amortization schedules, and collateral, as those prevailing at the the trade credit financing program we participate in which originates

time for comparable transactions with other persons. In our opinion, and refinances agriculture equipment loans through independent equip-

none of these loans outstanding at December 31, 2015 involved more ment dealers. Director Brandon Robbins owns an equipment dealership

than a normal risk of collectability. that participates in this program. All dealerships in the trade credit

program are offered the same terms and conditions.

Related Party Loans and Leases Information As discussed in Note 8, we borrow from AgriBank, in the form of a

line of credit, to fund our loan portfolio.(IN THOUSANDS) 2015 2014 2013

We purchase various services from AgriBank including certainAs of December 31:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

financial and retail systems, financial reporting services, tax reportingTotal related party loans and leases $16,119 $14,101 $10,182. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . services, technology services, and insurance services. The total cost ofFor the year ended December 31:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . services we purchased from AgriBank was $4.8 million, $5.3 million,

Advances to related parties $5,890 $5,619 $2,852. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . and $5.3 million in 2015, 2014, and 2013, respectively.

Repayments by related parties 5,515 4,192 2,976. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . We also purchase human resource information systems, benefit, pay-

roll, and workforce management services from Farm Credit Foundations

(Foundations). As of December 31, 2015, 2014, and 2013, our investment

in Foundations was $113 thousand. The total cost of services purchased

from Foundations was $778 thousand, $708 thousand, and $658 thou-

sand in 2015, 2014, and 2013, respectively.



13 14CONTINGENCIES AND COMMITMENTS FAIR VALUE MEASUREMENTS

In the normal course of business, we have contingent liabilities and Fair value is defined as the price that would be received to sell an asset

outstanding commitments which may not be reflected in the accompa- or paid to transfer a liability in an orderly transaction between market

nying Consolidated Financial Statements. We do not anticipate any participants at the measurement date in the principal or most advanta-

material losses because of these contingencies or commitments. geous market for the asset or liability. Accounting guidance also estab-

We may be named as a defendant in lawsuits or legal actions in the lishes a fair value hierarchy, with three input levels that may be used

normal course of business. At the date of these Consolidated Financial to measure fair value. Refer to Note 2 for a more complete description

Statements, we were not aware of any such actions that would have a of the three input levels.

material impact on our financial condition. However, such actions could We did not have any assets or liabilities measured at fair value on a

arise in the future. recurring basis at December 31, 2015, 2014, or 2013.

We have commitments to extend credit and letters of credit to sat-

isfy the financing needs of our borrowers. These financial instruments NON-RECURRING BASIS

involve, to varying degrees, elements of credit risk that may be recog- We may be required, from time to time, to measure certain assets at

nized in the financial statements. Commitments to extend credit are fair value on a non-recurring basis.

agreements to lend to a borrower as long as there is not a violation of

any condition established in the loan contract. Standby letters of credit Assets Measured at Fair Value on a Non-recurring Basis

are agreements to pay a beneficiary if there is a default on a contrac- (IN THOUSANDS)AS OF Fair Valuetual arrangement. Commercial letters of credit are agreements to pay a TotalDECEMBER 31, 2015 Measurement Using

Fair Totalbeneficiary under specific conditions. At December 31, 2015, we had Level 1 Level 2 Level 3 Value Lossescommitments to extend credit and unexercised commitments related to Impaired loans $— $13,873 $— $13,873 $(15,358)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .standby letters of credit of $3.4 billion. Additionally, we had $25.4 mil-

Other propertylion of issued standby letters of credit as of December 31, 2015. owned — — 7,662 7,662 (2,247)

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

Commitments to extend credit and letters of credit generally have

fixed expiration dates or other termination clauses and we may require AS OF Fair ValueTotalDECEMBER 31, 2014 Measurement Using

Fair Totalpayment of a fee. If commitments to extend credit and letters of creditLevel 1 Level 2 Level 3 Value Losses

remain unfulfilled or have not expired, they may have credit risk notImpaired loans $— $13,093 $— $13,093 $(15,208). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .recognized in the financial statements. Many of the commitments toOther propertyextend credit and letters of credit will expire without being fully drawnowned — — 9,695 9,695 (806). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .upon. Therefore, the total commitments do not necessarily represent

future cash requirements. Certain letters of credit may have recourseAS OF Fair Value

TotalDECEMBER 31, 2013 Measurement Usingprovisions that would enable us to recover from third parties amounts Fair TotalLevel 1 Level 2 Level 3 Value Lossespaid under guarantees, thereby limiting our maximum potential expo-

Impaired loans $— $18,104 $— $18,104 $(17,238)sure. The credit risk involved in issuing these financial instruments is. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other propertyessentially the same as that involved in extending loans to borrowersowned — — 10,915 10,915 (1,741)and we apply the same credit policies. The amount of collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

obtained, if deemed necessary by us upon extension of credit, is based

on management’s credit evaluation of the borrower.

We are among the forming limited partners in a RBIC. Refer to

Note 6 for additional discussion regarding this commitment.


15VALUATION TECHNIQUES SUBSEQUENT EVENTS

IMPAIRED LOANS: Represents the carrying amount and related write-

downs of loans which were evaluated for individual impairment based We have evaluated subsequent events through March 11, 2016, which is

on the appraised value of the underlying collateral. When the value of the date the Consolidated Financial Statements were available to be

the collateral, less estimated costs to sell, is less than the principal issued. There have been no material subsequent events that would

balance of the loan, a specific reserve is established. Costs to sell require recognition in our 2015 Consolidated Financial Statements or

represent transaction costs and are not included as a component of the disclosures in the Notes to Consolidated Financial Statements.

asset’s fair value. If the process uses independent appraisals and other

market-based information, they fall under Level 2. If the process

requires significant input based on management’s knowledge of and

judgment about current market conditions, specific issues relating to

the collateral and other matters, they fall under Level 3.

OTHER PROPERTY OWNED: Represents the fair value and related losses

of foreclosed assets that were measured at fair value based on the

collateral value, which is generally determined using appraisals, or

other indications based on sales of similar properties. Costs to sell

represent transaction costs and are not included as a component of the

asset’s fair value.


DISCLOSURE INFORMATION REQUIRED BY REGULATIONS (UNAUDITED)

DESCRIPTION OF BUSINESS SELECTED FINANCIAL DATA

General information regarding the business is incorporated herein by The ‘‘Consolidated Five-Year Summary of Selected Financial Data’’ is

reference from Note 1 to the accompanying Consolidated Financial presented at the beginning of this Annual Report.

Statements.

The description of significant business developments, if any, is incor- MANAGEMENT’S DISCUSSION AND ANALYSIS

porated herein by reference from the ‘‘Management’s Discussion and Information regarding any material aspects of our financial condition,

Analysis’’ section of this Annual Report. changes in financial condition, and results of operations are discussed

in the ‘‘Management’s Discussion and Analysis’’ section of this Annual

DESCRIPTION OF PROPERTY Report.

There are 97 offices located throughout our territory making and ser-

vicing long and short-term loans. We own 85 buildings and lease BOARD OF DIRECTORS

12 offices. In addition to our Louisville office facility, we also lease Our Board of Directors is organized into the following committees to

additional space in Louisville to accommodate staff. There are 94 retail carry out Board responsibilities:

offices which are supported by seven special account units and four – The Audit Committee oversees financial reporting, the adequacy of

central processing units. A single building may house multiple offices. our internal control systems, the scope of our internal audit pro-

The owned facilities have net book values ranging between $36 thou- gram, the independence of the outside auditors, the processes for

sand and $7.9 million. Currently there are two buildings being held for monitoring compliance with laws and regulations and the code of

resale. During 2015, construction was completed on new facilities for ethics. The Audit Committee also oversees the adequacy of manage-

the replacement of the following offices in Indiana: Greencastle and ment’s action with respect to recommendations arising from audit-

Williamsport, in Kentucky: Elizabethtown and Lexington, in Tennessee: ing activities;

Greeneville. Remodels/additions were completed in Ohio: Versailles, in – The Governance Committee addresses issues of Board governance

Tennessee: Johnson City and Murfreesboro. Lot purchases in Ohio: and the Board’s continuing efforts to strengthen and renew the

Albany and Mansfield, in Tennessee: McMinnville. Board, administers a process for maintaining and periodically

reviewing board policies, and administers a planning process focused

LEGAL PROCEEDINGS upon achieving our mission and maintaining a viable, competitive

Information regarding legal proceedings is discussed in Note 13 to the institution;

accompanying Consolidated Financial Statements. We were not subject – The Human Resources Committee oversees and provides overall

to any enforcement actions as of December 31, 2015. direction and/or recommendations for compensation, benefits and

human resource performance management programs; and

DESCRIPTION OF CAPITAL STRUCTURE – The Risk Management Committee oversees the integration of risk

Information regarding our capital structure is discussed in Note 9 to management activities throughout our organization. Committee

the accompanying Consolidated Financial Statements. members review ongoing risk assessments of current and emerging

risks to ensure adequate planning and resources are directed at

DESCRIPTION OF LIABILITIES managing the identified risks. The Committee also establishes and

Information regarding liabilities is discussed in Notes 8, 10, 11, and 13 to promotes an effective risk culture throughout our organization.

the accompanying Consolidated Financial Statements.



Board of Directors as of December 31, 2015, including business experience during the last five years

Name Term Principal Occupation and Other Affiliations

D. Kevin Cox 2012–2016 Principal Occupation:Chair Self-employed farmer (corn, soybeans, alfalfa, and feeder cattle), trucking operation; previously, farming

included wheatOther Affiliations:Director Parke County REMC (electric cooperative), Jackson Township Advisory Board for Parke County (local

Service Began: 10/2008 government), and Nationwide Land as Your Legacy Advisory Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson 2015–2019 Principal Occupation:Vice Chair Self-employed farmer (corn, soybeans, wheat, hay, cattle, and hogs)Service Began: 10/2007. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins 2015–2019 Principal Occupation:Secretary Business owner, part-time farmer (cow-calf operation)

Other Affiliations:Owner of Mountain Farm International, LLC (equipment dealership)

Service Began: 10/2011 Formerly a Financial Services Officer for Farm Credit Mid-America. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

R. Hugh Adams 2014–2018 Principal Occupation:Director Self-employed farmer (corn, soybeans, and wheat); Retired from Tennessee Farm Bureau (Field Service Director)

Other Affiliations:Director of the Weakley County Farm Bureau (agriculture) and the West Tennessee River Basin Authority

Service Began: 10/2012 (environmental conservation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett 2014–2018 Principal Occupation:Outside Director Retired (formerly president/owner of management recruiting business)

Other Affiliations:Service Began: 06/1998 Director Farm Credit Foundations Plan Sponsor Committee (employee benefits, term ended December 2015). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates, III 2013–2017 Principal Occupation:Director Self-employed farmer (beef, corn, wheat, hay, barley, and alfalfa); previously, farming included dairy

Other Affiliations:Service Began: 01/1988 President of Bullitt County Farm Bureau (agriculture). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship 2012–2016 Principal Occupation:Director Self-employed farmer (vegetables, hay, corn, beans, wheat, custom farming, and beef cattle)

Other Affiliations:Service Began: 10/2008 AgriBank District Farm Credit Council Board (agriculture). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dwain Cottingham 2015–2019 Principal Occupation:Director Self-employed farmer (cash grains)

Other Affiliations:Service Began: 10/2015 Adams Township Advisory Board (local government, effective January 1, 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mary C. Courtney 2014–2019 Principal Occupation:Director Self-employed farmer (tobacco, soybeans, corn, wholesale produce, and cattle)

Other Affiliations:Co-Owner of Lawns of Perfection, LLC (lawn maintenance), Director of Shelby County Farm Bureau (agriculture),Shelby County Extension Council (agriculture), and Shelby County District Extension Board (agriculture,

Service Began: 07/2014 beginning January 2016). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp 1 2013–2017 Principal Occupation:Director Self-employed farmer (corn, soybeans, wheat, beef cattle, and hogs)

Other Affiliations:Director of Indiana Soybean Alliance (agriculture), Jasper County Drainage (water management), Jasper CountyRegional Water and Sewer District (sanitation), Jasper County Economic Development (county development),Northwest Indiana Solid Waste District (sanitation), Northwest Indiana Workforce Development (statedevelopment), American Soybean Association (agriculture), Indiana Farm Bureau (agriculture), Indiana County

Service Began: 10/2013 Commissioners Association (county government), and Jasper County Commissioner (county government). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Name Term Principal Occupation and Other Affiliations

David E. Hahn 2013–2017 Principal Occupation:Outside Director Professor, Department of Agricultural, Environmental and Development Economics, College of Food, Agriculture,

and Environmental Sciences at Ohio State University; Part-time farmer (grain)Other Affiliations:

