2014 ANNUAL REPORT - Farm Credit Mid-America Downloads...2014 ANNUAL REPORT 1 FARM CREDIT MID–AMERICA Customers are at the heart of everything we do. In 2014, staff spent more time

2014 ANNUALREPORT

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2014 ANNUAL REPORT FARM CREDIT MID–AMERICA1

Customers are at the heart of every thing we do. In 2014, staff spent more time on customer farms listening to their challenges and learning about their operations than ever before. New systems and processes provided tools allowing us to deepen customer understanding and improve the customer experience. Knowing where customers want to be in five or 10 years, their challenges and their appetite for risk is a top priority.

A balanced lending philosophy allowed our cooper-ative to meet operational goals and positioned us for future success. Despite declining commodity prices, farmers continued to grow and invest in their operations and, likewise, Farm Credit Mid-America continued to build financial strength to meet and exceed customer needs and expectations.

Successfully meeting customer needs requires us to have a long-term view. By involving ourselves in activities that have a substantial and sustainable effect on rural America, we continue to invest in communities where our customers live and work. We also advocate on behalf of our customers for issues that affect and advance agriculture and farming. This includes investing in future leaders of a g r ic u lt u r e, c h a mpi o n i n g l o n g-te r m F FA and 4-H grow th and spending quality time with

you ng a nd begi n n i ng fa rmers on progra ms to help them prosper i n agricu ltu re. Ou r staff is specially trained to provide personalized learning oppor t u n it ies to help f ut u re fa r mers bu i ld a foundation for sustained success. The future of agriculture hinges on the financial security of the next generation of farmers and we want to be there for them at all stages of their development.

In the year ahead we will continue our uncompro-mising commitment to customers by maintaining a unique focus on individual farmers and rural land and home owners, and their long-term interests. While the future may be challenging, we will con-tinue to invest in staff, bringing the best people to advise and serve, and anticipating customer needs before they have them. By getting out on farms and talking about the future of individual operations, we will continue to align business goals with customer needs, build personal relationships and support the long-term interests of the agricultural industry and our cooperative.

On behalf of our senior leadership, local office staff and board members, we thank you for your continued business and allowing us to play a role in building your dream and sharing your success. Together, we are all Farm Credit Mid-America.

COVER

1 Now in the fifth generation of family farming, Jerry Roberts, his sons, Rick and Randy, and his grandson, Landon, raise cattle and grain outside of Campbellsburg, Ind.

2 The Hayden family of Hebron, Ind., farms about 4,000 acres. They were named Indiana’s Farm Family of the Year in 2012.

3 Duaine Rose is a second-generation corn and soybean farmer who farms 8,500 acres with his son, Jon, outside Ethridge, Tenn.

4 As owners of a small hobby farm in Columbia, Tenn., Carl and Sherry Johnson are already living their dream and are in the process of building a new home on their rural property.

INSIDE

5 Dale Smith started his family farm in the early 1940s. These days, three generations at Smith Family Farms in Rochester, Ind., help run a large grain operation that includes seed corn production.

6 Good growing conditions throughout much of the season helped Indiana farmers pull in a record-breaking harvest.

7 Thirty-year customers, John and Celia Harrison, pictured here with their oldest daughter, Mary, started Sweetwater Valley Farm in east Tennessee from scratch. Today, they operate a dairy, which features a cheese-making operation and a 5,000-square-foot event and educational center.

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

Celebrating the diverse people who live, work and farm in Mid-America: Numbers in an annual report only tell part of the story. The people behind the numbers and the wide variety of farms, businesses, homes and communities make up Farm Credit Mid-America.

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Customers are at the heart of every thing we do. In 2014, staff spent more time on customer farms listening to their challenges and learning about their operations than ever before. New systems and processes provided tools allowing us to deepen customer understanding and improve the customer experience. Knowing where customers want to be in five or 10 years, their challenges and their appetite for risk is a top priority.

A balanced lending philosophy allowed our cooper-ative to meet operational goals and positioned us for future success. Despite declining commodity prices, farmers continued to grow and invest in their operations and, likewise, Farm Credit Mid-America continued to build financial strength to meet and exceed customer needs and expectations.

Successfully meeting customer needs requires us to have a long-term view. By involving ourselves in activities that have a substantial and sustainable effect on rural America, we continue to invest in communities where our customers live and work. We also advocate on behalf of our customers for issues that affect and advance agriculture and farming. This includes investing in future leaders of a g r ic u lt u r e, c h a mpi o n i n g l o n g-te r m F FA and 4-H grow th and spending quality time with

you ng a nd begi n n i ng fa rmers on progra ms to help them prosper i n agricu ltu re. Ou r staff is specially trained to provide personalized learning oppor t u n it ies to help f ut u re fa r mers bu i ld a foundation for sustained success. The future of agriculture hinges on the financial security of the next generation of farmers and we want to be there for them at all stages of their development.

In the year ahead we will continue our uncompro-mising commitment to customers by maintaining a unique focus on individual farmers and rural land and home owners, and their long-term interests. While the future may be challenging, we will con-tinue to invest in staff, bringing the best people to advise and serve, and anticipating customer needs before they have them. By getting out on farms and talking about the future of individual operations, we will continue to align business goals with customer needs, build personal relationships and support the long-term interests of the agricultural industry and our cooperative.

On behalf of our senior leadership, local office staff and board members, we thank you for your continued business and allowing us to play a role in building your dream and sharing your success. Together, we are all Farm Credit Mid-America.

COVER

1 Now in the fifth generation of family farming, Jerry Roberts, his sons, Rick and Randy, and his grandson, Landon, raise cattle and grain outside of Campbellsburg, Ind.

2 The Hayden family of Hebron, Ind., farms about 4,000 acres. They were named Indiana’s Farm Family of the Year in 2012.

3 Duaine Rose is a second-generation corn and soybean farmer who farms 8,500 acres with his son, Jon, outside Ethridge, Tenn.

4 As owners of a small hobby farm in Columbia, Tenn., Carl and Sherry Johnson are already living their dream and are in the process of building a new home on their rural property.

INSIDE

5 Dale Smith started his family farm in the early 1940s. These days, three generations at Smith Family Farms in Rochester, Ind., help run a large grain operation that includes seed corn production.

6 Good growing conditions throughout much of the season helped Indiana farmers pull in a record-breaking harvest.

7 Thirty-year customers, John and Celia Harrison, pictured here with their oldest daughter, Mary, started Sweetwater Valley Farm in east Tennessee from scratch. Today, they operate a dairy, which features a cheese-making operation and a 5,000-square-foot event and educational center.

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

Celebrating the diverse people who live, work and farm in Mid-America: Numbers in an annual report only tell part of the story. The people behind the numbers and the wide variety of farms, businesses, homes and communities make up Farm Credit Mid-America.

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FARM CREDIT MID–AMERICA2014 ANNUAL REPORT 32

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

8 Operating loans give customers the capital they need to make the most of their operations. We’ve watched the Sneed family grow their west Tennessee soybean operation from a single acre to several thousand over three generations.

9 The WS Roberts & Sons, Inc. farm outside Campbellsburg, Ind., has been in the family for more than 100 years. Nestled in cow country, their best way to get around is often in a four-wheeler.

10 For 98+ years, farmers and rural residents have turned to Farm Credit for financing their farms and country homes.

11 Years ago, Jerry Hayden’s daughter asked to raise two Miniature Herefords for 4-H. Showing cows piqued the family’s interest and, today, they raise and show more than 40 cows at local events throughout Indiana.

Last year continued Farm Credit Mid-America’s legacy of investing in the communities we serve. More than just writing checks, we see community engagement as our opportunity to continually build relationships and lay a foundation for our customers’ future success. This year we partnered with local Farm Bureaus, universities and the Farm Service Agency to host educational meetings where customers asked pressing questions and gave us an opportunity to better explain the complexities associated with the new Farm Bill. We continued our funding partnership with Purdue University, facilitating the construction of a new Agricultural and Life Sciences building, which will help the university’s College of Agriculture remain a leading educational force for future generations. We are also part of an initiative that strives to eliminate hunger by providing surplus farm produce to hundreds of food banks and citizens of local communities across our four-state territory.

Perhaps our biggest focus, which broadened in 2014, is on the next generation of farming. Providing resources to farmers of all ages and experience levels is important. As a board, we make a concerted effort to support programs that inspire young people who are interested in pursuing agricultural careers.

We want to reinforce the value production agriculture prov ides to consumers and our rural economy. Whether that’s bringing agriculture to elementary schools through Ag in the Classroom or investing in programs that help young producers get started, we understand the importance of supporting the next generation of farmers and equipping them to manage the challenges of running a farm.

We also recognize the importance of investing in ourselves as directors to bring our customers the best thinking possible. Intense, hands-on training brings the board’s broad range of philosophies and perspectives to life in a way that encourages healthy discussion, spurs participation and directly benefits our customers.

As farmers ourselves, we come with many unique points of view, and this allows us to adequately serve the needs of our diverse four-state area. As we look to our organization’s future, I know it’s this array of experience that will keep us strong and nimble as we help our customers navigate the changing agricultural landscape.

One of the many strengths of our association is the wide range of customers who make up its fabric. Our board is no different—as a group of elected borrowers, we each bring a unique perspective to the table that speaks to the challenges and opportunities farmers and rural residents face every day.

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98+years of rural financing

FARM CREDIT MID–AMERICA2014 ANNUAL REPORT 32

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

8 Operating loans give customers the capital they need to make the most of their operations. We’ve watched the Sneed family grow their west Tennessee soybean operation from a single acre to several thousand over three generations.

9 The WS Roberts & Sons, Inc. farm outside Campbellsburg, Ind., has been in the family for more than 100 years. Nestled in cow country, their best way to get around is often in a four-wheeler.

10 For 98+ years, farmers and rural residents have turned to Farm Credit for financing their farms and country homes.

11 Years ago, Jerry Hayden’s daughter asked to raise two Miniature Herefords for 4-H. Showing cows piqued the family’s interest and, today, they raise and show more than 40 cows at local events throughout Indiana.

Last year continued Farm Credit Mid-America’s legacy of investing in the communities we serve. More than just writing checks, we see community engagement as our opportunity to continually build relationships and lay a foundation for our customers’ future success. This year we partnered with local Farm Bureaus, universities and the Farm Service Agency to host educational meetings where customers asked pressing questions and gave us an opportunity to better explain the complexities associated with the new Farm Bill. We continued our funding partnership with Purdue University, facilitating the construction of a new Agricultural and Life Sciences building, which will help the university’s College of Agriculture remain a leading educational force for future generations. We are also part of an initiative that strives to eliminate hunger by providing surplus farm produce to hundreds of food banks and citizens of local communities across our four-state territory.

Perhaps our biggest focus, which broadened in 2014, is on the next generation of farming. Providing resources to farmers of all ages and experience levels is important. As a board, we make a concerted effort to support programs that inspire young people who are interested in pursuing agricultural careers.

We want to reinforce the value production agriculture prov ides to consumers and our rural economy. Whether that’s bringing agriculture to elementary schools through Ag in the Classroom or investing in programs that help young producers get started, we understand the importance of supporting the next generation of farmers and equipping them to manage the challenges of running a farm.

We also recognize the importance of investing in ourselves as directors to bring our customers the best thinking possible. Intense, hands-on training brings the board’s broad range of philosophies and perspectives to life in a way that encourages healthy discussion, spurs participation and directly benefits our customers.

As farmers ourselves, we come with many unique points of view, and this allows us to adequately serve the needs of our diverse four-state area. As we look to our organization’s future, I know it’s this array of experience that will keep us strong and nimble as we help our customers navigate the changing agricultural landscape.

One of the many strengths of our association is the wide range of customers who make up its fabric. Our board is no different—as a group of elected borrowers, we each bring a unique perspective to the table that speaks to the challenges and opportunities farmers and rural residents face every day.

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98+years of rural financing


12 Experiencing wet harvest conditions, Kevin and Luke Smith equipped their combine with tracks to stay on schedule with harvest.

13 Tobacco harvest in Tennessee means no shortage of hands, trucks and trailers. Dukie Eden hires local farmhands to help on his farm in Orlinda, Tenn.

14 Rich and Kristen Colwell always dreamed about moving to the country, but were tested when their home loan fell through with another lender due to rural financing complications. Now, with the help of financing from Farm Credit Mid-America, they’ve put down roots in Greenback, Tenn.

15 Tennessee is home to nearly 400 dairy farms ranging in size from just a few head to several thousand. Tennessee dairy operations produced more than 750 million pounds of milk in 2013.

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28.9%of our customers grow corn and soybeans


12 Experiencing wet harvest conditions, Kevin and Luke Smith equipped their combine with tracks to stay on schedule with harvest.

13 Tobacco harvest in Tennessee means no shortage of hands, trucks and trailers. Dukie Eden hires local farmhands to help on his farm in Orlinda, Tenn.

14 Rich and Kristen Colwell always dreamed about moving to the country, but were tested when their home loan fell through with another lender due to rural financing complications. Now, with the help of financing from Farm Credit Mid-America, they’ve put down roots in Greenback, Tenn.

15 Tennessee is home to nearly 400 dairy farms ranging in size from just a few head to several thousand. Tennessee dairy operations produced more than 750 million pounds of milk in 2013.

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28.9%of our customers grow corn and soybeans


16 A storage shed keeps hay covered from sunlight and helps protect nutritional value and quality.

17 John Harrison is one of 5,430 dairy farmers who are customers of Farm Credit.

18 Landon Roberts (on the right) is one of more than 23,000 young farmer customers in our territory. He plans to take over his family’s cattle and grain operation when his father and uncle pass it down.

19 Farm Credit Mid-America provides more than 150,000 loans to customers throughout Indiana, Ohio, Kentucky and Tennessee.

20 Using on-farm storage helps customers remain flexible with their crop marketing strategies.

21 John and Celia Harrison’s Sweetwater Valley Farm continues to grow. Today, it produces more than 20 million pounds of milk per year.

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21KENTUCKY34,769

OHIO44,130

INDIANA38,114

TENNESSEE39,003

L OA N S BY ST A T E


16 A storage shed keeps hay covered from sunlight and helps protect nutritional value and quality.

17 John Harrison is one of 5,430 dairy farmers who are customers of Farm Credit.

18 Landon Roberts (on the right) is one of more than 23,000 young farmer customers in our territory. He plans to take over his family’s cattle and grain operation when his father and uncle pass it down.

19 Farm Credit Mid-America provides more than 150,000 loans to customers throughout Indiana, Ohio, Kentucky and Tennessee.

20 Using on-farm storage helps customers remain flexible with their crop marketing strategies.

21 John and Celia Harrison’s Sweetwater Valley Farm continues to grow. Today, it produces more than 20 million pounds of milk per year.

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21KENTUCKY34,769

OHIO44,130

INDIANA38,114

TENNESSEE39,003

L OA N S BY ST A T E


22 Country dreams come in all shapes and sizes. In 2014, more than 6,000 customers worked with Farm Credit Mid-America to finance their country homes.

23 We spend time working alongside our customers, learning about their operational goals.

24 In operation for more than 100 years, Smith Family Farms continues to grow by adding 100,000 bushels of grain storage and bringing in a natural gas pipeline to reduce propane use.

25 Although Jerry Hayden and his family grow corn and soybeans, they always have livestock on the farm for 4-H projects.

26 Our diverse loan portfolio includes many different types of operations and properties, including those growing local produce.

27 Before hauling grain to storage bins, trucks need to be prepped and maintained at Smith Family Farms.

28 Net income reached $311.1 million, the fifth consecutive year of earnings growth for Farm Credit Mid-America.

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6,081rural homes financed in 2014

$311.1M$308.4M$278.6M$214.0M $288.6M

2 0 142 0 132 0 112 0 10 2 0 12

N E T I N C O M E


22 Country dreams come in all shapes and sizes. In 2014, more than 6,000 customers worked with Farm Credit Mid-America to finance their country homes.

23 We spend time working alongside our customers, learning about their operational goals.

24 In operation for more than 100 years, Smith Family Farms continues to grow by adding 100,000 bushels of grain storage and bringing in a natural gas pipeline to reduce propane use.

25 Although Jerry Hayden and his family grow corn and soybeans, they always have livestock on the farm for 4-H projects.

26 Our diverse loan portfolio includes many different types of operations and properties, including those growing local produce.

27 Before hauling grain to storage bins, trucks need to be prepped and maintained at Smith Family Farms.

28 Net income reached $311.1 million, the fifth consecutive year of earnings growth for Farm Credit Mid-America.

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6,081rural homes financed in 2014

$311.1M$308.4M$278.6M$214.0M $288.6M

2 0 142 0 132 0 112 0 10 2 0 12

N E T I N C O M E


29 With the help of dedicated crop insurance specialists, customers can be sure that their acres are well protected.

30 Natalie Gilbert, Lafayette, Ind., started farming in 2003 when she took over management of her grandfather’s acreage in Indiana.

31 Bobby and Matt Hayden help their father raise corn, soybeans, wheat and hay.

32 It’s our priority to be on customers’ fields and farms listening to their challenges and understanding their operations.

33 When it comes to egg production, Ohio is the second-biggest egg-producing state in the country.

34 With 23 acres of land, the Colwells have plenty of room to take care of their horses.

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29 With the help of dedicated crop insurance specialists, customers can be sure that their acres are well protected.

30 Natalie Gilbert, Lafayette, Ind., started farming in 2003 when she took over management of her grandfather’s acreage in Indiana.

31 Bobby and Matt Hayden help their father raise corn, soybeans, wheat and hay.

32 It’s our priority to be on customers’ fields and farms listening to their challenges and understanding their operations.

33 When it comes to egg production, Ohio is the second-biggest egg-producing state in the country.

34 With 23 acres of land, the Colwells have plenty of room to take care of their horses.

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35 A dentist by trade, Ron Hallmark prefers to spend his free time as a rodeo cowboy and steer wrestler, while his wife, Beth, loves to garden. With our help, they financed a new rural home in Spring Hill, Tenn., to strengthen their country roots.

36 Our Financial Services Officers meet with customers in a variety of places — even in the middle of a field during harvest.

37 With an on-site farm store, Sweetwater Valley Farm produces more than 200,000 pounds of cheese per year.

38 Almost 100,000 customers turn to Farm Credit Mid-America for financing.

39 More space to spread out, extra land to raise animals and a return to a familiar rural lifestyle were just a few of the reasons Carl and Sherry Johnson decided to build a new home in the country.

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98,189

2 0 14

92,882

2 0 11 2 0 12

96,968

2 0 13

97,822

N U M B E R O F C U ST O M E R S


35 A dentist by trade, Ron Hallmark prefers to spend his free time as a rodeo cowboy and steer wrestler, while his wife, Beth, loves to garden. With our help, they financed a new rural home in Spring Hill, Tenn., to strengthen their country roots.

36 Our Financial Services Officers meet with customers in a variety of places — even in the middle of a field during harvest.

37 With an on-site farm store, Sweetwater Valley Farm produces more than 200,000 pounds of cheese per year.

38 Almost 100,000 customers turn to Farm Credit Mid-America for financing.

39 More space to spread out, extra land to raise animals and a return to a familiar rural lifestyle were just a few of the reasons Carl and Sherry Johnson decided to build a new home in the country.

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98,189

2 0 14

92,882

2 0 11 2 0 12

96,968

2 0 13

97,822

N U M B E R O F C U ST O M E R S

2014 ANNUAL REPORT FARM CREDIT MID–AMERICA

40 Matt and Amanda Gajdzik of Shelbyville, Ky., are just two of the more than 43,000 beginning farmer customers we serve.

41 More than 1,000 new customers received financing through our dealer financing partner, AgDirect.®

42 Whether it’s a commercial catt le operation or a local apple orchard, just about every farm, including Sweetwater Valley Farm, has a dog that calls its acreage home.

43 Jacob, Ken and Adam Wyckoff are just three of many folks who maintain the family-owned Wyckoff Hybrids operation in Valparaiso, Ind.

44 Offering a consistent supply of farm-fresh eggs, backyard chickens are a staple of rural living.

45 In addition to growing corn, soybeans, hay, burley tobacco, and raising cattle, the Gajdziks also offer 15 varieties of apples through Mulberry Orchard.

46 The Roberts family continues to farm cattle and grain on property that has been in the family since the 1800s.

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40 Matt and Amanda Gajdzik of Shelbyville, Ky., are just two of the more than 43,000 beginning farmer customers we serve.

41 More than 1,000 new customers received financing through our dealer financing partner, AgDirect.®

42 Whether it’s a commercial catt le operation or a local apple orchard, just about every farm, including Sweetwater Valley Farm, has a dog that calls its acreage home.

43 Jacob, Ken and Adam Wyckoff are just three of many folks who maintain the family-owned Wyckoff Hybrids operation in Valparaiso, Ind.

44 Offering a consistent supply of farm-fresh eggs, backyard chickens are a staple of rural living.

45 In addition to growing corn, soybeans, hay, burley tobacco, and raising cattle, the Gajdziks also offer 15 varieties of apples through Mulberry Orchard.

46 The Roberts family continues to farm cattle and grain on property that has been in the family since the 1800s.

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2014 ANNUAL REPORT 5 FARM CREDIT MID–AMERICA16

EXECUTIVE LEADERSHIP TEAM

Kevin Cox, Chair10345 S 1100 E Brazil, IN55426

David Bates894 Pecan LaneShepherdsville, KY 40165

George Stebbins7883 N Montgomery County Line RdEnglewood, OH 45322

David Hahn*

3967 Shattuck AveColumbus, OH 43220

Bill JohnsonPresident & Chief Executive Officer

David LynnSenior Vice President –Financial Services

Kaye Hurst Whitehead6220 E Co Rd 650 S Muncie, IN 47302

Steve AllardActing Chief Credit Officer

Gordon HansonSenior Vice President –Chief Risk Officer

Dick PoeSenior Vice President –Financial Services

Hugh Adams2298 Lower Sharon RdDresden, TN 38225

Mary Courtney6843 Vigo RdBagdad, KY40003

Lowell Hill462 Co Rd 24 SDeGraff, OH43318

Jimmy Mays199 Cemetery RdScottsville, KY 42164

Donald Blankenship6319 Halls Hill PikeMurfreesboro, TN 37130

Kendell Culp, Secretary3496 S 150 WRensselaer, IN 47978

Andrew Wilson3485 Wilson RdSomerset, OH 43783

Paul BruceSenior Vice President –Financial Operations & Chief Financial Officer

Keith LaneSenior Vice President –Agribusiness

Jill MarchantGeneral Counsel

Dan WagnerSenior Vice President –Chief Information Officer

Dale Tucker3835 Horton HwyGreeneville, TN 37745

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

Tony Wolfe2197 E John Ford Rd Hazleton, IN 47640

Bill Patterson11380 Caves RdChesterland, OH 44026

Barney Barnett*

1175 McMakin RdShelbyville, KY 40065

Brandon Robbins, Vice Chair2702 Old Walton RdCookeville, TN 38506

Heather HornbackSenior Vice President –Human Capital

LEADERSHIP

BOARD OF DIRECTORS

P ER CEN TAG E

PERMANENT CAPITAL RATIO

P ER CEN TAG E

RETURN ON AVERAGE ASSETS (AFTER TAX)

LOANS (OWNED ONLY) TOTAL (OWNED AND MANAGED) ASSETS

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

2014 ANNUAL REPORT

*Appointed Directors

$18.8 $21.4

2 0132 0122 011 2 0142 0132 0122 011 2 014

$15 . 0$16 . 5

$17.7$2 0 .7$19 .7

$18 . 4$18 . 8

$21 . 4

16.8% 1.6%

2 0132 0122 011 2 0142 0132 0122 011 2 014

15 . 9 %15 . 5 %14 . 8 %

1.7%1.6% 1.6%

16 . 8 %

1.6%

2014 ANNUAL REPORT 5 FARM CREDIT MID–AMERICA16

EXECUTIVE LEADERSHIP TEAM

Kevin Cox, Chair10345 S 1100 E Brazil, IN55426

David Bates894 Pecan LaneShepherdsville, KY 40165

George Stebbins7883 N Montgomery County Line RdEnglewood, OH 45322

David Hahn*

3967 Shattuck AveColumbus, OH 43220

Bill JohnsonPresident & Chief Executive Officer

David LynnSenior Vice President –Financial Services

Kaye Hurst Whitehead6220 E Co Rd 650 S Muncie, IN 47302

Steve AllardActing Chief Credit Officer

Gordon HansonSenior Vice President –Chief Risk Officer

Dick PoeSenior Vice President –Financial Services

Hugh Adams2298 Lower Sharon RdDresden, TN 38225

Mary Courtney6843 Vigo RdBagdad, KY40003

Lowell Hill462 Co Rd 24 SDeGraff, OH43318

Jimmy Mays199 Cemetery RdScottsville, KY 42164

Donald Blankenship6319 Halls Hill PikeMurfreesboro, TN 37130

Kendell Culp, Secretary3496 S 150 WRensselaer, IN 47978

Andrew Wilson3485 Wilson RdSomerset, OH 43783

Paul BruceSenior Vice President –Financial Operations & Chief Financial Officer

Keith LaneSenior Vice President –Agribusiness

Jill MarchantGeneral Counsel

Dan WagnerSenior Vice President –Chief Information Officer

Dale Tucker3835 Horton HwyGreeneville, TN 37745

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

Tony Wolfe2197 E John Ford Rd Hazleton, IN 47640

Bill Patterson11380 Caves RdChesterland, OH 44026

Barney Barnett*

1175 McMakin RdShelbyville, KY 40065

Brandon Robbins, Vice Chair2702 Old Walton RdCookeville, TN 38506

Heather HornbackSenior Vice President –Human Capital

LEADERSHIP

BOARD OF DIRECTORS

P ER CEN TAG E

PERMANENT CAPITAL RATIO

P ER CEN TAG E

RETURN ON AVERAGE ASSETS (AFTER TAX)

LOANS (OWNED ONLY) TOTAL (OWNED AND MANAGED) ASSETS

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

2014 ANNUAL REPORT

*Appointed Directors

$18.8 $21.4

2 0132 0122 011 2 0142 0132 0122 011 2 014

$15 . 0$16 . 5

$17.7$2 0 .7$19 .7

$18 . 4$18 . 8

$21 . 4

16.8% 1.6%

2 0132 0122 011 2 0142 0132 0122 011 2 014

15 . 9 %15 . 5 %14 . 8 %

1.7%1.6% 1.6%

16 . 8 %

1.6%

14FEB2015124900715MAR2014202218915MAR2014202217575MAR2014202216245MAR201420221486

FINANCIAL OVERVIEW

CONSOLIDATED FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA

(DOLLARS IN THOUSANDS)

STATEMENT OF CONDITION DATA2 014 2 013 2 012 2 011 2 010

Loans $18,775,989 $17,669,775 $16,526,875 $15,010,650 $14,088,862. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 47,661 46,810 60,650 80,734 125,787

Net loans 18,728,328 17,622,965 16,466,225 14,929,916 13,963,075. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment in AgriBank, FCB 409,076 448,181 440,925 422,124 416,714. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,038,343 1,227,018 1,450,877 1,410,903 1,263,985. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 9,322 10,495 14,350 30,309 23,907. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 645,654 723,716 684,663 712,020 775,089

Total assets $20,830,723 $20,032,375 $19,057,040 $17,505,272 $16,442,770

Obligations with maturities of one year or less $17,204,330 $16,717,120 $16,051,081 $14,790,190 $14,008,073. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Obligations with maturities greater than one year 1,593 1,818 2,073 2,317 2,558

Total liabilities 17,205,923 16,718,938 16,053,154 14,792,507 14,010,631

Protected members’ equity — — — — 8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates 85,982 85,693 84,541 82,000 79,957. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,538,818 3,227,744 2,919,345 2,630,765 2,352,174

Total members’ equity 3,624,800 3,313,437 3,003,886 2,712,765 2,432,139

Total liabilities and members’ equity $20,830,723 $20,032,375 $19,057,040 $17,505,272 $16,442,770

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

Net interest income $416,622 $391,875 $353,779 $316,475 $304,478. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 10,328 (3,031) 2,791 (10,416) 95,084. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patronage income 65,105 67,877 65,374 61,748 78,909. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other expense, net 147,795 139,886 107,066 95,988 60,423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 12,530 14,498 20,716 14,060 13,928

Net income $311,074 $308,399 $288,580 $278,591 $213,952

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

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

Return on average members’ equity 9.0% 9.8% 10.1% 10.9% 9.2%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Members’ equity as a percentage of total assets 17.4% 16.5% 15.8% 15.5% 14.8%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Permanent capital ratio 16.8% 15.9% 15.5% 14.8% 14.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 16.3% 15.4% 15.0% 14.2% 13.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 16.3% 15.4% 15.0% 14.2% 13.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

2014 ANNUAL REPORT 18

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following commentary reviews the consolidated financial condi- – economic fluctuations in the agricultural and farm-related businesstion and consolidated results of operations of Farm Credit Mid- sectors,America, ACA (the Association) and its subsidiaries, Farm Credit Mid- – unfavorable weather, disease, and other adverse climatic or biologi-America, FLCA and Farm Credit Mid-America, PCA (the subsidiaries) cal conditions that periodically occur and impact agricultural pro-and provides additional specific information. The accompanying con- ductivity and income,solidated financial statements and notes to the consolidated financial – changes in U.S. government support of the agricultural industry andstatements also contain important information about our financial the System as a government-sponsored enterprise, as well as inves-condition and results of operations. tor and rating agency actions relating to events involving the U.S.

government, other government-sponsored enterprises, and otherThe Farm Credit System (System) is a nationwide system of coopera- financial institutions,tively owned banks and associations established by Congress to meet – actions taken by the Federal Reserve System in implementing mon-the credit needs of American agriculture. As of January 1, 2015, the etary policy,System consisted of three Farm Credit Banks (FCB), one Agricultural – credit, interest rate, and liquidity risks inherent in our lending activ-Credit Bank (ACB), and 76 customer-owned cooperative lending insti- ities, andtutions (associations). The System serves all 50 states, Washington – changes in our assumptions for determining the allowance for loanD.C., and Puerto Rico. This network of financial cooperatives is owned losses, other-than-temporary impairment, and fair value measurements.and governed by the rural customers the System serves.

AGRICULTURAL AND ECONOMIC CONDITIONSAgriBank, FCB (AgriBank), a System bank, and its affiliated associa- As reported in the United States Department of Agriculture (USDA)tions are collectively referred to as the AgriBank Farm Credit District ‘Highlights from the 2015 Farm Income Forecast’, the USDA is forecast-(AgriBank District or the District). Farm Credit Mid-America, ACA is ing net farm income of $108.0 billion in 2014, a decline of 16 percentone of the affiliated associations in the District. from $129.0 billion in 2013. While net income is forecast to decline,

after inflation adjustments, net farm income in 2013 was the highestThe Farm Credit Administration (FCA) is authorized by Congress to since 1973 and the forecast for 2014 is $23.0 billion above the previousregulate the System. The Farm Credit System Insurance Corporation 10 year average. The majority of the decline in net farm income during(FCSIC) ensures the timely payment of principal and interest on Sys- 2014 was the result of increased expenses. If forecasts are realized,temwide debt obligations and the retirement of protected borrower expenses increased for a fifth straight year, indicating a return tocapital at par or stated value. tighter margins.

