1 FEDERAL NATIONAL MORTGAGE ASSOCIATION 3900 Wisconsin Ave. NW Washington, D.C. 20016

ASSETS: $88.36 billion LOSS: $57.4 million LOSS PER SHARE: 87 cents DIVIDEND: 16 cents STOCKHOLDERS' EQUITY: $1.21 billion RETURN ON EQUITY: NA EXCHANGE: NYSE EMPLOYES: 1,700 TOP EXECUTIVES: David O. Maxwell, chairman and chief executive officer; Mark J. Riedy, president and chief operating officer FOUNDED: 1938

DESCRIPTION: Fannie Mae is a congressionally chartered stock corporation that forms a secondary market for residential mortgages by buying loans from primary lenders such as thrift institutions and mortgage bankers. This process recycles funds back to those lenders, allowing them to make more loans. Fannie Mae owns about one of every 14 U.S. home mortgages.

DEVELOPMENTS: Fannie Mae, the nation's third-largest company in terms of assets, slipped back into the red last year, pulled down by higher interest rates. The company owns a vast portfolio of low-yielding fixed-rate mortgages purchased in the 1970s and earlier, when interest rates were much lower. It must finance these with shorter-term debt at rates higher than the yield of the mortgages, a gap that grows when interest rates rise. This "negative interest margin" totaled $151.7 million last year, compared with $61.5 million in 1983, when the company registered a $75.5 million profit. "We can run, but we can't hide," Chairman David Maxwell observed in the annual report.

In addition, 1984 results suffered in comparison to 1983 because of a dramatic decline in gains on sales of mortgages. In 1983, Fannie Mae realized $90.3 million in such gains, but only $11.7 million last year. Since the 1983 level represented, to a large extent, sales in anticipation of prepayment, Maxwell said that, "in a sense, . . . one may say 1984's financial results, including far fewer mortgage sales, reflect the ongoing business of the corporation more accurately than 1983's."

To deal with its financial problems, Fannie Mae under Maxwell aggressively has sought to boost fee income, to lessen the mismatch between the maturities of its assets and liabilities, and to move into mortgage-backed securities, which shield the corporation from rate fluctuations. Maxwell called the performance of these and other programs "bright signs for 1985 and beyond."

The corporation is facing a renewed challenge on the political front, this time in the form of the Reagan administration's proposal to impose "user fees" on its debt. Because of its government connection, Fannie Mae enjoys an advantage when it borrows in the capital markets. The administration has proposed to require Fannie Mae and similar institutions to pay a fee for this. Such a fee could have disastrous consequences for Fannie Mae, and the corporation is working hard to help defeat it in Congress. 2: FEDERAL HOME LOAN MORTGAGE CORP. 1776 G St. NW Washington, D.C. 20013

ASSETS: $13.2 billion PROFITS: $267.4 million EARNINGS PER SHARE: NA DIVIDEND: NA STOCKHOLDERS' EQUITY: $606.6 million RETURN ON EQUITY: 52 percent EXCHANGE: NA EMPLOYES: 893 TOP EXECUTIVES: Edwin J. Gray, chairman; Kenneth J. Thygerson, president and chief executive officer FOUNDED: 1970

DESCRIPTION: Freddie Mac is a congressionally chartered corporation whose stock is owned by member savings institutions through common stock held for them by the 12 Federal Home Loan Banks. It operates a secondary market for conventional residential mortgages, purchasing loans from lenders and selling securities based on those loans.

DEVELOPMENTS: Freddie Mac's profits continued their rapid climb, reaching $267.4 million last year, up from $159.7 million in 1983 and $59 million in 1982. The corporation's collateralized mortgage obligations (CMOs), which Freddie Mac pioneered, continued to do well; from an initial $1 billion in June 1983, CMO volume was approaching $5 billion this spring. CMOs are a special type of mortgage-backed security that offer different classes of payments. This feature allows investors to choose a shorter term as well as offering them a greater degree of call protection.