Service Began: 03/2007 AgriBank District Farm Credit Council Board (agriculture). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lowell Hill 2014–2018 Principal Occupation:Director Self-employed farmer (grain); Retired general superintendent of Thomas Marker Construction CompanyService Began: 10/2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel Jr. 2012–2016 Principal Occupation:Director Self-employed farmer (dairy, corn, soybeans, wheat, hay, and alfalfa)

Other Affiliations:Director of the Daviess County Farm Bureau Board (agriculture), Daviess County Extension Council (cooperativeeducation), District 2 Chair State Resolutions Committee of Kentucky Farm Bureau (agriculture), AgriBankDistrict Farm Credit Council Board (agriculture), and Owensboro Community/Technical College Agriculture

Service Began: 10/2012 Advisory Commitee (education). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jimmy D. Mays 2014–2018 Principal Occupation:Director Self-employed farmer (beef cattle)Service Began: 10/2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson 2012–2016 Principal Occupation:Director President of Patterson Farms, Inc. (farm market, apples, strawberries, and peaches)

Other Affiliations:Director and Treasurer for the Ohio Farm Bureau Federation (agriculture), and Vice President of Orchard Hills

Service Began: 10/2004 (rental facility). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

George E. Stebbins 2013–2017 Principal Occupation:Director Self-employed farmer (corn, soybeans, and wheat); previously, farming included hog operationService Began: 10/2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker 2013–2017 Principal Occupation:Director Self-employed farmer (hay, timber, and cattle); Retired from Greene County Tennessee School System, North

Greene High School (agriculture education)Other Affiliations:

Service Began: 10/2013 Green County Commissioner (local government). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tony G. Wolfe 2014–2018 Principal Occupation:Director Self-employed farmer (corn, soybeans, wheat, and cattle); former Field Representative for Indiana Farm Bureau

Other Affiliations:Director of the Gibson County Farm Bureau (agriculture), Gibson County Chamber of Commerce (county tourism/development), Shiloh Church Cemetery Board (community organization), Selective Service System Board forGibson County (military), AgriBank District Farm Credit Council (agriculture), and The Farm Credit Council

Service Began: 10/2010 (national trade association for the Farm Credit system). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 After being elected to a position on the Indiana Farm Bureau Board of Directors, Kendell Culp resigned his position effective January 1, 2016.

Board of Directors Restructure Plan: Recent and upcoming develop- James Patterson. For the remaining two positions, the plan includes

ments, including the resignation of Indiana Director Kendell Culp, effec- scenarios that provide flexibility from both a position and timing stand-

tive January 1, 2016, and Ohio Director James Patterson’s stated intent point to allow for completion of the plan no later than November 2020.

not to seek re-election in 2016, provided an opportunity for our Board Directors are compensated in the form of an annual retainer paid

of Directors to review its governance structure. On January 20, 2016, monthly for time spent in preparing and attending board and commit-

the Board approved a plan to reduce in size by four positions, one in tee meetings, regional advisory committee meetings, summer planning

each of the four states served by our Association. This will reduce the meeting and AgriBank annual meeting. For the month of January 2015

number of stockholder elected directors on the Board from 16 to 12 the monthly rate paid was $2,820. Beginning February 1, 2015, the

over the course of the plan. Implementation of the plan begins this retainer increased to a monthly rate of $2,866. In addition, directors

year with the elimination of the positions held by Kendell Culp and


were compensated at the daily rate of $350 for attendance at desig- retainer paid monthly for the additional time commitments of their

nated meetings not specified above but set out by board policy. Direc- positions. The monthly amounts paid were as follows: Board Chair —

tors were also reimbursed for reasonable expenses incurred in connec- $300; Board Vice Chair and Secretary — $125; and Board Committee

tion with attending such meetings. Chairs — $104. Additionally, directors serving on standing committees

In 2015, the officers of the Board (Chair, Vice Chair, and Secretary) receive $175 for participation in conference call meetings.

and the Chair of each of the Board’s standing committees (Audit, Gov-

ernance, Human Resources, and Risk Management) received an annual

Information regarding compensation paid to each director who served during 2015 follows:

Number of Days Served 1Compensation Paid

Other for Service on a Total CompensationBoard Meetings Official Activities Board Committee 2 Name of Committee Paid in 2015

R. Hugh Adams 17.0 8.0 — $36,568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett 19.0 12.5 1,783 Audit 37,897. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates III 19.0 7.0 — 38,234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship 17.0 14.0 — 39,018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dwain Cottingham 3 6.0 7.0 — 11,066. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Kevin Cox 19.0 30.5 — 47,414. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mary C. Courtney 19.0 13.0 — 37,164. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp 5 19.0 19.5 525 Audit 39,989. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David E. Hahn 19.0 22.0 — 41,189. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lowell Hill 19.0 11.0 — 36,814. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel, Jr. 19.0 23.0 — 40,364. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jimmy D. Mays 17.0 3.5 175 Audit 34,539. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson 17.0 21.5 1,575 Audit 41,189. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins 15.0 11.0 1,042 Risk 40,056. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

George E. Stebbins 19.0 13.5 1,400 Audit 38,389. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker 17.0 10.5 1,250 Governance 37,785. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kaye Hurst Whitehead 4 13.0 3.5 1,638 Audit 30,204. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson 19.0 10.0 208 Risk 37,622. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tony G. Wolfe 19.0 18.0 1,250 Human Resources 42,184

$707,685

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

board meeting dates.3 Elected to Board of Directors in October 2015.4 Term expired in October 2015.5 After being elected to a position on the Indiana Farm Bureau Board of Directors, Kendell Culp resigned his position effective January 1, 2016.

Total compensation includes annual insurance of $1.21 for business travel and $16.80 for accidental death and dismemberment coverage per director.



SENIOR OFFICERS

The senior officers and the date each began his/her position include:

Name Position Business experience and employment during past five years

William L. Johnson President and Chief Executive Officer Senior Vice President and Chief Risk Information Officer for AgriBankfrom March 2009 to January 2011; Executive Vice President of BusinessServices for AgriBank from January 2011 to February 2011; President andChief Executive Officer-Elect of Farm Credit Mid-America from March2011 to May 2011; President and Chief Executive Officer of Farm CreditMid-America from May 2011 to present

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Steve Allard Senior Vice President — Chief Credit Officer Regional Vice President from December 2008 through October 2011; VicePresident — Credit Analysis from November 2011 through December 2014;Acting Chief Credit Officer January 2015 through March 2015; Senior VicePresident — Chief Credit Officer from April 2015 to present

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

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

Gordon Hanson Senior Vice President — Chief Risk Officer Credit Risk Program Manager — Farm Credit Administration fromFebruary 2007 to December 2013; Senior Vice President — Chief RiskOfficer of Farm Credit Mid-America from January 2014 to present

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

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

David Lynn 1 Senior Vice President — Financial Services Senior Vice President — Financial Services from September 2002 topresent

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Jill Marchant Senior Vice President — General Counsel and Associate General Counsel for Dine Equity, Inc. from January 2009 to JulyCorporate Secretary 2011; General Counsel for Texas Roadhouse from August 2011 to January

2014; Senior Vice President — General Counsel for Farm Credit Mid-America from June 2014 to May 2015; Senior Vice President — GeneralCounsel and Corporate Secretary from May 2015 to present

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

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

Heather Vidourek Senior Vice President — Human Capital Vice President — Human Resources from January 2009 to May 2012;Senior Vice President — Human Capital from June 2012 to present

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

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

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

1 After 35 years of service, David Lynn will be retiring on March 31, 2016. As part of the transition, beginning January 1, 2016, the position of Senior Vice President — FinancialServices held by Mr. Lynn is no longer designated as a senior officer position.

William L. Johnson is a director of Farm Credit Council Services Heather Vidourek is a trustee of Farm Credit Foundations

(Farm Credit business services), University of Evansville (Board of Visi- (employee benefits, effective January 2016), Kentucky Chamber of Com-

tors — education), and the Local Food Association Board (agriculture). merce Education and Workforce Council (business education), and Ohio

Paul Bruce is a director of Farm Credit Foundations (employee Farm Bureau Foundation Board (agriculture).

benefits).


SENIOR OFFICER COMPENSATION include measures specific to each business division. Payouts are earned

Compensation Overview: The CEO, senior officer, and highly compen- only when specific levels of performance are achieved, and are paid out

sated individuals compensation program’s design and governance fol- within 75 days of the end of the plan year (the plan year is the calen-

lows prudent risk management standards, while providing total com- dar year). The 2016 short-term program will be similar to the 2015

pensation that promotes the association’s mission and business strategy program.

to ensure a safe, sound, and dependable source of credit and related Long-term Incentive: In 2013, the Board of Directors approved imple-

services for agriculture and rural America. The association’s compensa- menting a long-term incentive program, which began in 2014, to align

tion philosophy aims to provide total cash compensation that is compet- the CEO and senior officers to the association’s long-term business

itive within the relevant market in order to recruit, reward and retain objectives, while providing the opportunity for a competitive market-

team members to meet the association’s objectives, while remaining based total compensation package. The Board of Directors set indepen-

aligned with the best interests of cooperative shareholders. The senior dent three-year performance objectives at the beginning of each plan

officer compensation program supports our risk management goals year, including efficiency, credit quality, and earning assets growth. In

through its balance of the following: (1) a balanced mix of base and addition, the Board of Directors, at its sole discretion, may increase or

variable pay, (2) a balanced use of performance measures that are risk- decrease the amount of the incentive calculated.

adjusted where appropriate, and (3) a pay-for-performance process that The first plan year began in 2014 and continues through 2016, and

allocates individual awards based on both results and how those results the payout will occur during the first quarter of 2017. The Board of

were achieved. Directors must approve all payouts. In addition, to create the desired

Elements of Compensation: The CEO, senior officers, and highly com- alignment between compensation and long-term performance sooner,

pensated individuals are compensated with a mix of direct cash and there is a one-time, two-year transition program that runs from 2014 to

long-term incentives as well as retirement plans generally available to 2015. The payout for this program will occur during the first quarter of

all employees. Our Board of Directors determines the appropriate bal- 2016. Individuals becoming eligible for the plan after commencement of

ance of short-term and long-term incentives while keeping in mind the plan (e.g., new hires) will receive a pro-rata long-term incentive and

their responsibilities to our members. Base salary and short-term incen- pro-rata transition long-term incentive based on months of service in

tives are intended to be competitive with annual compensation for com- an eligible position as long as the individual became eligible prior to

parable positions at peer organizations. January 1, 2016. The Human Resources Committee of the Board of

Base Salary: Base salaries for all team members, including the CEO Directors will administer the plan as it relates to the CEO and delegate

and senior officers, are determined by the position and responsibilities, the administration as it relates to other participants to the CEO and

performance, and competitive market compensation data. The CEO’s human resources function. In addition, the CEO, at his sole discretion,

base salary increase is determined by combining an individual perform- may increase or decrease the amount of the incentive calculated and

ance rating established by the Board of Directors and the association’s paid to a qualified plan participant based on market compensation and

performance. Senior officer and highly compensated individuals base individual contributions and performance, not exceeding the board

salary increases are determined by each officer’s individual perform- approved aggregate senior officer pool.

ance rating. CEO and senior officer base salary programs are annually Retirement Plans: We have various post-employment benefit plans

reviewed and approved by the Board of Directors. which are generally available to all association employees, including the

Short-term Incentives: The Board of Directors approves the short-term CEO and senior officers, based on dates of service to the association

incentive program each year and eligible team members, including the and are not otherwise differentiated by position, unless specifically

CEO and senior officers, participate in the program. The 2015 program stated. Information regarding the post-employment benefit plans is

included team and association performance measures based on financial included in Notes 2 and 11 to the accompanying Consolidated Financial

and business results, association initiatives, and credit performance. Statements.

These measures include efficiency ratio, new loan volume, earning asset Other Components of Compensation: Additionally, compensation associ-

growth, crop insurance growth, adverse credit, credit administration, ated with any company-paid vehicles, group term life insurance premi-

and progress made on key association projects. Association-level mea- ums, disability insurance premiums, or dependent financial aid may be

sures may be updated periodically and are approved by the Board of made available to the CEO and senior officers based on job criteria or

Directors and are consistent with the association’s business plan for the similar plans available to all employees.

corresponding year. Team measures align to the association and also



Compensation to the CEO, Senior Officers, and Highly Compensated Individuals

(IN THOUSANDS) Short-Term Deferred/ Change in Long-TermName Year Salary Incentive Perquisites Pension Value Incentive 2 Other Total

William L. Johnson, CEO 2015 $480 $216 $89 $129 $234 $31 $1,179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

William L. Johnson, CEO 2014 484 225 67 171 153 30 1,130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

William L. Johnson, CEO 2013 457 202 58 119 — 28 864. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aggregate Number of Senior Officers and Highly Compensated Individuals, excluding CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nine 2015 $2,059 $724 $182 $1,625 $663 $171 $5,424. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eleven 1 2014 2,253 882 63 2,807 524 227 6,756. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nine 2013 1,869 623 43 758 — 129 3,422. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 Includes pro-rated compensation for an individual who served as a Senior Officer until August 2014, as well as the compensation for the successor to this position who washired in June 2014.

