It all happened in 1916

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1916
Farm Credit A Proud Heritage, A Promising Future
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World War I
In 1916 the longest battle in World War I was
fought. It was known as the battle of Verdun. The
battle of Verdun lasted from February 21 to
December 16.
Hell cannot be so terrible as this. Humanity is
mad it must be mad to do what it is doing. 
--A French Soldier
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Baseball
George Herman Babe Ruth, also known as The
Bambino and the Sultan of Swat is
playing for the Boston Red Sox.
That year, he lead them to their second
straight World Series title.
The way a team plays as a whole determines its
success. You may have the greatest stars in the
world, but if they dont play together, the club
wont be worth a dime. --Babe Ruth
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Born in 1916just to name a few
Walter Cronkite
Kirk Douglas
Glenn Ford
Dinah Shore
Betty Grable
Jackie Gleason
I cant imagine a person becoming a success who
doesnt give this game of life everything hes
got.--Walter Cronkite
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How were farmers doing?
Loans were hard to come by in agriculture. Banks
charged exorbitant rates. A stable, reliable
source of credit was needed for farmers.
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And so begins the Farm Credit story
On July 17, 1916, President Woodrow Wilson signs
the Federal Farm Loan Act, which created 12
Federal Land Banks and associations known as
National Farm Loan Associations.
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Farm Credit, through the years
1916The passing of the Federal Farm Loan Act in
provided a much-needed source of long-term credit
for farmers. The National Farm Loan Associations
later became known as the Federal Land Bank
Associations.
1923The Federal Intermediate Credit Banks (FICB)
were created to supplement Land Bank loans. The
FICBs could offer short and intermediate term
credit to farmers. 1933The Production Credit
Associations and Bank for Cooperatives were
created. They provided a more effective credit
delivery system for farmers and their
cooperatives.
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1950sDuring this decade, there was a
technological explosion in agriculture and
marked a major period of growth for the Farm
Credit System. By 1968, the System had
repaid all federal capital borrowed and was now
completely owned by its member/borrowers.
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1971The most sweeping update of the Systems
charter was the Farm Credit Act of 1971. This act
significantly expanded the range of services that
System institutions could offer and expanded the
authorities of the local associations. For the
first time, Farm Credit could make home loans to
those living in rural areas.
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And the beat goes on
The 1980s saw major consolidation of the System
institutions. In the early 80s, the System was
made up of 37 banks and more than 1,000 local
lending associations. By the early 90s, there
were 15 banks and fewer than 300 associations.
Today there are five System Banks and less than
100 associations in the United States.
AgFirst FCB
AgriBank FCB
CoBank
FCB of Texas
U.S. AgBank FCB
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Farm Credit Serves Rural America through more
than 100 lending associations all over the
country.
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Farm Credit is the leader in agricultural and
rural financing in the United States.
In fact, Farm Credit is the largest single
lender to agriculture in the nation.
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Farm Credit in Florida today
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Farm Credit Associations of Florida

• Gross Accruing Volume
• 1,860,000,000
• Number of Stockholders
• 5,060
• as of 7/31/2006

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Farm Credit is a Customer-Owned Cooperative.

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What is a Cooperative?
A cooperative is a business that has the
following unique characteristics

• User-owned - the people who use the cooperatives
  services own the business
• User-controlled - the only people who can vote on
  cooperative matters are those who use the
  cooperative (and, thus, those who own stock in
  the cooperative)
• User benefits - users derive financial benefits
  from using the co-ops services.

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Were different from other lenders. Our
patronage refund program proves it!
Since 1988, the five Farm Credit Associations in
Florida have declared more than 400 Million in
Patronage Refunds! This can lower your effective
rate by as much as 1.5!
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What exactly is a patronage refund?

• A way of distributing the associations net
  income to borrowers.
• A borrowers refund is based on the proportion of
  interest earned on his loan to the total interest
  earned by the association (or other equitable
  method).
• May be paid in cash, allocated surplus, stock, or
  any combination of these items.

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Patronage Refunds The Cooperative Way of Doing
Business

• Most businesses return their profits to their
  investors, not their customers.
• Cooperatives, however, return profits to their
  customers, or member-users.
• The user-benefit principle is one of the basic
  cooperative principles.

