Farmer Mac Reports First Quarter 2025 Results
Farmer Mac (NYSE: AGM) reported strong Q1 2025 financial results, delivering record performance across key metrics. The company achieved net interest income of $90.9 million, up 5% year-over-year, and record core earnings of $46.0 million ($4.19 per diluted share), representing 6% growth from the previous year.
The company provided $1.8 billion in liquidity and lending capacity to rural American lenders. Farmer Mac maintained a robust capital position with total core capital of $1.5 billion, exceeding statutory requirements by 65%, and a Tier 1 Capital Ratio of 13.9%. The company's strong performance was attributed to its diversified revenue streams, disciplined asset-liability management, and resilient business model.
Farmer Mac (NYSE: AGM) ha riportato risultati finanziari solidi nel primo trimestre 2025, raggiungendo performance record su indicatori chiave. La società ha registrato un reddito netto da interessi di 90,9 milioni di dollari, in crescita del 5% rispetto all'anno precedente, e un record di utili core di 46,0 milioni di dollari (4,19 dollari per azione diluita), con un aumento del 6% rispetto all'anno precedente.
La società ha fornito 1,8 miliardi di dollari in liquidità e capacità di prestito ai finanziatori rurali americani. Farmer Mac ha mantenuto una solida posizione patrimoniale con un capitale core totale di 1,5 miliardi di dollari, superando i requisiti normativi del 65%, e un rapporto Tier 1 Capital del 13,9%. L'ottima performance dell'azienda è stata attribuita a flussi di ricavi diversificati, una gestione rigorosa di attività e passività e a un modello di business resiliente.
Farmer Mac (NYSE: AGM) reportó sólidos resultados financieros en el primer trimestre de 2025, alcanzando un desempeño récord en métricas clave. La compañía logró un ingreso neto por intereses de 90,9 millones de dólares, un aumento del 5% interanual, y un récord de ganancias básicas de 46,0 millones de dólares (4,19 dólares por acción diluida), lo que representa un crecimiento del 6% respecto al año anterior.
La empresa proporcionó 1,8 mil millones de dólares en liquidez y capacidad de préstamo a prestamistas rurales estadounidenses. Farmer Mac mantuvo una sólida posición de capital con un capital básico total de 1,5 mil millones de dólares, superando los requisitos legales en un 65%, y una relación de capital Tier 1 del 13,9%. El sólido desempeño de la compañía se atribuyó a sus flujos de ingresos diversificados, una gestión disciplinada de activos y pasivos, y un modelo de negocio resiliente.
Farmer Mac (NYSE: AGM)은 2025년 1분기에 강력한 재무 성과를 보고하며 주요 지표에서 기록적인 실적을 달성했습니다. 회사는 순이자수익 9,090만 달러를 기록하며 전년 대비 5% 증가했으며, 핵심 순이익 4,600만 달러 (희석 주당 4.19달러)로 전년 대비 6% 성장한 기록을 세웠습니다.
회사는 미국 농촌 대출 기관에 18억 달러의 유동성과 대출 능력을 제공했습니다. Farmer Mac은 총 핵심 자본 15억 달러를 보유하며 법적 요구 사항을 65% 초과 달성했고, Tier 1 자본 비율 13.9%를 유지하는 견고한 자본 구조를 유지했습니다. 회사의 강력한 성과는 다각화된 수익원, 엄격한 자산부채 관리, 그리고 탄탄한 비즈니스 모델 덕분으로 평가되었습니다.
Farmer Mac (NYSE : AGM) a annoncé de solides résultats financiers pour le premier trimestre 2025, affichant des performances record sur les indicateurs clés. La société a réalisé un revenu net d'intérêts de 90,9 millions de dollars, en hausse de 5 % par rapport à l'année précédente, et un record de bénéfices de base de 46,0 millions de dollars (4,19 dollars par action diluée), soit une croissance de 6 % par rapport à l'année précédente.
L'entreprise a fourni 1,8 milliard de dollars de liquidités et de capacité d'emprunt aux prêteurs ruraux américains. Farmer Mac a maintenu une solide position en capital avec un capital de base total de 1,5 milliard de dollars, dépassant les exigences légales de 65 %, et un ratio de capital de niveau 1 de 13,9 %. La performance robuste de la société a été attribuée à ses sources de revenus diversifiées, à une gestion rigoureuse des actifs et passifs, ainsi qu'à un modèle d'affaires résilient.
Farmer Mac (NYSE: AGM) meldete starke Finanzergebnisse für das erste Quartal 2025 und erzielte Rekordwerte bei wichtigen Kennzahlen. Das Unternehmen erreichte ein Nettozinseinkommen von 90,9 Millionen US-Dollar, was einem Anstieg von 5 % im Jahresvergleich entspricht, sowie rekordverdächtige Kerngewinne von 46,0 Millionen US-Dollar (4,19 US-Dollar je verwässerter Aktie), was einem Wachstum von 6 % gegenüber dem Vorjahr entspricht.