2 The 2014 Long-Term incentive compensation amounts have been revised to include the estimated compensation earned in 2014 under this plan.

The change in value of the pension benefits is defined as the change in The value of the pension benefits from December 31, 2014 to Decem-

the vested portion of the present value of the accumulated benefit obli- ber 31, 2015 changed primarily due to interest cost, accumulation of an

gation from December 31 of the prior year to December 31 of the most additional year of credited service by plan participants, and changes in

recent year for the District-wide Pension Plan and the Pension Restora- actuarial assumptions. The assumption with the largest impact in 2015

tion Plan, as applicable, as disclosed in Note 11 to the accompanying was a change in the discount rate methodology for the pension restora-

Consolidated Financial Statements. This change in value does not tion plan.

represent cash payments made by the Association during the year, but Members may request information on the compensation to the indi-

rather is an estimate of the change in the Association’s future obliga- viduals included in the preceding table during 2015.

tions under the pension plans. The change in the value of the pension Effective April 29, 2015 the Farm Credit Administration adopted a

benefits is highly sensitive to discount rates used to value the plan final rule changing the determination of employees that could be con-

liabilities to participants. sidered highly compensated employees. Under this final rule, changes in

The amount in ‘‘Long-Term Incentive’’ represents management’s esti- the value of an employee’s pension plan are not considered when deter-

mate of the incentive earned under this plan through December 31, mining whether an employee is considered highly compensated. While

2015. not final as of December 31, 2014, employees disclosed for 2014 in the

The amount in ‘‘Other’’ category in the preceding table primarily above chart were determined based on the final rule. No disclosures

includes the employer match on defined contribution plans available to were changed for the 2013 reporting period; therefore, comparability

all employees. may be limited as a result of this change.

No tax reimbursements are made to the CEO, senior officer, and

highly compensated individuals.

Pension Benefits Attributable to the CEO and Senior Officers

(DOLLARS IN THOUSANDS) Present Value of Payments Made2015 Years of Accumulated During theName Plan Credited Service Benefits Reporting Period

William L. Johnson, CEO AgriBank District Retirement Plan 33.2 $545 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank District Pension Restoration Plan 33.2 229 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Aggregate Number of Senior Officers, excluding CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Six AgriBank District Retirement Plan 33.0 $9,936 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The change in composition of the aggregate senior officer can have a Effective January 1, 2007, the AgriBank District Retirement Plan was

significant impact on the calculation of the accumulated pension closed to new employees. Therefore, any employee starting employment

benefits. with the AgriBank District after that date is not eligible to be in the plan.


The AgriBank District Pension Restoration Plan restores retirement MEMBER PRIVACY

benefits to certain highly compensated employees that would have been The FCA Regulations protect members’ nonpublic personal financial

provided under the qualified plan if such benefits were not above the information. Our directors and employees are restricted from disclosing

Internal Revenue Code compensation or other limits. Not all senior information about our association or our members not normally con-

officers or highly compensated employees are eligible to participate in tained in published reports or press releases.

this plan.

RELATIONSHIP WITH QUALIFIED PUBLIC ACCOUNTANT

TRANSACTIONS WITH SENIOR OFFICERS AND DIRECTORS There were no changes in independent auditors since the last Annual

Information regarding related party transactions is discussed in Note 12 Report to members and we are in agreement with the opinion

to the accompanying Consolidated Financial Statements. expressed by the independent auditors. The total fees paid during 2015

were $182 thousand. The fees paid were for audit services.

TRAVEL, SUBSISTENCE, AND OTHER RELATED EXPENSES

Directors and senior officers are reimbursed for reasonable travel, sub- FINANCIAL STATEMENTS

sistence, and other related expenses associated with business functions. The ‘‘Report of Management,’’ ‘‘Report on Internal Control Over Finan-

A copy of our policy for reimbursing these costs is available by contact- cial Reporting,’’ ‘‘Report of Audit Committee,’’ ‘‘Independent Auditor’s

ing us at: Report,’’ ‘‘Consolidated Financial Statements,’’ and ‘‘Notes to Consoli-

dated Financial Statements’’ are presented prior to this portion of the

P.O. Box 34390 Annual Report.

Louisville, KY 40232

(800) 444-FARM YOUNG, BEGINNING, AND SMALL FARMERS AND RANCHERS

www.e-farmcredit.com Information regarding credit and services to young, beginning, and

small farmers and ranchers, and producers or harvesters of aquatic

The total directors’ travel, subsistence, and other related expenses were products is discussed in an addendum to this Annual Report.

$289 thousand, $289 thousand, and $243 thousand in 2015, 2014, and

2013, respectively.

INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

No events occurred during the past five years that are material to eval-

uating the ability or integrity of any person who served as a director or

senior officer on January 1, 2016 or at any time during 2015.


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

The Board of Directors has approved a policy to serve the credit and related NEW LOAN PORTFOLIO

needs of young, beginning, and small farmers and ranchers in our territory. The association has also set a goal that 20% or more of new loans or

The definitions of young, beginning, and small farmers and ranchers follow: leases will be closed to young farm customers, 30% or more new loans

– Young: a farmer, rancher, producer or harvester of aquatic products or leases will be closed to beginning farmers, and 60% or more of new

who is age 35 or younger as of the loan transaction date. loans or leases will be closed to small farm customers.

– Beginning: a farmer, rancher, producer or harvester of aquatic prod-% of Loans

ucts who has 10 years or less farming or ranching experience as ofActual Goal

the loan transaction date.Young 24.0% 20.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .– Small: a farmer, rancher, producer or harvester of aquatic productsBeginning 38.4% 30.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .who normally generates less than $250,000 in annual gross sales ofSmall 62.5% 60.0%agricultural or aquatic products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SAFETY AND SOUNDNESS OF THE PROGRAMDEMOGRAPHICS

It is the responsibility of the President and Chief Executive Officer orWe have used the 2012 USDA Ag Census as our source of demographichis designee for development of appropriate standards and proceduresdata for Young, Beginning, and Small Farmers (YBS). There areto support implementation of this policy and special programs approved268,106 farms in the four state territory of Indiana, Kentucky, Ohio, andby the Board of Directors. The Board of Directors reviews the ongoingTennessee. Of that number, there are 31,098 young farmers (or 11.5%);adequacy of this policy at least annually and monitors progress on a66,299 beginning farmers (or 24.7%), and 246,771 small farmers (or 92.0%).quarterly basis.The census data is as of 2012 whereas our portfolio data is based on the

Management has developed a young, beginning and small farmernumber of current YBS customers and/or loans in the current year.program that provides sound and constructive credit through standard

or special programs targeted to this group.MISSION STATEMENT

Our mission for the Young, Beginning, and Small Farmer Program is toYBS PROGRAM FEATURESprovide sound and constructive credit to meet the needs of the nextWe implemented a young, beginning, and small farmer and rancher pro-generation of young, beginning, and small farmers by offering standardgram with four components, all of which will continue in 2016.or special programs targeted to this group.– Special underwriting program for young and beginning farmers. In

2015, Farm Credit Mid-America, ACA provided special underwritingTARGETS AND GOALS

standards on 662 loans representing $102.2 million in loan volume.TOTAL LOAN PORTFOLIO

– Farm Service Agency (FSA) loan guarantee reimbursement of 50%The goal of the young farmer program is to maintain the percentagefor young or beginning farmers. In 2015, the association waived itsthat young farmers represent of the total farm members in our portfo-origination fees and reimbursed members 50% of their FSA guaran-lio at 25% or higher; the goal of the beginning farmer program is totee fees on 87 loans representing more than $319 thousand in reim-maintain the percentage that beginning farmers represent of the totalbursed FSA fees.farm members in our portfolio at 45% or higher; the goal of the small

– 125 operations attended FCMA’s YBS seminar, ‘‘Know to Grow,’’farmer program is to maintain the percentage that small farmerswhich works with members to make sound management decisionsrepresent of the total farm members in our portfolio at 70% or higher.based upon their own financial information.In 2015, there were 80,919 farm members in our portfolio. Of that

– Reimbursement of up to $500 dollars (one time only) to young ornumber, there were 23,286 young farmers, 44,381 beginning farmers,beginning members who attend business, production, financial man-and 66,446 small farmers. Farm members could qualify in more thanagement, or agricultural leadership development programs that willone category. These numbers surpass the goals as follows:help them in their farm business.

% of Member Base

Actual Goal

Young 28.8% 25.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Beginning 54.9% 45.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small 82.1% 70.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


STEWARDSHIP AND SPONSORSHIPS OUTREACH AND EDUCATION

In 2015, our focus was on bringing additional knowledge to the cus- We continued to partner with many organizations to reach a variety of

tomer. We also supported young people by providing more than customers in 2015. We sponsored the Local Food Association and the

$125 thousand in scholarships to students from Indiana, Ohio, Kentucky, Kentucky Proud Local Food Heroes program. We currently work with

and Tennessee enrolled in college programs related to agriculture the Indiana State Department of Agriculture and the Indiana Certified

careers. The Board has a ‘‘stewardship philosophy’’ that contributed an Livestock Program, The Farm Bureau Young Farmer and Rancher orga-

additional $2.1 million in programs and gifts that benefitted rural com- nizations in all four states, Ohio State University and The University of

munities, young people, commodity groups, and other agricultural orga- Tennessee’s Center for Profitable Agriculture to name a few. Addition-

nizations. Employees also participated in and supported organizations ally, on the national level, we strive to partner with other associations

like FFA, 4-H, and Young Farmer groups by conducting training and from across the system by co-hosting an annual YBS idea sharing con-

education sessions to help the next generation of farmers. ference with the Farm Credit Council.


FUNDS HELD PROGRAM (UNAUDITED)

The Association offers a Funds Held Program (Funds Held) that pro- Commercial loans, with the exception of lines of credit, are paid a

vides for customers to make uninsured advance payments on loans. The rate of interest similar to short-term money market rates. The rate was

following terms and conditions apply to all Funds Held unless the loan 0.40 percent as of January 1, 2016.

agreement, or related documents, between the Association and the cus-

tomer provide for other limitations. WITHDRAWALS

Money in Funds Held may be withdrawn for the following items,

PAYMENT APPLICATION depending on the customer’s loan program.

Loan payments received by the Association before the loan has been – Customers may request that Funds Held or interest on Funds Held

billed will normally be placed into Funds Held and applied against the be applied to their loan balance at any time.

next installment date. Loan payments received after the loan has been – Customers with real estate and commercial loans may use Funds

billed will be directly applied to the installment due on the loan and Held for future installments or insurance. In addition, customers

related charges, if any. Funds received in excess of the billed amount may make up to four additional withdrawals for other approved pur-

will be placed into Funds Held unless the customer has specified the poses in lieu of increasing the loan amount. These four withdrawals

funds to be applied as a special prepayment of principal. have a minimum size limit of the lesser of $500 or the remaining

When a loan installment becomes due, monies in Funds Held for the balance in Funds Held in a 12-month period.

loan will be automatically applied toward the installment on the due

date. Any accrued interest on Funds Held will be applied first. If the ASSOCIATION OPTIONS

balance in Funds Held does not fully satisfy the entire installment, the In the event of default on any loan, or if Funds Held exceeds the maxi-

customer must pay the difference by the installment due date. mum limit as established above, or if the Association discontinues its

Funds Held program, the Association may apply funds in the account to

ACCOUNT MAXIMUM the unpaid balance and other amounts due, and shall return any excess

The amount in Funds Held may never exceed the unpaid principal bal- funds to the customer.

ance of the loan. Many loans have a further limit equal to the total If the customers sell, assign or transfer any interest in the underly-

payments due for the next year. In addition, Funds Held on loans with ing collateral, the Association may apply the funds in the account

certain prepayment penalties may not exceed 10 percent of the original against the remaining loan balance.

principal balance. Funds Held is generally not available on revolving If all customers who are party to the loan are deceased, the Associa-

lines of credit loans. tion may apply the funds in the account to the remaining loan balance.

INTEREST RATE UNINSURED ACCOUNT

Interest will accrue on Funds Held at a simple rate of interest that may Funds Held is not a depository account and is not insured. In the event

be changed by the association from time to time. But the rate will not of Association liquidation, customers having balances in Funds Held

exceed the interest rate charged on the related loan except in rare shall be notified according to FCA Regulations then in effect.

cases. The current interest rate is based upon the following criteria:

Real estate loans closed under the loan program in effect prior to QUESTIONS

October 1, 1994, are paid a rate of interest equal to the loan rate. Please direct all questions regarding Funds Held to your local Farm

Real estate loans closed under the loan program in effect on Octo- Credit Mid-America, ACA representative by calling

ber 1, 1994, and later are paid a rate of interest similar to short-term 1-800-444-FARM (3276).

money market rates. The rate was 0.40 percent as of January 1, 2016.