FORWARD-LOOKING INFORMATION The rate of growth of farm assets during 2014 is expected to slow,This Annual Report includes forward-looking statements. These state- compared to recent years. Lower net income is expected to lead toments are not guarantees of future performance and involve certain lower capital investment and slower growth in farm land values. Therisks, uncertainties, and assumptions that are difficult to predict. USDA is projecting farm sector debt to increase in 2014 due toWords such as ‘‘anticipate’’, ‘‘believe’’, ‘‘estimate’’, ‘‘may’’, ‘‘expect’’, increased demands for operating funds as a result of the decline in‘‘intend’’, ‘‘outlook’’, and similar expressions are used to identify such income. While farm debt for 2014 is projected to increase, the histori-forward-looking statements. These statements reflect our current cally low levels of debt to assets reaffirm the industry’s strong finan-views with respect to future events. However, actual results may differ cial position.materially from our expectations due to a number of risks and uncer-tainties which may be beyond our control. These risks and uncertain- In the association’s servicing area, many producers experienced higherties include, but are not limited to: yields in 2014 which helped offset some of the decline in grain prices.– political, legal, regulatory, financial markets, international, and eco- In addition, the general economy continues to display modest improve-

nomic conditions and developments in the United States (U.S.) and ment with unemployment declining for the region and slight gains inabroad, off-farm wages.

19 FARM CREDIT MID–AMERICA

10MAR201515275882

10MAR201515275744

10MAR201515280009


LOAN PORTFOLIO PORTFOLIO DISTRIBUTIONTotal loans were $18.8 billion at December 31, 2014, an increase of GEOGRAPHICAL DISTRIBUTION

$1.1 billion from December 31, 2013. The components of loans are (as of December 31, 2014)

presented in the following table (in thousands):

AS OF DECEMBER 31 2014 2013 2012

Accrual loans:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Real estate mortgage $12,643,528 $11,931,139 $11,143,868. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production andintermediate term 3,250,689 2,931,147 2,780,370

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

26.0% INDIANA

24.1% OHIO

18.9% TENNESSEE

14.4% KENTUCKY

16.5% OTHER

Agribusiness 1,207,897 1,112,888 919,368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential realestate 1,001,520 992,875 1,011,067 AGRICULTURAL COMMODITIES

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

Finance leases and other 479,490 490,205 436,543 (as of December 31, 2014). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-accrual loans 192,865 211,521 235,659

Total loans $18,775,989 $17,669,775 $16,526,875

The finance leases and other category is comprised of finance leases,communication, international, energy, and water and waste disposalrelated loans as well as loans originated under our mission relatedinvestment authority.

The increase in total loans from December 31, 2013 resulted primarilyfrom strong activity in mortgage and long-term lending.

Our production and intermediate term loan portfolio shows someseasonality. Borrowings increase throughout the planting and growingseasons to meet farmers’ operating and capital needs. These loans are

28.9% CORN AND SOYBEANS

17.7% OTHER CROPS

12.5% CATTLE

8.6% LANDLORDS

6.1% OTHER LIVESTOCK

5.1% RURAL HOME

4.2% TIMBER

4.8% PROCESSING AND MARKETING

3.8% DAIRY

5.3% OTHER

2.9% POULTRY AND EGGS

normally at their lowest levels during the winter months because ofoperating repayments following harvest.

INTEREST RATE AND TERM

(as of December 31, 2014)We offer variable, fixed, capped, indexed, and adjustable interest rateloan and lease programs to our borrowers. We determine interest mar-gins charged on each lending program based on cost of funds, creditrisk, market conditions, and the need to generate sufficient earnings.

As part of the AgriBank Asset Pool program, we have sold participationinterests in real estate loans to AgriBank. The total participation inter-ests in this program were $441.6 million, $544.0 million, and

41.2% FIXED OVER 10 YRS.

17.5% FIXED 2-5 YRS. OR LESS

16.6% FIXED 6-10 YRS.

13.8% VARIABLE

10.9% FIXED 1 YR. OR LESS

$677.3 million at December 31, 2014, 2013, and 2012, respectively.

Portfolio Credit QualityThe credit quality of our portfolio improved from December 31, 2013.Adversely classified loans decreased to 2.2% of the portfolio at Decem-ber 31, 2014, from 2.4% of the portfolio at December 31, 2013. Adverselyclassified loans are loans we have identified as showing some creditweakness outside our credit standards. We have considered portfoliocredit quality in assessing the reasonableness of our allowance for loanlosses. The positive change in credit quality resulted from improvedprofitability in the livestock and poultry industries as well as improve-ment in the general economy.


Risk Assets The following table presents allowance coverage, charge-off, andThe following table summarizes risk information (accruing loans adverse asset information:include accrued interest receivable) (dollars in thousands):

AS OF DECEMBER 31 2014 2013 2012AS OF DECEMBER 31 2014 2013 2012 Allowance as a percentage of:

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

Loans: Loans 0.3% 0.3% 0.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-accrual $192,865 $211,521 $235,659 Non-accrual loans 24.7% 22.1% 25.7%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured 15,968 12,434 10,358 Total risk loans 22.8% 20.9% 23.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more Net charge-offs as a percentage ofpast due — — 7,994 average loans 0.1% 0.1% 0.1%

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

Total risk loans 208,833 223,955 254,011 Adverse assets to risk funds 12.9% 15.2% 22.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 9,322 10,495 14,350

Total risk assets $218,155 $234,450 $268,361The allowance for loan losses balance increased from December 31,Risk loans as a percentage of total2013 due to the overall increase in the volume of our portfolio, whileloans 1.1% 1.3% 1.5%

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

being partially offset by improvement in credit quality. In our opinion,Non-accrual loans as a percentageof total loans 1.0% 1.2% 1.4% the allowance for loan losses was reasonable in relation to the risk in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total delinquencies as a percentage our loan portfolio at December 31, 2014. Additional loan information isof total loans 0.9% 0.7% 1.1% included in Notes 3, 11, 12, 13, and 14.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INVESTMENT SECURITIES AND OTHER EARNING ASSETSOur risk assets have decreased from December 31, 2013 and remain atIn addition to loans, we hold investment securities. Investmentsacceptable levels. Total risk loans as a percentage of total loansinclude our share of securities guaranteed by the Small Businessremains well within our established risk management guidelines.Administration, as well as Farm Services Administration securities,and securities issued by the USDA. Investment securities totaledThe decrease in non-accrual loans was due to an improving general$1.0 billion, $1.2 billion, and $1.5 billion at December 31, 2014, 2013, andeconomy and improved customer earnings in the livestock sector. This2012, respectively.permitted some loans to return to accruing status while other loans

were paid in full or in part. Non-accrual loans remained at an accept-The investment portfolio is evaluated for other-than-temporaryable level at December 31, 2014 and represented 1.0% of our totalimpairment. To date, we have not recognized any impairment on ourportfolio. Additionally, 64.8% of our non-accrual loans were current.investment portfolio. The decline in investment securities was relatedto the maturity of investments offset slightly by new volume acquiredThe increase in accruing restructured loans was primarily due to con-during the year. Our purchases of new investments have declined duetinued efforts to restructure challenged accounts. Improved repay-to revised FCA authority guidance.ment performance and consistent delinquent servicing resulted in no

accruing loans past due 90 days or more. Delinquencies as a percent ofOther earning assets resulted from successor-in-interest contractstotal loans increased slightly to 0.9% of the portfolio. Performancefrom our involvement with the federal government’s tobacco buy-outremains at an acceptable level. The decrease in other property ownedprogram. The volume was $74.0 million and $144.2 million at Decem-is a result of continued sales efforts and a decrease in the number ofber 31, 2013 and 2012, respectively. These amounts include both princi-properties acquired.pal and interest income receivable. We discontinued the purchase ofadditional contracts during 2011 and hold no interest in these assets atAllowance for Loan LossesDecember 31, 2014.The allowance for loan losses is an estimate of losses on loans in our

portfolio as of the financial statement date. We determine the appro-AgriBank and certain affiliated Associations, including Farm Credit Mid-priate level of allowance for loan losses based on the periodic evalua-America, ACA, are among the forming limited partners for a $154.5 mil-tion of factors such as loan loss history, estimated probability oflion Rural Business Investment Company (RBIC) established on Octo-default, estimated loss severity, portfolio quality, and current eco-ber 3, 2014. The RBIC will facilitate equity and debt investments innomic and environmental conditions.agriculture-related businesses that will create growth and job opportuni-ties in rural America. Our total commitment is $20 million over fiveyears and as of December 31, 2014 our investment was $757 thousand.

Additional investment securities information is included in Notes 5 and 14.


Risk Assets The following table presents allowance coverage, charge-off, andThe following table summarizes risk information (accruing loans adverse asset information:include accrued interest receivable) (dollars in thousands):

AS OF DECEMBER 31 2014 2013 2012AS OF DECEMBER 31 2014 2013 2012 Allowance as a percentage of:

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

Loans: Loans 0.3% 0.3% 0.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-accrual $192,865 $211,521 $235,659 Non-accrual loans 24.7% 22.1% 25.7%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured 15,968 12,434 10,358 Total risk loans 22.8% 20.9% 23.9%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more Net charge-offs as a percentage ofpast due — — 7,994 average loans 0.1% 0.1% 0.1%

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

Total risk loans 208,833 223,955 254,011 Adverse assets to risk funds 12.9% 15.2% 22.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 9,322 10,495 14,350

Total risk assets $218,155 $234,450 $268,361The allowance for loan losses balance increased from December 31,Risk loans as a percentage of total2013 due to the overall increase in the volume of our portfolio, whileloans 1.1% 1.3% 1.5%

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

being partially offset by improvement in credit quality. In our opinion,Non-accrual loans as a percentageof total loans 1.0% 1.2% 1.4% the allowance for loan losses was reasonable in relation to the risk in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total delinquencies as a percentage our loan portfolio at December 31, 2014. Additional loan information isof total loans 0.9% 0.7% 1.1% included in Notes 3, 11, 12, 13, and 14.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INVESTMENT SECURITIES AND OTHER EARNING ASSETSOur risk assets have decreased from December 31, 2013 and remain atIn addition to loans, we hold investment securities. Investmentsacceptable levels. Total risk loans as a percentage of total loansinclude our share of securities guaranteed by the Small Businessremains well within our established risk management guidelines.Administration, as well as Farm Services Administration securities,and securities issued by the USDA. Investment securities totaledThe decrease in non-accrual loans was due to an improving general$1.0 billion, $1.2 billion, and $1.5 billion at December 31, 2014, 2013, andeconomy and improved customer earnings in the livestock sector. This2012, respectively.permitted some loans to return to accruing status while other loans

were paid in full or in part. Non-accrual loans remained at an accept-The investment portfolio is evaluated for other-than-temporaryable level at December 31, 2014 and represented 1.0% of our totalimpairment. To date, we have not recognized any impairment on ourportfolio. Additionally, 64.8% of our non-accrual loans were current.investment portfolio. The decline in investment securities was relatedto the maturity of investments offset slightly by new volume acquiredThe increase in accruing restructured loans was primarily due to con-during the year. Our purchases of new investments have declined duetinued efforts to restructure challenged accounts. Improved repay-to revised FCA authority guidance.ment performance and consistent delinquent servicing resulted in no

accruing loans past due 90 days or more. Delinquencies as a percent ofOther earning assets resulted from successor-in-interest contractstotal loans increased slightly to 0.9% of the portfolio. Performancefrom our involvement with the federal government’s tobacco buy-outremains at an acceptable level. The decrease in other property ownedprogram. The volume was $74.0 million and $144.2 million at Decem-is a result of continued sales efforts and a decrease in the number ofber 31, 2013 and 2012, respectively. These amounts include both princi-properties acquired.pal and interest income receivable. We discontinued the purchase ofadditional contracts during 2011 and hold no interest in these assets atAllowance for Loan LossesDecember 31, 2014.The allowance for loan losses is an estimate of losses on loans in our

portfolio as of the financial statement date. We determine the appro-AgriBank and certain affiliated Associations, including Farm Credit Mid-priate level of allowance for loan losses based on the periodic evalua-America, ACA, are among the forming limited partners for a $154.5 mil-tion of factors such as loan loss history, estimated probability oflion Rural Business Investment Company (RBIC) established on Octo-default, estimated loss severity, portfolio quality, and current eco-ber 3, 2014. The RBIC will facilitate equity and debt investments innomic and environmental conditions.agriculture-related businesses that will create growth and job opportuni-ties in rural America. Our total commitment is $20 million over fiveyears and as of December 31, 2014 our investment was $757 thousand.

Additional investment securities information is included in Notes 5 and 14.



RESULTS OF OPERATIONS Changes in these ratios relate directly to:The following table presents profitability information (dollars in – changes in income as discussed below,thousands): – changes in assets as discussed in the Loan Portfolio, Investment

Securities and Other Earning Assets sections, andFOR THE YEAR ENDED – changes in members’ equity as discussed in the Capital AdequacyDECEMBER 31 2014 2013 2012

section.Net income $311,074 $308,399 $288,580. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Return on average assets 1.6% 1.6% 1.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

The following table summarizes the changes in components of netincome (in thousands):

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

2014 2013 2012 2014 vs 2013 2013 vs 2012


Provision for (reversal of) loan losses 10,328 (3,031) 2,791 (13,359) $5,822. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Patronage income 65,105 67,877 65,374 (2,772) $2,503. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other income, net 57,631 46,513 56,794 11,118 $(10,281). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating expenses 205,426 186,399 163,860 (19,027) $(22,539). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 12,530 14,498 20,716 1,968 $6,218

Net income $311,074 $308,399 $288,580 $2,675 $19,819

Net Interest Income loan losses, resulting in a reversal of provision expense. In 2014, thisNet interest income was $416.6 million for the year ended Decem- factor has remained unchanged and the resulting provision expense isber 31, 2014. The following table quantifies changes in net interest primarily related to net charge-offs on loans where specific reservesincome (in thousands): had not already been established. Refer to Note 3 for additional

discussion.2014 vs 2013 2013 vs 2012

Changes in volume $25,053 $30,188 Patronage Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in interest rates (1,015) 9,114 We received patronage income based on the average balance of our. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Changes in non-accrual income and note payable to AgriBank. AgriBank’s Board of Directors sets theother 709 (1,206) patronage rate. The patronage rates were 33.5 basis points, 34.5 basisNet change $24,747 $38,096 points, and 32 basis points in 2014, 2013, and 2012, respectively. We

recorded patronage income of $54.5 million, $54.5 million, andNet interest income included income on non-accrual loans that totaled $47.9 million in 2014, 2013, and 2012, respectively.$10.7 million, $10.0 million, and $11.2 million in 2014, 2013, and 2012,respectively. Non-accrual income is recognized when received in cash, Since 2008, we have participated in the AgriBank Asset Pool programcollection of the recorded investment is fully expected, and prior in which we sell participation interests in certain real estate loans tocharge-offs have been recovered. AgriBank. As part of this program, we received patronage income in an

amount that approximated the net earnings of the loans. Net earningsNet interest margin (net interest income as a percentage of average represents the net interest income associated with these loansearning assets) was 2.2%, 2.1%, and 2.1% in 2014, 2013, and 2012, adjusted for certain fees and costs specific to the related loans as wellrespectively. Net interest margin increased very slightly over the prior as adjustments deemed appropriate by AgriBank related to the credityear; however, margins could be compressed in the future if interest performance of the loans, as applicable. In addition, we receivedrates rise and competition increases. patronage income in an amount that approximated the wholesale

patronage had we retained the volume. Patronage declared on theseProvision for (Reversal of) Loan Losses pools is solely at the discretion of the AgriBank Board of Directors. WeThe fluctuation in the provision for loan losses is related to our esti- recorded asset pool patronage income of $10.4 million, $13.2 million,mate of losses in our portfolio for the applicable years. In 2013 condi- and $17.4 million in 2014, 2013, and 2012, respectively. As part of thistions warranted a lower environmental factor applied to residential income in 2012, we received a $1.2 million share of the distributionloans. This reduction lowered the amount of required allowance for from the Allocated Insurance Reserve Accounts (AIRA) related to the


AgriBank Asset Pool program. These reserve accounts were estab- The repricing attributes of our line of credit directly correspond to thelished in previous years by the FCSIC when premiums collected repricing attributes of our loan portfolio which significantly reducesincreased the level of the Farm Credit Insurance Fund above the our market interest rate risk. Our other source of lendable funds isrequired 2.0% of insured debt. No such distributions were received in from unallocated surplus.2014 or 2013.

LiquidityOther Income Our approach to sustaining sufficient liquidity to fund operations andThe increase in other income over 2013 is primarily due to increases in meet current obligations is to maintain an adequate line of credit withfinancially related services income and fee income. AgriBank. At December 31, 2014, we had $2.1 billion available under our

line of credit. We generally apply excess cash to this line of credit.Operating ExpensesThe following presents a comparison of operating expenses by major CAPITAL ADEQUACYcategory and the operating rate (operating expenses as a percentage of Total members’ equity increased $311.4 million from December 31, 2013average earning assets) for the past three years (dollars in thousands): due to net income for the year and an increase in capital stock and

participation certificates.FOR THE YEAR ENDEDDECEMBER 31 2014 2013 2012

Members’ equity position information is as follows (dollars inSalaries and employee benefits $127,540 $119,503 $109,435. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . thousands):Purchased and vendor services 9,054 8,467 8,390. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communications 3,252 3,094 2,770 AS OF DECEMBER 31 2014 2013 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Occupancy and equipment 15,101 11,611 10,500 Members’ equity $3,624,800 $3,313,437 $3,003,886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advertising and promotion 11,548 9,887 9,265 Surplus as a percentage of. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

members’ equity 97.6% 97.4% 97.2%Examination 2,795 2,752 2,881 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Permanent capital ratio 16.8% 15.9% 15.5%Farm Credit System insurance 19,212 15,170 7,235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 16.3% 15.4% 15.0%Other 16,924 15,915 13,384 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 16.3% 15.4% 15.0%Total operating expenses $205,426 $186,399 $163,860 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating rate 1.1% 1.0% 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our capital plan is designed to maintain an adequate amount of surplusand allowance for loan losses which represents our reserve for adver-The operating expense increases were primarily related to invest-sity prior to impairment of stock. We manage our capital to allow us toments in staffing, technology resources and facilities, and increasedmeet member needs and protect member interests, both now and inadvertising and promotion expenses.the future.

FCSIC insurance expense increased in 2014 primarily due to anAt December 31, 2014, our permanent capital, total surplus, and coreincrease in the premium rate charged on accrual loans by FCSIC fromsurplus ratios exceeded the regulatory minimum requirements.10 basis points in 2013 to 12 basis points in 2014.

Additional discussion of these regulatory ratios is included in Note 8.Provision for Income TaxesThe decrease in provision for income taxes is related to lower income

In addition to these regulatory requirements, we establish an optimumin our taxable entity compared to the prior year. Refer to Note 9 forpermanent capital target. This target allows us to maintain a capitaladditional discussion.base adequate for future growth and investment in new products andservices. The target is subject to revision as circumstances change.FUNDING AND LIQUIDITYRevised regulatory guidelines are expected during 2015 which couldFundingaffect our capital target. As of December 31, 2014, our optimum perma-We borrow from AgriBank under a note payable, in the form of a line ofnent capital target range was 12.0% to 18.0%.credit, as described in Note 7. The following table summarizes note

payable information (dollars in thousands):The changes in our capital ratios reflect changes in capital and assets.

FOR THE YEAR ENDED Refer to the Loan Portfolio and the Investment Securities and OtherDECEMBER 31 2014 2013 2012

Earning Assets sections for further discussion of the changes in assets.Average balance $16,265,741 $15,808,474 $14,961,343. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional members’ equity information is included in Note 8.Average interest rate 1.9% 2.0% 2.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


AgriBank Asset Pool program. These reserve accounts were estab- The repricing attributes of our line of credit directly correspond to thelished in previous years by the FCSIC when premiums collected repricing attributes of our loan portfolio which significantly reducesincreased the level of the Farm Credit Insurance Fund above the our market interest rate risk. Our other source of lendable funds isrequired 2.0% of insured debt. No such distributions were received in from unallocated surplus.2014 or 2013.

LiquidityOther Income Our approach to sustaining sufficient liquidity to fund operations andThe increase in other income over 2013 is primarily due to increases in meet current obligations is to maintain an adequate line of credit withfinancially related services income and fee income. AgriBank. At December 31, 2014, we had $2.1 billion available under our

line of credit. We generally apply excess cash to this line of credit.Operating ExpensesThe following presents a comparison of operating expenses by major CAPITAL ADEQUACYcategory and the operating rate (operating expenses as a percentage of Total members’ equity increased $311.4 million from December 31, 2013average earning assets) for the past three years (dollars in thousands): due to net income for the year and an increase in capital stock and

participation certificates.FOR THE YEAR ENDEDDECEMBER 31 2014 2013 2012

Members’ equity position information is as follows (dollars inSalaries and employee benefits $127,540 $119,503 $109,435. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . thousands):Purchased and vendor services 9,054 8,467 8,390. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Communications 3,252 3,094 2,770 AS OF DECEMBER 31 2014 2013 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Occupancy and equipment 15,101 11,611 10,500 Members’ equity $3,624,800 $3,313,437 $3,003,886. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advertising and promotion 11,548 9,887 9,265 Surplus as a percentage of. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

members’ equity 97.6% 97.4% 97.2%Examination 2,795 2,752 2,881 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Permanent capital ratio 16.8% 15.9% 15.5%Farm Credit System insurance 19,212 15,170 7,235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total surplus ratio 16.3% 15.4% 15.0%Other 16,924 15,915 13,384 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Core surplus ratio 16.3% 15.4% 15.0%Total operating expenses $205,426 $186,399 $163,860 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operating rate 1.1% 1.0% 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Our capital plan is designed to maintain an adequate amount of surplusand allowance for loan losses which represents our reserve for adver-The operating expense increases were primarily related to invest-sity prior to impairment of stock. We manage our capital to allow us toments in staffing, technology resources and facilities, and increasedmeet member needs and protect member interests, both now and inadvertising and promotion expenses.the future.

FCSIC insurance expense increased in 2014 primarily due to anAt December 31, 2014, our permanent capital, total surplus, and coreincrease in the premium rate charged on accrual loans by FCSIC fromsurplus ratios exceeded the regulatory minimum requirements.10 basis points in 2013 to 12 basis points in 2014.

Additional discussion of these regulatory ratios is included in Note 8.Provision for Income TaxesThe decrease in provision for income taxes is related to lower income

In addition to these regulatory requirements, we establish an optimumin our taxable entity compared to the prior year. Refer to Note 9 forpermanent capital target. This target allows us to maintain a capitaladditional discussion.base adequate for future growth and investment in new products andservices. The target is subject to revision as circumstances change.FUNDING AND LIQUIDITYRevised regulatory guidelines are expected during 2015 which couldFundingaffect our capital target. As of December 31, 2014, our optimum perma-We borrow from AgriBank under a note payable, in the form of a line ofnent capital target range was 12.0% to 18.0%.credit, as described in Note 7. The following table summarizes note

payable information (dollars in thousands):The changes in our capital ratios reflect changes in capital and assets.

FOR THE YEAR ENDED Refer to the Loan Portfolio and the Investment Securities and OtherDECEMBER 31 2014 2013 2012

Earning Assets sections for further discussion of the changes in assets.Average balance $16,265,741 $15,808,474 $14,961,343. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional members’ equity information is included in Note 8.Average interest rate 1.9% 2.0% 2.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



We do not have a patronage program as the board continues to advo- stock in AgriBank. Specifically, the AgDirect trade credit financingcate low rates upfront without patronage payments as members program is required to own stock in AgriBank in the amount of 6.0% ofbelieve this strategy provides the most value to existing and future the AgDirect program’s outstanding participation loan balance at quar-members of the cooperative. ter end plus 6.0% of the expected balance to be originated during the

following quarter.RELATIONSHIP WITH AGRIBANKBorrowing PatronageWe borrow from AgriBank to fund our lending operations in accor- We receive different types of discretionary patronage from AgriBank.dance with the Farm Credit Act. Approval from AgriBank is required AgriBank’s Board of Directors sets the level of patronage for each offor us to borrow elsewhere. A General Financing Agreement (GFA), as the following:discussed in Note 7, governs this lending relationship. Our note payable – patronage on our note payable with AgriBank,matures April 30, 2015, at which time the note will be renegotiated. – patronage based on the balance and net earnings of loans in theDue to the cooperative structure of the Farm Credit System and as the AgriBank Asset Pool program,Association is a stockholder of AgriBank, we expect this borrowing – partnership distribution based on our share of the net earnings ofrelationship to continue into the foreseeable future. the loans in the AgDirect trade credit financing program, adjusted

for required return on capital and servicing and origination fees.Cost of funds under the GFA includes a marginal cost of debt compo-nent, a spread component, which includes cost of servicing, cost of Patronage income for 2012 and 2013 on our note payable withliquidity, bank profit, and, if applicable, a risk premium component. AgriBank was paid in the form of cash and AgriBank stock. BeginningHowever, in the periods presented, we were not subject to the risk in 2014, patronage income earned on our note payable with AgriBank ispremium component. We are substantially protected from market paid in cash.interest rate risk through our borrowing relationship with AgriBank,whereby the marginal cost of debt simulates matching the cost of Purchased Servicesunderlying debt with substantially the same terms of our loans to We purchase various services from AgriBank including certain finan-borrowers. cial and retail systems, financial reporting services, tax reporting ser-

vices, technology services, and insurance services.InvestmentWe are required to invest in AgriBank capital stock as a condition of The total cost of services we purchased from AgriBank was $5.3 mil-borrowing. This investment may be in the form of purchased stock or lion in 2014, 2013, and 2012.stock representing previously distributed AgriBank surplus. OnMarch 5, 2014, the AgriBank Board of Directors approved an amend- Impact on Members’ Investmentment to the AgriBank capital plan which reduced the base required Due to the nature of our financial relationship with AgriBank, thestock investment for all affiliated associations, including Farm Credit financial condition and results of operations of AgriBank materiallyMid-America, ACA from 2.5% to 2.25% effective March 31, 2014. As of impact our members’ investment. To request free copies of theDecember 31, 2014, we were required to maintain a stock investment AgriBank and the combined AgriBank and Affiliated Associations’equal to 2.25% of the average quarterly balance of our note payable to financial reports contact us at:AgriBank plus an additional 1.0% on growth that exceeded a targetedrate. AgriBank’s current bylaws allow AgriBank to increase the Farm Credit Mid-America, ACArequired investment to 4.0%. However, AgriBank currently has not P.O. Box 34390communicated a plan to increase the required investment. Louisville, KY 40232

(800) 444-FARMIn addition, we are required to hold AgriBank stock equal to 8.0% of www.e-farmcredit.comthe quarter end balance in the AgriBank Asset Pool program.

Or contact AgriBank at:At December 31, 2014, $338.0 million of our investment in AgriBank AgriBank, FCBconsisted of stock representing distributed AgriBank surplus and 30 East 7th Street, Suite 1600$71.0 million consisted of purchased investment. For the periods St. Paul, MN 55101presented in this report, we have received no dividend income on this (651) 282-8800stock investment and we do not anticipate any in future years. [email protected]

www.agribank.comAs an AgDirect, LLP partnering association, we are required topurchase stock in AgDirect which purchases an equivalent amount of


To request free copies of our Annual or Quarterly Reports contact us as equipment loans through independent equipment dealers. The pro-stated above. Our Annual Report is available on our website no later gram is facilitated by another AgriBank District association through athan 75 days after the end of the calendar year and members are limited liability partnership in which we are a partial owner. Ourprovided a copy of such report no later than 90 days after the end of investment in AgDirect, LLP, was $14.9 million and $1.6 million atthe calendar year. The Quarterly Reports are available on our website December 31, 2014 and 2013, respectively.no later than 40 days after the end of each calendar quarter.

RBF Acquisition VIII, LLC: We received an equity interest in RBF Acqui-OTHER RELATIONSHIPS AND PROGRAMS sition VIII, LLC which was formed to facilitate the acquisition, manage-Relationships with Other Farm Credit Institutions ment and liquidation of assets acquired in 2009 from a troubled etha-Farm Credit Leasing: In September 2012 we entered into an agreement nol borrower. As of December 31, 2014, all assets of (and subsequentlywith Farm Credit Leasing (FCL), a System entity specializing in leasing our equity interest in) RBF Acquisition VIII, LLC were liquidated. Theproducts and providing industry expertise. Leases are originated and liquidation had a negligible impact on our consolidated financialserviced by FCL and we purchase a participation interest in the cash statements.flows of the transaction. At December 31, 2013 we held $79.3 million oflease volume originated prior to September 2012 in our retail sales Programsoffices. On January 2, 2014 we sold this lease volume to FCL. We simul- We are involved in a number of programs designed to improve ourtaneously purchased approximately a 69% interest in the cash flows of credit delivery, related services, and marketplace presence.the leases sold in the form of a loan participation. As part of thetransaction, we recognized a gain of $667 thousand. There was approx- AgriHedge: We offer the AgriHedge product to eligible association bor-imately $143.6 million, $43.7 million, and $7.4 million of lease volume rowers. The AgriHedge product is a simple, effective way for farmersoutstanding under this initiative, of which we held $84.0 million, to hedge their crop revenue. Farmers are able to establish a hedge$22.5 million, and $3.7 million as of December 31, 2014, 2013, and 2012, price on their corn, soybeans, or wheat by combining an operating loanrespectively. This arrangement provides our members with a broader with a third-party commodity swap product. This product combinationselection of product offerings and enhanced lease expertise. enables the farmer to hedge commodity price risk without the typical

upfront cash flows for fees and on-going margin calls (including costsCoBank, ACB: We have a relationship with CoBank, ACB (CoBank), a of borrowing) of a traditional swap product. Fees incurred are paid bySystem bank, which involves purchasing or selling participation inter- the farmer when the contract is settled and cash is received or paid.ests in loans. As part of this relationship, our equity investment in Eligible participants must meet certain credit criteria and the hedgesCoBank was $18 thousand, $18 thousand, and $1 thousand at Decem- must be for their own crop. The net impact to our consolidated finan-ber 31, 2014, 2013, and 2012, respectively. CoBank provides direct loan cial statements was negligible for the year ended December 31, 2014.funds to associations in its chartered territory and makes loans tocooperatives and other eligible borrowers. AgDirect: We participate in the AgDirect trade credit financing pro-

gram. Refer to the UBE section for further discussion on this program.Farm Credit Foundations: We have a relationship with Farm CreditFoundations (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 creditvices. As of December 31, 2014, 2013, and 2012, our investment in with an AgriBank investment bond to optimize members’ use of funds.Foundations was $113 thousand. The total cost of services we pur-chased from Foundations was $708 thousand, $658 thousand, and REGULATORY MATTERS$530 thousand in 2014, 2013, and 2012, respectively. On May 8, 2014, the FCA Board approved a proposed rule to modify the

regulatory capital requirements for System Banks and Associations.Rural Business Investment Company: AgriBank and certain affiliated The stated objectives of the proposed rule are as follows:Associations, including Farm Credit Mid-America, ACA, are among the – To modernize capital requirements while ensuring that institutionsforming limited partners for a $154.5 million Rural Business Invest- continue to hold sufficient regulatory capital to fulfill their missionment Company (RBIC) established on October 3, 2014. Refer to Invest- as a government-sponsored enterprise,ment Securities and Other Earning Assets section for further – To ensure that the System’s capital requirements are comparable todiscussion. the Basel III framework and the standardized approach that the

federal banking regulatory agencies have adopted, but also to ensureUnincorporated Business Entities (UBEs) that the rules recognize the cooperative structure and the organiza-AgDirect, LLP: We participate in the AgDirect trade credit financing tion of the System,program, which includes origination and refinancing of agriculture – To make System regulatory capital requirements more transparent,

and


To request free copies of our Annual or Quarterly Reports contact us as equipment loans through independent equipment dealers. The pro-stated above. Our Annual Report is available on our website no later gram is facilitated by another AgriBank District association through athan 75 days after the end of the calendar year and members are limited liability partnership in which we are a partial owner. Ourprovided a copy of such report no later than 90 days after the end of investment in AgDirect, LLP, was $14.9 million and $1.6 million atthe calendar year. The Quarterly Reports are available on our website December 31, 2014 and 2013, respectively.no later than 40 days after the end of each calendar quarter.

