Pub 1 2012 Issue 1

January/February 2012 19 Leading advocate for the banking industry in Kansas. If your bank belongs to the ABA, you can enjoy a FREE email subscription to FCW or you can read it monthly on-line, at www.aba.com . To receive FCWby e-mail or tomanage your subscription, please visit ABA E-Mail Bulletins and check or uncheck the appropriate boxes. For other inquiries, please contact Barbara McCoy at 1-800-BANKERS. FCS of America (FCSA), headquartered in Omaha, had a tax rate of 1.22% on $335 million of pre-tax earnings. The largest ACA, but second in the profitability derby, was Louisville-based Mid-America, ACA (MidAm), with a tax rate of 4.91% on pre-tax earnings of $201 million. FCSA’s lower tax rate is puzzling since 59.4% of its loans were secured by real estate at September 30, 2011, while 74.3% of MidAm’s loans were secured by real estate. Perhaps FCSA ismore creative in how it calculates its tax liability. The third-largest earner, Northwest FCS (Spokane), had $122 million of pre-tax income, a 3.99% tax rate. The fourth-largest, Farm Credit West (Roseville, California) had a rock-bottom tax rate of .09% on $111 million of pre-tax earnings. Capital Farm Credit (Bryan, Texas), the fifth-largest, with $96 million of pre-tax income had a tax liability of just $43,000, for a tax rate of .04%. As Congress searches for additional revenue to close the budget deficit, subjecting the FCS to the full corporate tax rate would bring in another $1 billion annually. Click here for a complete list of ACA tax rates. FCA board proposes more transparency for FCS com- pensation OnDecember 8, the board of the FarmCredit Administration (FCA) proposed “to amend regulations related to stockholder disclosures regarding senior officer compensation” for FCS “banks and associations to [provide to] their stockholders and investors.” No doubt this proposed rule has been warmly re- ceived by FCS executives. One of the most interesting provisions in the proposed rule, according to an FCA fact sheet, is disclo- sure of “the overall risk and reward structure for senior officer compensation plans and practices, the relationship of senior officer compensation to the institution’s overall performance, and the relationship of the compensation to the senior officers’ performance.” These disclosures will make for interesting read- ing at FCS institutions experiencing problems. In the spirit of improving compensation disclosures, FCW will resume its annual publication of the list of highest paid FCS CEOs. FCW’s annual compensation survey is widely read within the FCS. Report FCS lending abuses to: green-acres@ely-co.com Bankers are continuing to send FCW reports of FCS lending abuses, such as FCS loans for rural estates, weekend getaways, and hunting preserves. Email reports of similar lending abuses in your market to: green-acres@ely-co. com. Please provide as much detail as possible about any loan which violates the spirit, if not the law, governing FCS lending. freedom of choice Choose an EFT Network Invested in You While some would like community financial institutions to have fewer choices and less control, SHAZAM believes that community financial institutions must remain in control of their own futures. SHAZAM is owned and operated by community financial institutions. We understand who you are and what you believe in. We’re here for you, providing the cost-effective technology that makes you more effective. You do have a choice in EFT networks. Choose the only EFT network invested in your success. www.shazam.net (800) 537-5427