This notice contains information about your stock investment in Farm

Credit Mid-America, ACA (Association). Please read it carefully and

make sure you understand both the benefits and risks of an investment

in the Association.

Association Capitalization Bylaws (a copy of which is included as

part of this publication) require an investment in stock or participa-

tion certificates in the amount of two (2) percent of the loan amount

or $1,000, whichever is less, when obtaining a loan from either of its

wholly owned subsidiaries, the Farm Credit Mid-America, FLCA (FLCA)

or the Farm Credit Mid-America, PCA (PCA). The Association’s Board of

Directors (Board) has the discretion to apply the stock requirement on

a per-customer basis or a per-loan basis. Currently, the stock require-

ment is on a per customer basis.

The Association also sells stock or participation certificates to any

eligible customer of the FLCA or PCA as a condition of obtaining a lease

and as a condition for purchasing related services. The amount of stock

or participation certificates required may range from one share to no

more than the requirement for obtaining a loan, at the discretion of the

Board. At this time, the Board has decided to require one share for both

leasing and related services.

The voting stock issued by the Association is called “Class D Stock”

(Stock) and is issued only to farmers, ranchers and producers or har-

vesters of aquatic products. Other persons who are eligible to bor-

row or lease from or purchase financially related services with the

FLCA or PCA, but who are not eligible to own Stock, must purchase

“Participation Certificates” (Certificates), which are issued on essen-

tially the same terms as Stock except as described below.

Stock and Certificates issued as a condition of doing business with

the Association (which may include stock issued in connection with

loan renewals, assumptions, refinancing, etc.) are an investment in the

Association that is at risk and not a compensating balance.

HOW ST OCK A N D CERT IF IC AT ES A R E PU RCH A SED

Shares of Stock (and units of Certificates) are sold for their par value (or

face amount) of $5 each and can be paid for either with cash or with the

proceeds of a loan.

When the purchase price is borrowed, the amount of the FLCA and/

or PCA loan includes the cost of the Stock or Certificates and interest

is charged on the entire loan. The portion of the FLCA or PCA loan pro-

ceeds attributable to the purchase price of the Stock or Certificates is

withheld and applied to the purchase price of the Stock or Certificates.

The total amount of the loan, including the portion used to pay for the

Stock or Certificates, is a legally enforceable obligation that must be

repaid in full. The Association does not issue physical certificates for

Stock or Certificates. Instead, the ownership of Stock or Certificates is

evidenced by entries recorded on the combined books of the Association

as reflected in periodic account statements sent to each customer.

CERTA IN IM PORTA N T CH A R ACT ER IST ICS OF ST OCK A N D CERT IF IC AT ES

The principal difference between Stock and Certificates is that the

Stock entitles its holder to one vote (regardless of how many shares

are owned) with respect to the election of Association directors and

other matters on which stockholders are entitled to vote. Holders of

Certificates have no voting rights. In all other respects, Stock and

Certificates have substantially the same rights and restrictions.

Association bylaws provide that dividends may be paid on Stock or

Certificates with the approval of the Board. Dividends may not be paid

if, after or due to such action, the permanent capital of the Association

would thereafter fail to meet the minimum capital adequacy standards

established by the FCA.

The FLCA or PCA takes a lien on the Stock or Certificates held by a

customer as additional security for the customer’s loan. If the customer

defaults, the value of the customer’s investment (not to exceed par

value, or face amount) may be applied against the balance due on the

loan. If the customer’s Stock or Certificates are transferred, they are

still subject to this lien. In any event, Stock and Certificates are trans-

ferable only to persons eligible to purchase such equities.

Stock and Certificates do not appreciate in value. Any retirement

or conversion will be at their original issue price or, if less, their book

value. The possibility that this investment may result in a loss is dis-

cussed below under the heading “Impairment.”

R E T IR EM EN T OF ST OCK A N D CERT IF IC AT ES

Under Association bylaws, Stock and Certificates are retired only at

the discretion of the Board. Stock is retired at the lower of book value

or par value, while Certificates are retired at the lower of book value or

face amount. Book value will be determined in accordance with gener-

ally accepted accounting principles (GAAP).

Under Federal Law, there is no automatic right to have Stock or

Certificates retired upon repayment of the customer’s loan or when the

customer ceases to conduct other business with the FLCA and/or PCA.

Under the Association’s existing Equity Policy, equity is on a customer

basis and is required on existing fixed, adjustable or variable rate loans

originated after July 1, 1995, in an amount not less than two percent

or $1,000, whichever is less, according to the customer’s total loan bal-

ances (when the customer is the same on each loan).

Equity of one share is required on a lease or for a non-customer to

qualify for related services.

The Equity Policy may be amended by the Board at any time at their

sole discretion and in accordance with the Act, Regulations and Bylaws.


NOTICE TO CUSTOMERS CONCERNING INVESTMENTS

Effective 01/01/03, the Board’s policy permits the retirement of customer

equity only if the Association’s permanent capital percentage is above

the Board’s stated minimum, established annually. The Board allows

stock to be retired by management provided that retirements are in

accordance with the Association’s capital plan; the Association’s perma-

nent capital ratio will be in excess of 13 percent after any such retire-

ments; the Association meets and maintains all applicable minimum

surplus and collateral standards; and the aggregate amount of stock pur-

chases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under

any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,

– a non-borrower is no longer a purchaser of related services, or

– the customer’s loan is sold into the secondary market without

recourse, or

– management approves a partial retirement when a customer’s loan is

in good standing and due to paydown, requests excess stock

to be retired.

The retirement policy may be suspended or modified at any time

at the discretion of the Board in order to protect the financial condition

of the Association.

The Association is prohibited from retiring Stock or Certificates if

such retirement results in the Association’s failure to satisfy the

minimum capital adequacy standards established by the FCA.

Of course, even though you may be given the opportunity to

have your stock retired, you are not required to retire your Stock or

Certificates after repaying your FLCA and/or PCA loan and may con-

tinue to hold this investment. However, if you do not borrow from the

FLCA and/or PCA during the following two years, your Class D Stock

will be converted into non-voting Class C Stock.

IM PA IR M EN T

Your ownership of Stock or Certificates in the Association is an invest-

ment and is subject to certain risks that could result in a partial or

complete loss of investment. You are responsible for repayment of the

entire amount of the FLCA and/or PCA loan, including the amount bor-

rowed to pay for your Stock or Certificates, regardless of the value of

your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of inade-

quate evaluation of credit risks or adverse trends in agriculture, such

as loss of international markets, over-production, weather conditions

or disease,

– increases in the amount of non-accrual FLCA and/or PCA loans and

properties acquired from borrowers that reduce revenues, and

800 AU T HOR IZED SH A R ES

The Association is authorized to issue:

a one million (1,000,000) shares of Class C Preferred Stock

with a par value of $5 per share to be issued as provided in

Section 810.3 of these Bylaws;

b an unlimited number of shares of Class D Common Stock


Sections 810.4 and 845.2 of these Bylaws;

c the outstanding number of Participation Certificates as of

the Merger Date, of FLBA 4th, FLBA B and FLBA M and PCA

4th issued prior to October 6, 1988, which were converted by

book entry at the par, face or stated value of $5 per unit into

a like number of Class A Participation Certificates of the

Association;

d an unlimited number of Class B Participation Certificates,

with a face value of $5 per unit to be issued as provided in

Section 810.6 of these Bylaws; and

e such number of shares of such other classes of Capital

Stock as may be provided for in an amendment or amend-

ments to these Bylaws as adopted pursuant to Article

XIV, provided, however, if the class being proposed in

any amendment or amendments is for Preferred Stock

other than Preferred Stock to be issued to the Farm Credit

System’s Financial Assistance Corporation, it shall be

approved by majority of the shares of each class of stock

affected by the preference, voting as a class, whether or not

such classes are otherwise authorized to vote.

805 OW N ER SHIP

Evidence of ownership of Capital Stock and Participation

Certificates may be by book entry or in definitive form as

prescribed by the Board.

In the event of an Authorization Event under Section

210 hereof, a borrower’s required investment in Association

stock/participation certificates (and the required conver-

sion of such investment into a different class of equity)

shall be determined by reference to the borrowing relation-

ship with MidAm, PCA or MidAm, FLCA, as the case may be.

Accordingly, upon an Authorization Event, all references

to loans and outstanding loan balances in this Article shall

refer to aggregate loans held or originated by Association,

MidAm, PCA and MidAm, FLCA.

– impairment of AgriBank (Bank) stock owned by the Association due

to losses in other associations within the district, loan losses and

operating expenses of the Bank and the Bank’s joint and several lia-

bilities on Systemwide debt securities issues by other Banks in the

national Farm Credit System.

As a result of these or any other risks, the capital of the Association

could become impaired. Impairment means that the book value of the

Stock or Certificates has declined below par value (or face value), which

is $5 per share or unit. (For example, if the Association were to suffer

loan losses which exceeded its other income, its bad debt reserve and

its surplus accounts, the Stock and Certificates could have a book value

less than $5 and thus would be impaired.) So long as the capital of the

Association is impaired, its customers would receive less than they

had paid for their stock upon retirement. If the Association were to be

liquidated at the time when its capital is impaired, holders of Stock or

Certificates would receive less than the par value or face amount of

their investment and may suffer a total loss of their investment in the

Association. However, in any event, customers would remain liable for

the full amount of their loan from the FLCA and/or PCA, including the

portion used to pay for the purchase of Stock or Certificates.

Of course, the Association will take all feasible action to prevent

its capital from becoming impaired. The FLCA and PCA maintain loss

reserves (and surplus accounts) to protect against this possibility.

The Farm Credit Act provides a mechanism for providing financial

assistance to distressed Farm Credit System entities. This mechanism

is described in the Association’s 2015 Annual Report. However, the

assistance mechanisms in the Farm Credit Act provide no assurance

to customers that Stock and Certificates will be protected. Therefore

members are advised to review the financial statements of the

Association and of the Bank and other available information about the

Farm Credit System. Copies of the Association and the Bank’s Annual

and Interim Reports to Investors are available from the Association

upon request.

A SSOCI AT ION PER M A N EN T C A PI TA L STA N DA R DS

The Association presently meets its minimum permanent capital stan-

dard. The Association does not know of any reason it will not meet its

permanent capital standard on the next earnings distribution date,

though no earnings distribution date is scheduled.

810 ISSU E , R IGH T S, PR EF ER ENCES A N D L IMI TAT IONS OF CL A SSES OF ST OCK

810.1 CL A SS A PR EF ER R ED ST OCK

a Issue: There shall be no Class A Preferred Stock issued

other than those shares issued as a result of the conversion

on Merger Date of PCA 4th’s Class A non-voting stock or a

conversion in accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class A Preferred Stock shall have

no voting rights.

c Rights: Rights of a holder to dividends, to patronage

refunds, to transfer, to retirement, upon loss and upon

impairment shall be subject to the Act, Regulations and

in accordance with provisions of Section 815 (Application

of Earnings and Losses), Section 830 (Dividends), Section

835 (Patronage Refunds), Section 840 (Transfer), Section

845 (Conversion), Section 850 (Retirement), Section 855

(Impairment) and Section 860 (Liquidation) of these Bylaws.

d Stock Protection: When retiring Class A Preferred Stock in

accordance with the Act, Regulations and these Bylaws, the

stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class A Preferred

Stock shall be issued or paid.

810.2 CL A SS B COM MON ST OCK

a Issue: There shall be no Class B Common Stock issued other

than those shares issued as a result of the conversion of

FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s

Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting

rights.








(Impairment) and Section 860 (Liquidation) of these

Bylaws.

d Stock Protection: When retiring Class B Common Stock in



e Fractional Shares: No fractional shares of Class B Common


ARTICLE VIII - CAPITALIZATION

71 2015 ANNUAL REPORT70BUILDING FOR THE NEXT 100 YEARS

CAPITALIZATION BYLAWSNOTICE TO CUSTOMERS CONCERNING INVESTMENTS (CONT)

Effective 01/01/03, the Board’s policy permits the retirement of customer

equity only if the Association’s permanent capital percentage is above

the Board’s stated minimum, established annually. The Board allows

stock to be retired by management provided that retirements are in

accordance with the Association’s capital plan; the Association’s perma-

nent capital ratio will be in excess of 13 percent after any such retire-

ments; the Association meets and maintains all applicable minimum

surplus and collateral standards; and the aggregate amount of stock pur-

chases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under

any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,

– a non-borrower is no longer a purchaser of related services, or

– the customer’s loan is sold into the secondary market without

recourse, or

– management approves a partial retirement when a customer’s loan is

in good standing and due to paydown, requests excess stock

to be retired.

