The Federal Agricultural Mortgage Corp. replaced its chief executive as it also announced a $65 million capital infusion from a group of banks that is crucial to the company being able to restore capital and meet regulatory requirements.

The CEO change and investment in the government-chartered company referred to as Farmer Mac comes as the provider of funding for U.S. agricultural loans has been trying to find ways to stabilize itself.

Shares of Farmer Mac jumped 22% to $5 in recent pre-market trading.

Under the executive change, Michael A. Gerber will now serve as acting president and CEO of Farmer Mac, succeeding Henry D. Edelman. Edelman, appointed in 1989, was the first and only president and CEO that Farmer Mac had ever had. Gerber will continue as CEO of Farm Credit of Western New York, an association in the Farm Credit System.

The company couldn't immediately be reached for comment on Edelman's departure.

Farmer Mac faces heavy losses due to its holdings of tens of millions of dollars worth of investments that have rapidly lost value, including preferred stock of its cousin, Fannie Mae, which was seized by the government last month, and Lehman Brothers Holdings Inc., the collapsed investment bank.

If Farmer Mac was unable to raise capital, its regulator, the Farm Credit Administration, could downgrade its rating for the first time in its history. That could hurt banks that hold equity stakes in the company and could also curb its ability to make new loans.

The company's board also created an executive committee that will focus on the company's operations, capital structure and "transition issues" that include its search for a new, permanent CEO.

Gerber — who has been a member of Farmer Mac's board since June 2007 — said that "Farmer Mac's core business remains strong and with the capital enhancement we announced today, I am confident that, with our strengthened balance sheet, we will be in a good position to continue our important mission."

Acting Chairman Lowell Junkins also noted that the capital infusion "meets our commitment to satisfy regulatory requirements and support our plans to further our congressional mission for the benefit of farmers, ranchers and rural residents."

Farmer Mac was created by Congress in 1988 to buy mortgages and other loans that banks make to farmers and ranchers in rural America. Farmer Mac then repackages the loans into asset-backed securities. That business model has come under pressure this year as credit markets have seized up.

The bigger problems have come from the Washington-based company's investment portfolio. Last month, Farmer Mac disclosed that its holdings of preferred shares in Fannie Mae, another government-sponsored enterprise that the government took into conservatorship last month, left the company facing a $44 million write-down.

Last week, Farmer Mac warned it is likely to suffer another big write-down due to its holdings of $60 million in debt of Lehman Brothers, which filed for bankruptcy earlier this month. Farmer Mac is the latest financial institution to suffer from its investments in Fannie or Lehman. Many regional banks have been hit especially hard by such losses, which have depleted their capital levels.

The investors in the capital infusion — which is in the form of non-voting preferred stock — announced Wednesday include AgFirst Farm Credit Bank, AgriBank FCB, CoBank ACB, Farm Credit Bank of Texas, U.S. AgBank FCB and Zions Bancorp. Zions is the largest originator of loans sold to Farmer Mac.

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