Das Unternehmen stellte 1,8 Milliarden US-Dollar an Liquidität und Kreditkapazität für ländliche US-amerikanische Kreditgeber bereit. Farmer Mac hielt eine robuste Kapitalposition mit einem Gesamtkernkapital von 1,5 Milliarden US-Dollar, das die gesetzlichen Anforderungen um 65 % überstieg, sowie einer Tier-1-Kapitalquote von 13,9 %. Die starke Leistung des Unternehmens wurde auf diversifizierte Einnahmequellen, diszipliniertes Asset-Liability-Management und ein widerstandsfähiges Geschäftsmodell zurückgeführt.
- Net interest income grew 5% year-over-year to $90.9 million
- Record core earnings of $46.0 million, up 6% year-over-year
- Strong capital position with $1.5 billion total core capital, exceeding requirements by 65%
- Net effective spread increased 8% to record $90.0 million
- Provided $1.8 billion in liquidity to rural American lenders
- Net change in business volume decreased from $376.2M in Q1 2024 to $232.3M in Q1 2025
- Diluted EPS declined 6% year-over-year to $4.01
- Sequential 3% decrease in net interest income from Q4 2024
Insights
Farmer Mac delivered record Q1 2025 results with strong core earnings growth, solid liquidity position, and healthy capital buffers amid market volatility.
Farmer Mac's Q1 2025 performance demonstrates impressive momentum across key financial metrics. The company achieved record core earnings of
The firm's net effective spread—a crucial non-GAAP measure of lending profitability—reached a record
Balance sheet fundamentals remain exceptionally strong. The company provided
Liquidity metrics reveal Farmer Mac's ability to weather market stress, with 289 days of liquidity as of quarter-end. This extensive buffer provides operational flexibility while fulfilling their mission of increasing financing accessibility for agriculture and rural infrastructure.
While net business volume growth of
- Outstanding Business Volume of
"I'm pleased to report that we delivered another outstanding quarter, surpassing previous records in revenue, net effective spread, and core earnings," said Brad Nordholm, President and Chief Executive Officer. "Our first quarter results reflect the strength of our long-term growth strategy and provide a solid foundation to navigate market volatility and evolving credit conditions. Our resilient business model—anchored by diversified revenue streams, a strong capital position, reliable access to markets, and disciplined asset-liability management—not only sets us apart but also enables us to stay focused on our mission while enhancing long-term shareholder returns."
First Quarter 2025
- Provided
$1.8 billion - Net interest income grew
5% year-over-year to$90.9 million - Net effective spread1 increased
8% from the prior-year period to a record$90.0 million - Net income attributable to common stockholders was
$44.0 million - Record core earnings1 of
$46.0 million $4.19 6% growth year-over-year - Maintained strong capital position with total core capital of
$1.5 billion 65% and a Tier 1 Capital Ratio of13.9% as of March 31, 2025 - As of March 31, 2025, Farmer Mac had 289 days of liquidity
$ in thousands, except per | Quarter Ended | ||||
March 31, | December 31, | March 31, | Sequential % | YoY % | |
Net Change in Business Volume | N/A | N/A | |||
Net Interest Income (GAAP) | (3) % | 5 % | |||
Net Effective Spread (Non-GAAP) | 3 % | 8 % | |||
Diluted EPS (GAAP) | (13) % | (6) % | |||
Core EPS (Non-GAAP) | 6 % | 6 % | |||
1 Non-GAAP Measure |
Earnings Conference Call Information
The conference call to discuss Farmer Mac's first quarter 2025 financial results will be held beginning at 8:30 a.m. eastern time on Friday, May 9, 2025, and can be accessed by telephone or live webcast as follows:
Telephone (Domestic): (800) 836-8184
Telephone (International): (646) 357-8785
Webcast: https://www.farmermac.com/investors/events-presentations/
When dialing in to the call, please ask for the "Farmer Mac Earnings Conference Call." The call can be heard live and will also be available for replay on Farmer Mac's website for one week following the conclusion of the call.
More complete information about Farmer Mac's performance for first quarter 2025 is in Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed today with the SEC.
Use of Non-GAAP Measures
In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends. The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.
Core Earnings and Core Earnings Per Share
The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and core earnings per share, which is consistent with Farmer Mac's historical treatment of any losses on the retirement of preferred stock.
Net Effective Spread
Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of those assets. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain.
Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.
Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "(Losses)/gains on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.
Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and
More information about Farmer Mac's use of non-GAAP measures is available in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations" in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, filed February 21, 2025 with the SEC. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, and net interest income and net interest yield to net effective spread, see "Reconciliations" below.