The retirement policy may be suspended or modified at any time

at the discretion of the Board in order to protect the financial condition

of the Association.

The Association is prohibited from retiring Stock or Certificates if

such retirement results in the Association’s failure to satisfy the

minimum capital adequacy standards established by the FCA.

Of course, even though you may be given the opportunity to

have your stock retired, you are not required to retire your Stock or

Certificates after repaying your FLCA and/or PCA loan and may con-

tinue to hold this investment. However, if you do not borrow from the

FLCA and/or PCA during the following two years, your Class D Stock

will be converted into non-voting Class C Stock.

IM PA IR M EN T

Your ownership of Stock or Certificates in the Association is an invest-

ment and is subject to certain risks that could result in a partial or

complete loss of investment. You are responsible for repayment of the

entire amount of the FLCA and/or PCA loan, including the amount bor-

rowed to pay for your Stock or Certificates, regardless of the value of

your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of inade-

quate evaluation of credit risks or adverse trends in agriculture, such

as loss of international markets, over-production, weather conditions

or disease,

– increases in the amount of non-accrual FLCA and/or PCA loans and

properties acquired from borrowers that reduce revenues, and

800 AU T HOR IZED SH A R ES

The Association is authorized to issue:

a one million (1,000,000) shares of Class C Preferred Stock


Section 810.3 of these Bylaws;

b an unlimited number of shares of Class D Common Stock


Sections 810.4 and 845.2 of these Bylaws;

c the outstanding number of Participation Certificates as of

the Merger Date, of FLBA 4th, FLBA B and FLBA M and PCA

4th issued prior to October 6, 1988, which were converted by

book entry at the par, face or stated value of $5 per unit into

a like number of Class A Participation Certificates of the

Association;

d an unlimited number of Class B Participation Certificates,

with a face value of $5 per unit to be issued as provided in

Section 810.6 of these Bylaws; and

e such number of shares of such other classes of Capital

Stock as may be provided for in an amendment or amend-

ments to these Bylaws as adopted pursuant to Article

XIV, provided, however, if the class being proposed in

any amendment or amendments is for Preferred Stock

other than Preferred Stock to be issued to the Farm Credit

System’s Financial Assistance Corporation, it shall be

approved by majority of the shares of each class of stock

affected by the preference, voting as a class, whether or not

such classes are otherwise authorized to vote.

805 OW N ER SHIP

Evidence of ownership of Capital Stock and Participation

Certificates may be by book entry or in definitive form as

prescribed by the Board.

In the event of an Authorization Event under Section

210 hereof, a borrower’s required investment in Association

stock/participation certificates (and the required conver-

sion of such investment into a different class of equity)

shall be determined by reference to the borrowing relation-

ship with MidAm, PCA or MidAm, FLCA, as the case may be.

Accordingly, upon an Authorization Event, all references

to loans and outstanding loan balances in this Article shall

refer to aggregate loans held or originated by Association,

MidAm, PCA and MidAm, FLCA.

– impairment of AgriBank (Bank) stock owned by the Association due

to losses in other associations within the district, loan losses and

operating expenses of the Bank and the Bank’s joint and several lia-

bilities on Systemwide debt securities issues by other Banks in the

national Farm Credit System.

As a result of these or any other risks, the capital of the Association

could become impaired. Impairment means that the book value of the

Stock or Certificates has declined below par value (or face value), which

is $5 per share or unit. (For example, if the Association were to suffer

loan losses which exceeded its other income, its bad debt reserve and

its surplus accounts, the Stock and Certificates could have a book value

less than $5 and thus would be impaired.) So long as the capital of the

Association is impaired, its customers would receive less than they

had paid for their stock upon retirement. If the Association were to be

liquidated at the time when its capital is impaired, holders of Stock or

Certificates would receive less than the par value or face amount of

their investment and may suffer a total loss of their investment in the

Association. However, in any event, customers would remain liable for

the full amount of their loan from the FLCA and/or PCA, including the

portion used to pay for the purchase of Stock or Certificates.

Of course, the Association will take all feasible action to prevent

its capital from becoming impaired. The FLCA and PCA maintain loss

reserves (and surplus accounts) to protect against this possibility.

The Farm Credit Act provides a mechanism for providing financial

assistance to distressed Farm Credit System entities. This mechanism

is described in the Association’s 2015 Annual Report. However, the

assistance mechanisms in the Farm Credit Act provide no assurance

to customers that Stock and Certificates will be protected. Therefore

members are advised to review the financial statements of the

Association and of the Bank and other available information about the

Farm Credit System. Copies of the Association and the Bank’s Annual

and Interim Reports to Investors are available from the Association

upon request.

A SSOCI AT ION PER M A N EN T C A PI TA L STA N DA R DS

The Association presently meets its minimum permanent capital stan-

dard. The Association does not know of any reason it will not meet its

permanent capital standard on the next earnings distribution date,

though no earnings distribution date is scheduled.

810 ISSU E , R IGH T S, PR EF ER ENCES A N D L IMI TAT IONS OF CL A SSES OF ST OCK

810.1 CL A SS A PR EF ER R ED ST OCK

a Issue: There shall be no Class A Preferred Stock issued

other than those shares issued as a result of the conversion

on Merger Date of PCA 4th’s Class A non-voting stock or a

conversion in accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class A Preferred Stock shall have

no voting rights.









d Stock Protection: When retiring Class A Preferred Stock in



e Fractional Shares: No fractional shares of Class A Preferred


810.2 CL A SS B COM MON ST OCK

a Issue: There shall be no Class B Common Stock issued other

than those shares issued as a result of the conversion of

FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s

Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting

rights.









Bylaws.

d Stock Protection: When retiring Class B Common Stock in



e Fractional Shares: No fractional shares of Class B Common


ARTICLE VIII - CAPITALIZATION


CAPITALIZATION BYLAWSNOTICE TO CUSTOMERS CONCERNING INVESTMENTS (CONT)

810.3 CL A SS C PR EF ER R ED ST OCK

a Issue: This stock may be issued in accordance with the Act

and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be permit-

ted under a plan adopted by the Board;

3 | For allocated surplus distributions, dividend payments,

and patronage distributions; and

4 | In accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class C Preferred Stock shall have

no voting rights.









d Fractional Shares: No fractional shares of Class C

Preferred Stock shall be issued or paid.

810.4 CL A SS D COM MON ST OCK

a Issue: Class D Common Stock may only be issued to borrow-

ers who are farmers, ranchers or producers or harvesters of

aquatic products and other requirements of such borrowers

as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting

rights.









Bylaws.

d Fractional Shares: No fractional shares of Class D Common


e Condition to Borrowing:

1 | Any borrower who is entitled to own Class D Common

Stock shall acquire voting stock in the Association as

a condition for obtaining a loan from the Association,

MidAm, PCA or MidAm, FLCA. The amount of Class D

Common Stock which a borrower shall be required to

810.6 CL A SS B PA RT ICIPAT ION CERT IF IC AT ES

a Issue: Class B Participation Certificates may be issued in

accordance with the Act and Regulations:

1 | To borrowers who are rural residents to capitalize their

rural housing loans.

2 | To borrowers who are persons or organizations fur-

nishing to farmers and ranchers farm related services

directly related to their agricultural production, to capi-

talize their loans.

3 | To other persons or organizations who are eligible to bor-

row or participate in loans from Association, MidAm, PCA

or MidAm, FLCA but are not eligible to hold voting stock.


and patronage distributions.

5 | To any person who is not a stockholder but who is eligible to

borrow from Association, MidAm, PCA or MidAm, FLCA for

the purpose of qualifying such person for technical assis-

tance, financially related services, and leasing services

offered by Association, MidAm, PCA or MidAm, FLCA.

b Voting Rights: Class B Participation Certificates shall have

no voting rights.









d Fractional Units: No fractional units of Class B

Participation Certificates shall be issued or paid.


1 | Any borrower who is entitled to own Class B Participation

Certificates shall acquire Participation Certificates as a

condition for obtaining a loan from Association, MidAm,

PCA or MidAm, FLCA. The amount of Class B Participation

Certificates which a borrower shall acquire shall be two

(2) percent of the loan amount or $1,000, whichever is less.

The Board shall establish from time to time whether the

certificate requirement shall apply to each loan to a bor-

rower or apply to a borrower’s aggregate outstanding loan

balance on all borrower’s loans (as used in this section

shall only include those loans, including the new loan,

where the borrowers are the same on each loan).

acquire shall be two (2) percent of the loan amount or

$1,000, whichever is less. The Board shall establish from

time to time whether the stock requirement shall apply

to each loan to a borrower or apply to a borrower’s aggre-

gate outstanding loan balance on all borrower’s loans (as

used in this section shall only include those loans, includ-

ing the new loan, where the borrowers are the same on

each loan).

2 | If the Association fails to meet the minimum permanent

capital standards the Class D Common Stock shall be

purchased from the Association.

3 | Loan origination fees may be charged as a condition of

borrowing from the Association, MidAm, PCA or MidAm,

FLCA as the Board from time to time may determine.

a Condition to Lease: As a condition of obtaining a lease from

Association, MidAm, PCA or MidAm, FLCA any lessee who

is entitled to own Class D Common Stock shall be required

to acquire Class D Common Stock in an amount as deter-

mined by the Board from time to time. The equity require-

ment to be not less than one share or the minimum require-

ment as set out in the Act and Regulations, if any, and not to

exceed the equity requirement for obtaining a loan.

810.5 CL A SS A PA RT ICIPAT ION CERT IF IC AT ES

a Issue: There shall be no Class A Participation Certificates

issued other than those units issued as a result of the

conversion of FLBA 4th, FLBA B, FLBA M and PCA 4th’s

Participation Certificates as of the Merger Date.

b Voting Rights: Class A Participation Certificates shall have

no voting rights.









d Protection of Participation Certificates: When retir-

ing Class A Participation Certificates in accordance with

the Act, Regulations and these Bylaws, the units shall be

retired at par value.

e Fractional Units: No fractional units of Class A



capital standards, the Class B Participation Certificates

shall be purchased from the Association.


borrowing as the Board from time to time may determine.

f Condition to Lease or Purchase of Financially Related

Services: As a condition of obtaining a lease or pur-

chasing financially related services from Association,

MidAm, PCA or MidAm, FLCA any lessee or purchaser of

financially related services who is entitled to own Class B

Participation Certificates shall be required to acquire Class

B Participation Certificates in an amount as determined by

the Board from time to time. The equity requirement to be

not less than one share or the minimum requirement as set

out in the Act and Regulations, if any, and not to exceed the

equity requirement for obtaining a loan.

815 A PPL IC AT ION OF E A R N INGS OR L OSSES

815.1 At the end of each fiscal year, the Association shall apply

its earnings (including patronage allocations and refunds

received from the FCB) for such fiscal year in the following

order:

a to cover operating expenses, including additions to loan

valuation reserves as provided by law;

b to restore the amount of any impairment of Stock and

Participation Certificates as prescribed in Section 855.2

of these Bylaws;

c to restore the amount of any impairment of allocated

surplus;

d to restore the amount of any impairment of paid-in surplus;

e to create and maintain an unallocated surplus account as

provided in Section 820 of these Bylaws;

f to pay dividends on Stock of the Association if authorized

pursuant to Section 830 of these Bylaws;

g to make patronage distributions if authorized pursuant

to Section 835 of these Bylaws; and

h to transfer any remaining earnings to the reserved

surplus account.


CAPITALIZATION BYLAWS (CONT)CAPITALIZATION BYLAWS (CONT)

810.3 CL A SS C PR EF ER R ED ST OCK

a Issue: This stock may be issued in accordance with the Act

and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be permit-

ted under a plan adopted by the Board;


and patronage distributions; and

4 | In accordance with Section 845.2 of these Bylaws.

b Voting Rights: Class C Preferred Stock shall have

no voting rights.









d Fractional Shares: No fractional shares of Class C

Preferred Stock shall be issued or paid.

810.4 CL A SS D COM MON ST OCK

a Issue: Class D Common Stock may only be issued to borrow-

ers who are farmers, ranchers or producers or harvesters of

aquatic products and other requirements of such borrowers

as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting

rights.









Bylaws.

d Fractional Shares: No fractional shares of Class D Common



1 | Any borrower who is entitled to own Class D Common

Stock shall acquire voting stock in the Association as

a condition for obtaining a loan from the Association,

MidAm, PCA or MidAm, FLCA. The amount of Class D

Common Stock which a borrower shall be required to

810.6 CL A SS B PA RT ICIPAT ION CERT IF IC AT ES

a Issue: Class B Participation Certificates may be issued in

accordance with the Act and Regulations:

1 | To borrowers who are rural residents to capitalize their

rural housing loans.

