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Exhibit 1-1

DIRECT LOANS AND DIRECT BORROWERS

There are 8,144 Direct Borrowers - $851,237,556 principal, and $252,806,402 interest owed for a total owed of $1,104,043,958.

There are 116,261 total borrowers nationwide. Texas has seven percent of the borrowers and eight percent of the dollar amount owed.

Of the $1,104,043,958 owed on direct loans, we have $406,136,624 delinquent or 36.79% of dollars delinquent.

Of the 8,144 direct borrowers, 40 percent or 3,258 are delinquent. These 3,258 owe $711,512,862.

The 8,144 borrowers have 23,793 loans outstanding.

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Of the 8,144 borrowers the following represents a breakdown by amount of debt owed:

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The 65 million dollar accounts owe $118,736,267. Of this, $89,054,478 is delinquent with 64 of the 65 million dollar accounts delinquent.

We have 362 Direct Loans to Socially Disadvantaged (SDA) borrowers. These borrowers have 651 loans with a total of $38,187,439 principal + interest (P+) owed. There are 132 borrowers delinquent with a delinquent amount owed of $2,053,442.

We have 312 beginning farmer borrowers. These borrowers have 498 loans with a total of $31,298,598 P+I owed. There are 65 of these borrowers delinquent with delinquent amount owed of $982,515.

Exhibit 2-1

GUARANTEED LOANS AND BORROWERS

We have 2,791 Guaranteed Loan Borrowers owing $491,288,647 principal. These 2,791 borrowers have 4,779 loans. Of these loans, 441 are delinquent in the amount of $22,758,045. We have 9.23% of our guaranteed loans delinquent with 4.63% of dollar owed delinquent.

Loan breakdown is as follows:

3 economic emergency

712 farm ownership

4,064 operating.

CERTIFIED LENDER PROGRAM

The Certified Lender Program is going reasonably well in Texas. We currently have 69 lenders participating in the Certified Lender Program in Texas. We believe this would represent approximately 70% of the lenders that have the loan volume and loss ratio to be considered eligible to participate.

The Preferred Lender Program has not been implemented. Representatives from Washington would need to comment on the status of this program.

The Agriculture Credit Improvement Act of 1992 (1992 Act) limited the number of years a borrower was eligible to receive loans from the Farm Service Agency (formerly Farmers Home Administration Farm Loans). The requirements of the 1992 Act were superseded by requirements in the 1996 Farm Bill. As we understand, part of the provision that changed limits the number of years a borrower could receive a loan instead of limiting the number of years the borrower had loans outstanding as provided for in the 1992 Act. We have not received the regulations implementing the provision of the 1996 Farm Bill. At this time, we are unsure as to how many borrowers this will affect in Texas. The number that will be affected immediately will be significantly less under the 1996 Farm Bill than would have been affected under the 1992 Act. We understand the 1996 Farm Bill provides for a transition rule to allow borrowers to retain eligibility during this transition period.

Exhibit 3-2

The Credit Reform Provisions of the 1996 Farm Bill provide limits to the number of times a borrower may receive debt forgiveness and limits the type of assistance for borrowers that have received a debt writedown. Since 1989 we have had 5,411 borrowers in Texas to receive debt forgiveness. Since 1989, the agency has written off $713,255,550 principal, $403,739,250 interest, and $43,768,096 partial writedown for a total of $1,160,762,896 in total debt forgiveness.

The number of borrowers receiving debt forgiveness in Texas during this time period is the highest in the nation. The 5,411 represents approximately 42% of the total receiving debt forgiveness in the Southwest Area. The average forgiveness per borrower is a little over $200,000 per borrower.

We believe 696 of the borrowers receiving debt forgiveness in the past currently have either Direct or Guaranteed Loans. Of these 696 borrowers, we believe 129 would be unable to receive any additional assistance. The balance of these borrowers would be able to receive direct or guaranteed loans for annual farm operating and family living expenses only.

We have 108 borrowers that received two or more debt forgivenesses in subsequent fiscal years since implementation of the Agricultural Credit Act of 1987.

We have attached a chart showing the dollar amount of Guaranteed Loans closed since the inception of the Guaranteed Program and the dollar amount of losses paid in Texas. This chart reflects we have closed a total of 12,872 guaranteed loans for a total dollar amount of $1,432,262,965 and we have paid 990 loss claims for a total of $59,321,280. The losses paid are tied back to the year the loans originated, not the year the claim was paid.

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