INVESTMENT SECURITIES

The following tables present the amount outstanding, amortized cost, and fair values of Farmer Mac's investment securities as of March 31, 2013 and December 31, 2012:



	March 31, 2013
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	74,100	$	—		$	74,100	$	—	$	(8,887	)	$	65,213
Floating rate asset-backed securities	146,110		(326		)	145,784		905		(11		)	146,678
Fixed rate asset-backed securities	2,983		—			2,983		—		(3		)	2,980
Floating rate corporate debt securities	91,345		(16		)	91,329		475		—			91,804
Fixed rate corporate debt securities	62,000		258			62,258		117		(18		)	62,357
Floating rate Government/GSE guaranteed mortgage-backed securities	673,283		5,603			678,886		9,096		(4		)	687,978
Fixed rate GSE guaranteed mortgage-backed securities	1,580		1			1,581		123		—			1,704
Floating rate GSE subordinated debt	70,000		—			70,000		—		(6,849		)	63,151
Fixed rate GSE preferred stock	78,500		683			79,183		7,609		—			86,792
Fixed rate taxable municipal bonds	8,542		50			8,592		5		—			8,597
Floating rate senior agency debt	50,000		(3		)	49,997		51		—			50,048
Fixed rate senior agency debt	119,000		474			119,474		147		—			119,621
Fixed rate U.S. Treasuries	907,000		1,996			908,996		268		—			909,264
Total available-for-sale	2,284,443		8,720			2,293,163		18,796		(15,772		)	2,296,187
Trading:
Floating rate asset-backed securities	4,013		—			4,013		—		(2,884		)	1,129
Total investment securities	$	2,288,456	$	8,720		$	2,297,176	$	18,796	$	(18,656	)	$	2,297,316



	December 31, 2012
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	74,100	$	—		$	74,100	$	—	$	(10,941	)	$	63,159
Floating rate asset-backed securities	150,519		(372		)	150,147		933		(36		)	151,044
Fixed rate asset-backed securities	6,501		—			6,501		—		—			6,501
Floating rate corporate debt securities	76,345		(32		)	76,313		450		—			76,763
Fixed rate corporate debt securities	51,969		243			52,212		204		—			52,416
Floating rate Government/GSE guaranteed mortgage-backed securities	699,062		5,973			705,035		8,035		(211		)	712,859
Fixed rate GSE guaranteed mortgage-backed securities	1,910		1			1,911		154		—			2,065
Floating rate GSE subordinated debt	70,000		—			70,000		—		(12,569		)	57,431
Fixed rate GSE preferred stock	78,500		784			79,284		7,802		—			87,086
Floating rate senior agency debt	50,000		(6		)	49,994		61		—			50,055
Fixed rate senior agency debt	72,700		287			72,987		128		(1		)	73,114
Fixed rate U.S. Treasuries	1,163,400		2,240			1,165,640		258		(9		)	1,165,889
Total available-for-sale	2,495,006		9,118			2,504,124		18,025		(23,767		)	2,498,382
Trading:
Floating rate asset-backed securities	4,327		—			4,327		—		(3,080		)	1,247
Total investment securities	$	2,499,333	$	9,118		$	2,508,451	$	18,025	$	(26,847	)	$	2,499,629

During the three months ended March 31, 2013, Farmer Mac received proceeds of $15.0 million from the sale of securities from its available-for-sale investment portfolio, resulting in gross realized gains of $2,000, compared to proceeds of $5.0 million for the same period in 2012, resulting in gross realized gains of $28,000.

As of March 31, 2013 and December 31, 2012, unrealized losses on available-for-sale investment securities were as follows:



	March 31, 2013
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	65,213	$	(8,887	)
Floating rate asset-backed securities	—		—			10,337		(11		)
Fixed rate asset-backed securities	2,981		(3		)	—		—
Fixed rate corporate debt securities	25,099		(18		)	—		—
Floating rate Government/GSE guaranteed mortgage-backed securities	8,185		(2		)	816		(2		)
Floating rate GSE subordinated debt	—		—			63,151		(6,849		)
Total	$	36,265	$	(23	)	$	139,517	$	(15,749	)



	December 31, 2012
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	63,159	$	(10,941	)
Floating rate asset-backed securities	21,648		(27		)	3,619		(9		)
Floating rate Government/GSE guaranteed mortgage-backed securities	174,352		(209		)	829		(2		)
Floating rate GSE subordinated debt	—		—			57,431		(12,569		)
Fixed rate senior agency debt	50,088		(1		)	—		—
Fixed rate U.S. Treasuries	136,194		(9		)	—		—
Total	$	382,282	$	(246	)	$	125,038	$	(23,521	)

The unrealized losses presented above are principally due to a general widening of credit spreads from the dates of acquisition to March 31, 2013 and December 31, 2012, as applicable. The resulting decrease in fair values reflect an increase in the perceived risk by the financial markets related to those securities. As of March 31, 2013, all of the investment securities in an unrealized loss position had credit ratings of at least "AA+" except three that were rated "A-". As of December 31, 2012, all of the investment securities in an unrealized loss position had credit ratings of at least "AA+" except one that was rated "A-". The unrealized losses were on 16 and 17 individual investment securities as of March 31, 2013 and December 31, 2012, respectively.

As of March 31, 2013, 9 of the securities in loss positions had been in loss positions for more than 12 months and had a total unrealized loss of $15.7 million. As of December 31, 2012, 9 of the securities in loss positions had been in loss positions for more than 12 months and had a total unrealized loss of $23.5 million. The unrealized losses on those securities are principally due to a general widening of credit spreads from the dates of acquisition. Securities in unrealized loss positions 12 months or more have a fair value as of March 31, 2013 that is, on average, approximately 89.9 percent of their amortized cost basis. Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of changes in credit spreads or maturity. Accordingly, Farmer Mac has concluded that none of the unrealized losses on these available-for-sale investment securities represent other-than-temporary impairment as of March 31, 2013 and December 31, 2012. Farmer Mac does not intend to sell these securities and it is not more likely than not that Farmer Mac will be required to sell the securities before recovery of the amortized cost basis.

Farmer Mac did not own any held-to-maturity investment securities as of March 31, 2013 and December 31, 2012. As of March 31, 2013, Farmer Mac owned trading investment securities with an amortized cost of $4.0 million, a fair value of $1.1 million, and a weighted average yield of 4.29 percent. As of December 31, 2012, Farmer Mac owned trading investment securities with an amortized cost of $4.3 million, a fair value of $1.2 million, and a weighted average yield of 4.29 percent.

The amortized cost, fair value, and weighted average yield of available-for-sale investment securities by remaining contractual maturity as of March 31, 2013 are set forth below. Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.



	Investment Securities Available-for-Sale as of
	March 31, 2013
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,102,158	$	1,102,548	0.59%
Due after one year through five years	178,721		179,528		1.02%
Due after five years through ten years	399,858		396,373		1.07%
Due after ten years	612,426		617,738		2.61%
Total	$	2,293,163	$	2,296,187	1.25%