2 | To borrowers who are persons or organizations fur-

nishing to farmers and ranchers farm related services

directly related to their agricultural production, to capi-

talize their loans.

3 | To other persons or organizations who are eligible to bor-

row or participate in loans from Association, MidAm, PCA

or MidAm, FLCA but are not eligible to hold voting stock.


and patronage distributions.

5 | To any person who is not a stockholder but who is eligible to

borrow from Association, MidAm, PCA or MidAm, FLCA for

the purpose of qualifying such person for technical assis-

tance, financially related services, and leasing services

offered by Association, MidAm, PCA or MidAm, FLCA.

b Voting Rights: Class B Participation Certificates shall have

no voting rights.









d Fractional Units: No fractional units of Class B



1 | Any borrower who is entitled to own Class B Participation

Certificates shall acquire Participation Certificates as a

condition for obtaining a loan from Association, MidAm,

PCA or MidAm, FLCA. The amount of Class B Participation

Certificates which a borrower shall acquire shall be two

(2) percent of the loan amount or $1,000, whichever is less.

The Board shall establish from time to time whether the

certificate requirement shall apply to each loan to a bor-

rower or apply to a borrower’s aggregate outstanding loan

balance on all borrower’s loans (as used in this section

shall only include those loans, including the new loan,

where the borrowers are the same on each loan).

acquire shall be two (2) percent of the loan amount or

$1,000, whichever is less. The Board shall establish from

time to time whether the stock requirement shall apply

to each loan to a borrower or apply to a borrower’s aggre-

gate outstanding loan balance on all borrower’s loans (as

used in this section shall only include those loans, includ-

ing the new loan, where the borrowers are the same on

each loan).


capital standards the Class D Common Stock shall be

purchased from the Association.


borrowing from the Association, MidAm, PCA or MidAm,

FLCA as the Board from time to time may determine.

a Condition to Lease: As a condition of obtaining a lease from

Association, MidAm, PCA or MidAm, FLCA any lessee who

is entitled to own Class D Common Stock shall be required

to acquire Class D Common Stock in an amount as deter-

mined by the Board from time to time. The equity require-

ment to be not less than one share or the minimum require-

ment as set out in the Act and Regulations, if any, and not to

exceed the equity requirement for obtaining a loan.

810.5 CL A SS A PA RT ICIPAT ION CERT IF IC AT ES

a Issue: There shall be no Class A Participation Certificates

issued other than those units issued as a result of the

conversion of FLBA 4th, FLBA B, FLBA M and PCA 4th’s

Participation Certificates as of the Merger Date.

b Voting Rights: Class A Participation Certificates shall have

no voting rights.









d Protection of Participation Certificates: When retir-

ing Class A Participation Certificates in accordance with

the Act, Regulations and these Bylaws, the units shall be

retired at par value.

e Fractional Units: No fractional units of Class A



capital standards, the Class B Participation Certificates

shall be purchased from the Association.


borrowing as the Board from time to time may determine.

f Condition to Lease or Purchase of Financially Related

Services: As a condition of obtaining a lease or pur-

chasing financially related services from Association,

MidAm, PCA or MidAm, FLCA any lessee or purchaser of

financially related services who is entitled to own Class B

Participation Certificates shall be required to acquire Class

B Participation Certificates in an amount as determined by

the Board from time to time. The equity requirement to be

not less than one share or the minimum requirement as set

out in the Act and Regulations, if any, and not to exceed the

equity requirement for obtaining a loan.

815 A PPL IC AT ION OF E A R N INGS OR L OSSES

815.1 At the end of each fiscal year, the Association shall apply

its earnings (including patronage allocations and refunds

received from the FCB) for such fiscal year in the following

order:

a to cover operating expenses, including additions to loan

valuation reserves as provided by law;

b to restore the amount of any impairment of Stock and

Participation Certificates as prescribed in Section 855.2

of these Bylaws;

c to restore the amount of any impairment of allocated

surplus;

d to restore the amount of any impairment of paid-in surplus;

e to create and maintain an unallocated surplus account as

provided in Section 820 of these Bylaws;

f to pay dividends on Stock of the Association if authorized

pursuant to Section 830 of these Bylaws;

g to make patronage distributions if authorized pursuant

to Section 835 of these Bylaws; and

h to transfer any remaining earnings to the reserved

surplus account.



815.2 In the event of a net loss for any fiscal year, after applying

earnings for such fiscal year as provided in Section 815.1 above,

such loss shall be absorbed by, first, charges to the unallocated

surplus account; second, impairment of paid-in surplus; third,

impairment of the allocated surplus account; fourth, impair-

ment of Class B Common Stock, Class D Common Stock, Class A

Participation Certificates, Class B Participation Certificates,

concurrently; and fifth, impairment of Class A Preferred Stock

and Class C Preferred Stock, concurrently. Notwithstanding

this Section, Class B Common Stock and Class A Participation

Certificates shall be retired in accordance with Section 4.9A of

the Act.

820 SU R PLUS ACCOU N T S

The Association shall create and maintain an unallocated sur-

plus account and may maintain an allocated surplus account.

Except as provided in Section 815, the unallocated surplus

account may not be reduced and no part thereof may be trans-

ferred to the allocated surplus account.

825 A L L OC AT ED SU R PLUS ACCOU N T S

825.1 The Association may, subject to the Act and the Regulations,

create and maintain an allocated surplus account consisting of

earnings held therein and allocated to borrowers on a patron-

age basis in accordance with Section 835 of these Bylaws. In

the event of a net loss for any fiscal year, such allocated sur-

plus account shall be subject to impairment in the order speci-

fied in Section 815.2 of these Bylaws, and on the basis of latest

allocations first.

825.2 Association, MidAm, PCA and MidAm, FLCA shall have a first

lien on all surplus account allocations owned by any borrower,

and all distributions thereof, as additional collateral for

such borrower’s indebtedness to Association, MidAm, PCA or

MidAm, FLCA, as the case may be.

825.3 When the debt of a borrower is in default or is in the process

of final liquidation, the Association may, upon notice to the

borrower, order any and all surplus account allocations owned

by such borrower to be applied against the indebtedness to

Association, MidAm, PCA or MidAm, FLCA, as the case may be.

Any such retirement and application against indebtedness of

surplus account allocations shall be before similar retirement

and application of Stock or Participation Certificates owned

by the borrower.

of dividends on Class B Common Stock and Class D Common

Stock may not be less than the rate paid on Class A Participation

Certificates and Class B Participation Certificates.

830.2 Dividends may be paid to holders of record on the effective

date of the declaration, provided the Stock or Participation

Certificates were outstanding for at least sixty (60) calendar

days prior to the effective date of the declaration.

830.3 Dividends on Stock and Participation Certificates may be paid

in cash, Class C Preferred Stock, or partly in cash and partly

in Stock, except that dividends on Stock held by the FCB shall

be paid in cash. If any part of such dividends payable in Stock

to one borrower are less than $5, the dividends may be distrib-

uted in cash or held by the Association and accumulated with

subsequent dividends until the retained dividends equal $5,

so that the dividends may be distributed as one whole share of

Class C Preferred Stock.

830.4 Dividends shall be noncumulative.

835 PAT R ONAGE R EF U N DS

835.1 Prior to the beginning of any fiscal year, the Board may adopt

a resolution in accordance with the Act and the Regulations,

so as to obligate the Association to distribute to borrowers on

a patronage basis all or any portion of available net earnings

of Association for such fiscal year, or for that and subsequent

fiscal years. However, no patronage distribution will be paid if

the earnings available for distribution do not exceed $500,000.

835.2 All patronage distributions shall be in the proportion that

the amount of interest earned by Association, MidAm, PCA or

MidAm, FLCA on its loans to each borrower bears to the total

interest earned by Association, MidAm, PCA or MidAm, FLCA

on all such loans outstanding during the fiscal year, except

that another proportionate patronage basis may be used upon

approval by the Board in accordance with the Act and the

Regulations.

825.4 At the Board’s discretion and subject to the Act, Regulations,

and any other restrictions, when all of the Stock and

Participation Certificates of the Association owned by a bor-

rower are retired or otherwise disposed of, any surplus account

allocations owned by such borrower may also be retired, upon

request by the borrower and subject to the approval of the

Board, and the proceeds paid to the borrower. Alternatively, if

the Board so directs, upon notice to the borrower such surplus

account applications may be applied against any of the borrow-

er’s indebtedness to Association, MidAm, PCA or MidAm, FLCA,

as the case may be. As a condition, however, to the approval

of a former borrower’s application for an advance within two

(2) years after retirement hereunder, the applicant must first

repay any allocated surplus proceeds resulting from such

retirement which would not otherwise have been paid through

normal distributions.

825.5 Subject to the Act and the Regulations, allocated surplus may

be distributed, oldest allocations first, in Class C Preferred

Stock of the Association or in cash. The cash proceeds may

be applied against the indebtedness of the borrower to the

Association. In no event shall such distributions reduce the

surplus account below the minimum amount prescribed by

the Act and the Regulations. Distributions of less than the

full amount of all allocations issued as of the same date shall

be on a pro rata basis. If any part of a distribution in Class C

Preferred Stock to one borrower is less than $5, such distribu-

tion may be held by the Association and accumulated with sub-

sequent partial distributions to equal one whole share of Class

A Preferred Stock or Class C Preferred Stock.

830 DI V IDEN DS

830.1 In accordance with the Act and the Regulations, the Board may

declare dividends on the Stock and Participation Certificates

of the Association. Such dividends may be paid on Class A

Preferred Stock and Class C Preferred Stock alone or on all

classes of Stock and Participation Certificates. No dividends

may be paid on Class B Common Stock, Class D Common Stock,

Class A Participation Certificates or Class B Participation

Certificates during any fiscal year with respect to which the

Association has obligated itself to distribute earnings on a

patronage basis pursuant to Section 835 of these Bylaws. The

rate of dividends paid on Class A Preferred Stock and Class

C Preferred Stock for any fiscal year may not be less than

the rate of dividends paid on Class B Common Stock, Class D

Common Stock, Class A Participation Certificates or Class B

Participation Certificates for such year and, similarly, the rate

835.3 Net earnings of any fiscal year shall be available for patronage

distribution only after making the applications as required in

(a) through (e) of Section 815 and paying dividends on Class A

Preferred Stock and Class C Preferred Stock. Patronage allo-

cations and refunds received from the FCB in the form of stock

shall be excluded from net earnings available for patronage

distributions and dividends. The amount available for patron-

age distributions for any fiscal year shall in no event exceed

the net earnings from patronage from Association, MidAm,

PCA and MidAm, FLCA borrowers and from the patronage

received from the FCB in the form of cash for such year.

835.4 Patronage distributions may be in cash, Class C Preferred

Stock, allocations of earnings retained in an allocated sur-

plus account, or any one or more of such forms of distribution,

except that at least twenty percent of the total patronage dis-

tributions to any borrower for any fiscal year shall always be

in cash. Cash distributions may not exceed twenty percent of

the patronage distribution if such distribution would cause

the surplus account at the end of the fiscal year for which the

distribution is paid to be less than the minimum amount pre-

scribed by the Act and the Regulations. Any part of a patronage

distribution in Class C Preferred Stock to one borrower that is

not a multiple of $5 may be distributed in cash or held by the

Association for the borrower and included in a subsequent

distribution.

835.5 Each holder of Class B Common Stock or Class D Common Stock

of this Association shall, by such act alone, consent that the

amount of any distributions with respect to patronage which

are made in written notices of allocation, as defined in 26 U.S.C.

1388 (i.e. patronage allocations of surplus account and patron-

age refunds paid in Class C Preferred Stock of the Association,

and which are received by him or her from the Association),

will be taken into account as income by such person at the

stated dollar amounts in the manner provided in 26 U.S.C.

1385(a) in the taxable year in which such written notices of

allocation are received. Such holder of Class B Common Stock

or Class D Common Stock also consents by such act alone, to

take into account as income in the same manner the amount of

any distributions with respect to patronage provided he or she

receives written notice from the Association that such amount

has been applied on his or her indebtedness to Association,

MidAm, PCA or MidAm, FLCA, as the case may be.



815.2 In the event of a net loss for any fiscal year, after applying

earnings for such fiscal year as provided in Section 815.1 above,

such loss shall be absorbed by, first, charges to the unallocated

surplus account; second, impairment of paid-in surplus; third,

impairment of the allocated surplus account; fourth, impair-

ment of Class B Common Stock, Class D Common Stock, Class A

Participation Certificates, Class B Participation Certificates,

concurrently; and fifth, impairment of Class A Preferred Stock

and Class C Preferred Stock, concurrently. Notwithstanding

this Section, Class B Common Stock and Class A Participation

Certificates shall be retired in accordance with Section 4.9A of

the Act.

820 SU R PLUS ACCOU N T S

The Association shall create and maintain an unallocated sur-

plus account and may maintain an allocated surplus account.