RBF Acquisition VIII, LLC: We received an equity interest in RBF Acqui-OTHER RELATIONSHIPS AND PROGRAMS sition VIII, LLC which was formed to facilitate the acquisition, manage-Relationships with Other Farm Credit Institutions ment and liquidation of assets acquired in 2009 from a troubled etha-Farm Credit Leasing: In September 2012 we entered into an agreement nol borrower. As of December 31, 2014, all assets of (and subsequentlywith Farm Credit Leasing (FCL), a System entity specializing in leasing our equity interest in) RBF Acquisition VIII, LLC were liquidated. Theproducts and providing industry expertise. Leases are originated and liquidation had a negligible impact on our consolidated financialserviced by FCL and we purchase a participation interest in the cash statements.flows of the transaction. At December 31, 2013 we held $79.3 million oflease volume originated prior to September 2012 in our retail sales Programsoffices. On January 2, 2014 we sold this lease volume to FCL. We simul- We are involved in a number of programs designed to improve ourtaneously purchased approximately a 69% interest in the cash flows of credit delivery, related services, and marketplace presence.the leases sold in the form of a loan participation. As part of thetransaction, we recognized a gain of $667 thousand. There was approx- AgriHedge: We offer the AgriHedge product to eligible association bor-imately $143.6 million, $43.7 million, and $7.4 million of lease volume rowers. The AgriHedge product is a simple, effective way for farmersoutstanding under this initiative, of which we held $84.0 million, to hedge their crop revenue. Farmers are able to establish a hedge$22.5 million, and $3.7 million as of December 31, 2014, 2013, and 2012, price on their corn, soybeans, or wheat by combining an operating loanrespectively. This arrangement provides our members with a broader with a third-party commodity swap product. This product combinationselection of product offerings and enhanced lease expertise. enables the farmer to hedge commodity price risk without the typical

upfront cash flows for fees and on-going margin calls (including costsCoBank, ACB: We have a relationship with CoBank, ACB (CoBank), a of borrowing) of a traditional swap product. Fees incurred are paid bySystem bank, which involves purchasing or selling participation inter- the farmer when the contract is settled and cash is received or paid.ests in loans. As part of this relationship, our equity investment in Eligible participants must meet certain credit criteria and the hedgesCoBank was $18 thousand, $18 thousand, and $1 thousand at Decem- must be for their own crop. The net impact to our consolidated finan-ber 31, 2014, 2013, and 2012, respectively. CoBank provides direct loan cial statements was negligible for the year ended December 31, 2014.funds to associations in its chartered territory and makes loans tocooperatives and other eligible borrowers. AgDirect: We participate in the AgDirect trade credit financing pro-

gram. Refer to the UBE section for further discussion on this program.Farm Credit Foundations: We have a relationship with Farm CreditFoundations (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 creditvices. As of December 31, 2014, 2013, and 2012, our investment in with an AgriBank investment bond to optimize members’ use of funds.Foundations was $113 thousand. The total cost of services we pur-chased from Foundations was $708 thousand, $658 thousand, and REGULATORY MATTERS$530 thousand in 2014, 2013, and 2012, respectively. On May 8, 2014, the FCA Board approved a proposed rule to modify the

regulatory capital requirements for System Banks and Associations.Rural Business Investment Company: AgriBank and certain affiliated The stated objectives of the proposed rule are as follows:Associations, including Farm Credit Mid-America, ACA, are among the – To modernize capital requirements while ensuring that institutionsforming limited partners for a $154.5 million Rural Business Invest- continue to hold sufficient regulatory capital to fulfill their missionment Company (RBIC) established on October 3, 2014. Refer to Invest- as a government-sponsored enterprise,ment Securities and Other Earning Assets section for further – To ensure that the System’s capital requirements are comparable todiscussion. the Basel III framework and the standardized approach that the

federal banking regulatory agencies have adopted, but also to ensureUnincorporated Business Entities (UBEs) that the rules recognize the cooperative structure and the organiza-AgDirect, LLP: We participate in the AgDirect trade credit financing tion of the System,program, which includes origination and refinancing of agriculture – To make System regulatory capital requirements more transparent,

and



– To meet the requirements of section 939A of the Dodd-Frank Wall – To enhance the ability of the System Banks to supply credit toStreet Reform and Consumer Protection Act. agricultural and aquatic producers,

– To comply with the requirements of section 939A of the Dodd-FrankThe public comment period ended on February 16, 2015. Act,

– To modernize the investment eligibility criteria for System Banks,On June 12, 2014, the FCA Board approved a proposed rule to revise the andrequirements governing the eligibility of investments for System – To revise the investment regulation for System Associations toBanks and Associations. The stated objectives of the proposed rule are improve their investment management practices so they are moreas follows: resilient to risk.– To strengthen the safety and soundness of System Banks and

Associations, The public comment period ended on October 23, 2014.– To ensure that System Banks hold sufficient liquidity to continue

operations and pay maturing obligations in the event of marketdisruption,


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 integ-rity and objectivity, including amounts that must necessarily be based on judgments and estimates. The consolidated financial statementshave been prepared in conformity with accounting principles generally accepted in the United States of America. The consolidated finan-cial statements, in our opinion, fairly present the financial condition of the Association. Other financial information included in the AnnualReport 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 providereasonable, but not absolute assurance that assets are safeguarded and transactions are properly authorized and recorded. Costs must bereasonable in relation to the benefits derived when designing accounting and internal control systems. Financial operations audits areperformed 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 UnitedStates of America. The Farm Credit Administration also performs examinations for safety and soundness as well as compliance withapplicable laws and regulations.

The Board of Directors has overall responsibility for our system of internal control and financial reporting. The Board of Directors and itsAudit Committee consults regularly with us and meets periodically with the independent auditors and other auditors to review the scopeand results of their work. The independent auditors have direct access to the Board of Directors, which is composed solely of directorswho are not officers or employees of the Association.

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

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

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

PAUL BRUCEChief Financial OfficerFarm Credit Mid-America, ACA

March 12, 2015


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 integ-rity and objectivity, including amounts that must necessarily be based on judgments and estimates. The consolidated financial statementshave been prepared in conformity with accounting principles generally accepted in the United States of America. The consolidated finan-cial statements, in our opinion, fairly present the financial condition of the Association. Other financial information included in the AnnualReport 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 providereasonable, but not absolute assurance that assets are safeguarded and transactions are properly authorized and recorded. Costs must bereasonable in relation to the benefits derived when designing accounting and internal control systems. Financial operations audits areperformed 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 UnitedStates of America. The Farm Credit Administration also performs examinations for safety and soundness as well as compliance withapplicable laws and regulations.

The Board of Directors has overall responsibility for our system of internal control and financial reporting. The Board of Directors and itsAudit Committee consults regularly with us and meets periodically with the independent auditors and other auditors to review the scopeand results of their work. The independent auditors have direct access to the Board of Directors, which is composed solely of directorswho are not officers or employees of the Association.

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

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



March 12, 2015


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 similarfunctions, are responsible for establishing and maintaining adequate internal control over financial reporting for the Association’s consoli-dated financial statements. For purposes of this report, ‘‘internal control over financial reporting’’ is defined as a process designed by, orunder the supervision of the Association’s principal executives and financial officers, or persons performing similar functions, and effectedby its Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reportinginformation and the preparation of the consolidated financial statements for external purposes in accordance with accounting principlesgenerally accepted in the United States of America and includes those policies and procedures that: (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Association, (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial information in accordance withaccounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only inaccordance with authorizations of management and directors of the Association, and (3) provide reasonable assurance regarding preventionor timely detection of unauthorized acquisition, use or disposition of the Association’s assets that could have a material effect on itsconsolidated financial statements.

The Association’s management has completed an assessment of the effectiveness of internal control over financial reporting as of Decem-ber 31, 2014. In making the assessment, management used the 2013 framework in Internal Control — Integrated Framework, promulgatedby 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, 2014, the internal control over financial reportingwas effective based upon the COSO criteria. Additionally, based on this assessment, the Association determined that there were nomaterial weaknesses in the internal control over financial reporting as of December 31, 2014.



March 12, 2015


14FEB201500050609

REPORT OF AUDIT COMMITTEE

The consolidated financial statements were prepared under the oversight of the Audit Committee. The Audit Committee is composed of asubset of the Board of Directors of Farm Credit Mid-America, ACA (the Association). The Audit Committee oversees the scope of theAssociation’s internal audit program, the approval, and independence of PricewaterhouseCoopers LLP (PwC) as independent auditors, theadequacy of the Association’s system of internal controls and procedures, and the adequacy of management’s actions with respect torecommendations arising from those auditing activities. The Audit Committee’s responsibilities are described more fully in the InternalControl Policy and the Audit Committee Charter.

Management is responsible for internal controls and the preparation of the consolidated financial statements in accordance with account-ing principles generally accepted in the United States of America. PwC is responsible for performing an independent audit of the consoli-dated financial statements in accordance with auditing standards generally accepted in the United States of America and to issue theirreport 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 Decem-ber 31, 2014, with management. The Audit Committee also reviewed with PwC the matters required to be discussed by Statement onAuditing Standards AU-C 260, The Auditor’s Communication with Those Charged with Governance, and both PwC and the internal auditorsdirectly 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 Committeealso reviewed the non-audit services provided by PwC, if any, and concluded these services were not incompatible with maintaining PwC’sindependence. The Audit Committee discussed with management and PwC any other matters and received any assurances from them asthe Audit Committee deemed appropriate.

Based on the foregoing review and discussions, and relying thereon, the Audit Committee recommended that the Board of Directorsinclude the audited consolidated financial statements in the Annual Report for the year ended December 31, 2014.

KAYE HURST WHITEHEADChair of the Audit CommitteeFarm Credit Mid-America, ACA

Audit Committee Members:Barney BarnettJimmy D. MaysJames William PattersonGeorge E. StebbinsKaye Hurst Whitehead

March 12, 2015


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, 2014, 2013 and 2012, andthe related consolidated statements of income, changes in members’ equity and cash flows for the years then ended.

Management’s Responsibility for the Consolidated Financial StatementsManagement is responsible for the preparation and fair presentation of the consolidated financial statements inaccordance 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 consolidatedfinancial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the consolidated financial statements based on our audits. We conductedour audits in accordance with auditing standards generally accepted in the United States of America. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on our judgment, including the assessment of the risks of materialmisstatement 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 financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing 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 significantaccounting estimates made by management, as well as evaluating the overall presentation of the consolidated financialstatements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.

OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of Farm Credit Mid-America, ACA and its subsidiaries at December 31, 2014, 2013 and 2012, and theresults of its operations and its cash flows for the years then ended in accordance with accounting principles generallyaccepted in the United States of America.

March 12, 2015

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


CONSOLIDATED STATEMENTS OF CONDITION

AS OF DECEMBER 31 (IN THOUSANDS) 2014 2013 2012

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

Loans $18,775,989 $17,669,775 $16,526,875. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 47,661 46,810 60,650

Net loans 18,728,328 17,622,965 16,466,225. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment in AgriBank, FCB 409,076 448,181 440,925. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,038,343 1,227,018 1,450,877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest receivable 145,002 132,836 129,699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets — 74,048 144,199. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 9,322 10,495 14,350. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assets held for lease, net 345,985 398,005 323,065. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 154,667 118,827 87,700

Total assets $20,830,723 $20,032,375 $19,057,040

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

Note payable to AgriBank, FCB $16,956,038 $16,479,097 $15,818,603. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Deferred tax liabilities, net 109,657 115,774 101,758. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities 58,818 45,422 51,148

Total liabilities 17,205,923 16,718,938 16,053,154

Contingencies and commitments — — —

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

Capital stock and participation certificates 85,982 85,693 84,541. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,538,818 3,227,744 2,919,345

Total members’ equity 3,624,800 3,313,437 3,003,886

Total liabilities and members’ equity $20,830,723 $20,032,375 $19,057,040

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


CONSOLIDATED STATEMENTS OF CONDITION

AS OF DECEMBER 31 (IN THOUSANDS) 2014 2013 2012

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

Loans $18,775,989 $17,669,775 $16,526,875. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Allowance for loan losses 47,661 46,810 60,650

Net loans 18,728,328 17,622,965 16,466,225. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment in AgriBank, FCB 409,076 448,181 440,925. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,038,343 1,227,018 1,450,877. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued interest receivable 145,002 132,836 129,699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets — 74,048 144,199. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned 9,322 10,495 14,350. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assets held for lease, net 345,985 398,005 323,065. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 154,667 118,827 87,700

Total assets $20,830,723 $20,032,375 $19,057,040

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

Note payable to AgriBank, FCB $16,956,038 $16,479,097 $15,818,603. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Deferred tax liabilities, net 109,657 115,774 101,758. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other liabilities 58,818 45,422 51,148

Total liabilities 17,205,923 16,718,938 16,053,154

Contingencies and commitments — — —

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

Capital stock and participation certificates 85,982 85,693 84,541. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unallocated surplus 3,538,818 3,227,744 2,919,345

Total members’ equity 3,624,800 3,313,437 3,003,886

Total liabilities and members’ equity $20,830,723 $20,032,375 $19,057,040



CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEAR ENDED DECEMBER 31 (IN THOUSANDS) 2014 2013 2012

Interest income $733,574 $701,389 $693,885. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest expense 316,952 309,514 340,106

Net interest income 416,622 391,875 353,779. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 10,328 (3,031) 2,791

Net interest income after provision for (reversal of) loan losses 406,294 394,906 350,988

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

Patronage income 65,105 67,877 65,374. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financially related services income 8,732 6,403 5,993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Fee income 37,298 30,127 33,089. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Operating lease income 11,238 11,248 11,483. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned losses, net (1,161) (2,141) (10,536). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous income, net 1,524 876 433

Total other income 122,736 114,390 122,168

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

Salaries and employee benefits 127,540 119,503 109,435. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other operating expenses 77,886 66,896 54,425

Total operating expenses 205,426 186,399 163,860

Income before income taxes 323,604 322,897 309,296. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for income taxes 12,530 14,498 20,716

Net income $311,074 $308,399 $288,580



CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

CapitalStock and Total

Participation Unallocated Members’(IN THOUSANDS) Certificates Surplus Equity

Balance as of December 31, 2011 $82,000 $2,630,765 $2,712,765. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income — 288,580 288,580. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates issued 7,808 — 7,808. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates retired (5,267) — (5,267)

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

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




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



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



CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

CapitalStock and Total

Participation Unallocated Members’(IN THOUSANDS) Certificates Surplus Equity

Balance as of December 31, 2011 $82,000 $2,630,765 $2,712,765. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income — 288,580 288,580. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




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




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



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



CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31 (IN THOUSANDS) 2014 2013 2012

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

Net income $311,074 $308,399 $288,580. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation on premises and equipment 6,474 4,248 3,839. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Gain) loss on sale of premises and equipment (428) (87) 137. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Depreciation on assets held for lease 61,112 57,455 47,361. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gain on disposal of assets held for lease (512) (679) (240). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amortization of premiums on investment securities 11,416 15,913 16,931. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 10,328 (3,031) 2,791. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock patronage received from AgriBank, FCB (11,985) (25,360) (23,969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loss on other property owned 806 1,741 9,945. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Increase accrued interest receivable (17,813) (10,868) (7,844). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(Increase) decrease other assets (5,485) (2,135) 12,471. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase (decrease) accrued interest payable 2,765 (3,000) (10,462). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Increase other liabilities 7,277 8,290 30,892

Net cash provided by operating activities 375,029 350,886 370,432

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

Increase in loans, net (1,114,301) (1,151,388) (1,536,483). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Redemptions of investment in AgriBank, FCB, net 51,090 18,104 5,168. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of investment in other Farm Credit Institutions, net (13,293) (1,612) (113). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Decrease (increase) in investment securities, net 177,259 207,946 (56,905). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Decrease in other earning assets, net 74,048 70,151 66,746. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of assets held for lease, net (8,580) (131,716) (88,540). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Proceeds from sales of other property owned 6,068 8,971 12,673. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Purchases of premises and equipment, net (23,110) (31,541) (13,505)

Net cash used in investing activities (850,819) (1,011,085) (1,610,959)

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

Increase in note payable to AgriBank, FCB, net 476,943 660,494 1,240,217. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Capital stock and participation certificates (retired) issued, net (1,153) (295) 310

Net cash provided by financing activities 475,790 660,199 1,240,527

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

Cash at beginning of year — — —

Cash at end of year $— $— $—

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

Stock financed by loan activities $5,470 $5,524 $6,221. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock applied against loan principal 4,012 4,064 3,975. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Stock applied against interest 16 13 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Interest transferred to loans 5,631 7,718 7,030. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans transferred to other property owned 6,768 8,877 10,815. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financed sales of other property owned 1,067 2,020 4,156. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Interest paid $314,187 $312,514 $350,568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Taxes paid 25,151 2,419 3,334. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1......................................................................................ORGANIZATION AND OPERATIONS The Farm Credit Act established the Farm Credit System Insurance

Corporation (FCSIC) to administer the Farm Credit Insurance FundFARM CREDIT SYSTEM AND DISTRICT (Insurance Fund). The Insurance Fund is used to ensure the timelyThe Farm Credit System (System) is a nationwide system of coopera- payment of principal and interest on Farm Credit Systemwide debttively owned banks and associations established by Congress to meet obligations, to ensure the retirement of protected borrower capital atthe credit needs of American agriculture. As of January 1, 2015, the par or stated value, and for other specified purposes.System consisted of three Farm Credit Banks (FCB), one AgriculturalCredit Bank (ACB), and 76 customer-owned cooperative lending insti- At the discretion of the FCSIC, the Insurance Fund is also available totutions (associations). AgriBank, FCB (AgriBank), a System bank, and provide assistance to certain troubled System institutions and for theits affiliated associations are collectively referred to as the AgriBank operating expenses of the FCSIC. Each System bank is required to payFarm Credit District (AgriBank District or the District). At January 1, premiums into the Insurance Fund until the assets in the Insurance2015, the District consisted of 17 Agricultural Credit Associations (ACA) Fund equal 2.0% of the aggregated insured obligations adjusted tothat each have wholly-owned Federal Land Credit Association (FLCA) reflect the reduced risk on loans or investments guaranteed by federaland Production Credit Association (PCA) subsidiaries. or state governments. This percentage of aggregate obligations can be

changed by the FCSIC, at its sole discretion, to a percentage it deter-FLCAs are authorized to originate long-term real estate mortgage mines to be actuarially sound. The basis for assessing premiums is debtloans. PCAs are authorized to originate short-term and intermediate outstanding with adjustments made for non-accrual loans andterm loans. ACAs are authorized to originate long-term real estate impaired investment securities which are assessed a surcharge whilemortgage loans and short-term and intermediate term loans either guaranteed loans and investment securities are deductions from thedirectly or through their subsidiaries. Associations are authorized to premium base. AgriBank, in turn, assesses premiums to Districtprovide lease financing options for agricultural purposes and are also associations each year based on similar factors.authorized to purchase and hold certain types of investments.AgriBank provides funding to all associations chartered within the ASSOCIATIONDistrict. Farm Credit Mid-America, ACA (the Association) and its subsidiaries,

Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCAAssociations are authorized to provide, either directly or in participa- (the subsidiaries) are lending institutions of the System. We are ation with other lenders, credit and related services to eligible borrow- member-owned cooperative providing credit and credit-related ser-ers. Eligible borrowers may include farmers, ranchers, producers or vices to, or for the benefit of, eligible members for qualified agricul-harvesters of aquatic products, rural residents, and farm-related ser- tural purposes in all counties in Indiana; all counties in Ohio, with thevice businesses. In addition, associations can participate with other exception of Marion, Crawford, Wyandot, Hancock, Seneca, Wood,lenders in loans to similar entities. Similar entities are parties that are Ottawa, Lucas, and Sandusky; all counties in Kentucky, with the excep-not eligible for a loan from a System lending institution, but have tion of Graves, Hickman, Carlisle, Fulton, Ballard, McCracken, Callo-operations that are functionally similar to the activities of eligible way, and Marshall; and all counties in Tennessee.borrowers.

We borrow from AgriBank and provide financing and related servicesThe Farm Credit Administration (FCA) is authorized by Congress to to our members. Our ACA holds all the stock of the FLCA and PCAregulate the System banks and associations. We are examined by the subsidiaries.FCA and certain association actions are subject to the prior approval ofthe FCA and/or AgriBank. We offer crop hail and multi-peril crop insurance to borrowers and

those eligible to borrow.



1......................................................................................ORGANIZATION AND OPERATIONS The Farm Credit Act established the Farm Credit System Insurance

Corporation (FCSIC) to administer the Farm Credit Insurance FundFARM CREDIT SYSTEM AND DISTRICT (Insurance Fund). The Insurance Fund is used to ensure the timelyThe Farm Credit System (System) is a nationwide system of coopera- payment of principal and interest on Farm Credit Systemwide debttively owned banks and associations established by Congress to meet obligations, to ensure the retirement of protected borrower capital atthe credit needs of American agriculture. As of January 1, 2015, the par or stated value, and for other specified purposes.System consisted of three Farm Credit Banks (FCB), one AgriculturalCredit Bank (ACB), and 76 customer-owned cooperative lending insti- At the discretion of the FCSIC, the Insurance Fund is also available totutions (associations). AgriBank, FCB (AgriBank), a System bank, and provide assistance to certain troubled System institutions and for theits affiliated associations are collectively referred to as the AgriBank operating expenses of the FCSIC. Each System bank is required to payFarm Credit District (AgriBank District or the District). At January 1, premiums into the Insurance Fund until the assets in the Insurance2015, the District consisted of 17 Agricultural Credit Associations (ACA) Fund equal 2.0% of the aggregated insured obligations adjusted tothat each have wholly-owned Federal Land Credit Association (FLCA) reflect the reduced risk on loans or investments guaranteed by federaland Production Credit Association (PCA) subsidiaries. or state governments. This percentage of aggregate obligations can be

changed by the FCSIC, at its sole discretion, to a percentage it deter-FLCAs are authorized to originate long-term real estate mortgage mines to be actuarially sound. The basis for assessing premiums is debtloans. PCAs are authorized to originate short-term and intermediate outstanding with adjustments made for non-accrual loans andterm loans. ACAs are authorized to originate long-term real estate impaired investment securities which are assessed a surcharge whilemortgage loans and short-term and intermediate term loans either guaranteed loans and investment securities are deductions from thedirectly or through their subsidiaries. Associations are authorized to premium base. AgriBank, in turn, assesses premiums to Districtprovide lease financing options for agricultural purposes and are also associations each year based on similar factors.authorized to purchase and hold certain types of investments.AgriBank provides funding to all associations chartered within the ASSOCIATIONDistrict. Farm Credit Mid-America, ACA (the Association) and its subsidiaries,

Farm Credit Mid-America, FLCA and Farm Credit Mid-America, PCAAssociations are authorized to provide, either directly or in participa- (the subsidiaries) are lending institutions of the System. We are ation with other lenders, credit and related services to eligible borrow- member-owned cooperative providing credit and credit-related ser-ers. Eligible borrowers may include farmers, ranchers, producers or vices to, or for the benefit of, eligible members for qualified agricul-harvesters of aquatic products, rural residents, and farm-related ser- tural purposes in all counties in Indiana; all counties in Ohio, with thevice businesses. In addition, associations can participate with other exception of Marion, Crawford, Wyandot, Hancock, Seneca, Wood,lenders in loans to similar entities. Similar entities are parties that are Ottawa, Lucas, and Sandusky; all counties in Kentucky, with the excep-not eligible for a loan from a System lending institution, but have tion of Graves, Hickman, Carlisle, Fulton, Ballard, McCracken, Callo-operations that are functionally similar to the activities of eligible way, and Marshall; and all counties in Tennessee.borrowers.

We borrow from AgriBank and provide financing and related servicesThe Farm Credit Administration (FCA) is authorized by Congress to to our members. Our ACA holds all the stock of the FLCA and PCAregulate the System banks and associations. We are examined by the subsidiaries.FCA and certain association actions are subject to the prior approval ofthe FCA and/or AgriBank. We offer crop hail and multi-peril crop insurance to borrowers and

those eligible to borrow.



2......................................................................................SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES cases where the collection of the recorded investment is fully

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

Certain amounts in prior years’ financial statements have been reclas- In situations where, for economic or legal reasons related to the bor-sified to conform to the current year’s presentation. rower’s financial difficulties, we grant a concession for other than an

insignificant period of time to the borrower that we would not other-PRINCIPLES OF CONSOLIDATION wise consider, the related loan is classified as a troubled debt restruc-The consolidated financial statements present the consolidated finan- turing, also known as a restructured loan. A concession is generallycial results of Farm Credit Mid-America, ACA and its subsidiaries. All granted in order to minimize economic loss and avoid foreclosure.material intercompany transactions and balances have been elimi- Concessions vary by program and borrower and may include interestnated in consolidation. rate reductions, term extensions, payment deferrals, or an acceptance

of additional collateral in lieu of payments. In limited circumstances,SIGNIFICANT ACCOUNTING POLICIES principal may be forgiven. Loans classified as troubled debt restructur-LOANS: Loans are carried at their principal amount outstanding net of ings are considered risk loans (as defined below).any unearned income, cumulative charge-offs, unamortized deferredfees and costs on originated loans, and unamortized premiums or dis- Loans that are sold as participations are transferred as entire financialcounts on purchased loans. Loan interest is accrued and credited to assets, groups of entire financial assets or participating interests ininterest income based upon the daily principal amount outstanding. the loans. The transfers of such assets or participating interests areMaterial fees, net of related costs, are deferred and recognized over structured such that control over the transferred assets or participat-the life of the loan as an adjustment to net interest income. The net ing interests have been surrendered and that all of the conditions haveamount of other loan fees and related origination costs are not mate- been met to be accounted for as a sale.rial to the consolidated financial statements taken as a whole.

ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is anWe place loans in non-accrual status when: estimate of losses in our loan portfolio as of the financial statement– principal or interest is delinquent for 90 days or more (unless the date. We determine the appropriate level of allowance for loan losses

loan is well secured and in the process of collection) or based on periodic evaluation of factors such as:– circumstances indicate that full collection is not expected. – loan loss history,

– estimated probability of default,When a loan is placed in non-accrual status, we reverse current year – estimated loss severity,accrued interest to the extent principal plus accrued interest before – portfolio quality, andthe transfer exceeds the net realizable value of the collateral. Any – current economic and environmental conditions.unpaid interest accrued in a prior year is capitalized to the recordedinvestment of the loan, unless the net realizable value is less than the Loans in our portfolio that are considered impaired are analyzed indi-recorded investment in the loan, then it is charged-off against the vidually to establish a specific allowance. A loan is impaired when it isallowance for loan losses. Any cash received on non-accrual loans is probable that all amounts due will not be collected according to theapplied to reduce the recorded investment in the loan, except in those contractual terms of the loan agreement. We generally measure


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

impairment based on the net realizable value of the collateral. All risk PREMISES AND EQUIPMENT: The carrying amount of premises andloans are considered to be impaired loans. Risk loans include: equipment is at cost, less accumulated depreciation and is included in– non-accrual loans, ‘‘Other assets’’ in the Consolidated Statements of Condition. Calcula-– accruing restructured loans, and tion of depreciation is generally on the straight-line method over the– accruing loans 90 days or more past due. estimated useful lives of the assets. Gains or losses on disposition are

included in ‘‘Miscellaneous income, net’’ in the Consolidated State-We record a specific allowance to reduce the carrying amount of the ments of Income. Depreciation and maintenance and repair expensesrisk loan by the amount the recorded investment exceeds the net are included in ‘‘Other operating expenses’’ in the Consolidated State-realizable value of collateral. When we deem a loan to be uncollectible, ments of Income and improvements are capitalized.we charge the loan principal and prior year(s) accrued interest againstthe allowance for loan losses. Subsequent recoveries, if any, are added OTHER PROPERTY OWNED: Other property owned, consisting of realto the allowance for loan losses. and personal property acquired through foreclosure or deed in lieu of

foreclosure, is recorded at the fair value less estimated selling costsAn allowance is recorded for probable and estimable credit losses as of upon acquisition. Any initial reduction in the carrying amount of a loanthe financial statement date for loans that are not individually to the fair value of the collateral received is charged to the allowanceassessed as impaired. We use a two-dimensional loan risk rating model for loan losses. Revised estimates to the fair value less costs to sell arethat incorporates a 14-point rating scale to identify and track the reported as adjustments to the carrying amount of the asset, providedprobability of borrower default and a separate 6-point scale addressing that such adjusted value is not in excess of the carrying amount atthe loss severity. The combination of estimated default probability and acquisition. Related income, expenses, and gains or losses from opera-loss severity is the primary basis for recognition and measurement of tions and carrying value adjustments are included in ‘‘Other propertyloan collectability of these pools of loans. These estimated losses may owned losses, net’’ in the Consolidated Statements of Income.be adjusted for relevant current environmental factors.

