Company: AGM-PH
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000845877-25-000033
Chunk: 152

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 152
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 Farmer Mac's secondary market, which could adversely affect Farmer Mac's business and decrease its revenues and profits.

Operational Risk

The inadequacy or failure of Farmer Mac's operational systems, cybersecurity program, internal controls or processes, or infrastructure, or those of third parties, could have a material adverse effect on Farmer Mac's business, operating results, or financial condition.

Farmer Mac is exposed to operational risk due to the complex nature of its business operations and the processes and systems used to undertake its business activities and comply with regulatory requirements.  Operational risk includes the risk of loss to Farmer Mac resulting from:

•inadequate or failed internal processes, systems, cybersecurity program, or infrastructure;

•Farmer Mac's inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure; 

•any cybersecurity incident or compromise of Farmer Mac's information systems or security measures (including of its third parties), or the unauthorized access and/or acquisition of data;

•failed execution of system implementations and upgrades;

•human error, malfeasance, or other misconduct;

•undetected or unknown errors, defects, or vulnerabilities in third party software or cybersecurity incidents related to third party software; 

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•inadequate or failed internal controls or processes to detect or prevent fraud or other violations of law or regulations; or 

•external events, including a disruption involving physical site access, catastrophic events, natural disasters, terrorist activities, or disease pandemics.  

Farmer Mac relies on business processes that largely depend on people, technology, and the use of complex systems and models to manage its business, process a high volume of daily transactions, and generate the records on which Farmer Mac's financial statements are based. Inadequacies or failures in Farmer Mac's internal processes, personnel, systems, cybersecurity program, or infrastructure could lead to a significant disruption to business operations; unauthorized access to, or acquisition, destruction, alteration, release, theft, or loss of, confidential, proprietary, or personal data; fraud on Farmer Mac's business and customers; extortion; financial and economic loss or costs; errors in its financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; or reputational damage.  

The potential for operational risk exposure also exists as a result of Farmer Mac's interactions with, and reliance on, third parties. Farmer Mac's business relies on