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Financing Available from Farm Credit

• Rural Property
• Agricultural real estate (with or without
  improvements)
• Recreational property
• Hunting tracts
• Residential lots

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• Homes
• Buying or building a home
• Refinancing
• Remodeling and home improvements

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• Barns, stables, sheds, grain bins
• Operating expenses
• Buying and leasing machinery, equipment, vehicles
• Livestock and horses

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We offer Rates, Terms PaymentOptions to Meet
Your Needs

• Variable Rate Options
• Prime Rate Loans are indexed to the Wall Street
  Journal Prime Rate.
• LIBOR (London Interbank Offered Rate) is a
  market-driven rate it reacts to changes in the
  money market more quickly than does Prime. (If
  you have a commercial farming operation, LIBOR
  may be a good fit because it moves with the
  market like the price of the commodities you buy
  and sell.)

Variable Rate Loans A variable rate loan will
generally offer you the lowest interest rate
available at any point in time.
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We offer Rates, Terms PaymentOptions to Meet
Your Needs
Adjustable Rate Loans Adjustable rate loans
(ARMs) feature rates which are fixed for a
specific term, normally 1, 3 or 5 years. Our
ARMs have caps to protect you from broad swings
in interest rates.
Fixed Rate Loans With a fixed rate loan, your
interest rate will remain the same for the term
of your loan. No pre-payment penalties for most
of our fixed rate loans.
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Loan Terms and Payment Options

• LOAN TERMS
• Farm Credit
• offers loan terms of
• one month to 30 years,
• and everything
• in between.
• You choose the term best for you.
  Generally, shorter the term, lower the rate.

• PAYMENT OPTIONS
• Monthly
• Quarterly
• Semi-Annual
• Annual
• Each option has an account draft feature
  that can save you time and money.

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The Impact of Rural America Bonds
Rural America Bonds allows Farm Credit toplay a
greater role in stimulating economicgrowth and
development in rural areas.
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Improving Quality of Life

• By making these investments, we seek to improve
  the quality of life in the communities in which
  our farmers and ranchers live and work.

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Targets for Rural America Bonds

• Projects that support rural communities include
• Housing for low and moderate-income families
• Community revitalization and development projects
• Rural infrastructure, such as water, waste,
  utility and transportation projects
• Essential community facilities including schools,
  libraries, community centers, child-care
  facilities, police, fire and rescue stations,
  medical and assisted-living facilities.

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Targets for Rural America Bonds

• Rural businesses that create or preserve jobs and
  provide products or services primarily serving
  rural areas and their residents.
• does not include major national
  corporations, religious organizations, or gaming
  operations

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Targets for Rural America Bonds

• Alternative energy
• projects, such as
• Ethanol plants,
• Bio-diesel facilities
• Wind or hydro-energy projects
• Other projects that qualify under the USDAs
  Renewal Energy and Energy Efficiency Program.

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Financing Related to Alternative Energy Projects

• Equipment Purchase/ Installation Costs
• Plant Construction
• Land Acquisitions

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The Farm Credit Advantage

• Farm Credit offers local service with credit
  decisions made locally, by local people.
• We live and work in the communities where our
  customers live and work.
• Our board of directors is made of our borrowers,
  who make decisions to benefit you and your
  lending cooperative.

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Financing Terms

• Equity gt 40
• Loan Structure
• Term Loan (75 of term debt)
• Revolving Term Loan (25 of term debt)
• Working Capital Loan (1.50 per gallon)
• 10 year loan amortization with additional cash
  sweep requirement
• Collateral All Assets

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Example

• 50 mmgy Fuel Ethanol Facility
• Total Cost 100,000,000
• Equity 40,000,000
• Term Loan 45,000,000
• Revolving Term Loan 15,000,000
• Working Capital Loan 7,500,000

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Example

• Terms of Repayment
• Term Loan Quarterly installments of principal in
  the amount of 1,500,000 plus interest.
  Additional cash sweep.
• Revolving Term Loan Quarterly interest payments.
  Once the Term Loan is paid in full, the
  commitment amount will be reduced by 1,500,000
  each quarter.
• Working Capital Loan Quarterly interest
  payments. Availability is subject to a borrowing
  base of inventory and receivables.

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Financial Covenants

• Working Capital
• 1.00 per gallon minimum
• Definition current assets / current liabilities
• Equity Ratio
• 40 minimum
• Definition total equity / total assets
• Debt Service Coverage
• 1.50x minimum
• Definition EBIDA minus shareholder
  distributions and capital expenditures divided by
  current portion of term debt

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Other Conditions

• Limitations
• Shareholder Distributions
• Capital Expenditures
• Change of Management
• Financial Reporting
• Monthly - internal financial statements
• Quarterly - compliance certificate
• Annual - audited financial statements

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Material Documents

• Feasibility Study
• Engineering, Procurement and Construction
• Builders Risk Insurance
• Permits
• Utility Supply Agreements
• Risk Management Policy
• Supply Origination Contracts
• Marketing Contracts