LEASES: We have finance and operating leases. Unearned income fromChanges in the allowance for loan losses consist of provision activity, finance lease contracts represents the excess of gross lease receiv-recorded in ‘‘Provision for (reversal of) loan losses’’ in the Consolidated ables plus residual receivables over the cost of leased equipment. WeStatements of Income, recoveries, and charge-offs. amortize net unearned finance lease income to earnings using the

interest method. The carrying amount of finance leases is included inINVESTMENT IN AGRIBANK: Our stock investment in AgriBank is on a ‘‘Loans’’ in the Consolidated Statements of Condition and representscost plus allocated equities basis. lease rent receivables net of the unearned income plus the residual

receivable. With operating leases, property is recorded at cost andINVESTMENT SECURITIES: We are authorized to purchase and hold depreciated on a straight-line basis over the lease term to an estimatedcertain types of investments. As we have the positive intent and ability residual value. We recognize operating lease revenue evenly over theto hold these investments to maturity, they have been classified as term of the lease and charge depreciation and other expenses againstheld-to-maturity and are carried at cost adjusted for the amortization revenue as incurred in ‘‘Operating lease income’’ in the Consolidatedof premiums and accretion of discounts. If an investment is deter- Statements of Income. The amortized cost of operating leases ismined to be other-than-temporarily impaired, the carrying value of included in ‘‘Assets held for lease, net’’ in the Consolidated Statementsthe security is written down to fair value. The impairment loss is of Condition and represents the asset cost net of accumulatedseparated into credit related and non-credit related components. The depreciation.credit related component is expensed through ‘‘Miscellaneous income,net’’ in the Consolidated Statements of Income in the period of impair- POST-EMPLOYMENT BENEFIT PLANS: The District has various post-ment. The non-credit related component is recognized in other com- employment benefit plans in which our employees participate.prehensive income. Purchased premiums and discounts are amortized Expenses related to these plans are included in ‘‘Salaries and employeeor accreted using the interest method over the terms of the respective benefits’’ in the Consolidated Statements of Income.securities. Realized gains and losses are determined using specificidentification method and are recognized in current operations. Certain employees participate in the defined benefit retirement plan

of the District. The plan is comprised of two benefit formulas. At theiroption, employees hired prior to October 1, 2001 are on the cash balance


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

impairment based on the net realizable value of the collateral. All risk PREMISES AND EQUIPMENT: The carrying amount of premises andloans are considered to be impaired loans. Risk loans include: equipment is at cost, less accumulated depreciation and is included in– non-accrual loans, ‘‘Other assets’’ in the Consolidated Statements of Condition. Calcula-– accruing restructured loans, and tion of depreciation is generally on the straight-line method over the– accruing loans 90 days or more past due. estimated useful lives of the assets. Gains or losses on disposition are

included in ‘‘Miscellaneous income, net’’ in the Consolidated State-We record a specific allowance to reduce the carrying amount of the ments of Income. Depreciation and maintenance and repair expensesrisk loan by the amount the recorded investment exceeds the net are included in ‘‘Other operating expenses’’ in the Consolidated State-realizable value of collateral. When we deem a loan to be uncollectible, ments of Income and improvements are capitalized.we charge the loan principal and prior year(s) accrued interest againstthe allowance for loan losses. Subsequent recoveries, if any, are added OTHER PROPERTY OWNED: Other property owned, consisting of realto the allowance for loan losses. and personal property acquired through foreclosure or deed in lieu of

foreclosure, is recorded at the fair value less estimated selling costsAn allowance is recorded for probable and estimable credit losses as of upon acquisition. Any initial reduction in the carrying amount of a loanthe financial statement date for loans that are not individually to the fair value of the collateral received is charged to the allowanceassessed as impaired. We use a two-dimensional loan risk rating model for loan losses. Revised estimates to the fair value less costs to sell arethat incorporates a 14-point rating scale to identify and track the reported as adjustments to the carrying amount of the asset, providedprobability of borrower default and a separate 6-point scale addressing that such adjusted value is not in excess of the carrying amount atthe loss severity. The combination of estimated default probability and acquisition. Related income, expenses, and gains or losses from opera-loss severity is the primary basis for recognition and measurement of tions and carrying value adjustments are included in ‘‘Other propertyloan collectability of these pools of loans. These estimated losses may owned losses, net’’ in the Consolidated Statements of Income.be adjusted for relevant current environmental factors.

LEASES: We have finance and operating leases. Unearned income fromChanges in the allowance for loan losses consist of provision activity, finance lease contracts represents the excess of gross lease receiv-recorded in ‘‘Provision for (reversal of) loan losses’’ in the Consolidated ables plus residual receivables over the cost of leased equipment. WeStatements of Income, recoveries, and charge-offs. amortize net unearned finance lease income to earnings using the

interest method. The carrying amount of finance leases is included inINVESTMENT IN AGRIBANK: Our stock investment in AgriBank is on a ‘‘Loans’’ in the Consolidated Statements of Condition and representscost plus allocated equities basis. lease rent receivables net of the unearned income plus the residual

receivable. With operating leases, property is recorded at cost andINVESTMENT SECURITIES: We are authorized to purchase and hold depreciated on a straight-line basis over the lease term to an estimatedcertain types of investments. As we have the positive intent and ability residual value. We recognize operating lease revenue evenly over theto hold these investments to maturity, they have been classified as term of the lease and charge depreciation and other expenses againstheld-to-maturity and are carried at cost adjusted for the amortization revenue as incurred in ‘‘Operating lease income’’ in the Consolidatedof premiums and accretion of discounts. If an investment is deter- Statements of Income. The amortized cost of operating leases ismined to be other-than-temporarily impaired, the carrying value of included in ‘‘Assets held for lease, net’’ in the Consolidated Statementsthe security is written down to fair value. The impairment loss is of Condition and represents the asset cost net of accumulatedseparated into credit related and non-credit related components. The depreciation.credit related component is expensed through ‘‘Miscellaneous income,net’’ in the Consolidated Statements of Income in the period of impair- POST-EMPLOYMENT BENEFIT PLANS: The District has various post-ment. The non-credit related component is recognized in other com- employment benefit plans in which our employees participate.prehensive income. Purchased premiums and discounts are amortized Expenses related to these plans are included in ‘‘Salaries and employeeor accreted using the interest method over the terms of the respective benefits’’ in the Consolidated Statements of Income.securities. Realized gains and losses are determined using specificidentification method and are recognized in current operations. Certain employees participate in the defined benefit retirement plan

of the District. The plan is comprised of two benefit formulas. At theiroption, employees hired prior to October 1, 2001 are on the cash balance



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

formula or on the final average pay formula. New benefits eligible likelihood of losses given disbursement are utilized in determining aemployees hired between October 1, 2001 and December 31, 2006 are reserve, if needed. Based on management’s assessment, any reserve ison the cash balance formula. Effective January 1, 2007, the defined recorded in ‘‘Other liabilities’’ in the Consolidated Statements of Condi-benefit retirement plan was closed to new employees. The District plan tion and a corresponding loss is recorded in ‘‘Provision for credit losses’’utilizes the ‘‘Projected Unit Credit’’ actuarial method for financial in the Consolidated Statements of Income. However, no such reservereporting and funding purposes. was necessary as of December 31, 2014, 2013, or 2012.

Certain employees also participate in the non-qualified defined benefit STATEMENTS OF CASH FLOWS: For purposes of reporting cash flow,Pension Restoration Plan of the AgriBank District. This plan restores cash includes cash on hand.retirement benefits to certain highly compensated eligible employeesthat would have been provided under the qualified plan if such bene- FAIR VALUE MEASUREMENT: The accounting guidance describes threefits were not above the Internal Revenue Code compensation or other levels of inputs that may be used to measure fair value.limits.

Level 1 — Quoted prices in active markets for identical assets or liabili-We also provide certain health insurance benefits to eligible retired ties that the reporting entity has the ability to access at the measure-employees according to the terms of those benefit plans. The antici- ment date.pated cost of these benefits is accrued during the employees’ activeservice period. Level 2 — Observable inputs other than quoted prices included within

Level 1 that are observable for the asset or liability either directly orThe defined contribution plans allow eligible employees to save for indirectly. Level 2 inputs include the following:their retirement either pre-tax, Roth after-tax, post-tax, or both, with – quoted prices for similar assets or liabilities in active markets,an employer match on a percentage of the employee’s contributions. – quoted prices for identical or similar assets or liabilities in marketsWe provide benefits under this plan in the form of a fixed percentage that are not active so that they are traded less frequently thanof salary contribution in addition to the employer match for those exchange-traded instruments, quoted prices that are not current, oremployees that do not participate in the District’s defined benefit principal market information that is not released publicly,retirement plan. Employer contributions are expensed when incurred. – inputs that are observable such as interest rates and yield curves,

prepayment speeds, credit risks, and default rates, andINCOME TAXES: The ACA and PCA accrue federal and state income – inputs derived principally from or corroborated by observable mar-taxes. Deferred tax assets and liabilities are recognized for future tax ket data by correlation or other means.consequences of temporary differences between the carrying amountsand tax basis of assets and liabilities. Deferred tax assets are recorded Level 3 — Unobservable inputs that are supported by little or no mar-if the deferred tax asset is more likely than not to be realized. If the ket activity and that are significant to the fair value of the assets orrealization test cannot be met, the deferred tax asset is reduced by a liabilities. These unobservable inputs reflect the reporting entity’s ownvaluation allowance. The expected future tax consequences of uncer- assumptions about assumptions that market participants would use intain income tax positions are accrued. pricing the asset or liability. Level 3 assets and liabilities include finan-

cial instruments whose value is determined using pricing models, dis-The FLCA is exempt from federal and other taxes to the extent pro- counted cash flow methodologies, or similar techniques, as well asvided in the Farm Credit Act. instruments for which the determination of fair value requires signifi-

cant management judgment or estimation.OFF-BALANCE SHEET CREDIT EXPOSURES: Commitments to extendcredit are agreements to lend to customers, generally having fixed RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTSexpiration dates or other termination clauses. Standby letters of credit We have assessed the potential impact of accounting standards thatare agreements to pay a beneficiary if there is a default on a contrac- have been issued, but are not yet effective, and have determined thattual arrangement. Any reserve for unfunded lending commitments no such standards are expected to have a material impact to ourand unexercised letters of credit is based on management’s best esti- consolidated financial statements. In addition, no accounting pro-mate of losses inherent in these instruments but the commitments nouncements were adopted during 2014.have not yet disbursed. Factors such as likelihood of disbursal and


3......................................................................................LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans consisted of the following (dollars in thousands):

2014 2013 2012

AS OF DECEMBER 31 Amount % Amount % Amount %

Real estate mortgage $12,776,369 68.0% $12,077,663 68.3% $11,298,575 68.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,282,508 17.5% 2,964,868 16.8% 2,825,749 17.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,207,921 6.4% 1,113,251 6.3% 919,755 5.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,029,707 5.5% 1,023,348 5.8% 1,045,861 6.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 479,484 2.6% 490,645 2.8% 436,935 2.6%

Total $18,775,989 100.0% $17,669,775 100.0% $16,526,875 100.0%

Generally, FCA loan types are defined as: PORTFOLIO CONCENTRATIONS– Real estate mortgage — long-term real estate loans made to borrow- We have individual borrower, agricultural, and territorial

ers typically for farm real estate, refinancing existing mortgages, or concentrations.constructing various facilities used in operations.

– Production and intermediate term — loans made to borrowers typi- As of December 31, 2014, volume plus commitments to our ten largestcally for operating funds and equipment. borrowers totaled an amount equal to 3.4% of total loans and

– Agribusiness — loans made to cooperatives and their subsidiaries, commitments.farm related businesses, and processing and marketing entities.

– Rural residential real estate — loans made to borrowers for any rural Our agricultural commodity concentrations at December 31, 2014,home purpose. included: Corn and soybeans 28.9%, other crops 17.7%, cattle 12.5%,

– Finance leases and other loans — lease receivables made under regu- landlords 8.6%, other livestock 6.1%, and rural home 5.1%.latory authorities and loans that do not meet the individual defini-tions described above. Our portfolio is concentrated primarily in the following states at

December 31, 2014: Indiana 26.0%, Ohio 24.1%, Tennessee 18.9%, andThe finance leases and other category is comprised of finance leases, Kentucky 14.4%.communication, international, energy, and water and waste disposalrelated loans as well as loans originated under our mission related While these concentrations represent our maximum potential creditinvestment authority. risk as it relates to recorded loan principal, a substantial portion of our

lending activities are collateralized. This reduces our exposure tocredit loss associated with our lending activities. We consider creditrisk exposure in establishing the allowance for loan losses.


3......................................................................................LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans consisted of the following (dollars in thousands):

2014 2013 2012

AS OF DECEMBER 31 Amount % Amount % Amount %

Real estate mortgage $12,776,369 68.0% $12,077,663 68.3% $11,298,575 68.4%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,282,508 17.5% 2,964,868 16.8% 2,825,749 17.1%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,207,921 6.4% 1,113,251 6.3% 919,755 5.6%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 1,029,707 5.5% 1,023,348 5.8% 1,045,861 6.3%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 479,484 2.6% 490,645 2.8% 436,935 2.6%

Total $18,775,989 100.0% $17,669,775 100.0% $16,526,875 100.0%

Generally, FCA loan types are defined as: PORTFOLIO CONCENTRATIONS– Real estate mortgage — long-term real estate loans made to borrow- We have individual borrower, agricultural, and territorial

ers typically for farm real estate, refinancing existing mortgages, or concentrations.constructing various facilities used in operations.

– Production and intermediate term — loans made to borrowers typi- As of December 31, 2014, volume plus commitments to our ten largestcally for operating funds and equipment. borrowers totaled an amount equal to 3.4% of total loans and

– Agribusiness — loans made to cooperatives and their subsidiaries, commitments.farm related businesses, and processing and marketing entities.

– Rural residential real estate — loans made to borrowers for any rural Our agricultural commodity concentrations at December 31, 2014,home purpose. included: Corn and soybeans 28.9%, other crops 17.7%, cattle 12.5%,

– Finance leases and other loans — lease receivables made under regu- landlords 8.6%, other livestock 6.1%, and rural home 5.1%.latory authorities and loans that do not meet the individual defini-tions described above. Our portfolio is concentrated primarily in the following states at

December 31, 2014: Indiana 26.0%, Ohio 24.1%, Tennessee 18.9%, andThe finance leases and other category is comprised of finance leases, Kentucky 14.4%.communication, international, energy, and water and waste disposalrelated loans as well as loans originated under our mission related While these concentrations represent our maximum potential creditinvestment authority. risk as it relates to recorded loan principal, a substantial portion of our

lending activities are collateralized. This reduces our exposure tocredit loss associated with our lending activities. We consider creditrisk exposure in establishing the allowance for loan losses.



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

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

Other Farm Credit Non-Farm CreditAgriBank Institutions Institutions Total

Participations Participations Participations ParticipationsAS OF DECEMBER 31, 2014 Purchased Sold Purchased Sold Purchased Sold Purchased Sold

Real estate mortgage $— $(458,577) $210,065 $(13,258) $1,149,419 $(9,705) $1,359,484 $(481,540). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediateterm — — 271,653 (7,609) 136,577 (974) 408,230 (8,583)

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

Agribusiness — (2,957) 906,990 (140,481) 89,650 (211) 996,640 (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 intermediateterm — — 73,009 — 132,474 (87) 205,483 (87)

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

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

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


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

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

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

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

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

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

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


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

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


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CREDIT QUALITY AND DELINQUENCY – Doubtful: loans exhibit similar weaknesses to substandard loans;One credit quality indicator we utilize is the FCA Uniform Classifica- however, doubtful loans have additional weaknesses in existing fac-tion System that categorizes loans into five categories. The categories tors, conditions, and values that make collection in full highly ques-are defined as follows: tionable, and– Acceptable: loans are expected to be fully collectible and represent – Loss: loans are considered uncollectible.

the highest quality,– Other assets especially mentioned (OAEM): loans are currently col- We had no loans categorized as loss at December 31, 2014, 2013, or 2012.

lectible but exhibit some potential weakness,– Substandard: loans exhibit some serious weakness in repayment The following table summarizes loans and related accrued interest

capacity, equity, and/or collateral pledged on the loan, receivable classified under the FCA Uniform Classification System byloan type (dollars in thousands):

Substandard/Acceptable OAEM Doubtful Total

AS OF DECEMBER 31, 2014 Amount % Amount % Amount % Amount

Real estate mortgage $12,417,465 96.5% $195,190 1.5% $256,325 2.0% $12,868,980. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,120,699 93.9% 95,039 2.9% 105,029 3.2% 3,320,767. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 1,198,340 98.8% 11,854 1.0% 2,627 0.2% 1,212,821. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 978,912 94.8% 7,909 0.8% 45,497 4.4% 1,032,318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other 464,114 96.8% 15,105 3.1% 612 0.1% 479,831

Total $18,179,530 96.1% $325,097 1.7% $410,090 2.2% $18,914,717

As of December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



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


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

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

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



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



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


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CREDIT QUALITY AND DELINQUENCY – Doubtful: loans exhibit similar weaknesses to substandard loans;One credit quality indicator we utilize is the FCA Uniform Classifica- however, doubtful loans have additional weaknesses in existing fac-tion System that categorizes loans into five categories. The categories tors, conditions, and values that make collection in full highly ques-are defined as follows: tionable, and– Acceptable: loans are expected to be fully collectible and represent – Loss: loans are considered uncollectible.

the highest quality,– Other assets especially mentioned (OAEM): loans are currently col- We had no loans categorized as loss at December 31, 2014, 2013, or 2012.

lectible but exhibit some potential weakness,– Substandard: loans exhibit some serious weakness in repayment The following table summarizes loans and related accrued interest

capacity, equity, and/or collateral pledged on the loan, receivable classified under the FCA Uniform Classification System byloan type (dollars in thousands):

Substandard/Acceptable OAEM Doubtful Total

AS OF DECEMBER 31, 2014 Amount % Amount % Amount % Amount



Agribusiness 1,198,340 98.8% 11,854 1.0% 2,627 0.2% 1,212,821. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



Total $18,179,530 96.1% $325,097 1.7% $410,090 2.2% $18,914,717

As of December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



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


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

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

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



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



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



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

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

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

Days or More Total 30 Days Total Past DueAS OF DECEMBER 31, 2014 Past Due Past Due Past Due Past Due Loans and Accruing

Real estate mortgage $101,094 $26,388 $127,482 $12,741,498 $12,868,980 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 7,243 6,995 14,238 3,306,529 3,320,767 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 3,754 — 3,754 1,209,067 1,212,821 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 13,765 5,959 19,724 1,012,594 1,032,318 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

There were no loans 90 days or more past due and still accruinginterest at December 31, 2014 and 2013.


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

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

AS OF DECEMBER 31 2014 2013 2012AS OF DECEMBER 31 2014 2013 2012 Real estate mortgage $132,834 $146,524 $154,708

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

Non-accrual loans: Production and intermediate term 31,820 33,721 45,378. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current $124,985 $119,695 $121,618 Agribusiness 24 362 388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Past due 67,880 91,826 114,041 Rural residential real estate 28,187 30,473 34,794. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total non-accrual loans 192,865 211,521 235,659 Finance leases and other — 441 391. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured loans 15,968 12,434 10,358 Total $192,865 $211,521 $235,659. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more pastdue — — 7,994

The decrease in non-accrual loans was due to an improving generalTotal risk loans $208,833 $223,955 $254,011

economy and improved customer earnings in the livestock sector. ThisVolume with specific reserves $16,883 $22,172 $34,232. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . permitted some loans to return to accruing status while other loansVolume without specific reserves 191,950 201,783 219,779 were paid in full or in part.Total risk loans $208,833 $223,955 $254,011

Total specific reserves $4,413 $4,931 $8,863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accruing loans 90 days or more past due and related accrued interest

by loan type were as follows (in thousands):FOR THE YEAR ENDEDDECEMBER 31 2014 2013 2012 AS OF DECEMBER 31 2014 2013 2012Income on accrual risk loans $918 $758 $847 Real estate mortgage $— $— $7,830. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Income on non-accrual loans 10,693 9,985 11,191 Production and intermediate term — — 116

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total income on risk loans $11,611 $10,743 $12,038 Rural residential real estate — — 48Average risk loans $220,848 $240,184 $278,065 Total $— $— $7,994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

All loans 90 days or more past due and still accruing interest wereadequately secured and in the process of collection and, as such, wereeligible to remain in accruing status.


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

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

AS OF DECEMBER 31 2014 2013 2012AS OF DECEMBER 31 2014 2013 2012 Real estate mortgage $132,834 $146,524 $154,708

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

Non-accrual loans: Production and intermediate term 31,820 33,721 45,378. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Current $124,985 $119,695 $121,618 Agribusiness 24 362 388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Past due 67,880 91,826 114,041 Rural residential real estate 28,187 30,473 34,794. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total non-accrual loans 192,865 211,521 235,659 Finance leases and other — 441 391. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing restructured loans 15,968 12,434 10,358 Total $192,865 $211,521 $235,659. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accruing loans 90 days or more pastdue — — 7,994

The decrease in non-accrual loans was due to an improving generalTotal risk loans $208,833 $223,955 $254,011

economy and improved customer earnings in the livestock sector. ThisVolume with specific reserves $16,883 $22,172 $34,232. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . permitted some loans to return to accruing status while other loansVolume without specific reserves 191,950 201,783 219,779 were paid in full or in part.Total risk loans $208,833 $223,955 $254,011

Total specific reserves $4,413 $4,931 $8,863. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accruing loans 90 days or more past due and related accrued interest

by loan type were as follows (in thousands):FOR THE YEAR ENDEDDECEMBER 31 2014 2013 2012 AS OF DECEMBER 31 2014 2013 2012Income on accrual risk loans $918 $758 $847 Real estate mortgage $— $— $7,830. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Income on non-accrual loans 10,693 9,985 11,191 Production and intermediate term — — 116

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total income on risk loans $11,611 $10,743 $12,038 Rural residential real estate — — 48Average risk loans $220,848 $240,184 $278,065 Total $— $— $7,994. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

All loans 90 days or more past due and still accruing interest wereadequately secured and in the process of collection and, as such, wereeligible to remain in accruing status.



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All risk loans are considered to be impaired loans. The following tableprovides additional impaired loan information (in thousands):

For the year endedAs of December 31, 2014 December 31, 2014

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

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

Real estate mortgage $10,110 $12,098 $2,736 $10,592 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 3,948 5,028 1,075 4,262 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Rural residential real estate 2,825 3,692 602 2,852 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — — —

Total $16,883 $20,818 $4,413 $17,706 $—

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

Real estate mortgage $136,171 $163,181 $— $142,672 $8,094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 29,789 41,206 — 32,155 1,878. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 239 244 — 1,713 159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 25,751 31,688 — 25,993 1,480. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — 609 —

Total $191,950 $236,319 $— $203,142 $11,611

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

Real estate mortgage $146,281 $175,279 $2,736 $153,264 $8,094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 33,737 46,234 1,075 36,417 1,878. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 239 244 — 1,713 159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 28,576 35,380 602 28,845 1,480. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Finance leases and other — — — 609 —

Total $208,833 $257,137 $4,413 $220,848 $11,611


......................................................................................For the year ended

As 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .



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








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



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




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



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




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



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









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



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




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


Finance leases and other 391 391 — 1,245 —

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




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


Finance leases and other 391 391 — 1,245 —

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

The recorded investment in the loan is the face amount increased ordecreased by applicable accrued interest and unamortized premium,discount, finance charges, and acquisition costs and may also reflect aprevious direct charge-off of the investment.

Unpaid principal balance represents the contractual principal balanceof the loan.

Commitments to lend additional money to borrowers whose loanswere at risk were negligible at December 31, 2014.


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

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

2014 2013 2012

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

Real estate mortgage $3,092 $3,549 $8,464 $9,102 $8,734 $8,832. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 549 344 24,377 23,871 2,826 2,700. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Rural residential real estate 399 342 1,433 1,241 1,590 1,472

Total $4,040 $4,235 $34,551 $34,492 $13,150 $13,004

Pre-modification represents the outstanding recorded investment of The following table presents TDRs that defaulted during the yearthe loan just prior to restructuring and post-modification represents ended December 31 in which the modification date was withinthe outstanding recorded investment of the loan immediately follow- 12 months of the respective reporting period (in thousands):ing the restructuring. The recorded investment of the loan is the face

2014 2013 2012amount of the receivable increased or decreased by applicable accruedReal estate mortgage $952 $588 $2,372interest and unamortized premium, discount, finance charges, and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — 243 28acquisition costs and may also reflect a previous direct charge-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 118 — 508

Total $1,070 $831 $2,908The primary types of modification typically include: forgiveness ofinterest, interest rate reduction below market, or forgiveness ofprincipal.

The following table presents information regarding TDRs outstanding(in thousands):

2014 2013 2012

TDRs in TDRs in TDRs in TDRs in TDRs in TDRs inAccrual Nonaccrual Total TDRs Accrual Nonaccrual Total TDRs Accrual Nonaccrual Total TDRs

AS OF DECEMBER 31 Status Status Outstanding Status Status Outstanding Status Status Outstanding

Real estate mortgage $13,441 $13,232 $26,673 $11,763 $14,854 $26,617 $9,890 $11,152 $21,042. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediateterm 1,917 4,740 6,657 585 7,017 7,602 293 4,337 4,630. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 221 — 221 — 263 263 — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 389 1,997 2,386 86 2,435 2,521 175 1,685 1,860

Total $15,968 $19,969 $35,937 $12,434 $24,569 $37,003 $10,358 $17,174 $27,532

There were no additional commitments to lend to borrowers whoseloans have been modified in a TDR at December 31, 2014.


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

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

2014 2013 2012

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

Real estate mortgage $3,092 $3,549 $8,464 $9,102 $8,734 $8,832. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term 549 344 24,377 23,871 2,826 2,700. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Rural residential real estate 399 342 1,433 1,241 1,590 1,472

Total $4,040 $4,235 $34,551 $34,492 $13,150 $13,004

Pre-modification represents the outstanding recorded investment of The following table presents TDRs that defaulted during the yearthe loan just prior to restructuring and post-modification represents ended December 31 in which the modification date was withinthe outstanding recorded investment of the loan immediately follow- 12 months of the respective reporting period (in thousands):ing the restructuring. The recorded investment of the loan is the face

2014 2013 2012amount of the receivable increased or decreased by applicable accruedReal estate mortgage $952 $588 $2,372interest and unamortized premium, discount, finance charges, and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediate term — 243 28acquisition costs and may also reflect a previous direct charge-off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 118 — 508

Total $1,070 $831 $2,908The primary types of modification typically include: forgiveness ofinterest, interest rate reduction below market, or forgiveness ofprincipal.

The following table presents information regarding TDRs outstanding(in thousands):

2014 2013 2012

TDRs in TDRs in TDRs in TDRs in TDRs in TDRs inAccrual Nonaccrual Total TDRs Accrual Nonaccrual Total TDRs Accrual Nonaccrual Total TDRs

AS OF DECEMBER 31 Status Status Outstanding Status Status Outstanding Status Status Outstanding

Real estate mortgage $13,441 $13,232 $26,673 $11,763 $14,854 $26,617 $9,890 $11,152 $21,042. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Production and intermediateterm 1,917 4,740 6,657 585 7,017 7,602 293 4,337 4,630. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Agribusiness 221 — 221 — 263 263 — — —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rural residential real estate 389 1,997 2,386 86 2,435 2,521 175 1,685 1,860

Total $15,968 $19,969 $35,937 $12,434 $24,569 $37,003 $10,358 $17,174 $27,532

There were no additional commitments to lend to borrowers whoseloans have been modified in a TDR at December 31, 2014.



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

ALLOWANCE FOR LOAN LOSSESA summary of the changes in the allowance for loan losses follows The allowance for loan losses balance increased from December 31,(in thousands): 2013 due to the overall increase in the volume of our portfolio, while

being partially offset by improvement in credit quality.For the year ended December 31 2014 2013 2012

Balance at beginning of year $46,810 $60,650 $80,734 A summary of changes in the allowance for loan losses and period end. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for (reversal of) loan losses 10,328 (3,031) 2,791 recorded investments in loans by loan type follows (in thousands):. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan recoveries 6,249 10,361 5,205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loan charge-offs (15,726) (21,170) (28,080)

Balance at end of year $47,661 $46,810 $60,650

Productionand Rural Finance

Real Estate Intermediate Residential leasesMortgage Term Agribusiness Real Estate and other Total

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

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

Provision for (reversal of) loan losses (1,646) 5,528 (214) 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)

Balance as of December 31, 2014 $20,923 $14,769 $5,173 $4,535 $2,261 $47,661

Ending balance: individually evaluated for impairment $2,736 $1,075 $— $602 $— $4,413

Ending balance: collectively evaluated for impairment $18,187 $13,694 $5,173 $3,933 $2,261 $43,248

Recorded investment in loans outstanding:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Ending balance as of December 31, 2014 $12,868,980 $3,320,767 $1,212,821 $1,032,318 $479,831 $18,914,717

Ending balance: individually evaluated for impairment $146,281 $33,737 $239 $28,576 $— $208,833

Ending balance: collectively evaluated for impairment $12,722,699 $3,287,030 $1,212,582 $1,003,742 $479,831 $18,705,884


......................................................................................Production

and Rural FinanceReal Estate Intermediate Residential leases

Mortgage Term Agribusiness Real Estate and other Total



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

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

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


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 $2,963,868 $1,117,639 $995,261 $490,606 $17,571,671


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

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

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

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





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


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



......................................................................................Production

and Rural FinanceReal Estate Intermediate Residential leases

Mortgage Term Agribusiness Real Estate and other Total



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

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

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


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





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


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

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

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

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





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


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




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

INVESTMENT IN AGRIBANK INVESTMENT SECURITIES AND OTHER EARNINGASSETS

Effective March 31, 2014, we were required by AgriBank to maintain aninvestment equal to 2.25% of the average quarterly balance of our AgriBank and certain affiliated Associations, including Farm Creditnote payable to AgriBank plus an additional 1.0% on growth that Mid-America, ACA, are among the forming limited partners for aexceeded a targeted rate. Prior to March 31, 2014, the required invest- $154.5 million Rural Business Investment Company (RBIC) establishedment was equal to 2.5%. on October 3, 2014. The RBIC will facilitate equity and debt invest-

ments in agriculture-related businesses that will create growth and jobAs of December 31, 2014, we were also required by AgriBank to main- opportunities in rural America. Our total commitment is $20 milliontain an investment equal to 8.0% of the quarter end balance of the over five years. As of December 31, 2014 our investment isparticipation interests in real estate loans sold to AgriBank under the $757 thousand.AgriBank Asset Pool program.

We held investment securities of $1.0 billion, $1.2 billion, and $1.5 bil-The balance of our investment in AgriBank, all required stock, was lion at December 31, 2014, 2013, and 2012, respectively. Our investment$409.1 million, $448.2 million, and $440.9 million at December 31, 2014, securities consisted of:2013, and 2012, respectively. – securities containing loans guaranteed by the Small Business

Administration,– investment securities made up of Farm Service Agency securities,

and– securities issued by the United States Department of Agriculture.

Our investments are either mortgage-backed securities (MBS), whichare generally longer-term investments, or asset-backed securities(ABS), which are generally shorter-term investments.

The investment securities have been classified as held-to-maturity.The investment portfolio is evaluated for other-than-temporaryimpairment. To date, we have not recognized any impairment on ourinvestment portfolio.