In December, Freddie Mac distributed 15 million shares of participating preferred stock to the 12 Federal Home Loan Banks, which in turn distributed the stock to their member savings and loans. The transaction helped boost the net worth of the troubled S&L industry, though it was criticized in some quarters as mere accounting sleight of hand.

This year, for the first time, Freddie Mac becomes subject to federal taxes and faces proposals by the Reagan administration to charge a "user fee" for its federal connection when it borrows money. 3: STUDENT LOAN MARKETING ASSOCIATION 1050 Thomas Jefferson St. NW Washington, D.C. 20007

ASSETS: $11.62 billion PROFITS: $99.3 million EARNINGS PER SHARE: $1.91DIVIDEND: 12 cents STOCKHOLDERS' EQUITY: $576.6 million RETURN ON EQUITY: 27.5 percent EXCHANGE: NYSE EMPLOYES: 681 TOP EXECUTIVES: Edward A. McCabe, chairman; Edward A. Fox, president and chief executive officer FOUNDED: 1973

DESCRIPTION: Sallie Mae is a federally chartered, stockholder-owned corporation that provides, through a secondary market, the nation's largest single source of financing for insured student loans.

DEVELOPMENTS: Last year Sallie Mae's profits and dividends to common stockholders increased 49 percent. It moved from the over-the-counter market to the New York Stock Exchange, and its institutional customer base grew 30 percent to more than 2,300 institutions that originate or fund student loans. 4:USF&G CORP. 100 Light St. Baltimore, Md. 21202

ASSETS: $6.16 billion PROFITS: $4.3 million EARNINGS PER SHARE: 8 cents DIVIDEND: $2.08 STOCKHOLDERS' EQUITY: $1.1 billion RETURN ON EQUITY: NA EXCHANGE: NYSE EMPLOYES: 9,000 TOP EXECUTIVE: Jack Mosely, chairman and president FOUNDED: 1896

DESCRIPTION: USF&G is a leading insurer specializing in property, casualty and life insurance.

DEVELOPMENTS: Fiscal 1984 was a transitional year for the property/casualty insurance industry, with record underwriting losses exceeding the growth of investment credit. USF&G felt the pinch as severely as its competitors, and profits plummeted from $276 million for 1983 to $4 million for the year ended Dec. 31.

USF&G said it is taking several corrective steps to improve finances, including raising its rates. It also introduced three new major property-casualty insurance products in 1984: a Preferred Risk Program offering custom-designed coverage for property damage; a package designed especially for contractors; and an "Agribusinessowners Program" aimed at the commercial farm market.

In September, USF&G opened a new support facility on a 68-acre site in Mount Washington, not far from its main headquarters. The center houses 850 employes. 5: NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP. 1115 30th St. NW Washington, D.C. 20007

ASSETS: $2.84 billion PROFITS: $27.7 million EARNINGS PER SHARE: NA DIVIDEND: NA STOCKHOLDERS' EQUITY: NA RETURN ON EQUITY: NA EXCHANGE: NA EMPLOYES: 132 TOP EXECUTIVE: Charles B. Gill, governor and chief executive officer FOUNDED: 1969

DESCRIPTION: National Rural Utilities Cooperative Finance Corp. is a nonprofit cooperative that provides its 936 rural electric systems, which serve nearly 23 million consumers, with financing to supplement federal loans from the Rural Electrification Administration.

DEVELOPMENTS: NRUCFC reported a year of steady growth, with $2.68 billion in loans outstanding at the end of the fiscal year ended May 31, 1984, up 8 percent over fiscal 1983. Low operating costs last year -- which came to less than one-quarter of 1 percent of outstanding loans -- pushed NRUCFC's net margin over $27 million, the largest in its history. This margin will be returned to members six years from now, according to the group's current capital policy.

NRUCFC's first pooled tax-exempt bonds were rated double-A by Moody's and Standard & Poor Corp. last year, while the bond ratings on single tax-exempt issues with NRUCFC's guarantee were upgraded. In addition to the tax-exempt program, a Fuel Financing Program was developed during the year and will be used by members to reduce their costs of financing coal and fuel oil reserves.