Except as provided in Section 815, the unallocated surplus

account may not be reduced and no part thereof may be trans-

ferred to the allocated surplus account.

825 A L L OC AT ED SU R PLUS ACCOU N T S

825.1 The Association may, subject to the Act and the Regulations,

create and maintain an allocated surplus account consisting of

earnings held therein and allocated to borrowers on a patron-

age basis in accordance with Section 835 of these Bylaws. In

the event of a net loss for any fiscal year, such allocated sur-

plus account shall be subject to impairment in the order speci-

fied in Section 815.2 of these Bylaws, and on the basis of latest

allocations first.

825.2 Association, MidAm, PCA and MidAm, FLCA shall have a first

lien on all surplus account allocations owned by any borrower,

and all distributions thereof, as additional collateral for

such borrower’s indebtedness to Association, MidAm, PCA or

MidAm, FLCA, as the case may be.

825.3 When the debt of a borrower is in default or is in the process

of final liquidation, the Association may, upon notice to the

borrower, order any and all surplus account allocations owned

by such borrower to be applied against the indebtedness to

Association, MidAm, PCA or MidAm, FLCA, as the case may be.

Any such retirement and application against indebtedness of

surplus account allocations shall be before similar retirement

and application of Stock or Participation Certificates owned

by the borrower.

of dividends on Class B Common Stock and Class D Common

Stock may not be less than the rate paid on Class A Participation

Certificates and Class B Participation Certificates.

830.2 Dividends may be paid to holders of record on the effective

date of the declaration, provided the Stock or Participation

Certificates were outstanding for at least sixty (60) calendar

days prior to the effective date of the declaration.

830.3 Dividends on Stock and Participation Certificates may be paid

in cash, Class C Preferred Stock, or partly in cash and partly

in Stock, except that dividends on Stock held by the FCB shall

be paid in cash. If any part of such dividends payable in Stock

to one borrower are less than $5, the dividends may be distrib-

uted in cash or held by the Association and accumulated with

subsequent dividends until the retained dividends equal $5,

so that the dividends may be distributed as one whole share of

Class C Preferred Stock.

830.4 Dividends shall be noncumulative.

835 PAT R ONAGE R EF U N DS

835.1 Prior to the beginning of any fiscal year, the Board may adopt

a resolution in accordance with the Act and the Regulations,

so as to obligate the Association to distribute to borrowers on

a patronage basis all or any portion of available net earnings

of Association for such fiscal year, or for that and subsequent

fiscal years. However, no patronage distribution will be paid if

the earnings available for distribution do not exceed $500,000.

835.2 All patronage distributions shall be in the proportion that

the amount of interest earned by Association, MidAm, PCA or

MidAm, FLCA on its loans to each borrower bears to the total

interest earned by Association, MidAm, PCA or MidAm, FLCA

on all such loans outstanding during the fiscal year, except

that another proportionate patronage basis may be used upon

approval by the Board in accordance with the Act and the

Regulations.

825.4 At the Board’s discretion and subject to the Act, Regulations,

and any other restrictions, when all of the Stock and

Participation Certificates of the Association owned by a bor-

rower are retired or otherwise disposed of, any surplus account

allocations owned by such borrower may also be retired, upon

request by the borrower and subject to the approval of the

Board, and the proceeds paid to the borrower. Alternatively, if

the Board so directs, upon notice to the borrower such surplus

account applications may be applied against any of the borrow-

er’s indebtedness to Association, MidAm, PCA or MidAm, FLCA,

as the case may be. As a condition, however, to the approval

of a former borrower’s application for an advance within two

(2) years after retirement hereunder, the applicant must first

repay any allocated surplus proceeds resulting from such

retirement which would not otherwise have been paid through

normal distributions.

825.5 Subject to the Act and the Regulations, allocated surplus may

be distributed, oldest allocations first, in Class C Preferred

Stock of the Association or in cash. The cash proceeds may

be applied against the indebtedness of the borrower to the

Association. In no event shall such distributions reduce the

surplus account below the minimum amount prescribed by

the Act and the Regulations. Distributions of less than the

full amount of all allocations issued as of the same date shall

be on a pro rata basis. If any part of a distribution in Class C

Preferred Stock to one borrower is less than $5, such distribu-

tion may be held by the Association and accumulated with sub-

sequent partial distributions to equal one whole share of Class

A Preferred Stock or Class C Preferred Stock.

830 DI V IDEN DS

830.1 In accordance with the Act and the Regulations, the Board may

declare dividends on the Stock and Participation Certificates

of the Association. Such dividends may be paid on Class A

Preferred Stock and Class C Preferred Stock alone or on all

classes of Stock and Participation Certificates. No dividends

may be paid on Class B Common Stock, Class D Common Stock,

Class A Participation Certificates or Class B Participation

Certificates during any fiscal year with respect to which the

Association has obligated itself to distribute earnings on a

patronage basis pursuant to Section 835 of these Bylaws. The

rate of dividends paid on Class A Preferred Stock and Class

C Preferred Stock for any fiscal year may not be less than

the rate of dividends paid on Class B Common Stock, Class D

Common Stock, Class A Participation Certificates or Class B

Participation Certificates for such year and, similarly, the rate

835.3 Net earnings of any fiscal year shall be available for patronage

distribution only after making the applications as required in

(a) through (e) of Section 815 and paying dividends on Class A

Preferred Stock and Class C Preferred Stock. Patronage allo-

cations and refunds received from the FCB in the form of stock

shall be excluded from net earnings available for patronage

distributions and dividends. The amount available for patron-

age distributions for any fiscal year shall in no event exceed

the net earnings from patronage from Association, MidAm,

PCA and MidAm, FLCA borrowers and from the patronage

received from the FCB in the form of cash for such year.

835.4 Patronage distributions may be in cash, Class C Preferred

Stock, allocations of earnings retained in an allocated sur-

plus account, or any one or more of such forms of distribution,

except that at least twenty percent of the total patronage dis-

tributions to any borrower for any fiscal year shall always be

in cash. Cash distributions may not exceed twenty percent of

the patronage distribution if such distribution would cause

the surplus account at the end of the fiscal year for which the

distribution is paid to be less than the minimum amount pre-

scribed by the Act and the Regulations. Any part of a patronage

distribution in Class C Preferred Stock to one borrower that is

not a multiple of $5 may be distributed in cash or held by the

Association for the borrower and included in a subsequent

distribution.

835.5 Each holder of Class B Common Stock or Class D Common Stock

of this Association shall, by such act alone, consent that the

amount of any distributions with respect to patronage which

are made in written notices of allocation, as defined in 26 U.S.C.

1388 (i.e. patronage allocations of surplus account and patron-

age refunds paid in Class C Preferred Stock of the Association,

and which are received by him or her from the Association),

will be taken into account as income by such person at the

stated dollar amounts in the manner provided in 26 U.S.C.

1385(a) in the taxable year in which such written notices of

allocation are received. Such holder of Class B Common Stock

or Class D Common Stock also consents by such act alone, to

take into account as income in the same manner the amount of

any distributions with respect to patronage provided he or she

receives written notice from the Association that such amount

has been applied on his or her indebtedness to Association,

MidAm, PCA or MidAm, FLCA, as the case may be.



835.6 The Association shall obtain the written consent of each holder

of Class A Participation Certificates or Class B Participation

Certificates that the amount of any distributions with respect

to the holder’s patronage, which are made in written notices

of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allo-

cations of surplus account, patronage refunds paid in Class

C Preferred Stock, or distributions with respect to patron-

age that have been applied to the holder’s indebtedness to

Association, MidAm, PCA or MidAm, FLCA, as the case may be,

and for which the holder has received written notice), will be

taken into account as income by the holder at the stated dollar

amounts in the manner provided for in 26 U.S.C. 1385(a) in the

taxable year in which such written notices of allocation are

received. The form of consent shall be prescribed by the Board,

except that it shall be continuing in effect until revoked by

the Class A Participation Certificate or Class B Participation

Certificate holder, and it may be included as part of the loan

application or other appropriate form signed by borrowers.

Consent may also be obtained by use of a qualified check in the

manner provided for in 26 U.S.C. 1388.

835.7 In the event of an Authorization Event under Section 210

hereof, the Association’s net earnings for purposes of comput-

ing and paying patronage dividends shall include the net earn-

ings of MidAm, PCA and MidAm, FLCA (computed on a consoli-

dated basis).

8 40 T R A NSF ER

8 40.1 Stock and Participation Certificates may be transferred to

persons or organizations eligible to receive or to hold such

Stock or Participation Certificates as provided in Section 810

of these Bylaws.

8 40.2 The Association shall be its own transfer agent in all matters

relating to its Stock and Participation Certificates.

8 45 CON V ER SION

8 45.1 Each class of Stock and Participation Certificates may be

converted into any other class of Stock or Participation

Certificates for which the holder is eligible as provided in

Section 810.

850.4 R E T IR EM EN T IN T H E E V EN T OF DEFAU LT

When the debt of a borrower is in default, the Association may,

upon notice to such borrower, order the retirement of any

Stock or Participation Certificates held by the borrower and

the proceeds thereof applied against the borrower’s indebt-

edness to Association, MidAm, PCA or MidAm, FLCA, as the

case may be. Any such retirement and application of Stock or

Participation Certificates shall be after similar retirement

and application of surplus account allocations owned by the

borrower.

855 IM PA IR M EN T

855.1 Any losses which result in an impairment of the Association’s

capital shall be borne ratably by, first, each share of Class B

Common Stock and Class D Common Stock, and each unit of

Class A Participation Certificates and Class B Participation

Certificates outstanding; and second, each share of Class A

Preferred Stock and Class C Preferred Stock outstanding.

Notwithstanding this Section, Class B Common Stock and

Class A Participation Certificates shall be retired in accor-

dance with Section 4.9A of the Act.

855.2 Impaired Stock and Participation Certificates shall be restored

in the reverse of the sequence set forth in Section 855.1 until

each share of Stock and unit of Participation Certificates has a

book value equal to the par value or face value, respectively.

860 L IQU IDAT ION

In the event of a voluntary or involuntary liquidation of the

Association, following the payment of all claims in accordance

with the Act and Regulations, the remainder of the assets of

the Association shall be distributed to the holders of Stock and

Participation Certificates. In the event there are insufficient

funds to pay the holders of Stock and Participation Certificates

at par value, then distribution should be made in accordance

with the priorities for impairment set forth in Section 855.1

of these Bylaws. In the event funds are sufficient to pay all

holders of Stock and Participation Certificates at par value,

any excess funds shall be distributed, insofar as practicable, to

the holders of Class B Common Stock, Class D Common Stock,


Certificates in the proportion that the aggregate interest paid

by each holder over the prior two years bears to the total inter-

est paid by all holders of stock and participation certificates.

8 45.2 Class B Common Stock shall be converted into Class A

Preferred Stock within two years after the holder thereof

ceases to be a borrower from Association, MidAm, PCA or

MidAm, FLCA. Class D Common Stock shall be converted into

Class C Preferred Stock within two years after the holder

thereof ceases to be a borrower from Association, MidAm, PCA

or MidAm, FLCA.

850 R E T IR EM EN T

850.1 CL A SS A PR EF ER R ED ST OCK , CL A SS B COM MON ST OCK , A N D CL A SS A PA RT ICIPAT ION CERT IF IC AT ES

Retirement may be upon repayment of a loan or under a retire-

ment plan in effect prior to January 6, 1988, and for such equi-

ties issued after that date, a retirement plan in effect at the

time the loan was made. Such equities shall be retired at par,

even if book value is less than par. Such equities may also be

retired under other conditions approved by the Board with

prior approval of the FCA.

850.2 CL A SS C PR EF ER R ED ST OCK , CL A SS D COM MON ST OCK A N D CL A SS B PA RT ICIPAT ION CERT IF IC AT ES

Subject to the Act, Regulations and any other restrictions,

such equities shall be retireable only at the discretion of the

Board and not on a date certain or upon the happening of an

event such as repayment of a loan or pursuant to an automatic

retirement or revolvement plan. Such equities shall be retired

at their book value and shall not exceed their par value. No

such equities shall be retired unless after the retirement the

institution would continue to meet the minimum permanent

capital standards or the interim permanent capital standards,

as the case may be.

850.3 M A N DAT ORY R E T IR EM EN T

At the Board’s discretion and subject to the Act, Regulations

and any other restrictions (including minimum permanent

capital standards), the Board may order the retirement of such

amounts of Class A Preferred Stock or Class C Preferred Stock

as it may determine in accordance with procedures which

assure equitable treatment of all holders of Class A Preferred

Stock or Class C Preferred Stock.