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

The following table presents further information on investment secur- The following table presents contractual maturities of our investmentities (dollars in thousands): securities (in thousands):

AS OF Weighted AS OF DECEMBER 31, 2014 Amortized CostDECEMBER 31, Average Amortized Unrealized Unrealized Fair Less than one year $1,446

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2014 Yield Cost Gains Losses ValueOne to five years 78,584. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MBS 2.7% $935,124 $6,104 $14,151 $927,077

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Five to ten years 165,575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ABS 2.7% 103,219 3,110 218 106,111More than ten years 792,738

Total 2.7% $1,038,343 $9,214 $14,369 $1,033,188Total $1,038,343

AS OF WeightedDECEMBER 31, Average Amortized Unrealized Unrealized Fair A summary of investments in an unrealized loss position presented by2013 Yield Cost Gains Losses Value the length of time the investments have been in continuous unrealizedMBS 2.7% $1,086,943 $7,498 $19,671 $1,074,770. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . loss position follows (in thousands):ABS 2.4% 140,075 4,439 411 144,103

Total 2.6% $1,227,018 $11,937 $20,082 $1,218,873 Greater thanLess than 12 months 12 months

AS OF DECEMBER 31, Unrealized UnrealizedAS OF Weighted2014 Fair Value Losses Fair Value LossesDECEMBER 31, Average Amortized Unrealized Unrealized Fair

2012 Yield Cost Gains Losses Value MBS $82,590 $2,837 $601,346 $11,314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MBS 2.7% $1,254,371 $7,251 $27,300 $1,234,322 ABS 278 — 10,865 218. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS 2.4% 196,506 4,568 1,115 199,959 Total $82,868 $2,837 $612,211 $11,532Total 2.6% $1,450,877 $11,819 $28,415 $1,434,281

Unrealized losses associated with investment securities are not con-The decline in investment securities was related to the maturity of sidered to be other-than-temporary due to the 100% guarantee of theinvestments offset slightly by new volume acquired during the year. principal by the U.S. government. However, the premiums paid to

purchase the investment are not guaranteed and are amortized overInvestment income is recorded in ‘‘Interest income’’ in the Consoli- the weighted average maturity of each loan as a reduction of interestdated Statements of Income and totaled $29.0 million, $32.5 million, income. Repayment of principal is assessed at least quarterly, and anyand $37.3 million in 2014, 2013, and 2012, respectively. 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, 2014, the majority ofthe $14.4 million unrealized loss represents unamortized premium.

Other earning assets resulted from successor-in-interest contractsfrom our involvement with the federal government’s tobacco buy-outprogram. The volume was $74.0 million and $144.2 million at Decem-ber 31, 2013 and 2012, respectively. The final payments were receivedin January 2014. These amounts included both principal and interestincome receivable. We discontinued the purchase of additional con-tracts during 2011. These assets were 100% guaranteed by the U.S.government.


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

The following table presents further information on investment secur- The following table presents contractual maturities of our investmentities (dollars in thousands): securities (in thousands):

AS OF Weighted AS OF DECEMBER 31, 2014 Amortized CostDECEMBER 31, Average Amortized Unrealized Unrealized Fair Less than one year $1,446

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2014 Yield Cost Gains Losses ValueOne to five years 78,584. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MBS 2.7% $935,124 $6,104 $14,151 $927,077

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Five to ten years 165,575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ABS 2.7% 103,219 3,110 218 106,111More than ten years 792,738

Total 2.7% $1,038,343 $9,214 $14,369 $1,033,188Total $1,038,343

AS OF WeightedDECEMBER 31, Average Amortized Unrealized Unrealized Fair A summary of investments in an unrealized loss position presented by2013 Yield Cost Gains Losses Value the length of time the investments have been in continuous unrealizedMBS 2.7% $1,086,943 $7,498 $19,671 $1,074,770. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . loss position follows (in thousands):ABS 2.4% 140,075 4,439 411 144,103

Total 2.6% $1,227,018 $11,937 $20,082 $1,218,873 Greater thanLess than 12 months 12 months

AS OF DECEMBER 31, Unrealized UnrealizedAS OF Weighted2014 Fair Value Losses Fair Value LossesDECEMBER 31, Average Amortized Unrealized Unrealized Fair

2012 Yield Cost Gains Losses Value MBS $82,590 $2,837 $601,346 $11,314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

MBS 2.7% $1,254,371 $7,251 $27,300 $1,234,322 ABS 278 — 10,865 218. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ABS 2.4% 196,506 4,568 1,115 199,959 Total $82,868 $2,837 $612,211 $11,532Total 2.6% $1,450,877 $11,819 $28,415 $1,434,281

Unrealized losses associated with investment securities are not con-The decline in investment securities was related to the maturity of sidered to be other-than-temporary due to the 100% guarantee of theinvestments offset slightly by new volume acquired during the year. principal by the U.S. government. However, the premiums paid to

purchase the investment are not guaranteed and are amortized overInvestment income is recorded in ‘‘Interest income’’ in the Consoli- the weighted average maturity of each loan as a reduction of interestdated Statements of Income and totaled $29.0 million, $32.5 million, income. Repayment of principal is assessed at least quarterly, and anyand $37.3 million in 2014, 2013, and 2012, respectively. 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, 2014, the majority ofthe $14.4 million unrealized loss represents unamortized premium.

Other earning assets resulted from successor-in-interest contractsfrom our involvement with the federal government’s tobacco buy-outprogram. The volume was $74.0 million and $144.2 million at Decem-ber 31, 2013 and 2012, respectively. The final payments were receivedin January 2014. These amounts included both principal and interestincome receivable. We discontinued the purchase of additional con-tracts during 2011. These assets were 100% guaranteed by the U.S.government.



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

ASSETS HELD FOR LEASE, NET NOTE PAYABLE TO AGRIBANK

We hold property for the purpose of agricultural leasing, primarily Our note payable to AgriBank represents borrowings, in the form of afarm equipment and livestock facilities. Net operating lease income line of credit, to fund our loan portfolio. The line of credit is governedtotaled $11.2 million, $11.2 million, and $11.5 million in 2014, 2013, and by a General Financing Agreement (GFA) and our assets serve as collat-2012, respectively. Net operating lease assets totaled $346.0 million, eral. The following table summarizes note payable information (dollars$398.0 million, and $323.1 million at December 31, 2014, 2013, and 2012, in thousands):respectively.

AS OF DECEMBER 31 2014 2013 2012

Line of credit $19,100,000 $18,600,000 $16,675,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Outstanding principal underthe line of credit 16,956,038 16,479,097 15,818,603. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Our note payable matures April 30, 2015, at which time the note will berenegotiated.

The GFA provides for limitations on our ability to borrow funds basedon specified factors or formulas relating primarily to outstanding bal-ances, credit quality, and financial condition. At December 31, 2014, andthroughout the year, we were within the specified limitations and incompliance with all debt covenants.


8......................................................................................MEMBERS’ EQUITY DESCRIPTION OF EQUITIES

The following table presents information regarding classes and num-CAPITALIZATION REQUIREMENTS ber of shares of stock and participation certificates outstanding as ofIn accordance with the Farm Credit Act, each borrower is required to December 31, 2014. All shares and participation certificates are statedinvest in the Association as a condition of obtaining a loan. As author- at a $5.00 par value.ized by the Agricultural Credit Act and our capital bylaws, the Board of

SharesDirectors has adopted a capital plan that establishes a stock or partici-Outstanding

pation certificate purchase requirement for obtaining a loan of 2.0% ofClass D common stock (at-risk) 14,164,745. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .the customer’s total loan(s) or one thousand dollars, whichever is less.Class B participation certificates (at-risk) 3,031,711. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The stock purchase requirement of obtaining a lease is one share of

Class D common stock for those eligible to hold such stock or oneUnder our bylaws, we are also authorized to issue Class C preferredClass B participation certificate for those not eligible to hold suchstock. This stock is at-risk and nonvoting with a $5.00 par value perstock. In addition, the purchase of one Class B participation certificateshare. Currently, no stock of this class has been issued.is required of all customers who purchase financial services and are

not a stockholder. The Board of Directors may increase the amount ofOnly holders of Class D common stock have voting rights. Our bylawsrequired investment to the extent authorized in the capital bylaws.do not prohibit us from paying dividends on any classes of stock.The borrower acquires ownership of the capital stock at the time theHowever, no dividends have been declared to date.loan or lease is made. The aggregate par value of the stock is added to

the principal amount of the related obligation. We retain a first lien onOur bylaws generally permit stock and participation certificates to bethe stock or participation certificates owned by customers.retired at the discretion of our Board of Directors and in accordancewith our capitalization plans, provided prescribed capital standardsREGULATORY CAPITALIZATION REQUIREMENTShave been met. At December 31, 2014, we exceeded the prescribedUnder current capital adequacy regulations, we are required to main-standards. We do not anticipate any significant changes in capital thattain a permanent capital ratio of at least 7.0%, a total surplus ratio ofwould affect the normal retirement of stock.at least 7.0%, and a core surplus ratio of at least 3.5%. The calculation

of these ratios in accordance with the FCA Regulations is discussed asfollows:– The permanent capital ratio is average at-risk capital divided by

average risk-adjusted assets. At December 31, 2014, our ratio was16.8%.

– The total surplus ratio is average unallocated surplus less any deduc-tions made in the computation of permanent capital divided by aver-age risk-adjusted assets. At December 31, 2014, our ratio was 16.3%.

– The core surplus ratio is average unallocated surplus less any deduc-tions made in the computation of total surplus and less any excessstock investment in AgriBank divided by average risk-adjustedassets. At December 31, 2014, our ratio was 16.3%.

Regulatory capital includes all of our investment in AgriBank that is inexcess of the required investment under an allotment agreement withAgriBank. However, we did not have any excess stock at December 31,2014, 2013, or 2012.


8......................................................................................MEMBERS’ EQUITY DESCRIPTION OF EQUITIES

The following table presents information regarding classes and num-CAPITALIZATION REQUIREMENTS ber of shares of stock and participation certificates outstanding as ofIn accordance with the Farm Credit Act, each borrower is required to December 31, 2014. All shares and participation certificates are statedinvest in the Association as a condition of obtaining a loan. As author- at a $5.00 par value.ized by the Agricultural Credit Act and our capital bylaws, the Board of

SharesDirectors has adopted a capital plan that establishes a stock or partici-Outstanding

pation certificate purchase requirement for obtaining a loan of 2.0% ofClass D common stock (at-risk) 14,164,745. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .the customer’s total loan(s) or one thousand dollars, whichever is less.Class B participation certificates (at-risk) 3,031,711. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The stock purchase requirement of obtaining a lease is one share of

Class D common stock for those eligible to hold such stock or oneUnder our bylaws, we are also authorized to issue Class C preferredClass B participation certificate for those not eligible to hold suchstock. This stock is at-risk and nonvoting with a $5.00 par value perstock. In addition, the purchase of one Class B participation certificateshare. Currently, no stock of this class has been issued.is required of all customers who purchase financial services and are

not a stockholder. The Board of Directors may increase the amount ofOnly holders of Class D common stock have voting rights. Our bylawsrequired investment to the extent authorized in the capital bylaws.do not prohibit us from paying dividends on any classes of stock.The borrower acquires ownership of the capital stock at the time theHowever, no dividends have been declared to date.loan or lease is made. The aggregate par value of the stock is added to

the principal amount of the related obligation. We retain a first lien onOur bylaws generally permit stock and participation certificates to bethe stock or participation certificates owned by customers.retired at the discretion of our Board of Directors and in accordancewith our capitalization plans, provided prescribed capital standardsREGULATORY CAPITALIZATION REQUIREMENTShave been met. At December 31, 2014, we exceeded the prescribedUnder current capital adequacy regulations, we are required to main-standards. We do not anticipate any significant changes in capital thattain a permanent capital ratio of at least 7.0%, a total surplus ratio ofwould affect the normal retirement of stock.at least 7.0%, and a core surplus ratio of at least 3.5%. The calculation

of these ratios in accordance with the FCA Regulations is discussed asfollows:– The permanent capital ratio is average at-risk capital divided by

average risk-adjusted assets. At December 31, 2014, our ratio was16.8%.

– The total surplus ratio is average unallocated surplus less any deduc-tions made in the computation of permanent capital divided by aver-age risk-adjusted assets. At December 31, 2014, our ratio was 16.3%.

– The core surplus ratio is average unallocated surplus less any deduc-tions made in the computation of total surplus and less any excessstock investment in AgriBank divided by average risk-adjustedassets. At December 31, 2014, our ratio was 16.3%.

Regulatory capital includes all of our investment in AgriBank that is inexcess of the required investment under an allotment agreement withAgriBank. However, we did not have any excess stock at December 31,2014, 2013, or 2012.



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

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

FOR THE YEAR ENDEDcertificates in proportion that the aggregate interest paid by eachDECEMBER 31 2014 2013 2012

holder over the prior two years bears to the total interest paid by allCurrent:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .holders of stock and participation certificates.

Federal $17,811 $17 $890. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State 836 465 429In the event of impairment, losses will be absorbed pro rata by impair-Total current 18,647 482 1,319ment based on the following order of priority:Deferred:– first, to holders of Class D common stock and Class B participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Federal (5,183) 13,443 18,217certificates and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State (934) 573 1,180– second, to holders of Class C preferred stock.Total deferred (6,117) 14,016 19,397

Provision for income taxes $12,530 $14,498 $20,716All classes of stock are transferable to other customers who are eligi-ble to hold such class as long as we meet the regulatory minimum Effective tax rate 3.9% 4.5% 6.7%

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

capital requirements.

The following table quantifies the differences between the provisionPATRONAGE DISTRIBUTIONSfor income taxes and income taxes at the statutory ratesThe FCA Regulations prohibit patronage distributions to the extent(in thousands):they would reduce our permanent capital ratio below the minimum

permanent capital adequacy standards. We do not foresee any eventsFOR THE YEAR ENDEDthat would result in this prohibition in 2015. However, we do not have aDECEMBER 31 2014 2013 2012

patronage program to make such distributions.Federal tax at statutory rate $113,261 $113,014 $105,714. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State tax, net 494 614 898. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of non-taxable entity (100,944) (99,241) (86,375). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other (281) 111 479

Provision for income taxes $12,530 $14,498 $20,716


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

DEFERRED INCOME TAXES A valuation allowance for the deferred tax assets was not necessary atTax laws require certain items to be included in our tax returns at December 31, 2014, 2013, or 2012.different times than the items are reflected on our Consolidated State-ments of Income. Some of these items are temporary differences that We have not provided for deferred income taxes on approximatelywill reverse over time. We record the tax effect of temporary differ- $188.8 million of patronage allocations received from AgriBank priorences as deferred tax assets and liabilities netted on our Consolidated to 1993, which comprises our total permanent investment in AgriBank.Statements of Condition. Deferred tax assets and liabilities were com- Such allocations, distributed in the form of stock, are subject to taxposed of the following (in thousands): only upon conversion to cash. Our intent is to permanently maintain

this investment in AgriBank. Additionally, we have not providedAS OF DECEMBER 31 2014 2013 2012 deferred income taxes on accumulated FLCA earnings of $2.5 billion asAllowance for loan losses $4,114 $3,555 $3,565 it is our intent to permanently maintain this equity in the FLCA or to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Postretirement benefit accrual 293 325 357 distribute the earnings to members in a manner that results in no. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Previously taxed non-accrual additional tax liability to us.interest 1,290 1,247 1,372. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net operating loss carryforward — 3,456 3,576. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our income tax returns are subject to review by various United StatesLeasing related, net (111,367) (121,248) (107,350) taxing authorities. We record accruals for items that we believe may. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank 2002 allocated stock (2,897) (2,918) (2,915) be challenged by these taxing authorities. However, we had no uncer-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued pension asset (1,715) (1,432) (1,533) tain income tax positions at December 31, 2014. In addition, we believe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 625 1,241 1,170 we are no longer subject to income tax examinations for years prior toDeferred tax liabilities, net $(109,657) $(115,774) $(101,758) 2011.Gross deferred tax assets $6,322 $9,824 $10,040

Gross deferred tax liabilities $(115,979) $(125,598) $(111,798)


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

DEFERRED INCOME TAXES A valuation allowance for the deferred tax assets was not necessary atTax laws require certain items to be included in our tax returns at December 31, 2014, 2013, or 2012.different times than the items are reflected on our Consolidated State-ments of Income. Some of these items are temporary differences that We have not provided for deferred income taxes on approximatelywill reverse over time. We record the tax effect of temporary differ- $188.8 million of patronage allocations received from AgriBank priorences as deferred tax assets and liabilities netted on our Consolidated to 1993, which comprises our total permanent investment in AgriBank.Statements of Condition. Deferred tax assets and liabilities were com- Such allocations, distributed in the form of stock, are subject to taxposed of the following (in thousands): only upon conversion to cash. Our intent is to permanently maintain

this investment in AgriBank. Additionally, we have not providedAS OF DECEMBER 31 2014 2013 2012 deferred income taxes on accumulated FLCA earnings of $2.5 billion asAllowance for loan losses $4,114 $3,555 $3,565 it is our intent to permanently maintain this equity in the FLCA or to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Postretirement benefit accrual 293 325 357 distribute the earnings to members in a manner that results in no. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Previously taxed non-accrual additional tax liability to us.interest 1,290 1,247 1,372. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net operating loss carryforward — 3,456 3,576. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our income tax returns are subject to review by various United StatesLeasing related, net (111,367) (121,248) (107,350) taxing authorities. We record accruals for items that we believe may. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank 2002 allocated stock (2,897) (2,918) (2,915) be challenged by these taxing authorities. However, we had no uncer-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accrued pension asset (1,715) (1,432) (1,533) tain income tax positions at December 31, 2014. In addition, we believe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other assets 625 1,241 1,170 we are no longer subject to income tax examinations for years prior toDeferred tax liabilities, net $(109,657) $(115,774) $(101,758) 2011.Gross deferred tax assets $6,322 $9,824 $10,040

Gross deferred tax liabilities $(115,979) $(125,598) $(111,798)



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

EMPLOYEE BENEFIT PLANS projected benefit obligation is the actuarial present value of all bene-fits attributed by the pension benefit formula to employee service

PENSION AND POST-EMPLOYMENT BENEFIT PLANS rendered prior to the measurement date based on assumed futureComplete financial information for the pension and post-employment compensation levels. The projected benefit obligation of the District-benefit plans may be found in the Combined AgriBank and Affiliated wide plan was $1.2 billion, $1.0 billion, and $1.1 billion at December 31,Associations 2014 Annual Report (District financial statements). 2014, 2013, and 2012, respectively. The fair value of the plan assets was

$881.1 million, $759.5 million, and $640.1 million at December 31, 2014,The Farm Credit Foundations Plan Sponsor and Trust Committees 2013, and 2012, respectively. The accumulated benefit obligation,provide oversight of the benefit plans. These governance committees which is the actuarial present value of the benefits attributed toare comprised of elected or appointed representatives (senior leader- employee service rendered before the measurement date and based onship and/or Board of Director members) from the participating organi- current employee service and compensation, exceeds pension planzations. The Coordinating Committee (a subset of the Plan Sponsor assets. The accumulated benefit obligation for the District-wide planCommittee comprised of AgriBank District representatives) is respon- was $1.1 billion, $864.2 million, and $908.2 million at December 31,sible for decisions regarding retirement benefits at the direction of the 2014, 2013, and 2012, respectively. The funding status is subject toAgriBank District participating employers. The Trust Committee is many variables including performance of plan assets and interest rateresponsible for fiduciary and plan administrative functions. levels. Therefore, changes in assumptions could significantly affect

these estimates.PENSION PLAN: Certain employees participate in the AgriBank DistrictRetirement Plan, a District-wide multi-employer defined benefit Costs are determined for each individual employer based on costsretirement plan. The Department of Labor has determined the plan to directly related to their current employees as well as an allocation ofbe a governmental plan; therefore, the plan is not subject to the provi- the remaining costs based proportionately on the estimated projectedsions of the Employee Retirement Income Security Act of 1974, as liability of the employer under this plan. We recognize our propor-amended (ERISA). As the plan is not subject to ERISA, the plan’s bene- tional share of expense and contribute a proportional share of funding.fits are not insured by the Pension Benefit Guaranty Corporation. Total plan expense for participating employers was $45.8 million,Accordingly, the amount of accumulated benefits that participants $63.3 million, and $52.7 million for 2014, 2013, and 2012, respectively.would receive in the event of the plan’s termination is contingent on Our allocated share of plan expenses included in ‘‘Salaries andthe sufficiency of the plan’s net assets to provide benefits at that time. employee benefits’’ in the Consolidated Statements of Income wasThis Plan is noncontributory and covers certain eligible District $10.1 million, $12.3 million, and $10.3 million for 2014, 2013, and 2012,employees. The assets, liabilities, and costs of the plan are not segre- respectively. The plan expense for participating employers in 2015 isgated by participating entities. As such, plan assets are available for expected to increase to levels more consistent with 2013 primarily dueany of the participating employers’ retirees at any point in time. Addi- to changes in discount rate and mortality assumptions. Participatingtionally, if a participating employer stops contributing to the plan, the employers contributed $52.0 million, $59.0 million, and $51.3 million tounfunded obligations of the plan may be borne by the remaining par- the plan in 2014, 2013, and 2012, respectively. Our allocated share ofticipating employers. Further, if we choose to stop participating in the these pension contributions was $10.1 million, $11.5 million, andplan, we may be required to pay an amount based on the underfunded $10.1 million for 2014, 2013, and 2012, respectively. Benefits paid tostatus of the plan. Because of the nature of the plan, any individual participants in the District were $42.6 million in 2014, none of whichemployer is not able to unilaterally change the provisions of the plan. were paid to our senior officers who were actively employed duringIf an employee transfers to another employer within the same plan, the year. While the plan is a governmental plan and is not subject tothe employee benefits under the plan transfer. Benefits are based on minimum funding requirements, the employers contribute amountssalary and years of service. There is no collective bargaining agree- necessary on an actuarial basis to provide the plan with sufficientment in place as part of this plan. assets to meet the benefits to be paid to participants. The amount of

the total District employer contributions expected to be paid into theAs disclosed in the District financial statements, the defined benefit pension plans during 2015 is $57.9 million. Our allocated share of thesepension plan reflects an unfunded liability totaling $423.9 million at pension contributions is expected to be $11.4 million. The amount ulti-December 31, 2014. The pension benefits funding status reflects the mately to be contributed and the amount ultimately recognized asnet of the fair value of the plan assets and the projected benefit expense as well as the timing of those contributions and expenses, areobligation at the date of these consolidated financial statements. The subject to many variables including performance of plan assets and


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

interest rate levels. These variables could result in actual contribu- the Consolidated Statements of Income were $200 thousand,tions and expenses being greater than or less than the amounts $230 thousand, and $216 thousand for 2014, 2013, and 2012, respec-reflected in the District financial statements. tively. Our cash contributions, equal to the benefits paid, were

$24 thousand, $26 thousand, and $28 thousand for 2014, 2013, andNONQUALIFIED RETIREMENT PLAN: We also participate in the District- 2012, respectively.wide non-qualified defined benefit Pension Restoration Plan. This planrestores retirement benefits to certain highly compensated eligible DEFINED CONTRIBUTION PLANSemployees that would have been provided under the qualified plan if We participate in a District-wide defined contribution retirement sav-such benefits were not above the Internal Revenue Code compensation ings plan. For employees hired before January 1, 2007, employee contri-or other limits. butions are matched dollar for dollar up to 2.0% and 50 cents on the

dollar on the next 4.0% on both pre-tax and post-tax contributions.As disclosed in the District financial statements, the Pension Restora- The maximum employer match is 4.0%. For employees hired aftertion Plan reflects an unfunded liability totaling $27.7 million at Decem- December 31, 2006, we contribute 3.0% of the employee’s compensa-ber 31, 2014. This plan is funded as the benefits are paid; therefore, tion and will match employee contributions dollar for dollar up to athere are no assets in the plan and the unfunded liability is equal to the maximum of 6.0% on both pre-tax and post-tax contributions. Theprojected benefit obligation. The projected benefit obligation of the maximum employer contribution is 9.0%.Pension Restoration Plan was $27.7 million, $25.3 million, and$23.5 million at December 31, 2014, 2013, and 2012, respectively. The We also participate in a District-wide Nonqualified Deferred Compen-accumulated benefit obligation for the Pension Restoration Plan was sation Plan. Eligible participants must meet one of the following crite-$23.0 million, $19.8 million, and $17.5 million at December 31, 2014, ria: certain salary thresholds as determined by the IRS, be either a2013, and 2012, respectively. The amount of the pension benefits fund- Chief Executive Officer or President of a participating employer, oring status is subject to many variables including interest rate levels. have previously elected pre-tax deferrals in 2006 under predecessorTherefore, changes in assumptions could significantly affect these nonqualified deferred compensation plans. Under this plan theestimates. employee may defer a portion of his/her salary, bonus, and other com-

pensation. Additionally, the plan provides for supplemental employerCosts are determined for each individual employer based on costs matching contributions related to any compensation deferred by thedirectly related to their participants in the plan. Total Pension Resto- employee that would have been eligible for a matching contributionration Plan expense for participating employers was $3.7 million, under the retirement savings plan if it were not for certain IRS$3.6 million, and $2.4 million for 2014, 2013, and 2012, respectively. Our limitations.allocated share of plan expenses included in ‘‘Salaries and employeebenefits’’ in the Consolidated Statements of Income was $309 thou- Employer contribution expenses for the retirement savings plans,sand, $284 thousand, and $321 thousand for 2014, 2013, and 2012, included in ‘‘Salaries and employee benefits’’ in the Consolidated State-respectively. The Pension Restoration Plan is unfunded and we make ments of Income, were $5.2 million, $4.8 million, and $3.8 million inannual contributions to fund benefits paid to our retirees covered by 2014, 2013, and 2012, respectively. These expenses were equal to ourthe plan. Our cash contributions, equal to the benefits paid, were cash contributions for each year.$331 thousand, $331 thousand, and $1.0 million for 2014, 2013, and2012, respectively. There were no benefits paid under the Pension Additionally, we participate in a District-wide Pre-409A Frozen Non-Restoration Plan to our senior officers who were actively employed qualified Deferred Compensation Plan. This plan serves the same pur-during the year. pose as the Nonqualified Deferred Compensation Plan. However, the

plan was frozen effective January 1, 2007. As such, no additional par-RETIREE MEDICAL PLANS: District employers also provide certain ticipants are eligible to enter the plan and no additional employerhealth insurance benefits to eligible retired employees according to contributions will be made to the plan.the terms of the benefit plan. The anticipated costs of these benefitsare accrued during the period of the employee’s active status. Postre-tirement benefit costs included in ‘‘Salaries and employee benefits’’ in


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

interest rate levels. These variables could result in actual contribu- the Consolidated Statements of Income were $200 thousand,tions and expenses being greater than or less than the amounts $230 thousand, and $216 thousand for 2014, 2013, and 2012, respec-reflected in the District financial statements. tively. Our cash contributions, equal to the benefits paid, were

$24 thousand, $26 thousand, and $28 thousand for 2014, 2013, andNONQUALIFIED RETIREMENT PLAN: We also participate in the District- 2012, respectively.wide non-qualified defined benefit Pension Restoration Plan. This planrestores retirement benefits to certain highly compensated eligible DEFINED CONTRIBUTION PLANSemployees that would have been provided under the qualified plan if We participate in a District-wide defined contribution retirement sav-such benefits were not above the Internal Revenue Code compensation ings plan. For employees hired before January 1, 2007, employee contri-or other limits. butions are matched dollar for dollar up to 2.0% and 50 cents on the

dollar on the next 4.0% on both pre-tax and post-tax contributions.As disclosed in the District financial statements, the Pension Restora- The maximum employer match is 4.0%. For employees hired aftertion Plan reflects an unfunded liability totaling $27.7 million at Decem- December 31, 2006, we contribute 3.0% of the employee’s compensa-ber 31, 2014. This plan is funded as the benefits are paid; therefore, tion and will match employee contributions dollar for dollar up to athere are no assets in the plan and the unfunded liability is equal to the maximum of 6.0% on both pre-tax and post-tax contributions. Theprojected benefit obligation. The projected benefit obligation of the maximum employer contribution is 9.0%.Pension Restoration Plan was $27.7 million, $25.3 million, and$23.5 million at December 31, 2014, 2013, and 2012, respectively. The We also participate in a District-wide Nonqualified Deferred Compen-accumulated benefit obligation for the Pension Restoration Plan was sation Plan. Eligible participants must meet one of the following crite-$23.0 million, $19.8 million, and $17.5 million at December 31, 2014, ria: certain salary thresholds as determined by the IRS, be either a2013, and 2012, respectively. The amount of the pension benefits fund- Chief Executive Officer or President of a participating employer, oring status is subject to many variables including interest rate levels. have previously elected pre-tax deferrals in 2006 under predecessorTherefore, changes in assumptions could significantly affect these nonqualified deferred compensation plans. Under this plan theestimates. employee may defer a portion of his/her salary, bonus, and other com-

pensation. Additionally, the plan provides for supplemental employerCosts are determined for each individual employer based on costs matching contributions related to any compensation deferred by thedirectly related to their participants in the plan. Total Pension Resto- employee that would have been eligible for a matching contributionration Plan expense for participating employers was $3.7 million, under the retirement savings plan if it were not for certain IRS$3.6 million, and $2.4 million for 2014, 2013, and 2012, respectively. Our limitations.allocated share of plan expenses included in ‘‘Salaries and employeebenefits’’ in the Consolidated Statements of Income was $309 thou- Employer contribution expenses for the retirement savings plans,sand, $284 thousand, and $321 thousand for 2014, 2013, and 2012, included in ‘‘Salaries and employee benefits’’ in the Consolidated State-respectively. The Pension Restoration Plan is unfunded and we make ments of Income, were $5.2 million, $4.8 million, and $3.8 million inannual contributions to fund benefits paid to our retirees covered by 2014, 2013, and 2012, respectively. These expenses were equal to ourthe plan. Our cash contributions, equal to the benefits paid, were cash contributions for each year.$331 thousand, $331 thousand, and $1.0 million for 2014, 2013, and2012, respectively. There were no benefits paid under the Pension Additionally, we participate in a District-wide Pre-409A Frozen Non-Restoration Plan to our senior officers who were actively employed qualified Deferred Compensation Plan. This plan serves the same pur-during the year. pose as the Nonqualified Deferred Compensation Plan. However, the

plan was frozen effective January 1, 2007. As such, no additional par-RETIREE MEDICAL PLANS: District employers also provide certain ticipants are eligible to enter the plan and no additional employerhealth insurance benefits to eligible retired employees according to contributions will be made to the plan.the terms of the benefit plan. The anticipated costs of these benefitsare accrued during the period of the employee’s active status. Postre-tirement benefit costs included in ‘‘Salaries and employee benefits’’ in



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

RELATED PARTY TRANSACTIONS As discussed in Note 7, we borrow from AgriBank, in the form of a lineof credit, to fund our loan portfolio.

