cancellations (total of 17) resulted from mergers or consolidations of System associations. Please note that the total number of cancellations does not include 33 PCA charters and 31 FLCA charters that customarily would have been cancelled when they consolidated to establish ACAS. Instead, these charters were amended to allow the associations to continue as subsidiaries of the new ACAS. FCA views an ACA and its PCA and FLCA subsidiaries as a single entity for most purposes and counts them only as an ACA when reporting on the number and type of associations comprising the Farm Credit System.

Thus far in FY 2002, FCA has canceled 10 charters as follows: 5 PCA charters (including charters for 2 PCA subsidiaries), 4 FLCA charters (including the charter of 1 FLCA subsidiary), and 1 ACA charter as a result of mergers or consolidations of System associations. Also, 6 PCA charters and 4 FLCA charters that customarily would have been cancelled when they consolidated to establish ACAS were amended instead to allow them to continue as subsidiaries of new ACAS.

FARM CREDIT SYSTEM FINANCIAL CONDITION

Mr. Bonilla. Please provide a table showing the loan volume of Farm Credit institutions for fiscal years 1997 through 2001.

The System's gross loan volume has risen 27 percent since 1997. The increase over the past 12 months stems mainly from long-term real estate loans (up $4.2 billion or 11.7 percent), and short- and intermediate-term loans (up $2.5 billion or 13.1 percent). Other reasons for the growth have been increases in loan participations purchased from nonSystem lenders (up 27 percent) and increases in lease receivables (up nearly 20 percent for the Farm Credit Leasing Services Corporation).

Mr. Bonilla. What is the Farm Credit System capital as a percent of total assets? How

FCS institutions continue to strengthen their capital and financial positions in order to provide for future growth and absorb risk in the agricultural economy. During FY 2001, the System's capital increased by $1.6 billion to $15.7 billion on September 30, 2001.

Mr. Bonilla. What percent of all loans were non-performing for 2001? How does this compare to 2000?

Response: Nonperforming loans (which consist of nonaccrual loans, accruing restructured loans, and accruing loans 90 days or more past due) totaled $941 million on September 30, 2001 compared to $1.094 billion on September 30, 2000. These loans represented 0.98 percent of the System's gross loans on September 30, 2001, a decrease from 1.28 percent on September 30, 2000.

FARM CREDIT SYSTEM SENIOR OFFICER COMPENSATION

Mr. Bonilla. Please provide a table showing the salaries and benefits of Farm Credit System CEOs for all districts and entities for the past 5 years to include fiscal year 2001.

Response. We routinely collect information on the annual compensation of each Farm Credit System bank and certain other institutions such as the federal Farm Credit Banks Funding Corporation. Our regulations also require each FCS institution to disclose in its annual report to shareholders the total annual compensation of its CEO and separately, the aggregate compensation paid to other senior officers. Information on the total annual compensation for the CEO of each Farm Credit Bank (FCB) and certain other entities is

1.

Effective July 1, 1999, St. Paul BC merged with and into CoBank, ACB, the continuing bank. 2. Includes salary of both the retiring CEO and continuing CEO.

3. Beginning in 1997, the Western FCB and AgAmerica, FCB began operating under a joint management agreement. The CEO of the Western FCB retired in 1998. Since then, the banks have operated under the direction of a single CEO through December 31, 2001.

4.

Annual compensation includes bonuses paid in the form of shares of Farmer Mac Class C Non-Voting Stock.

EXAMINATION ISSUES

Mr. Bonilla. Your regulations require that Farm Credit System members be audited annually. Were all audits completed in 2001 and were there any audit opinions other than unqualified?

Response. All institutions were audited and received an unqualified opinion from their external auditors.

Mr. Bonilla. Please identify any Farm Credit System institutions that are in receivership.

Response. No FCS institutions are in receivership.

Mr. Bonilla. How many FCS institutions were under enforcement action at the end of 2001? How does this compare with the three previous years?

Response. At the end 2001, 2000 and 1999, no FCS institutions were under enforcement

AUDIT

Mr. Bonilla. What were the principal conclusions of the most recent annual independent financial audit?

Response. In December 2001, the Inspector General transmitted Harper, Rains, Stokes & Knight's, P.A. (HRSK) reports on the audit of FCA's financial statements for the fiscal year ended September 30, 2001. HRSK issued an unqualified opinion. HRSK opined the principal financial statements present fairly, in all material respects, the financial position of FCA as of September 30, 2001 and 2000, in conformity with generally accepted accounting principles. HRSK issued two other reports. The report on the internal control noted no matters involving the internal control and its operation that HRSK considered to be material weaknesses. The HRSK report on compliance with laws and regulations does not note any instances of noncompliance.

Attached for your information is a copy of FCA's fiscal year 2001 Performance and Accountability Report that contains the reports issued by the auditors.