865 L IEN

Except with respect to Stock or Participation Certificates held

by other System institutions, each of Association, MidAm,

PCA and MidAm, FLCA shall have a first lien on all Stock and

Participation Certificates in the Association owned by its

borrowers as additional collateral for any indebtedness of

such borrower. Upon an Authorization Event, all Stock and

Participation Certificates shall be pledged to MidAm, PCA or

MidAm, FLCA, as the case may be, as additional collateral for

any indebtedness of the borrower to MidAm, PCA or MidAm,

FLCA, respectively. Stock and Participation Certificates may

not be pledged or hypothecated to third parties.

870 PA ID -IN SU R PLUS

The Association is authorized to receive paid-in surplus from

the FCB in accordance with the Act and the Regulations.

875 SECON DA RY M A R K E T L OA NS

875.1 EQU I T Y R E T IR EM EN T

On or after 12-01-96 no stock or participation certificate is

required to be purchased as a condition for obtaining a loan

which is designated, at the time the loan is made, for sale to a

secondary market. Designated loans not sold within the 180

day period shall be subject to the equity requirement for loans

as stated in bylaw 810.4(e) or 810.6(e).

875.2 R E T IR EM EN T

The Board is authorized to retire stock or participation certif-

icates on those loans sold to a secondary market prior to 12-01-

96 and on those loans designated for sale to the

secondary market but not sold within the 180 day time period,

provided however that the Association shall not retire such

stock or participation certificates if the action would result in

the failure of the Association to meet the minimum permanent

capital adequacy standard established in the FCA regulations.



835.6 The Association shall obtain the written consent of each holder

of Class A Participation Certificates or Class B Participation

Certificates that the amount of any distributions with respect

to the holder’s patronage, which are made in written notices

of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allo-

cations of surplus account, patronage refunds paid in Class

C Preferred Stock, or distributions with respect to patron-

age that have been applied to the holder’s indebtedness to

Association, MidAm, PCA or MidAm, FLCA, as the case may be,

and for which the holder has received written notice), will be

taken into account as income by the holder at the stated dollar

amounts in the manner provided for in 26 U.S.C. 1385(a) in the

taxable year in which such written notices of allocation are

received. The form of consent shall be prescribed by the Board,

except that it shall be continuing in effect until revoked by

the Class A Participation Certificate or Class B Participation

Certificate holder, and it may be included as part of the loan

application or other appropriate form signed by borrowers.

Consent may also be obtained by use of a qualified check in the

manner provided for in 26 U.S.C. 1388.

835.7 In the event of an Authorization Event under Section 210

hereof, the Association’s net earnings for purposes of comput-

ing and paying patronage dividends shall include the net earn-

ings of MidAm, PCA and MidAm, FLCA (computed on a consoli-

dated basis).

8 40 T R A NSF ER

8 40.1 Stock and Participation Certificates may be transferred to

persons or organizations eligible to receive or to hold such

Stock or Participation Certificates as provided in Section 810

of these Bylaws.

8 40.2 The Association shall be its own transfer agent in all matters

relating to its Stock and Participation Certificates.

8 45 CON V ER SION

8 45.1 Each class of Stock and Participation Certificates may be

converted into any other class of Stock or Participation

Certificates for which the holder is eligible as provided in

Section 810.

850.4 R E T IR EM EN T IN T H E E V EN T OF DEFAU LT

When the debt of a borrower is in default, the Association may,

upon notice to such borrower, order the retirement of any

Stock or Participation Certificates held by the borrower and

the proceeds thereof applied against the borrower’s indebt-

edness to Association, MidAm, PCA or MidAm, FLCA, as the

case may be. Any such retirement and application of Stock or

Participation Certificates shall be after similar retirement

and application of surplus account allocations owned by the

borrower.

855 IM PA IR M EN T

855.1 Any losses which result in an impairment of the Association’s

capital shall be borne ratably by, first, each share of Class B

Common Stock and Class D Common Stock, and each unit of


Certificates outstanding; and second, each share of Class A

Preferred Stock and Class C Preferred Stock outstanding.

Notwithstanding this Section, Class B Common Stock and

Class A Participation Certificates shall be retired in accor-

dance with Section 4.9A of the Act.

855.2 Impaired Stock and Participation Certificates shall be restored

in the reverse of the sequence set forth in Section 855.1 until

each share of Stock and unit of Participation Certificates has a

book value equal to the par value or face value, respectively.

860 L IQU IDAT ION

In the event of a voluntary or involuntary liquidation of the

Association, following the payment of all claims in accordance

with the Act and Regulations, the remainder of the assets of

the Association shall be distributed to the holders of Stock and

Participation Certificates. In the event there are insufficient

funds to pay the holders of Stock and Participation Certificates

at par value, then distribution should be made in accordance

with the priorities for impairment set forth in Section 855.1

of these Bylaws. In the event funds are sufficient to pay all

holders of Stock and Participation Certificates at par value,

any excess funds shall be distributed, insofar as practicable, to

the holders of Class B Common Stock, Class D Common Stock,


Certificates in the proportion that the aggregate interest paid

by each holder over the prior two years bears to the total inter-

est paid by all holders of stock and participation certificates.

8 45.2 Class B Common Stock shall be converted into Class A

Preferred Stock within two years after the holder thereof

ceases to be a borrower from Association, MidAm, PCA or

MidAm, FLCA. Class D Common Stock shall be converted into

Class C Preferred Stock within two years after the holder

thereof ceases to be a borrower from Association, MidAm, PCA

or MidAm, FLCA.

850 R E T IR EM EN T

850.1 CL A SS A PR EF ER R ED ST OCK , CL A SS B COM MON ST OCK , A N D CL A SS A PA RT ICIPAT ION CERT IF IC AT ES

Retirement may be upon repayment of a loan or under a retire-

ment plan in effect prior to January 6, 1988, and for such equi-

ties issued after that date, a retirement plan in effect at the

time the loan was made. Such equities shall be retired at par,

even if book value is less than par. Such equities may also be

retired under other conditions approved by the Board with

prior approval of the FCA.

850.2 CL A SS C PR EF ER R ED ST OCK , CL A SS D COM MON ST OCK A N D CL A SS B PA RT ICIPAT ION CERT IF IC AT ES

Subject to the Act, Regulations and any other restrictions,

such equities shall be retireable only at the discretion of the

Board and not on a date certain or upon the happening of an

event such as repayment of a loan or pursuant to an automatic

retirement or revolvement plan. Such equities shall be retired

at their book value and shall not exceed their par value. No

such equities shall be retired unless after the retirement the

institution would continue to meet the minimum permanent

capital standards or the interim permanent capital standards,

as the case may be.

850.3 M A N DAT ORY R E T IR EM EN T

At the Board’s discretion and subject to the Act, Regulations

and any other restrictions (including minimum permanent

capital standards), the Board may order the retirement of such

amounts of Class A Preferred Stock or Class C Preferred Stock

as it may determine in accordance with procedures which

assure equitable treatment of all holders of Class A Preferred

Stock or Class C Preferred Stock.

865 L IEN

Except with respect to Stock or Participation Certificates held

by other System institutions, each of Association, MidAm,

PCA and MidAm, FLCA shall have a first lien on all Stock and

Participation Certificates in the Association owned by its

borrowers as additional collateral for any indebtedness of

such borrower. Upon an Authorization Event, all Stock and

Participation Certificates shall be pledged to MidAm, PCA or

MidAm, FLCA, as the case may be, as additional collateral for

any indebtedness of the borrower to MidAm, PCA or MidAm,

FLCA, respectively. Stock and Participation Certificates may

not be pledged or hypothecated to third parties.

870 PA ID -IN SU R PLUS

The Association is authorized to receive paid-in surplus from

the FCB in accordance with the Act and the Regulations.

875 SECON DA RY M A R K E T L OA NS

875.1 EQU I T Y R E T IR EM EN T

On or after 12-01-96 no stock or participation certificate is

required to be purchased as a condition for obtaining a loan

which is designated, at the time the loan is made, for sale to a

secondary market. Designated loans not sold within the 180

day period shall be subject to the equity requirement for loans

as stated in bylaw 810.4(e) or 810.6(e).

875.2 R E T IR EM EN T

The Board is authorized to retire stock or participation certif-

icates on those loans sold to a secondary market prior to 12-01-

96 and on those loans designated for sale to the

secondary market but not sold within the 180 day time period,

provided however that the Association shall not retire such

stock or participation certificates if the action would result in

the failure of the Association to meet the minimum permanent

capital adequacy standard established in the FCA regulations.



OU R COOPER AT I V E A N D YOU

Customer ownership of Farm Credit began 100 years ago when the cre-

ators of the Farm Credit System envisioned a cooperative network that

would not only provide a dependable source of credit to agriculture and

rural communities, but have the support and involvement of the people

who are at its very roots.

As a cooperative, Farm Credit Mid-America is owned by the people

who use our services — you, our customer. What makes us competitive

and effective is having our customers actively engaged and communi-

cating with our staff and board members about products and services

that will help you and our cooperative grow and be successful.

Becoming involved in Farm Credit Mid-America can be rewarding

to you on a personal level. Investing your time and talents will allow

you to form and build relationships with others, expand your personal

networks, and hone your leadership skills. You’ll also have the satis-

faction of knowing that by supporting your cooperative, you are also

helping to secure the future of rural America by keeping our rural com-

munities innovative, expanding, and active.

Customer involvement is what has made Farm Credit work so well

for agriculture and rural communities over the last century. It’s what

will make it work even better in the next.

Below are three ways you can become involved in Farm Credit

Mid-America.

BOA R D OF DIR ECT OR S *

Our Board of Directors is responsible for establishing policies, provid-

ing strategic direction to and oversight of management and making

sure information provided to customers is accurate, understandable,

and reliable.

The Board consists of stockholder-elected directors from each

of Farm Credit Mid-America’s four states and two appointed directors

who bring an independent and objective perspective to the boardroom.

Each director serves on a committee responsible for a specific area

of board governance — Executive, Audit, Human Resources, Risk

Management and Governance.

Visionary thinking, leadership experience, strong communication

skills, diverse perspectives and backgrounds, and a passion to serve

— these are just some of the qualities customers contribute to Farm

Credit Mid-America through service on our Board of Directors.

Board members receive compensation for their service and are reim-

bursed for expenses incurred in attending meetings.

NOMINAT ING COM MI T T EE *

Each year, five customers from each of Farm Credit Mid-America’s

four states are elected by voting customers to serve on the Nominating

Committee. The Nominating Committee meets each June to nominate

candidates for open Director and Nominating Committee positions.

Members are compensated for their time and travel.

A DV ISORY COM MI T T EE

More than 1,000 customers serve at the local level on a Farm Credit

Mid-America Advisory Committee. These customers, along with

community influencers, serve as grass roots advisors to the Board

of Directors, providing input and making the concerns of the general

membership known to the Board.

NO T ICE T O OU T- OF-T ER R I T ORY CUST OM ER S

Farm Credit Mid-America’s bylaws prohibit customers who do not farm

or reside within Farm Credit Mid-America’s chartered four-state area

from serving on the Board of Directors or the Nominating Committee.

WA N T T O L E A R N MOR E ?

Contact your local office at 1-800-444-3276 or our office in Louisville

at 1-502-420-3728 to learn more about how you can become involved.

Recommendations are now being accepted for positions up

for election this year on the Board of Directors and for next year’s

Nominating Committee.

* Qualifications and eligibility requirements apply.

CUST OM ER PR I VAC Y

Your privacy and the security of your financial and personal information

are vital to our ability to serve your credit needs. We hold your informa-

tion in strict confidence. It is not sold or traded to marketing companies

or information brokers. It may only be disclosed to others in situations

allowed by federal regulations or upon your consent.

78BUILDING FOR THE NEXT 100 YEARS

GETTING INVOLVED

PHOTO: As owners of Sweetwater Valley Farm (located

south of Knoxville, Tennessee), John and Celia Harrison,

and their daughter, Mary, know what success in farming

looks like today. They’ve started thinking about a plan for

the future, too, which includes transitioning their farm to

their children. For them, it’s about securing the future of

their farm so future generations can enjoy the way of life

that they’ve worked to achieve.

RESPONSIBLE PRINTING

• SFI Certified Sourcing

• Printed with Soy Ink

• Rainforest Alliance Certified

2015 ANNUALREPORT

BUILDINGFOR THE NEXT100 YEARS

PRSRT STD

U.S. POSTAGE

PAID

PERMIT NO. 778

P.O. Box 34390

Louisville, Kentucky 40232

1-800-444-FARM

Visit us at e-farmcredit.com

For the past 100 years, we’ve stood committed to you and to agriculture. In the next 100, we look forward to a continued partnership and dedication to building an even brighter future for our industry and for rural America. To find a location near you, call 1-800-444-FARM or visit e-farmcredit.com

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2 0 1 5 ANNUAL REPORT P.O. Box 34390 Louisville, Kentucky ... · build a bright future for rural communities and agriculture. As agriculture continues to change, we bring knowledge,

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