In the ordinary course of business, we may enter into loan transactionswith our officers, directors, their immediate family members, and Additional transactions other than loans in the ordinary course ofother organizations with which such persons may be associated. Such business involving directors and senior officers include our dealertransactions are subject to special approval requirements contained in credit program which provides financing for new and used equipmentthe FCA Regulations and are made on the same terms, including inter- for an equipment dealership that is owned by Director Brandon Rob-est rates, amortization schedules, and collateral, as those prevailing at bins. All dealerships in the dealer credit program are offered the samethe time for comparable transactions with other persons. In our opin- terms and conditions.ion, none of these loans outstanding at December 31, 2014 involvedmore than a normal risk of collectability. We purchase various services from AgriBank including certain finan-

cial and retail systems, financial reporting services, tax reporting ser-The following table presents information on loans and leases to related vices, technology services, and insurance services. The total cost ofparties (in thousands): services we purchased from AgriBank was $5.3 million in 2014, 2013,

and 2012.2014 2013 2012

As of December 31: We also purchase human resource information systems, benefit, pay-. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total related party loans and roll, and workforce management services from Farm Credit Founda-leases $14,101 $10,182 $17,473

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . tions (Foundations). Our investment was $113 thousand at Decem-For the year ended December 31:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ber 31, 2014, 2013, and 2012. The total cost of services purchased from

Advances to related parties $5,619 $2,852 $6,624. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foundations was $708 thousand, $658 thousand, and $530 thousand in

Repayments by related parties 4,192 2,976 4,991 2014, 2013, and 2012, respectively.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The related parties can be different each year end primarily due tochanges in the composition of the Board of Directors. Advances andrepayments to related parties at the end of each year are included inthe preceding chart.


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

CONTINGENCIES AND COMMITMENTS a beneficiary under specific conditions. At December 31, 2014, we hadcommitments to extend credit and unexercised commitments related

In the normal course of business, we have contingent liabilities and to standby letters of credit of $3.1 billion. Additionally, we hadoutstanding commitments which may not be reflected in the accompa- $18.6 million of issued standby letters of credit as of December 31,nying consolidated financial statements. We do not anticipate any 2014.material losses because of these contingencies or commitments.

Commitments to extend credit and letters of credit generally haveWe may be named as a defendant in lawsuits or legal actions in the fixed expiration dates or other termination clauses and we maynormal course of business. At the date of these consolidated financial require payment of a fee. If commitments to extend credit and lettersstatements, we were not aware of any such actions that would have a of credit remain unfulfilled or have not expired, they may have creditmaterial impact on our financial condition. However, such actions risk not recognized in the financial statements. Many of the commit-could arise in the future. ments to extend credit and letters of credit will expire without being

fully drawn upon. Therefore, the total commitments do not necessarilyWe have commitments to extend credit and letters of credit to satisfy represent future cash requirements. Certain letters of credit may havethe financing needs of our borrowers. These financial instruments recourse provisions that would enable us to recover from third partiesinvolve, to varying degrees, elements of credit risk that may be recog- amounts paid under guarantees, thereby limiting our maximum poten-nized in the financial statements. Commitments to extend credit are tial exposure. The credit risk involved in issuing these financial instru-agreements to lend to a borrower as long as there is not a violation of ments is essentially the same as that involved in extending loans toany condition established in the loan contract. Standby letters of credit borrowers and we apply the same credit policies.are agreements to pay a beneficiary if there is a default on a contrac-tual arrangement. Commercial letters of credit are agreements to pay



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

FAIR VALUE MEASUREMENTS establishes a fair value hierarchy, with three input levels that may beused to measure fair value. Refer to Note 2 for a more complete

Fair value is defined as the price that would be received to sell an asset description of the three input levels.or paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date in the principal or most advan- We did not have any assets measured at fair value on a recurring basistageous market for the asset or liability. Accounting guidance also at December 31, 2014, 2013, or 2012.

NON-RECURRING BASISWe may be required, from time to time, to measure certain assets at fair value on a non-recurring basis. Information on assets measured at fairvalue on a non-recurring basis follows (in thousands):

AS OF DECEMBER 31, 2014 Fair Value Measurement Using Total GainsLevel 1 Level 2 Level 3 Total Fair Value (Losses)

Loans $— $13,093 $— $13,093 $(15,208). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other property owned — — 9,695 9,695 (806). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


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

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


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

Other property owned — — 14,924 14,924 (9,945). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

VALUATION TECHNIQUES

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


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

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

2014 2013 2012

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

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

Net loans $18,728,328 $18,819,743 $17,622,965 $17,345,519 $16,466,225 $16,730,439. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,038,343 1,033,188 1,227,018 1,218,873 1,450,877 1,434,281. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets — — 74,048 74,185 144,199 147,519. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Note payable to AgriBank, FCB $16,956,038 $17,025,965 $16,479,097 $16,246,759 $15,818,603 $16,068,610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Commitments to extend credit and letters of credit $(3,943) $(3,651) $(3,027). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

borrowers with similar credit risk. In addition, loans are valued usingThese estimates involve uncertainties, matters of judgment, and can- the Farm Credit interest rate yield curve, prepayment rates, contrac-not be determined with precision. Changes in assumptions could sig- tual loan information, credit classification, and collateral values. Asnificantly affect the estimates. the discount rates are based upon internal pricing mechanisms and

other management estimates, management has no basis to determineEstimating the fair value of our investment in AgriBank is not practi- whether the fair values presented would be indicative of the exit pricecal because the stock is not traded. As discussed in Notes 2 and 4, the negotiated in an actual sale. Furthermore, certain statutory or regula-investment is a requirement of borrowing from AgriBank. tory factors not considered in the valuation, such as the unique statu-

tory rights of System borrowers, could render our portfolio less mar-ketable outside the System.

For fair value of loans individually impaired, we assume collection willresult only from the sale of the underlying collateral. Fair value isestimated to equal the total net realizable value of the underlyingcollateral. Costs to sell represent transaction costs and are notincluded as a component of the asset’s fair value.


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

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

2014 2013 2012

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

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

Net loans $18,728,328 $18,819,743 $17,622,965 $17,345,519 $16,466,225 $16,730,439. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investment securities 1,038,343 1,033,188 1,227,018 1,218,873 1,450,877 1,434,281. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other earning assets — — 74,048 74,185 144,199 147,519. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Note payable to AgriBank, FCB $16,956,038 $17,025,965 $16,479,097 $16,246,759 $15,818,603 $16,068,610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Commitments to extend credit and letters of credit $(3,943) $(3,651) $(3,027). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

borrowers with similar credit risk. In addition, loans are valued usingThese estimates involve uncertainties, matters of judgment, and can- the Farm Credit interest rate yield curve, prepayment rates, contrac-not be determined with precision. Changes in assumptions could sig- tual loan information, credit classification, and collateral values. Asnificantly affect the estimates. the discount rates are based upon internal pricing mechanisms and

other management estimates, management has no basis to determineEstimating the fair value of our investment in AgriBank is not practi- whether the fair values presented would be indicative of the exit pricecal because the stock is not traded. As discussed in Notes 2 and 4, the negotiated in an actual sale. Furthermore, certain statutory or regula-investment is a requirement of borrowing from AgriBank. tory factors not considered in the valuation, such as the unique statu-

tory rights of System borrowers, could render our portfolio less mar-ketable outside the System.

For fair value of loans individually impaired, we assume collection willresult only from the sale of the underlying collateral. Fair value isestimated to equal the total net realizable value of the underlyingcollateral. Costs to sell represent transaction costs and are notincluded as a component of the asset’s fair value.



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

INVESTMENT SECURITIES: If an active market exists, the fair value is NOTE PAYABLE TO AGRIBANK: Estimating the fair value of the notebased on currently quoted market prices. For those securities for payable to AgriBank is determined by segregating the note into pricingwhich an active market does not exist, we estimate the fair value of pools according to the types and terms of the underlying loans funded.these investments by discounting the expected future cash flows using We discount the estimated cash flows from these pools using thecurrent interest rates adjusted for credit risk. current rate charged by AgriBank for additional borrowings with simi-

lar characteristics.OTHER EARNING ASSETS: Other earning assets resulted from succes-sor-in-interest contracts from our involvement with the federal gov- COMMITMENTS TO EXTEND CREDIT AND LETTERS OF CREDIT: Estimat-ernment’s tobacco buy-out program. We estimated the fair value of ing the fair value of commitments and letters of credit is determinedthese investments by discounting the expected future cash flows using by the inherent credit loss in such instruments.current interest rates.


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

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

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

2014 First Second Third Fourth Total


Provision for (reversal of) loan losses 926 7,723 2,907 (1,228) 10,328. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




Net income $77,645 $71,333 $78,778 $83,318 $311,074



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




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



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




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


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

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

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



Provision for (reversal of) loan losses 926 7,723 2,907 (1,228) 10,328. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .




Net income $77,645 $71,333 $78,778 $83,318 $311,074



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




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



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




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



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

SUBSEQUENT EVENTS

We have evaluated subsequent events through March 12, 2015, which is the date the consolidated financial statements were available to beissued. There have been no material subsequent events that would require recognition in our 2014 consolidated financial statements ordisclosures in the Notes to Consolidated Financial Statements.


DISCLOSURE INFORMATION REQUIRED BY REGULATIONS (UNAUDITED)

DESCRIPTION OF BUSINESS MANAGEMENT’S DISCUSSION AND ANALYSISGeneral information regarding the business is discussed in Note 1 of Information regarding any material aspects of our financial condition,this Annual Report. changes in financial condition, and results of operations are discussed

in the ‘‘Management’s Discussion and Analysis’’ section of this AnnualThe description of significant business developments, if any, is dis- Report.cussed in the ‘‘Management’s Discussion and Analysis’’ section of thisAnnual Report. BOARD OF DIRECTORS

Our Board of Directors is organized into the following committees toDESCRIPTION OF PROPERTY carry out Board responsibilities:There are 98 offices located throughout our territory making and – The Audit Committee oversees financial reporting, the adequacy ofservicing long and short-term loans. We own 82 buildings and lease 16 our internal control systems, the scope of our internal audit pro-office spaces. In addition to our Louisville office facility, we also lease gram, the independence of the outside auditors, the processes foradditional space in Louisville to accommodate staff. There are 95 sales monitoring compliance with laws and regulations and the code ofoffices which are supported by seven special account units and four ethics. The Audit Committee also oversees the adequacy of manage-central processing units. A single building may house multiple offices. ment’s action with respect to recommendations arising from audit-The owned facilities have net book values ranging between $16 thou- ing activities;sand and $7.8 million. Currently there is one building being held for – The Governance Committee addresses issues of Board governanceresale. During 2014, construction was completed on new facilities for and the Board’s continuing efforts to strengthen and renew thethe replacement of the following offices in Indiana: Rushville, Jasper, Board, administers a process for maintaining and periodicallyBloomington, and Columbus, in Ohio: Delphos and Lebanon, in Ken- reviewing board policies, and administers a planning processtucky: Somerset, in Tennessee: Chattanooga, Lebanon, Fayetteville, focused upon achieving our mission and maintaining a viable, com-and Maryville. petitive institution;

– The Human Resources Committee oversees and provides overallLEGAL PROCEEDINGS direction and/or recommendations for compensation, benefits andInformation regarding legal proceedings is discussed in Note 12 of this human resource performance management programs; andAnnual Report. We were not subject to any enforcement actions as of – The Risk Management Committee oversees the integration of riskDecember 31, 2014. management activities throughout our organization. Committee

members review ongoing risk assessments of current and emergingDESCRIPTION OF CAPITAL STRUCTURE risks to ensure adequate planning and resources are directed atInformation regarding our capital structure is discussed in Note 8 of managing the identified risks. The Committee also establishes andthis Annual Report. promotes an effective risk culture throughout our organization.

DESCRIPTION OF LIABILITIES Information regarding directors who served as of December 31, 2014,Information regarding liabilities is discussed in Notes 7, 9, 10, 12, and 14 including business experience in the last five years and any otherof this Annual Report. business interest where a director serves on the Board of Directors or

as a senior officer follows:SELECTED FINANCIAL DATAThe ‘‘Consolidated Five-Year Summary of Selected Financial Data’’ ispresented at the beginning of this Annual Report.

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

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

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

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

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

R. Hugh Adams First year of a four year term Self-employed farmer (corn, soybeans, and wheat); retired fromDirector Tennessee Farm Bureau (Field Service Director). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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



DESCRIPTION OF BUSINESS MANAGEMENT’S DISCUSSION AND ANALYSISGeneral information regarding the business is discussed in Note 1 of Information regarding any material aspects of our financial condition,this Annual Report. changes in financial condition, and results of operations are discussed

in the ‘‘Management’s Discussion and Analysis’’ section of this AnnualThe description of significant business developments, if any, is dis- Report.cussed in the ‘‘Management’s Discussion and Analysis’’ section of thisAnnual Report. BOARD OF DIRECTORS

Our Board of Directors is organized into the following committees toDESCRIPTION OF PROPERTY carry out Board responsibilities:There are 98 offices located throughout our territory making and – The Audit Committee oversees financial reporting, the adequacy ofservicing long and short-term loans. We own 82 buildings and lease 16 our internal control systems, the scope of our internal audit pro-office spaces. In addition to our Louisville office facility, we also lease gram, the independence of the outside auditors, the processes foradditional space in Louisville to accommodate staff. There are 95 sales monitoring compliance with laws and regulations and the code ofoffices which are supported by seven special account units and four ethics. The Audit Committee also oversees the adequacy of manage-central processing units. A single building may house multiple offices. ment’s action with respect to recommendations arising from audit-The owned facilities have net book values ranging between $16 thou- ing activities;sand and $7.8 million. Currently there is one building being held for – The Governance Committee addresses issues of Board governanceresale. During 2014, construction was completed on new facilities for and the Board’s continuing efforts to strengthen and renew thethe replacement of the following offices in Indiana: Rushville, Jasper, Board, administers a process for maintaining and periodicallyBloomington, and Columbus, in Ohio: Delphos and Lebanon, in Ken- reviewing board policies, and administers a planning processtucky: Somerset, in Tennessee: Chattanooga, Lebanon, Fayetteville, focused upon achieving our mission and maintaining a viable, com-and Maryville. petitive institution;

– The Human Resources Committee oversees and provides overallLEGAL PROCEEDINGS direction and/or recommendations for compensation, benefits andInformation regarding legal proceedings is discussed in Note 12 of this human resource performance management programs; andAnnual Report. We were not subject to any enforcement actions as of – The Risk Management Committee oversees the integration of riskDecember 31, 2014. management activities throughout our organization. Committee

members review ongoing risk assessments of current and emergingDESCRIPTION OF CAPITAL STRUCTURE risks to ensure adequate planning and resources are directed atInformation regarding our capital structure is discussed in Note 8 of managing the identified risks. The Committee also establishes andthis Annual Report. promotes an effective risk culture throughout our organization.

DESCRIPTION OF LIABILITIES Information regarding directors who served as of December 31, 2014,Information regarding liabilities is discussed in Notes 7, 9, 10, 12, and 14 including business experience in the last five years and any otherof this Annual Report. business interest where a director serves on the Board of Directors or

as a senior officer follows:SELECTED FINANCIAL DATAThe ‘‘Consolidated Five-Year Summary of Selected Financial Data’’ ispresented at the beginning of this Annual Report.


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

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

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

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

R. Hugh Adams First year of a four year term Self-employed farmer (corn, soybeans, and wheat); retired fromDirector Tennessee Farm Bureau (Field Service Director). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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




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

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

Mary C. Courtney First year of a one year term Self-employed farmer (tobacco, soybeans, corn, wholesale produce, andDirector cattle), Co-Owner of Lawns of Perfection, LLC (lawn maintenance). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Lowell Hill First year of a four year term Self-employed farmer (grain); retired general superintendent of ThomasDirector Marker Construction Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel Jr. Third year of a four year term Self-employed farmer (dairy, corn, soybeans, wheat, hay, and alfalfa)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jimmy D. Mays First year of a four year term Self-employed farmer (beef cattle)Director. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson Third year of a four year term President of Patterson Farms, Inc. (farm market, apples, strawberries,Director and peaches). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

George E. Stebbins Second year of a four year term Self-employed farmer (corn, soybeans, and wheat); previously, farmingDirector included hog operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker Second year of a four year term Self-empoyed farmer (hay, timber, and cattle); retired from GreeneDirector County Tennessee School System, North Greene High School (agriculture

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

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

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

Tony G. Wolfe First year of a four year term Self-employed farmer (corn, soybeans, wheat, and cattle); former FieldDirector Representative for Indiana Farm Bureau. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional business interests where a director serves on the board of Water and Sewer District (sanitation), Jasper County Economic Devel-directors or as a senior officer includes: opment (county development), Northwest Indiana Solid Waste DistrictR. Hugh Adams is a director of the Weakley County Farm Bureau (sanitation), Northwest Indiana Workforce Development (state devel-(agriculture) and the West Tennessee River Basin Authority (environ- opment), American Soybean Association (agriculture) and Indianamental conservation). County Commissioners Association (county government).

Barney Barnett is a director of Farm Credit Foundations (employee David E. Hahn serves on the AgriBank District Farm Credit Councilbenefits). Board (agriculture).

David A. Bates, III is the president of Bullitt County Farm Bureau John L. Kuegel Jr. is a director of the Daviess County Farm Bureau(agriculture). Board (agriculture), Daviess County Extension Council (cooperative

education), District 2 Chair State Resolutions Committee of KentuckyDonald Blankenship serves on the AgriBank District Farm Credit Farm Bureau (agriculture), and serves on the AgriBank District FarmCouncil Board (agriculture). Credit Council Board (agriculture).

Mary C. Courtney is a director of the Shelby County Farm Bureau James William Patterson is a director of Geauga County Farm Bureau(agriculture) and the Shelby County Extension Council (agriculture). (agriculture) and is Treasurer for the Ohio Farm Bureau Federation

(agriculture).D. Kevin Cox is a director of Parke County REMC (electric cooperative)and also serves on the Jackson Township Advisory Board for Parke Kaye Hurst Whitehead serves as a director of the Delaware CountyCounty (local government). Pork Producers (agriculture), the Indiana University Health Ball

Memorial Hospital (medical facility), the Ivy Tech Community CollegeKendell Culp is a director of Indiana Soybean Alliance (agriculture), (education), chair of the Delaware County Farm Bureau (agriculture),Jasper County Drainage (water management), Jasper County Regional and serves on the AgriBank District Farm Credit Council Board

(agriculture).


Tony G. Wolfe is a director of the Gibson County Farm Bureau (agricul- attendance at designated meetings not specified above but set out byture), Gibson County Chamber of Commerce (county tourism/develop- board policy. Directors were also reimbursed for reasonable expensesment), Shiloh Church Cemetery Board (community organization), and incurred in connection with attending such meetings.Selective Service System Board for Gibson County (military).

In 2014, the officers of the Board (Chair, Vice Chair and Secretary) andDirectors are compensated in the form of an annual retainer paid the Chair of each of the Board’s standing committees (Audit, Govern-monthly for time spent in preparing and attending board and commit- ance, Human Resources, and Risk Management) received an annualtee meetings, advisory committee meetings, customer appreciation retainer paid monthly for the additional time commitments of theirmeetings, summer planning and AgriBank annual meetings. For the positions. The monthly amounts paid were as follows: Board Chair —month of January 2014 the monthly rate paid was $2,780. Beginning $300; Board Vice Chair and Secretary — $125; and Board CommitteeFebruary 1, 2014, the retainer increased to a monthly rate of $2,820. In Chairs — $104. Additionally, directors serving on standing committeesaddition, directors were compensated at the daily rate of $350 for receive $175 for participation in conference call meetings.

Information regarding compensation paid to each director who servedduring 2014 follows:

CompensationNumber of Days Served 1

Paid for Service TotalOther Official on a Board Name of Compensation

Board Meetings Activities Committee 2 Committee Paid in 2014

R. Hugh Adams 16.0 3.0 $— $34,820. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett 18.0 11.5 700 Audit 35,799104 Risk

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

Robert E. Barton 3 14.0 7.0 350 Governance 27,460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates III 20.0 11.0 — 32,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship 18.0 13.0 — 38,520. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Kevin Cox 20.0 31.5 104 Risk 46,070. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp 20.0 24.0 350 Governance 38,570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mary Courtney 4 11.0 7.0 — 17,590. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Roger D. Earley 3 14.0 13.0 525 Audit 26,935. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dan E. Flanagan 5 5.0 1.0 208 Risk 9,248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David E. Hahn 20.0 26.0 350 Governance 40,420. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lowell Hill 6 6.0 6.5 — 8,955. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel, Jr. 20.0 21.5 1,045 Governance 38,355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jimmy D. Mays 6 6.0 2.0 700 Audit 9,130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson 17.0 12.0 1,638 Audit 37,682. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins 15.0 3.0 592 Governance 35,536208 Risk

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

George E. Stebbins 20.0 12.5 525 Audit 27,275. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker 20.0 21.5 733 Governance 38,878. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kaye Hurst Whitehead 18.0 26.0 208 Audit 39,928. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson 14.0 9.0 1,042 Human Resources 38,340729 Risk

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

Tony G. Wolfe 20.0 21.0 208 Human Resources 39,228

$10,319 $660,739

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 Term expired in October 2014.4 Appointed to Board of Directors in July 2014 to fill vacancy.5 Mr. Flanagan resigned in March 2014 as he was elected to the AgriBank Board of Directors.6 Elected to Board of Directors in October 2014.

Total compensation includes annual insurance of $1.51 for business travel and $18.00 for AD&D per director.


Tony G. Wolfe is a director of the Gibson County Farm Bureau (agricul- attendance at designated meetings not specified above but set out byture), Gibson County Chamber of Commerce (county tourism/develop- board policy. Directors were also reimbursed for reasonable expensesment), Shiloh Church Cemetery Board (community organization), and incurred in connection with attending such meetings.Selective Service System Board for Gibson County (military).

In 2014, the officers of the Board (Chair, Vice Chair and Secretary) andDirectors are compensated in the form of an annual retainer paid the Chair of each of the Board’s standing committees (Audit, Govern-monthly for time spent in preparing and attending board and commit- ance, Human Resources, and Risk Management) received an annualtee meetings, advisory committee meetings, customer appreciation retainer paid monthly for the additional time commitments of theirmeetings, summer planning and AgriBank annual meetings. For the positions. The monthly amounts paid were as follows: Board Chair —month of January 2014 the monthly rate paid was $2,780. Beginning $300; Board Vice Chair and Secretary — $125; and Board CommitteeFebruary 1, 2014, the retainer increased to a monthly rate of $2,820. In Chairs — $104. Additionally, directors serving on standing committeesaddition, directors were compensated at the daily rate of $350 for receive $175 for participation in conference call meetings.

Information regarding compensation paid to each director who servedduring 2014 follows:

CompensationNumber of Days Served 1

Paid for Service TotalOther Official on a Board Name of Compensation

Board Meetings Activities Committee 2 Committee Paid in 2014

R. Hugh Adams 16.0 3.0 $— $34,820. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Barney Barnett 18.0 11.5 700 Audit 35,799104 Risk

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Robert E. Barton 3 14.0 7.0 350 Governance 27,460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David A. Bates III 20.0 11.0 — 32,000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Donald Blankenship 18.0 13.0 — 38,520. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Kevin Cox 20.0 31.5 104 Risk 46,070. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kendell Culp 20.0 24.0 350 Governance 38,570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mary Courtney 4 11.0 7.0 — 17,590. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Roger D. Earley 3 14.0 13.0 525 Audit 26,935. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dan E. Flanagan 5 5.0 1.0 208 Risk 9,248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

David E. Hahn 20.0 26.0 350 Governance 40,420. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Lowell Hill 6 6.0 6.5 — 8,955. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

John L. Kuegel, Jr. 20.0 21.5 1,045 Governance 38,355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Jimmy D. Mays 6 6.0 2.0 700 Audit 9,130. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

James William Patterson 17.0 12.0 1,638 Audit 37,682. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Brandon Robbins 15.0 3.0 592 Governance 35,536208 Risk

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George E. Stebbins 20.0 12.5 525 Audit 27,275. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dale B. Tucker 20.0 21.5 733 Governance 38,878. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Kaye Hurst Whitehead 18.0 26.0 208 Audit 39,928. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Andrew Wilson 14.0 9.0 1,042 Human Resources 38,340729 Risk

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Tony G. Wolfe 20.0 21.0 208 Human Resources 39,228

$10,319 $660,739

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 Term expired in October 2014.4 Appointed to Board of Directors in July 2014 to fill vacancy.5 Mr. Flanagan resigned in March 2014 as he was elected to the AgriBank Board of Directors.6 Elected to Board of Directors in October 2014.

Total compensation includes annual insurance of $1.51 for business travel and $18.00 for AD&D per director.



SENIOR OFFICERSThe 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 Vice President of Operations/Information Services for AgriBank fromAugust 2006 to March 2009; Senior Vice President and Chief RiskInformation Officer for AgriBank from March 2009 to January 2011;Executive Vice President of Business Services for AgriBank from January2011 to February 2011; President and Chief Executive Officer-Elect ofFarm Credit Mid-America from March 2011 to May 2011; President andChief Executive Officer of Farm Credit Mid-America from May 2011 topresent.

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Randall Barnard 1 Senior Vice President and Chief Audit Executive Vice President — Internal Audit from October 1999 to February 2010;Senior Vice President — Risk Management from March 2010 toDecember 2013, Senior Vice President and Chief Audit Executive fromJanuary 2014 to present.

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

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Heather Hornback Senior Vice President — Human Capital Vice President — Human Resources from January 2009 to May 2012;Senior Vice President — Human Capital from June 2012 to present.

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Philip Kimmel 1 Senior Vice President — Credit and Chief Credit Senior Vice President — Credit and Chief Credit Officer from JanuaryOfficer 2008 to January 2015.

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

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

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

Jill Marchant General Counsel Associate General Counsel for Dine Equity, Inc. from January 2009 toJuly 2011; General Counsel for Texas Roadhouse from August 2011 toJanuary 2014; General Counsel for Farm Credit Mid-America from June2014 to present.

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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 —Chief Information Officer of Farm Credit Mid-America from June 2012 topresent.

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1 On January 2, 2015, Phillip Kimmel retired. Effective upon his retirement, Steve Allard was named Acting Chief Credit Officer, serving in this position until a successor is named.Other senior officer changes taking effect January 2, 2015, were: 1) Gordon Hanson, Senior Vice President and Chief Risk Officer, was named a senior officer, reporting to thePresident and CEO, and 2) the position of Senior Vice President and Chief Audit Executive, currently held by Randall Barnard, is no longer designated as a senior officer position.

Other business interests where a senior officer served as a director or senior officer includes:

William L. Johnson is a director of the Local Food Association Board Paul Bruce is a director of Farm Credit Foundations (employee(agriculture). benefits).

Randall Barnard is a partner of Barnard Farm (family farmingoperation).


SENIOR OFFICER COMPENSATION The CEO’s short-term incentive opportunity is established by theCompensation Overview: The CEO and senior officer compensation pro- Board of Directors. The Board of Directors has full discretion regardinggram’s design and governance follows prudent risk management stan- the amount of the payout, and it has consistently used the results fromdards, while providing total compensation that promotes the associa- the short-term incentive plan to determine the payout amount. Thetion’s mission and business strategy to ensure a safe, sound, and CEO’s short-term incentive is based solely on the association’s per-dependable source of credit and related services for agriculture and formance, while senior officer short-term incentive is based on bothrural America. The association’s compensation philosophy aims to pro- their team (35%) and the association’s (65%) performance. Seniorvide total cash compensation that is competitive within the relevant officers’ team measures are established by the CEO.market in order to recruit, reward and retain team members to meetthe association’s objectives, while remaining aligned with the best Long-term Incentive: In 2013, the Board of Directors approved imple-interests of cooperative shareholders. The senior officer compensation menting a long-term incentive program, which began in 2014, to alignprogram supports our risk management goals through its balance of the CEO and senior officers to the association’s long-term businessthe following: (1) a balanced mix of base and variable pay, (2) a balanced objectives, while providing the opportunity for a competitive market-use of performance measures that are risk-adjusted where appropri- based total compensation package. The Board of Directors set indepen-ate, and (3) a pay-for-performance process that allocates individual dent three-year performance objectives at the beginning of each planawards based on both results and how those results were achieved. year, including efficiency, credit quality, and Average Daily Balance

(ADB) growth. In addition, the Board of Directors, at its sole discretion,Elements of Compensation: Senior officers, including the CEO, are com- may increase or decrease the amount of the incentive calculated.pensated with a mix of direct cash and retirement plans generallyavailable to all employees. The Board of Directors determines the The first plan year began in 2014 and continues through 2016, and theappropriate balance of base salary and short-term incentives, while payout will occur during the first quarter of 2017. The Board of Direc-keeping their responsibilities to shareholders top of mind. Base salary tors must approve all payouts. In addition, to create the desired align-and short-term incentives are intended to be competitive with annual ment between compensation and long-term performance sooner, therecompensation for comparable positions at peer organizations. is a one-time, two-year transition program that runs from 2014 to 2015.

The payout for this program will occur during the first quarter of 2016.Base Salary: Base salaries for all team members, including the CEO and Individuals becoming eligible for the plan after commencement of thesenior officers, are determined by the position and responsibilities, plan (e.g., new hires) will receive a pro-rata long-term incentive andperformance, and competitive market compensation data. The CEO’s pro-rata transition long-term incentive based on months of service inbase salary increase is determined by combining an individual per- an eligible position as long as the individual became eligible prior toformance rating established by the Board of Directors and the associa- January 1, 2016. The Human Resources Committee of the Board oftion’s performance. Senior officer base salary increases are deter- Directors will administer the plan as it relates to the CEO and delegatemined by each officer’s individual performance rating. CEO and senior the administration as it relates to other participants to the CEO andofficer base salary programs are annually reviewed and approved by human resources function. In addition, the CEO, at his sole discretion,the Board of Directors. may increase or decrease the amount of the incentive calculated based

on market compensation and individual contributions andShort-term Incentive: The Board of Directors approves the short-term performance.incentive program each year and eligible team members, including theCEO and senior officers, participate in the program. The 2014 program Retirement Plans: We also have various post-employment benefit plansincluded team and association performance measures based on finan- which are generally available to all association employees, includingcial and business results, association initiatives, and credit perform- the CEO and senior officers, based on dates of service to the associa-ance. These measures include efficiency ratio, new loan volume, earn- tion and are not otherwise differentiated by position, unless specifi-ing asset growth, crop insurance growth, adverse credit, credit cally stated. Information regarding the post-employment benefit plansadministration, and progress made on key association projects. Associ- is included in Notes 2 and 10 of this Annual Report.ation-level measures may be updated periodically and are approved bythe Board of Directors and are consistent with the association’s busi- Other Components of Compensation: Additionally, compensation associ-ness plan for the corresponding year. Team measures align to the ated with any company-paid vehicles, group term life insurance premi-association and also include measures specific to each business divi- ums, disability insurance premiums, or dependent financial aid may besion. Payouts are earned only when specific levels of performance are made available to the CEO and senior officers based on job criteria orachieved, and are paid out within 75 days of the end of the plan year similar plans available to all employees.(the plan year is the calendar year). The 2015 short-term program willbe similar to the 2014 program.


