Our Financials

Farm Credit Services of the Mountain Plains, ACA

To Our Stockholders:

We are pleased to present this summary of our financial performance in 2009, and we encourage you to read Management's Discussion and Analysis for a look at the year's results.

2009 was a challenging year for some of our customers. Economic conditions and stress in the dairy, cow/calf, and timber industries caused our credit quality to decline and increased the amount of earnings recorded in our provision for loan losses. In addition, the patronage income we receive from our funding bank, U.S. AgBank, was substantially lower in 2009. As such, 2009 net income was $10.09 million, as compared with $18.22 million for the prior year.

Facing the worst economic recession since the Great Depression, the board of directors and management quickly responded by decreasing Association operating expenses and focusing staff resources on working with customers experiencing financial stress. Unlike some lending institutions, we have not tightened our credit standards. That would only serve to make today's economic climate more difficult for producers in certain segments of agriculture. Our ability to maintain a strong financial position in this challenging environment reflects our efforts to actively manage our loan portfolio.

We are a financially sound and well-capitalized institution. And, because of this, we have money to lend to creditworthy borrowers. Our loan volume at the end of 2009 was mostly unchanged from year-end 2008. We remain subject to strong, independent regulatory oversight by the Farm Credit Administration which oversees our safety and soundness.

Most important, however, we are focused on our mission of ensuring a permanent source of reliable and competitive credit for the agriculture industry and rural America. Even in these stressful times, the board of directors was able to return $3.0 million of earnings to our customers through the Ownership Dividend Program. Since 2004, this program has returned $45.5 million of earnings to our customers.

We are working hard to serve you. As always, thank you for the trust and loyalty you've placed in us.

Sincerely,

Kirvin Knox
Chairman of the Board

Terry D Anders
Chief Executive Officer