SENIOR OFFICER COMPENSATION The CEO’s short-term incentive opportunity is established by theCompensation Overview: The CEO and senior officer compensation pro- Board of Directors. The Board of Directors has full discretion regardinggram’s design and governance follows prudent risk management stan- the amount of the payout, and it has consistently used the results fromdards, while providing total compensation that promotes the associa- the short-term incentive plan to determine the payout amount. Thetion’s mission and business strategy to ensure a safe, sound, and CEO’s short-term incentive is based solely on the association’s per-dependable source of credit and related services for agriculture and formance, while senior officer short-term incentive is based on bothrural America. The association’s compensation philosophy aims to pro- their team (35%) and the association’s (65%) performance. Seniorvide total cash compensation that is competitive within the relevant officers’ team measures are established by the CEO.market in order to recruit, reward and retain team members to meetthe association’s objectives, while remaining aligned with the best Long-term Incentive: In 2013, the Board of Directors approved imple-interests of cooperative shareholders. The senior officer compensation menting a long-term incentive program, which began in 2014, to alignprogram supports our risk management goals through its balance of the CEO and senior officers to the association’s long-term businessthe following: (1) a balanced mix of base and variable pay, (2) a balanced objectives, while providing the opportunity for a competitive market-use of performance measures that are risk-adjusted where appropri- based total compensation package. The Board of Directors set indepen-ate, and (3) a pay-for-performance process that allocates individual dent three-year performance objectives at the beginning of each planawards based on both results and how those results were achieved. year, including efficiency, credit quality, and Average Daily Balance

(ADB) growth. In addition, the Board of Directors, at its sole discretion,Elements of Compensation: Senior officers, including the CEO, are com- may increase or decrease the amount of the incentive calculated.pensated with a mix of direct cash and retirement plans generallyavailable to all employees. The Board of Directors determines the The first plan year began in 2014 and continues through 2016, and theappropriate balance of base salary and short-term incentives, while payout will occur during the first quarter of 2017. The Board of Direc-keeping their responsibilities to shareholders top of mind. Base salary tors must approve all payouts. In addition, to create the desired align-and short-term incentives are intended to be competitive with annual ment between compensation and long-term performance sooner, therecompensation for comparable positions at peer organizations. is a one-time, two-year transition program that runs from 2014 to 2015.

The payout for this program will occur during the first quarter of 2016.Base Salary: Base salaries for all team members, including the CEO and Individuals becoming eligible for the plan after commencement of thesenior officers, are determined by the position and responsibilities, plan (e.g., new hires) will receive a pro-rata long-term incentive andperformance, and competitive market compensation data. The CEO’s pro-rata transition long-term incentive based on months of service inbase salary increase is determined by combining an individual per- an eligible position as long as the individual became eligible prior toformance rating established by the Board of Directors and the associa- January 1, 2016. The Human Resources Committee of the Board oftion’s performance. Senior officer base salary increases are deter- Directors will administer the plan as it relates to the CEO and delegatemined by each officer’s individual performance rating. CEO and senior the administration as it relates to other participants to the CEO andofficer base salary programs are annually reviewed and approved by human resources function. In addition, the CEO, at his sole discretion,the Board of Directors. may increase or decrease the amount of the incentive calculated based

on market compensation and individual contributions andShort-term Incentive: The Board of Directors approves the short-term performance.incentive program each year and eligible team members, including theCEO and senior officers, participate in the program. The 2014 program Retirement Plans: We also have various post-employment benefit plansincluded team and association performance measures based on finan- which are generally available to all association employees, includingcial and business results, association initiatives, and credit perform- the CEO and senior officers, based on dates of service to the associa-ance. These measures include efficiency ratio, new loan volume, earn- tion and are not otherwise differentiated by position, unless specifi-ing asset growth, crop insurance growth, adverse credit, credit cally stated. Information regarding the post-employment benefit plansadministration, and progress made on key association projects. Associ- is included in Notes 2 and 10 of this Annual Report.ation-level measures may be updated periodically and are approved bythe Board of Directors and are consistent with the association’s busi- Other Components of Compensation: Additionally, compensation associ-ness plan for the corresponding year. Team measures align to the ated with any company-paid vehicles, group term life insurance premi-association and also include measures specific to each business divi- ums, disability insurance premiums, or dependent financial aid may besion. Payouts are earned only when specific levels of performance are made available to the CEO and senior officers based on job criteria orachieved, and are paid out within 75 days of the end of the plan year similar plans available to all employees.(the plan year is the calendar year). The 2015 short-term program willbe similar to the 2014 program.



A summary of compensation earned by the CEO, senior officers, and highly compensated individuals follows (in thousands):

Name of Individual Year Salary Bonus Deferred/Perquisites Other Total

William Johnson, CEO 2014 $484 $225 $67 $201 $977. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

Aggregate Number of Senior Officers/Highly Compensated Individuals, excluding CEO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Eleven1 2014 $2,253 $882 $63 $3,034 $6,232. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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 was hired inJune 2014.

The amount in ‘‘Other’’ category in the preceding table includes: requirements in the chart above. Under the current rule, an employee– Beginning in 2013, ‘‘Other’’ includes any changes in the value of who is not otherwise among the Association’s five most highly compen-

pension benefits. The value of the pension benefits from Decem- sated employees may have a significant change in the value of his/herber 31, 2013 to December 31, 2014 increased $3.0 million, and from pension, making him/her among the top five most highly compensatedDecember 31, 2012 to December 31, 2013 increased $876 thousand employees. This could cause an individual to be excluded from thedue to changes in actuarial assumptions. The assumptions with the disclosure, who under normal circumstances, would be consideredlargest impact in 2014 included a reduction in the discount rate and among the Association’s most highly compensated. The final ruleupdated mortality tables reflecting longer life expectancies. This excludes from the requirement any employee who, without changes invalue is not reflected for 2012. value related to their pension plan, would not be considered among the

– Employer match on defined contribution plans available to all top five most highly compensated employees. The exclusion wouldemployees. only apply if the individual’s pension plan was available to all similarly

– Compensation paid related to the relocation of senior officers and situated employees on the same basis. While not final as of Decem-highly compensated individuals in 2014 and 2012. ber 31, 2014, employees disclosed for 2014 in the above chart were

determined based on the final rule. No disclosures were changed fromThe change in value of the pension benefits is defined as the change in prior reporting periods; therefore, comparability may be limited as athe vested portion of the present value of the accumulated benefit result of this change.obligation from December 31 of the prior year to December 31 of themost recent year for the District-wide Pension Plan and the Pension No tax reimbursements are made to senior officers.Restoration Plan, as applicable, as disclosed in Note 10 of the consoli-dated financial statements. This change in value does not represent Members may request information on the compensation paid duringcash payments made by the Association during the year, but rather is 2014 to the individuals included in the preceding table.an estimate of the Association’s future obligations under the pensionplans. Effective June 18, 2014, the FCA Board adopted a final rule to remove

all requirements related to advisory votes at Farm Credit Institutions.On February 26, 2015, the FCA published a final rule in the Federal This rule eliminates the requirement for advisory votes on CEO and/orRegister to revise compensation disclosures to shareholders and inves- senior officer compensation.tors. The final rule excludes certain employees from the current report


A summary of the pension benefits attributable to the CEO and senior officers as of December 31, 2014 follows (dollars in thousands):Present Value of Payments Made

Years of Accumulated During theName of Individual Plan Credited Service Benefits Reporting Period

William Johnson, CEO AgriBank District Retirement Plan 32.2 $485 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank District Pension Restoration Plan 32.2 159 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Seven AgriBank District Retirement Plan 33.2 $10,528 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effective January 1, 2007, the AgriBank District Retirement Plan was Member Privacyclosed to new employees. Therefore, any employee starting employ- The FCA Regulations protect members’ nonpublic personal financialment with the AgriBank District after that date is not eligible to be in information. Our directors and employees are restricted from disclos-the plan. ing information about our association or our members not normally

contained in published reports or press releases.The AgriBank District Pension Restoration Plan restores retirementbenefits to certain highly compensated employees that would have Relationship with Qualified Public Accountantbeen provided under the qualified plan if such benefits were not above There were no changes in independent auditors since the last Annualthe Internal Revenue Code compensation or other limits. Not all senior Report to members and we are in agreement with the opinionofficers or highly compensated employees are eligible to participate in expressed by the independent auditors. The total fees paid during 2014this plan. were $178 thousand. The fees paid were for audit services.

Transactions with Senior Officers and Directors Financial StatementsInformation regarding related party transactions is discussed in The ‘‘Report of Management’’, ‘‘Report on Internal Control Over Finan-Note 11 of this Annual Report. cial Reporting’’, ‘‘Report of Audit Committee’’, ‘‘Independent Auditor’s

Report’’, ‘‘Consolidated Financial Statements’’, and ‘‘Notes to Consoli-Travel, Subsistence, and Other Related Expenses dated Financial Statements’’ are presented prior to this portion of theDirectors and senior officers are reimbursed for reasonable travel, Annual Report.subsistence, and other related expenses associated with business func-tions. A copy of our policy for reimbursing these costs is available by Young, Beginning, and Small Farmers and Rancherscontacting us at: Information regarding credit and services to young, beginning, and

small farmers and ranchers, and producers or harvesters of aquaticFarm Credit Mid-America, ACA products is discussed in an addendum to this Annual Report.

P.O. Box 34390Louisville, KY 40232 Equal Employment Opportunity

(800) 444-FARM We are an equal opportunity employer. It is our policy to provide equalwww.e-farmcredit.com employment opportunity to all persons regardless of race, color, relig-

ion, national origin, sex, age, disability, veteran status, genetic infor-The total directors’ travel, subsistence, and other related expenses mation, sexual orientation, creed, marital status, status with regard towere $289 thousand, $243 thousand, and $206 thousand in 2014, 2013, public assistance, membership or activity involving a local humanand 2012, respectively. rights commission, or any other characteristic protected by law. We

comply with all state and local equal employment opportunity regula-Involvement in Certain Legal Proceedings tions. We conduct all personnel decisions and processes relating to ourNo events occurred during the past five years that are material to employees and job applicants in an environment free of discriminationevaluating the ability or integrity of any person who served as a direc- and harassment.tor or senior officer on January 1, 2015, or at any time during 2014.


A summary of the pension benefits attributable to the CEO and senior officers as of December 31, 2014 follows (dollars in thousands):Present Value of Payments Made

Years of Accumulated During theName of Individual Plan Credited Service Benefits Reporting Period

William Johnson, CEO AgriBank District Retirement Plan 32.2 $485 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

AgriBank District Pension Restoration Plan 32.2 159 —. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


Seven AgriBank District Retirement Plan 33.2 $10,528 $—. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effective January 1, 2007, the AgriBank District Retirement Plan was Member Privacyclosed to new employees. Therefore, any employee starting employ- The FCA Regulations protect members’ nonpublic personal financialment with the AgriBank District after that date is not eligible to be in information. Our directors and employees are restricted from disclos-the plan. ing information about our association or our members not normally

contained in published reports or press releases.The AgriBank District Pension Restoration Plan restores retirementbenefits to certain highly compensated employees that would have Relationship with Qualified Public Accountantbeen provided under the qualified plan if such benefits were not above There were no changes in independent auditors since the last Annualthe Internal Revenue Code compensation or other limits. Not all senior Report to members and we are in agreement with the opinionofficers or highly compensated employees are eligible to participate in expressed by the independent auditors. The total fees paid during 2014this plan. were $178 thousand. The fees paid were for audit services.

Transactions with Senior Officers and Directors Financial StatementsInformation regarding related party transactions is discussed in The ‘‘Report of Management’’, ‘‘Report on Internal Control Over Finan-Note 11 of this Annual Report. cial Reporting’’, ‘‘Report of Audit Committee’’, ‘‘Independent Auditor’s

Report’’, ‘‘Consolidated Financial Statements’’, and ‘‘Notes to Consoli-Travel, Subsistence, and Other Related Expenses dated Financial Statements’’ are presented prior to this portion of theDirectors and senior officers are reimbursed for reasonable travel, Annual Report.subsistence, and other related expenses associated with business func-tions. A copy of our policy for reimbursing these costs is available by Young, Beginning, and Small Farmers and Rancherscontacting us at: Information regarding credit and services to young, beginning, and

small farmers and ranchers, and producers or harvesters of aquaticFarm Credit Mid-America, ACA products is discussed in an addendum to this Annual Report.

P.O. Box 34390Louisville, KY 40232 Equal Employment Opportunity

(800) 444-FARM We are an equal opportunity employer. It is our policy to provide equalwww.e-farmcredit.com employment opportunity to all persons regardless of race, color, relig-

ion, national origin, sex, age, disability, veteran status, genetic infor-The total directors’ travel, subsistence, and other related expenses mation, sexual orientation, creed, marital status, status with regard towere $289 thousand, $243 thousand, and $206 thousand in 2014, 2013, public assistance, membership or activity involving a local humanand 2012, respectively. rights commission, or any other characteristic protected by law. We

comply with all state and local equal employment opportunity regula-Involvement in Certain Legal Proceedings tions. We conduct all personnel decisions and processes relating to ourNo events occurred during the past five years that are material to employees and job applicants in an environment free of discriminationevaluating the ability or integrity of any person who served as a direc- and harassment.tor or senior officer on January 1, 2015, or at any time during 2014.


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

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

who is age 35 or younger as of the loan transaction date.% of Loans– Beginning: a farmer, rancher, producer or harvester of aquatic prod-

Actual Goalucts who has 10 years or less farming or ranching experience as ofYoung 24.4% 20.0%the loan transaction date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Beginning 37.1% 30.0%– Small: a farmer, rancher, producer or harvester of aquatic products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small 79.1% 60.0%who normally generates less than $250,000 in annual gross sales of. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

agricultural or aquatic products.

DEMOGRAPHICS SAFETY AND SOUNDNESS OF THE PROGRAMWe have used the 2012 USDA Ag Census as our source of demographic It is the responsibility of the President and Chief Executive Officer ordata for Young, Beginning and Small Farmers (YBS). There are his designee for development of appropriate standards and procedures268,106 farms in the four state territory of Indiana, Kentucky, Ohio to support implementation of this policy and special programsand Tennessee. Of that number, there are 31,098 young farmers (or approved by the Board of Directors. The Board of Directors reviews the11.5%); 66,299 beginning farmers (or 24.72%), and 246,771 small farm- ongoing adequacy of this policy at least annually and monitors pro-ers (or 92.04%). The census data is as of 2012 whereas our portfolio gress on a quarterly basis.data is based on the number of current YBS customers and/or loans inthe current year. Management has developed a young, beginning and small farmer pro-

gram that provides sound and constructive credit through standard orMISSION STATEMENT special programs targeted to this group.Our mission for the Young, Beginning and Small Farmer Program is toprovide sound and constructive credit to meet the needs of the next YBS PROGRAM FEATURESgeneration of young, beginning and small farmers by offering standard We implemented a young, beginning and small farmer and rancheror special programs targeted to this group. program with four components, all of which will continue in 2015.

– Special underwriting program for young and beginning farmers. InTARGETS AND GOALS 2014, Farm Credit Mid-America provided special underwriting stan-Total Loan Portfolio dards on 289 loans representing $43.0 million in loan volume.The goal of the young farmer program is to maintain the percentage – Farm Service Agency (FSA) loan guarantee reimbursement of 50%that young farmers represent of the total farm members in our portfo- for young or beginning farmers. In 2014, the association waived itslio at 25% or higher; the goal of the beginning farmer program is to origination fees and reimbursed members 50% of their FSA guaran-maintain the percentage that beginning farmers represent of the total tee fees on 86 loans which represented $188 thousand in reimbursedfarm members in our portfolio at 45% or higher; the goal of the small FSA fees.farmer program is to maintain the percentage that small farmers – 30 operations attended the Association’s first YBS seminar, ‘‘Know torepresent of the total farm members in our portfolio at 70% or higher. Grow,’’ which works with members to make sound management

decisions based upon their own financial information.In 2014, there were 81,242 farm members in our portfolio. Of that – Reimbursement of up to $500 (one time only) to young or beginningnumber, there were 22,959 young farmers, 43,310 beginning farmers, members who attend business, production, financial management,and 66,827 small farmers. Farm members could qualify in more than or agricultural leadership development programs that will helpone category. These numbers surpass the goals as follows: them in their farm business.

% of MemberBase

Actual Goal

Young 28.3% 25.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Beginning 53.3% 45.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Small 82.2% 70.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .


STEWARDSHIP AND SPONSORSHIPS OUTREACH AND EDUCATIONIn 2014, our focus was on bringing additional knowledge to the cus- We continued to partner with many organizations to reach a variety oftomer. We held joint FSA-FCMA Farm Bill related meetings. We also customers in 2014. We sponsored the Local Food Association and thesupported young people by providing more than $125 thousand in Kentucky Proud Local Food Heroes program. From a University stand-scholarships to students from Indiana, Ohio, Kentucky, and Tennessee point, we worked with Ohio State University on their small farm pro-enrolled in college programs related to agriculture careers. The Board gram, University of Kentucky’s FarmStart program, University of Ten-has a ‘‘stewardship philosophy’’ that contributed an additional $2.1 mil- nessee’s UT Scholars program, and provided a one-time donation tolion in programs and gifts that benefitted rural communities, young Huntington University in Indiana to help fund a start-up agriculturepeople, commodity groups, and other agricultural organizations. program.Employees also participated in and supported organizations like FFA,4-H, and Young Farmer groups by conducting training and education The Association also hosted its first annual YBS educational seminarsessions to help the next generation of farmers. as part of the Growing Forward program. ‘‘Know to Grow’’ will be

offered across all four states in 2015, where customers will learn toaccurately assess the financial strengths and weaknesses of theiroperations.


STEWARDSHIP AND SPONSORSHIPS OUTREACH AND EDUCATIONIn 2014, our focus was on bringing additional knowledge to the cus- We continued to partner with many organizations to reach a variety oftomer. We held joint FSA-FCMA Farm Bill related meetings. We also customers in 2014. We sponsored the Local Food Association and thesupported young people by providing more than $125 thousand in Kentucky Proud Local Food Heroes program. From a University stand-scholarships to students from Indiana, Ohio, Kentucky, and Tennessee point, we worked with Ohio State University on their small farm pro-enrolled in college programs related to agriculture careers. The Board gram, University of Kentucky’s FarmStart program, University of Ten-has a ‘‘stewardship philosophy’’ that contributed an additional $2.1 mil- nessee’s UT Scholars program, and provided a one-time donation tolion in programs and gifts that benefitted rural communities, young Huntington University in Indiana to help fund a start-up agriculturepeople, commodity groups, and other agricultural organizations. program.Employees also participated in and supported organizations like FFA,4-H, and Young Farmer groups by conducting training and education The Association also hosted its first annual YBS educational seminarsessions to help the next generation of farmers. as part of the Growing Forward program. ‘‘Know to Grow’’ will be

offered across all four states in 2015, where customers will learn toaccurately assess the financial strengths and weaknesses of theiroperations.


FUNDS HELD PROGRAM

The Association offers a Funds Held Program (Funds Held) that pro- Commercial loans, with the exception of lines of credit, are paid a ratevides for customers to make uninsured advance payments on loans. of interest similar to short-term money market rates. The rate wasThe following terms and conditions apply to all Funds Held unless the 0.40 percent as of January 1, 2015.loan agreement, or related documents, between the Association andthe customer 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 Heldbilled 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 Fundsbilled will be directly applied to the installment due on the loan and Held for future installments or insurance. In addition, customersrelated charges, if any. Funds received in excess of the billed amount may make up to four additional withdrawals for other approvedwill be placed into Funds Held unless the customer has specified the purposes in lieu of increasing the loan amount. These four withdraw-funds to be applied as a special prepayment of principal. als have a minimum size limit of the lesser of $500 or the remaining

balance in Funds Held in a 12-month period.When a loan installment becomes due, monies in Funds Held for theloan will be automatically applied toward the installment on the due ASSOCIATION OPTIONSdate. Any accrued interest on Funds Held will be applied first. If the In the event of default on any loan, or if Funds Held exceeds thebalance in Funds Held does not fully satisfy the entire installment, the maximum limit as established above, or if the Association discontinuescustomer must pay the difference by the installment due date. its Funds Held program, the Association may apply funds in the

account to the unpaid balance and other amounts due, and shall returnACCOUNT MAXIMUM any excess funds to the customer.The amount in Funds Held may never exceed the unpaid principalbalance of the loan. Many loans have a further limit equal to the total If the customers sell, assign or transfer any interest in the underlyingpayments due for the next year. In addition, Funds Held on loans with collateral, the Association may apply the funds in the account againstcertain prepayment penalties may not exceed 10 percent of the origi- the remaining loan balance.nal principal balance. Funds Held is generally not available on revolv-ing lines of credit loans. If all customers who are party to the loan are deceased, the Association

may apply the funds in the account to the remaining loan balance.INTEREST RATEInterest will accrue on Funds Held at a simple rate of interest that may UNINSURED ACCOUNTbe changed by the association from time to time. But the rate will not Funds Held is not a depository account and is not insured. In the eventexceed the interest rate charged on the related loan except in rare of Association liquidation, customers having balances in Funds Heldcases. The current interest rate is based upon the following criteria: shall be notified according to FCA Regulations then in effect.

Real estate loans closed under the loan program in effect prior to QUESTIONSOctober 1, 1994, are paid a rate of interest equal to the loan rate. Please direct all questions regarding Funds Held to your local Farm

Credit Mid-America representative by calling 1-800-444-FARM (3276).Real estate loans closed under the loan program in effect on October 1,1994, and later are paid a rate of interest similar to short-term moneymarket rates. The rate was 0.40 percent as of January 1, 2015.



NOTICE TO CUSTOMERS CONCERNING INVESTMENTS

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

Association Capitalization Bylaws (a copy of which is included as part of this publication) require an investment in stock or participation cer-tificates 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-cus-tomer basis or a per-loan basis. Currently, the stock requirement is on a per customer basis.

The Association also sells stock or participation certificates to any eligible customer of the FLCA or PCA as a condition of obtaining a lease and as a 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 harvesters of aquatic products. Other persons who are eligible to borrow or lease from or purchase financially related services with the FLCA or PCA, but who are not eligible to own Stock, must purchase “Participation Certificates” (Certificates), which are issued on essentially the same terms as Stock except as described below.

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

HOW STOCK AND CERTIFICATES ARE PURCHASEDShares 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 cer-tificates for Stock or Certificates. Instead, the ownership of Stock or Certificates is evidenced by entries recorded on the combined books of the Association as reflected in periodic account statements sent to each customer.

CERTAIN IMPORTANT CHARACTERISTICS OF STOCK AND CERTIFICATESThe 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 cus-tomer defaults, the value of the customer’s investment (not to exceed par value, or face amount) may be applied against the balance due on the loan. If the customer’s Stock or Certificates are transferred, they are still subject to this lien. In any event, Stock and Certificates are transferable only to persons eligible to purchase such equities.

Stock and Certificates do not appreciate in value. Any retirement or 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.”

RETIREMENT OF STOCK AND CERTIFICATESUnder 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 generally accepted accounting principles (GAAP).

Under Federal Law, there is no automatic right to have Stock or Certificates retired upon repayment of the customer’s loan or when the customer ceases to conduct other business with the FLCA and/or PCA.

Under the Association’s existing Equity Policy, equity is on a customer basis and is required on existing fixed, adjustable or variable rate loans 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 balances (when the customer is the same on each loan).

Equity of one share is required on a lease or for a non-customer to qualify for related services.

The Equity Policy may be amended by the Board at any time at their sole discretion and in accordance with the Act, Regulations and Bylaws.

77 FARM CREDIT MID–AMERICA762014 ANNUAL REPORT

Effective 01/01/03, the Board’s policy permits the retirement of cus-tomer equity only if the Association’s permanent capital percentage is above the Board’s stated minimum, established annually. The Board allows stock to be retired by management provided that retirements are in accordance with the Association’s capital plan; the Association’s permanent capital ratio will be in excess of 12 percent after any such retirements; the Association meets and maintains all applicable min-imum surplus and collateral standards; and the aggregate amount of stock purchases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,– a non-borrower is no longer a purchaser of related services, or– the customer’s loan is sold into the secondary market without

recourse, or – management approves a partial retirement when a customer’s

loan is in good standing and due to paydown, requests excess stock to be retired.

The retirement policy may be suspended or modified at any time at the 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 continue 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.

IMPAIRMENTYour 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 borrowed to pay for your Stock or Certificates, regardless of the value of your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of 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

– 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 liabilities on Systemwide debt securities issues by other Banks in the national Farm Credit System.

As a result of these or any other risks, the capital of the Association could become impaired. Impairment means that the book value of the Stock or Certificates has declined below par value (or face value), which is $5 per share or unit. (For example, if the Association were to suffer loan losses which exceeded its other income, its bad debt reserve and its surplus accounts, the Stock and Certificates could have a book value less than $5 and thus would be impaired.) So long as the capital of the Association is impaired, its customers would receive less than they had paid for their stock upon retirement. If the Association were to be liquidated at the time when its capital is impaired, holders of Stock or Certificates would receive less than the par value or face amount of their investment and may suffer a total loss of their investment in the Association. However, in any event, customers would remain liable for the full amount of their loan from the FLCA and/or PCA, including the portion used to pay for the pur-chase 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 mecha-nism is described in the Association’s 2014 Annual Report. However, the assistance mechanisms in the Farm Credit Act provide no assur-ance to customers that Stock and Certificates will be protected. Therefore members are advised to review the financial statements of the Association and of the Bank and other available information about the Farm Credit System. Copies of the Association and the Bank’s Annual and Interim Reports to Investors are available from the Association upon request.

ASSOCIATION PERMANENT CAPITAL STANDARDSThe 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.

CAPITALIZATION BYLAWS

800 AUTHORIZED SHARES The Association is authorized to issue:

a one million (1,000,000) shares of Class C Preferred Stock with a par value of $5 per share to be issued as provided in Section 810.3 of these Bylaws;

b an unlimited number of shares of Class D Common Stock with a par value of $5 per share to be issued as provided in Sections 810.4 and 845.2 of these Bylaws;

c the outstanding number of Participation Certificates as of the 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 a n u n l i m ited nu mber of Cl a ss B P a r t icip at ion Certificates, with a face value of $5 per unit to be issued as provided in Section 810.6 of these Bylaws; and

e such number of shares of such other classes of Capital Stock as may be provided for in an amendment or amendments to these Bylaws as adopted pursuant to Article XIV, provided, however, if the class being proposed in any amendment or amendments is for Preferred Stock other than Preferred Stock to be issued to the Farm Credit System’s Financial Assistance Corporation, it shall be approved by majority of the shares of each class of stock affected by the preference, voting as a class, whether or not such classes are other-wise authorized to vote.

805 OWNERSHIP 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 relationship with MidAm, PCA or MidAm, FLCA, as the case may be. Accordingly, upon an Authorization Event, all references to loans and outstanding loan balances in this Article shall refer to aggregate loans held or originated by Association, MidAm, PCA and MidAm, FLCA.

810 ISSUE , RIGHTS, PREFERENCES AND LIMITATIONS OF CLASSES OF STOCK

810.1 CLASS A PREFERRED STOCK

a Issue: There shall be no Class A Preferred Stock issued other than those shares issued as a result of the conver-sion 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 CLASS B COMMON STOCK

a Issue: There shall be no Class B Common Stock issued other than those shares issued as a result of the conver-sion of FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting rights.


d Stock Protection: When retiring Class B Common Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class B Common Stock shall be issued or paid.

ARTICLE VIII - CAPITALIZATION

NOTICE TO CUSTOMERS CONCERNING INVESTMENTS (CONT)


Effective 01/01/03, the Board’s policy permits the retirement of cus-tomer equity only if the Association’s permanent capital percentage is above the Board’s stated minimum, established annually. The Board allows stock to be retired by management provided that retirements are in accordance with the Association’s capital plan; the Association’s permanent capital ratio will be in excess of 12 percent after any such retirements; the Association meets and maintains all applicable min-imum surplus and collateral standards; and the aggregate amount of stock purchases and retirements are reported to the Board of Directors monthly.

Except for loans in default, customer equity may be retired under any of the following conditions:

– the customer’s indebtedness for a loan or a lease is totally paid off,– a non-borrower is no longer a purchaser of related services, or– the customer’s loan is sold into the secondary market without

recourse, or – management approves a partial retirement when a customer’s

loan is in good standing and due to paydown, requests excess stock to be retired.

The retirement policy may be suspended or modified at any time at the 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 continue 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.

IMPAIRMENTYour 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 borrowed to pay for your Stock or Certificates, regardless of the value of your Stock or Certificates. These risks include:

– loan losses experienced by the FLCA and/or PCA as a result of 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

– 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 liabilities on Systemwide debt securities issues by other Banks in the national Farm Credit System.

As a result of these or any other risks, the capital of the Association could become impaired. Impairment means that the book value of the Stock or Certificates has declined below par value (or face value), which is $5 per share or unit. (For example, if the Association were to suffer loan losses which exceeded its other income, its bad debt reserve and its surplus accounts, the Stock and Certificates could have a book value less than $5 and thus would be impaired.) So long as the capital of the Association is impaired, its customers would receive less than they had paid for their stock upon retirement. If the Association were to be liquidated at the time when its capital is impaired, holders of Stock or Certificates would receive less than the par value or face amount of their investment and may suffer a total loss of their investment in the Association. However, in any event, customers would remain liable for the full amount of their loan from the FLCA and/or PCA, including the portion used to pay for the pur-chase 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 mecha-nism is described in the Association’s 2014 Annual Report. However, the assistance mechanisms in the Farm Credit Act provide no assur-ance to customers that Stock and Certificates will be protected. Therefore members are advised to review the financial statements of the Association and of the Bank and other available information about the Farm Credit System. Copies of the Association and the Bank’s Annual and Interim Reports to Investors are available from the Association upon request.

ASSOCIATION PERMANENT CAPITAL STANDARDSThe 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.

CAPITALIZATION BYLAWS

800 AUTHORIZED SHARES The Association is authorized to issue:

a one million (1,000,000) shares of Class C Preferred Stock with a par value of $5 per share to be issued as provided in Section 810.3 of these Bylaws;

b an unlimited number of shares of Class D Common Stock with a par value of $5 per share to be issued as provided in Sections 810.4 and 845.2 of these Bylaws;

c the outstanding number of Participation Certificates as of the 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 a n u n l i m ited nu mber of Cl a ss B P a r t icip at ion Certificates, with a face value of $5 per unit to be issued as provided in Section 810.6 of these Bylaws; and

e such number of shares of such other classes of Capital Stock as may be provided for in an amendment or amendments to these Bylaws as adopted pursuant to Article XIV, provided, however, if the class being proposed in any amendment or amendments is for Preferred Stock other than Preferred Stock to be issued to the Farm Credit System’s Financial Assistance Corporation, it shall be approved by majority of the shares of each class of stock affected by the preference, voting as a class, whether or not such classes are other-wise authorized to vote.

805 OWNERSHIP 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 relationship with MidAm, PCA or MidAm, FLCA, as the case may be. Accordingly, upon an Authorization Event, all references to loans and outstanding loan balances in this Article shall refer to aggregate loans held or originated by Association, MidAm, PCA and MidAm, FLCA.

810 ISSUE , RIGHTS, PREFERENCES AND LIMITATIONS OF CLASSES OF STOCK

810.1 CLASS A PREFERRED STOCK

a Issue: There shall be no Class A Preferred Stock issued other than those shares issued as a result of the conver-sion 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 accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class A Preferred Stock shall be issued or paid.

810.2 CLASS B COMMON STOCK

a Issue: There shall be no Class B Common Stock issued other than those shares issued as a result of the conver-sion of FLBA 4th, FLBA B and FLBA M’s voting stock and PCA 4th’s Class B voting stock as of the Merger date.

b Voting Rights: Class B Common Stock shall have voting rights.


d Stock Protection: When retiring Class B Common Stock in accordance with the Act, Regulations and these Bylaws, the stock shall be retired at par value.

e Fractional Shares: No fractional shares of Class B Common Stock shall be issued or paid.

ARTICLE VIII - CAPITALIZATION

NOTICE TO CUSTOMERS CONCERNING INVESTMENTS (CONT)


810.3 CLASS C PREFERRED STOCK

a Issue: This stock may be issued in accordance with the Act and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be per-mitted under a plan adopted by the Board;

3 | For allocated surplus distributions, dividend pay-ments, 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 CLASS D COMMON STOCK

a Issue: Class D Common Stock may only be issued to bor-rowers who are farmers, ranchers or producers or har-vesters of aquatic products and other requirements of such borrowers as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting rights.


d Fractional Shares: No fractional shares of Class D Common Stock shall be issued or paid.

e Condition to Borrowing:

1 | Any borrower who is entitled to own Class D Common Stock shall acquire voting stock in the Association as a condition for obtaining a loan from the Association, MidAm, PCA or MidAm, FLCA. The amount of Class D Common Stock which a borrower shall be required to acquire shall be two (2) percent of the loan amount or $1,000, whichever is less. The Board shall establish

from time to time whether the stock requirement shall apply to each loan to a borrower or apply to a borrower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum perma-nent 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.

f Condition to Lease: As a condition of obtaining a lease from Association, MidAm, PCA or MidAm, FLCA any lessee who is entitled to own Class D Common Stock shall be required to acquire Class D Common Stock in an amount as determined by the Board from time to time. The equity requirement to be not less than one share or the minimum requirement as set out in the Act and Regulations, if any, and not to exceed the equity requirement for obtaining a loan.

810.5 CLASS A PARTICIPATION CERTIFICATES

a Issue: There shall be no Class A Participation Certificates issued other than those units issued as a result of the 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 retiring Class A Participation Certificates in accordance with the Act, Regulations and these Bylaws, the units shall be retired at par value.

e Fractiona l Un its: No fractiona l u n its of Class A Participation Certificates shall be issued or paid.

CAPITALIZATION BYLAWS (CONT)

810.6 CLASS B PARTICIPATION CERTIFICATES

a Issue: Class B Participation Certificates may be issued in 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 capitalize their loans.

3 | To other persons or organizations who are eligible to borrow or participate in loans from Association, MidAm, PCA or MidAm, FLCA but are not eligible to hold voting stock.

4 | For allocated surplus distributions, dividend pay-ments, and patronage distributions.

5 | To any person who is not a stockholder but who is eligible to borrow from Association, MidAm, PCA or MidAm, FLCA for the purpose of qualifying such person for technical assistance, financially related services, and leasing services offered by Association, MidAm, PCA or MidAm, FLCA.

b Voting Rights: Class B Participation Certificates shall have no voting rights.


d Fractiona l Un its: No fractiona l u n its of Class B Participation Certificates shall be issued or paid.


1 | A ny borrower who is ent itled to ow n Cla ss 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 certifi-cate requirement shall apply to each loan to a borrower or apply to a borrower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum per-manent capital standards, the Class B Participation Certificates shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of 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 APPLICATION OF EARNINGS OR LOSSES

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.


810.3 CLASS C PREFERRED STOCK

a Issue: This stock may be issued in accordance with the Act and Regulations:

1 | To the bank and to investors;

2 | In such amounts and to such persons as may be per-mitted under a plan adopted by the Board;

3 | For allocated surplus distributions, dividend pay-ments, 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 CLASS D COMMON STOCK

a Issue: Class D Common Stock may only be issued to bor-rowers who are farmers, ranchers or producers or har-vesters of aquatic products and other requirements of such borrowers as specified in the Act and Regulations.

b Voting Rights: Class D Common Stock shall have voting rights.


d Fractional Shares: No fractional shares of Class D Common Stock shall be issued or paid.


1 | Any borrower who is entitled to own Class D Common Stock shall acquire voting stock in the Association as a condition for obtaining a loan from the Association, MidAm, PCA or MidAm, FLCA. The amount of Class D Common Stock which a borrower shall be required to acquire shall be two (2) percent of the loan amount or $1,000, whichever is less. The Board shall establish

from time to time whether the stock requirement shall apply to each loan to a borrower or apply to a borrower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum perma-nent 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.

f Condition to Lease: As a condition of obtaining a lease from Association, MidAm, PCA or MidAm, FLCA any lessee who is entitled to own Class D Common Stock shall be required to acquire Class D Common Stock in an amount as determined by the Board from time to time. The equity requirement to be not less than one share or the minimum requirement as set out in the Act and Regulations, if any, and not to exceed the equity requirement for obtaining a loan.

810.5 CLASS A PARTICIPATION CERTIFICATES

a Issue: There shall be no Class A Participation Certificates issued other than those units issued as a result of the 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 retiring Class A Participation Certificates in accordance with the Act, Regulations and these Bylaws, the units shall be retired at par value.

e Fractiona l Un its: No fractiona l u n its of Class A Participation Certificates shall be issued or paid.


810.6 CLASS B PARTICIPATION CERTIFICATES

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 capitalize their loans.

3 | To other persons or organizations who are eligible to borrow or participate in loans from Association, MidAm, PCA or MidAm, FLCA but are not eligible to hold voting stock.

4 | For allocated surplus distributions, dividend pay-ments, and patronage distributions.

5 | To any person who is not a stockholder but who is eligible to borrow from Association, MidAm, PCA or MidAm, FLCA for the purpose of qualifying such person for technical assistance, financially related services, and leasing services offered by Association, MidAm, PCA or MidAm, FLCA.

b Voting Rights: Class B Participation Certificates shall have no voting rights.


d Fractiona l Un its: No fractiona l u n its of Class B Participation Certificates shall be issued or paid.


1 | A ny borrower who is ent itled to ow n Cla ss 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 certifi-cate requirement shall apply to each loan to a borrower or apply to a borrower’s aggregate outstanding loan balance on all borrower’s loans (as used in this section shall only include those loans, including the new loan, where the borrowers are the same on each loan).

2 | If the Association fails to meet the minimum per-manent capital standards, the Class B Participation Certificates shall be purchased from the Association.

3 | Loan origination fees may be charged as a condition of 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 APPLICATION OF EARNINGS OR LOSSES

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 apply-ing 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, impairment of Class B Common Stock, Class D Common Stock, Class A Participation Certificates, Class B Participation Certificates, concurrently; and fifth, impairment of Class A Preferred Stock and Class C Preferred Stock, concurrently. Notw ithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in accordance with Section 4.9A of the Act.

820 SURPLUS ACCOUNTS The Association shall create and maintain an unallocated

surplus account and may maintain an allocated surplus account. Except as provided in Section 815, the unallocated surplus account may not be reduced and no part thereof may be transferred to the allocated surplus account.

825 ALLOCATED SURPLUS ACCOUNTS

825.1 T he A s s o c i at i on m ay, s u bje c t to t he A c t a n d t he Regulations, create and maintain an allocated surplus account consisting of earnings held therein and allo-cated to borrowers on a patronage basis in accordance with Section 835 of these Bylaws. In the event of a net loss for any fiscal year, such allocated surplus account shall be subject to impairment in the order specified 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 col-lateral 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 a l locat ion s ow ned by such borrower to be appl ied against the indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retire-ment and application against indebtedness of surplus account allocations shall be before similar retirement and application of Stock or Participation Certificates owned by the borrower.

825.4 At the Board’s discretion and subject to the Act, Regulations, and any other restrictions, when all of the Stock and Participation Certificates of the Association owned by a borrower are retired or otherwise disposed of, any surplus account allocations owned by such borrower may also be retired, upon request by the borrower and subject to the approval of the Board, and the proceeds paid to the bor-rower. Alternatively, if the Board so directs, upon notice to the borrower such surplus account applications may be applied against any of the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. As a condition, however, to the approval of a former bor-rower’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 distri-bution may be held by the Association and accumulated with subsequent partial distributions to equal one whole share of Class A Preferred Stock or Class C Preferred Stock.

830 DIVIDENDS

830.1 In accordance with the Act and the Regulations, the Board may declare dividends on the Stock and Participation Certificates of the Association. Such dividends may be paid on Class A Preferred Stock and Class C Preferred Stock alone or on all classes of Stock and Participation Certificates. No dividends may be paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates during any fiscal year with respect to which the Association has obligated itself to distribute earnings on a patronage basis pursuant to Section 835 of these Bylaws. The rate of dividends paid on Class A Preferred Stock and Class C Preferred Stock for any fiscal year may not be less than the rate of dividends paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates for such year and, similarly, the rate of divi-dends 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 pay-able in Stock to one borrower are less than $5, the dividends may be distributed in cash or held by the Association and accumulated with subsequent dividends until the retained dividends equal $5, so that the dividends may be distributed as one whole share of Class C Preferred Stock.

830.4 Dividends shall be noncumulative.

835 PATRONAGE REFUNDS

835.1 Prior to the beginning of any fiscal year, the Board may adopt a resolution in accordance with the Act and the Regulations, so as to obligate the Association to distribute to borrowers on a patronage basis all or any portion of available net earnings of Association for such fiscal year, or for that and subsequent fiscal years. However, no patronage distribution will be paid if the earnings available for distribution do not exceed $500,000.

835.2 All patronage distributions shall be in the proportion that the amount of interest earned by Association, MidAm, PCA or MidAm, FLCA on its loans to each borrower bears to the total interest earned by Association, MidAm, PCA or MidAm, FLCA on all such loans outstanding during the fiscal year, except that another proportionate patronage basis may be used upon approval by the Board in accordance with the Act and the Regulations.

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 div-idends on Class A Preferred Stock and Class C Preferred Stock. Patronage allocations and refunds received from the FCB in the form of stock shall be excluded from net earn-ings available for patronage distributions and dividends. The amount available for patronage distributions for any fiscal year shall in no event exceed the net earnings from patronage from Association, MidAm, PCA and MidAm, FLCA 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 surplus account, or any one or more of such forms of dis-tribution, except that at least twenty percent of the total patronage distributions 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 dis-tribution would cause the surplus account at the end of the fiscal year for which the distribution is paid to be less than the minimum amount prescribed by the Act and the Regulations. Any part of a patronage distribution in Class C Preferred Stock to one borrower that is not a multiple of $5 may be distributed in cash or held by the Association for the borrower and included in a 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 patron-age which are made in written notices of allocation, as defined in 26 U.S.C. 1388 (i.e. patronage allocations of surplus account and patronage refunds paid in Class C Preferred Stock of the Association, and which are received by him or her from the Association), will be taken into account as income by such person at the stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. Such holder of Class B Common Stock or Class D Common Stock also consents by such act alone, to take into account as income in the same manner the amount of any distributions with respect to patronage provided he or she receives writ-ten 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 apply-ing 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, impairment of Class B Common Stock, Class D Common Stock, Class A Participation Certificates, Class B Participation Certificates, concurrently; and fifth, impairment of Class A Preferred Stock and Class C Preferred Stock, concurrently. Notw ithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in accordance with Section 4.9A of the Act.

820 SURPLUS ACCOUNTS The Association shall create and maintain an unallocated

surplus account and may maintain an allocated surplus account. Except as provided in Section 815, the unallocated surplus account may not be reduced and no part thereof may be transferred to the allocated surplus account.

825 ALLOCATED SURPLUS ACCOUNTS

825.1 T he A s s o c i at i on m ay, s u bje c t to t he A c t a n d t he Regulations, create and maintain an allocated surplus account consisting of earnings held therein and allo-cated to borrowers on a patronage basis in accordance with Section 835 of these Bylaws. In the event of a net loss for any fiscal year, such allocated surplus account shall be subject to impairment in the order specified 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 col-lateral 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 a l locat ion s ow ned by such borrower to be appl ied against the indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retire-ment and application against indebtedness of surplus account allocations shall be before similar retirement and application of Stock or Participation Certificates owned by the borrower.

825.4 At the Board’s discretion and subject to the Act, Regulations, and any other restrictions, when all of the Stock and Participation Certificates of the Association owned by a borrower are retired or otherwise disposed of, any surplus account allocations owned by such borrower may also be retired, upon request by the borrower and subject to the approval of the Board, and the proceeds paid to the bor-rower. Alternatively, if the Board so directs, upon notice to the borrower such surplus account applications may be applied against any of the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. As a condition, however, to the approval of a former bor-rower’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 distri-bution may be held by the Association and accumulated with subsequent partial distributions to equal one whole share of Class A Preferred Stock or Class C Preferred Stock.

830 DIVIDENDS

830.1 In accordance with the Act and the Regulations, the Board may declare dividends on the Stock and Participation Certificates of the Association. Such dividends may be paid on Class A Preferred Stock and Class C Preferred Stock alone or on all classes of Stock and Participation Certificates. No dividends may be paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates during any fiscal year with respect to which the Association has obligated itself to distribute earnings on a patronage basis pursuant to Section 835 of these Bylaws. The rate of dividends paid on Class A Preferred Stock and Class C Preferred Stock for any fiscal year may not be less than the rate of dividends paid on Class B Common Stock, Class D Common Stock, Class A Participation Certificates or Class B Participation Certificates for such year and, similarly, the rate of divi-dends 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 pay-able in Stock to one borrower are less than $5, the dividends may be distributed in cash or held by the Association and accumulated with subsequent dividends until the retained dividends equal $5, so that the dividends may be distributed as one whole share of Class C Preferred Stock.

830.4 Dividends shall be noncumulative.

835 PATRONAGE REFUNDS

835.1 Prior to the beginning of any fiscal year, the Board may adopt a resolution in accordance with the Act and the Regulations, so as to obligate the Association to distribute to borrowers on a patronage basis all or any portion of available net earnings of Association for such fiscal year, or for that and subsequent fiscal years. However, no patronage distribution will be paid if the earnings available for distribution do not exceed $500,000.

835.2 All patronage distributions shall be in the proportion that the amount of interest earned by Association, MidAm, PCA or MidAm, FLCA on its loans to each borrower bears to the total interest earned by Association, MidAm, PCA or MidAm, FLCA on all such loans outstanding during the fiscal year, except that another proportionate patronage basis may be used upon approval by the Board in accordance with the Act and the Regulations.

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 div-idends on Class A Preferred Stock and Class C Preferred Stock. Patronage allocations and refunds received from the FCB in the form of stock shall be excluded from net earn-ings available for patronage distributions and dividends. The amount available for patronage distributions for any fiscal year shall in no event exceed the net earnings from patronage from Association, MidAm, PCA and MidAm, FLCA 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 surplus account, or any one or more of such forms of dis-tribution, except that at least twenty percent of the total patronage distributions 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 dis-tribution would cause the surplus account at the end of the fiscal year for which the distribution is paid to be less than the minimum amount prescribed by the Act and the Regulations. Any part of a patronage distribution in Class C Preferred Stock to one borrower that is not a multiple of $5 may be distributed in cash or held by the Association for the borrower and included in a 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 patron-age which are made in written notices of allocation, as defined in 26 U.S.C. 1388 (i.e. patronage allocations of surplus account and patronage refunds paid in Class C Preferred Stock of the Association, and which are received by him or her from the Association), will be taken into account as income by such person at the stated dollar amounts in the manner provided in 26 U.S.C. 1385(a) in the taxable year in which such written notices of allocation are received. Such holder of Class B Common Stock or Class D Common Stock also consents by such act alone, to take into account as income in the same manner the amount of any distributions with respect to patronage provided he or she receives writ-ten 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 distribu-tions with respect to the holder’s patronage, which are made in written notices of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allocations of surplus account, patronage refunds paid in Class C Preferred Stock, or distributions with respect to patronage that have been applied to the holder’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be, and for which the holder has received written notice), will be taken into account as income by the holder at the stated dollar amounts in the manner provided for in 26 U.S.C. 1385(a) in the taxable year in which such writ-ten notices of allocation are received. The form of consent shall be prescribed by the Board, except that it shall be con-tinuing 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 com-puting and paying patronage dividends shall include the net earnings of MidAm, PCA and MidAm, FLCA (computed on a consolidated basis).

840 TRANSFER

840.1 Stock and Participation Certificates may be transferred to persons or organizations eligible to receive or to hold such Stock or Participation Certificates as provided in Section 810 of these Bylaws.

840.2 The Association shall be its own transfer agent in all matters relating to its Stock and Participation Certificates.

845 CONVERSION

845.1 Each class of Stock and Participation Certificates may be converted into any other class of Stock or Participation Certificates for which the holder is eligible as provided in Section 810.

845.2 Class B Common Stock shall be converted into Class A Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA. Class D Common Stock shall be converted into Class C Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA.

850 RETIREMENT

850.1 CLASS A PREFERRED STOCK , CLASS B COMMON STOCK , AND CLASS A PARTICIPATION CERTIFICATES

Retirement may be upon repayment of a loan or under a retirement plan in effect prior to January 6, 1988, and for such equities issued after that date, a retirement plan in effect at the time the loan was made. Such equities shall be retired at par, even if book value is less than par. Such equi-ties may also be retired under other conditions approved by the Board with prior approval of the FCA.

850.2 CLASS C PREFERRED STOCK , CLASS D COMMON STOCK AND CLASS B PARTICIPATION CERTIFICATES

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 mini-mum permanent capital standards or the interim permanent capital standards, as the case may be.

850.3 MANDATORY RETIREMENT At the Board’s discretion and subject to the Act, Regulations

and any other restrictions (including minimum permanent capital standards), the Board may order the retirement of such amounts of Class A Preferred Stock or Class C Preferred Stock as it may determine in accordance with procedures which assure equitable treatment of all holders of Class A Preferred Stock or Class C Preferred Stock.


850.4 RETIREMENT IN THE EVENT OF DEFAULT When the debt of a borrower is in default, the Association

may, upon notice to such borrower, order the retirement of any Stock or Participation Certificates held by the borrower and the proceeds thereof applied against the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retirement and application of Stock or Participation Certificates shall be after similar retirement and application of surplus account allocations owned by the borrower.

855 IMPAIRMENT

855.1 Any losses which result in an impairment of the Association’s capital shall be borne ratably by, first, each share of Class B Common Stock and Class D Common Stock, and each unit of Class A Participation Certificates and Class B Participation Certificates outstanding; and second, each share of Class A Preferred Stock and Class C Preferred Stock outstanding. Notwithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in 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 LIQUIDATION In the event of a voluntary or involuntary liquidation of

the Association, following the payment of all claims in accordance with the Act and Regulations, the remainder of the assets of the Association shall be distributed to the holders of Stock and Participation Certificates. In the event there are insufficient funds to pay the holders of Stock and Participation Certificates at par value, then distribu-tion should be made in accordance with the priorities for impairment set forth in Section 855.1 of these Bylaws. In the event funds are sufficient to pay all holders of Stock and Participation Certificates at par value, any excess funds shall be distributed, insofar as practicable, to the holders of Class B Common Stock, Class D Common Stock, Class A Participation Certificates and Class B Participation Certificates in the proportion that the aggregate interest paid by each holder over the prior two years bears to the total interest paid by all holders of stock and participation certificates.

865 LIEN Except with respect to Stock or Participation Certificates

held by other System institutions, each of Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all Stock and Participation Certificates in the Association owned by its borrowers as 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 hypothe-cated to third parties.

870 PAID-IN SURPLUS The Association is authorized to receive paid-in surplus from

the FCB in accordance with the Act and the Regulations.

875 SECONDARY MARKET LOANS

875.1 EQUITY RETIREMENT On or after 12-01-96 no stock or participation certificate is

required to be purchased as a condition for obtaining a loan which is designated, at the time the loan is made, for sale to a secondary market. Designated loans not sold within the 180 day period shall be subject to the equity requirement for loans as stated in bylaw 810.4(e) or 810.6(e).

875.2 RETIREMENT The Board is authorized to retire stock or participation

certificates on those loans sold to a secondary market prior to 12-01-96 and on those loans designated for sale to the secondary market but not sold within the 180 day time period, provided however that the Association shall not retire such stock or participation certificates if the action would result in the failure of the Association to meet the minimum permanent capital adequacy standard established in the FCA regulations.


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 distribu-tions with respect to the holder’s patronage, which are made in written notices of allocations as defined in 26 U.S.C. 1388 (i.e., patronage allocations of surplus account, patronage refunds paid in Class C Preferred Stock, or distributions with respect to patronage that have been applied to the holder’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be, and for which the holder has received written notice), will be taken into account as income by the holder at the stated dollar amounts in the manner provided for in 26 U.S.C. 1385(a) in the taxable year in which such writ-ten notices of allocation are received. The form of consent shall be prescribed by the Board, except that it shall be con-tinuing 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 com-puting and paying patronage dividends shall include the net earnings of MidAm, PCA and MidAm, FLCA (computed on a consolidated basis).

840 TRANSFER

840.1 Stock and Participation Certificates may be transferred to persons or organizations eligible to receive or to hold such Stock or Participation Certificates as provided in Section 810 of these Bylaws.

840.2 The Association shall be its own transfer agent in all matters relating to its Stock and Participation Certificates.

845 CONVERSION

845.1 Each class of Stock and Participation Certificates may be converted into any other class of Stock or Participation Certificates for which the holder is eligible as provided in Section 810.

845.2 Class B Common Stock shall be converted into Class A Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA. Class D Common Stock shall be converted into Class C Preferred Stock within two years after the holder thereof ceases to be a borrower from Association, MidAm, PCA or MidAm, FLCA.

850 RETIREMENT

850.1 CLASS A PREFERRED STOCK , CLASS B COMMON STOCK , AND CLASS A PARTICIPATION CERTIFICATES

Retirement may be upon repayment of a loan or under a retirement plan in effect prior to January 6, 1988, and for such equities issued after that date, a retirement plan in effect at the time the loan was made. Such equities shall be retired at par, even if book value is less than par. Such equi-ties may also be retired under other conditions approved by the Board with prior approval of the FCA.

850.2 CLASS C PREFERRED STOCK , CLASS D COMMON STOCK AND CLASS B PARTICIPATION CERTIFICATES

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 mini-mum permanent capital standards or the interim permanent capital standards, as the case may be.

850.3 MANDATORY RETIREMENT At the Board’s discretion and subject to the Act, Regulations

and any other restrictions (including minimum permanent capital standards), the Board may order the retirement of such amounts of Class A Preferred Stock or Class C Preferred Stock as it may determine in accordance with procedures which assure equitable treatment of all holders of Class A Preferred Stock or Class C Preferred Stock.


850.4 RETIREMENT IN THE EVENT OF DEFAULT When the debt of a borrower is in default, the Association

may, upon notice to such borrower, order the retirement of any Stock or Participation Certificates held by the borrower and the proceeds thereof applied against the borrower’s indebtedness to Association, MidAm, PCA or MidAm, FLCA, as the case may be. Any such retirement and application of Stock or Participation Certificates shall be after similar retirement and application of surplus account allocations owned by the borrower.

855 IMPAIRMENT

855.1 Any losses which result in an impairment of the Association’s capital shall be borne ratably by, first, each share of Class B Common Stock and Class D Common Stock, and each unit of Class A Participation Certificates and Class B Participation Certificates outstanding; and second, each share of Class A Preferred Stock and Class C Preferred Stock outstanding. Notwithstanding this Section, Class B Common Stock and Class A Participation Certificates shall be retired in 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 LIQUIDATION In the event of a voluntary or involuntary liquidation of

the Association, following the payment of all claims in accordance with the Act and Regulations, the remainder of the assets of the Association shall be distributed to the holders of Stock and Participation Certificates. In the event there are insufficient funds to pay the holders of Stock and Participation Certificates at par value, then distribu-tion should be made in accordance with the priorities for impairment set forth in Section 855.1 of these Bylaws. In the event funds are sufficient to pay all holders of Stock and Participation Certificates at par value, any excess funds shall be distributed, insofar as practicable, to the holders of Class B Common Stock, Class D Common Stock, Class A Participation Certificates and Class B Participation Certificates in the proportion that the aggregate interest paid by each holder over the prior two years bears to the total interest paid by all holders of stock and participation certificates.

865 LIEN Except with respect to Stock or Participation Certificates

held by other System institutions, each of Association, MidAm, PCA and MidAm, FLCA shall have a first lien on all Stock and Participation Certificates in the Association owned by its borrowers as 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 hypothe-cated to third parties.

870 PAID-IN SURPLUS The Association is authorized to receive paid-in surplus from

the FCB in accordance with the Act and the Regulations.

875 SECONDARY MARKET LOANS

875.1 EQUITY RETIREMENT On or after 12-01-96 no stock or participation certificate is

required to be purchased as a condition for obtaining a loan which is designated, at the time the loan is made, for sale to a secondary market. Designated loans not sold within the 180 day period shall be subject to the equity requirement for loans as stated in bylaw 810.4(e) or 810.6(e).

875.2 RETIREMENT The Board is authorized to retire stock or participation

certificates on those loans sold to a secondary market prior to 12-01-96 and on those loans designated for sale to the secondary market but not sold within the 180 day time period, provided however that the Association shall not retire such stock or participation certificates if the action would result in the failure of the Association to meet the minimum permanent capital adequacy standard established in the FCA regulations.

842014 ANNUAL REPORT

As a member-owned cooperative, we rely on the time and talent of members like you. Becoming involved in Farm Credit keeps agriculture strong in your region, while ensuring the future of farming for generations to come. Strengthen your skills, build relationships, and expand your personal network by becoming involved in one of the three Farm Credit governance groups outlined here.

BOARD OF DIRECTORS*

Our Board of Directors includes 16 member-elected directors, each on a four-year term. It also includes two directors appointed by the board. The board is responsible for specific areas of governance, including an Executive, Audit, Human Resources, Risk Management and Governance Committee. Candidates are nominated annually for open positions based on skills, experience, and eligibility, with Farm Credit’s voting members making the final selection each fall.

The board is entrusted to use sound and ethical business principles when making decisions and representing member interests. They are responsible for maintaining financial strength, while ensuring a structure is in place to provide superior service.

Directors receive a monthly retainer for attending board meetings and other special events. If you are a Farm Credit member holding vot-ing stock and reside or farm in our service territory—and you combine visionary thinking, leadership experience, and strong communication skills with a passion to serve—you are eligible to be nominated for this position. Other qualifications and eligibility requirements apply.

NOMINATING COMMITTEE*

Voting Farm Credit members elect five members in each state’s ser-vice territory to serve as the Nominating Committee every year. This committee meets in June to nominate candidates for open director and Nominating Committee positions for the consideration of voting mem-bers. Any holder of Farm Credit voting stock is eligible to be nominated for a position on the Nominating Committee (other qualifications and eligibility requirements apply). Members are compensated for their time and travel.

ADVISORY COMMITTEEThe 1,000+ person Farm Credit Advisory Committee serves as grass-roots advisors to the Board of Directors. Acting at the local level, members meet regularly to provide input and make the concerns of the general membership known to its elected officials.

WANT TO FIND OUT MORE?Call your local office or our office in Louisville at 1-800-333-3276, extension 153728. We will be happy to provide you with more information. We appreciate your interest and look forward to your involvement!

Your privacy is important to us. We want you to know that we hold your financial and other personal information in strict confidence. Since 1972, Farm Credit Administration regulations have forbidden the directors and employees of Farm Credit institutions from disclosing personal borrower information to others without your consent. We do not sell or trade our members’ personal information to marketing companies or information brokers.

FCA rules allow us to disclose customer information to others only in these situations:

– We may give it to another Farm Credit institution that you do business with.

– We can be a credit reference for you with other lenders and provide information to a credit bureau or other consumer reporting agency.

– We can provide information in certain types of legal or law enforce-ment proceedings.

– FCA and bank examiners may review loan files during regular examinations of our association.

– If one of our employees applies to become a licensed real estate appraiser, we may give copies of real estate appraisal reports to the State agency that licenses appraisers when required. We will first remove as much personal information from the appraisal as possible.

As a member-owner of this institution, your privacy and the security of your personal information are vital to our continued ability to serve your ongoing credit needs.

* Recommendations are now being accepted by the 2015 Nominating Committee for the Director and Nominating Committee positions up for election in 2015. Contact Helen Strange at 502-420-3728 to request a form.

GETTING INVOLVED

HOW TO SUPPORT YOUR COOPERATIVE BORROWER PRIVACY


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Louisville, Kentucky 40232

1-800-444-FARM

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Celina

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1-888-515-5626

Coshocton

1-855-861-4412

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Eaton

1-800-686-4146

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1-800-325-3086

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Scottsburg

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OHIOAlliance

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1-800-589-6118

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1-888-713-4293

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1-800-216-9651

KENTUCKYBardstown

1-855-631-9924

Bowling Green

1-800-264-0310

Campbellsville

1-800-880-2396

Danville

1-800-880-1114

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1-800-880-6785

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1-800-880-7288

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1-800-880-9425

Grayson

1-800-880-6453

Hardinsburg

1-877-212-8616

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1-800-783-9776

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London

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1-800-261-3071

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Richmond

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1-855-507-6415

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TENNESSEEAthens

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1-800-346-2190

Crossville

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1-800-524-0932

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1-800-227-7414

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1-800-346-2191

Fayetteville

1-855-631-9921

Greeneville

1-800-218-1040

Johnson City

1-800-444-3276

Knoxville

1-800-524-0931

Lawrenceburg

1-800-273-0260

Lebanon

1-800-765-7172

Maryville

1-855-297-7199

McMinnville

1-855-838-9958

Murfreesboro

1-855-631-9923

Oneida

1-800-226-7017

Ripley

1-800-635-5003

Shelbyville

1-855-631-9922

Somerville

1-800-469-2794

Springfield

1-800-894-9998

Tazewell

1-866-630-5017

Trenton

1-888-855-0631

INDIANAAnderson

1-800-878-0195

Bloomington

1-800-372-3276

Bluffton

1-800-477-4737

Columbia City

1-888-823-2719

Columbus

1-800-231-2747

Corydon

1-800-835-2501

Crawfordsville

1-800-875-5531

Evansville

1-800-345-2835

Franklin

1-800-327-5099

Greencastle

1-800-446-0306

Greensburg

1-877-850-6488

Hagerstown

1-800-647-0299

Jasper

1-800-752-7429

Kokomo

1-888-956-5666

Lafayette

1-888-232-9000

LaGrange

1-888-823-2718

Documents

2014 ANNUAL REPORT - Farm Credit Mid-America Downloads...2014 ANNUAL REPORT 1 FARM CREDIT MID–AMERICA Customers are at the heart of everything we do. In 2014, staff spent more time