Forward-Looking Statements
Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the forward-looking statements in this release, including uncertainties about:
- the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms;
- legislative, regulatory, or political developments that could affect Farmer Mac, its sources of business, or agricultural or infrastructure industries;
- fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries;
- the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac;
- the general rate of growth in agricultural mortgage and infrastructure indebtedness;
- the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or infrastructure lending, borrower repayment capacity, or collateral values, including inflation, fluctuations in interest rates, changes in
U.S. trade policies (including tariffs and trade restrictions), fluctuations in export demand forU.S. agricultural products and foreign currency exchange rates, supply chain disruptions, increases in input costs, labor availability, and volatility in commodity prices; - the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes;
- developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac;
- the effects of the Federal Reserve's efforts to achieve monetary policy normalization to respond to inflation and employment levels; and
- other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, or fluctuations in agricultural real estate values.
Other risk factors are discussed in "Risk Factors" in Part I, Item 1A in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 21, 2025. Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this release. The forward-looking statements contained in this release represent management's expectations as of the date of this release. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements included in this release to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this release is not necessarily indicative of future results.
About Farmer Mac
Farmer Mac is driven by its mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to our nation's agricultural and infrastructure businesses, supporting a vibrant and strong rural America. We offer a wide range of solutions to help meet financial institutions' growth, liquidity, risk management, and capital relief needs across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Additional information about Farmer Mac (including the Annual Report on Form 10-K referenced above) is available on our website at www.farmermac.com.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) | |||
As of | |||
March 31, 2025 | December 31, 2024 | ||
(in thousands) | |||
Assets: | |||
Cash and cash equivalents (includes restricted cash of | $ 1,048,135 | $ 1,024,007 | |
Investment securities: | |||
Available-for-sale, at fair value (amortized cost of | 6,230,080 | 5,953,014 | |
Held-to-maturity, at amortized cost | 9,125 | 9,270 | |
Other investments | 13,281 | 11,017 | |
Total Investment Securities | 6,252,486 | 5,973,301 | |
Farmer Mac Guaranteed Securities: | |||
Available-for-sale, at fair value (amortized cost of | 5,623,384 | 5,514,546 | |
Held-to-maturity, at amortized cost | 2,451,407 | 2,717,688 | |
Total Farmer Mac Guaranteed Securities | 8,074,791 | 8,232,234 | |
USDA Securities: | |||
Trading, at fair value | 651 | 818 | |
Held-to-maturity, at amortized cost | 2,376,690 | 2,370,534 | |
Total USDA Securities | 2,377,341 | 2,371,352 | |
Loans: | |||
Loans held for sale, at lower of cost or fair value | 6,045 | 6,170 | |
Loans held for investment, at amortized cost | 11,636,815 | 11,183,408 | |
Loans held for investment in consolidated trusts, at amortized cost | 2,005,680 | 2,038,283 | |
Allowance for losses | (25,056) | (23,223) | |
Total loans, net of allowance | 13,623,484 | 13,204,638 | |
Financial derivatives, at fair value | 27,867 | 27,789 | |
Accrued interest receivable (includes | 262,809 | 310,592 | |
Guarantee and commitment fees receivable | 49,888 | 50,499 | |
Deferred tax asset, net | — | 1,544 | |
Prepaid expenses and other assets | 87,138 | 128,786 | |
Total Assets | $ 31,803,939 | $ 31,324,742 | |
Liabilities and Equity: | |||
Liabilities: | |||
Notes payable | $ 27,975,196 | $ 27,371,174 | |
Debt securities of consolidated trusts held by third parties | 1,894,920 | 1,929,628 | |
Financial derivatives, at fair value | 63,389 | 77,326 | |
Accrued interest payable (includes | 221,954 | 195,113 | |
Guarantee and commitment obligation | 47,679 | 48,326 | |
Accounts payable and accrued expenses | 71,232 | 212,527 | |
Deferred tax liability, net | 2,402 | — | |
Reserve for losses | 1,521 | 1,622 | |
Total Liabilities | 30,278,293 | 29,835,716 | |
Commitments and Contingencies | |||
Equity: | |||
Preferred stock: | |||
Series D, par value | 96,659 | 96,659 | |
Series E, par value | 77,003 | 77,003 | |
Series F, par value | 116,160 | 116,160 | |
Series G, par value | 121,327 | 121,327 | |
Common stock: | |||
Class A Voting, | 1,031 | 1,031 | |
Class B Voting, | 500 | 500 | |
Class C Non-Voting, | 9,402 | 9,360 | |
Additional paid-in capital | 134,500 | 135,894 | |
Accumulated other comprehensive loss, net of tax | (1,808) | (12,147) | |
Retained earnings | 970,872 | 943,239 | |
Total Equity | 1,525,646 | 1,489,026 | |
Total Liabilities and Equity | $ 31,803,939 | $ 31,324,742 | |
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||
For the Three Months Ended | |||
March 31, 2025 | March 31, 2024 | ||
(in thousands, except per share amounts) | |||
Interest income: | |||
Investments and cash equivalents | $ 83,308 | $ 84,924 | |
Farmer Mac Guaranteed Securities and USDA Securities | 126,342 | 166,813 | |
Loans | 171,764 | 144,580 | |
Total interest income | 381,414 | 396,317 | |
Total interest expense | 290,475 | 309,949 | |
Net interest income | 90,939 | 86,368 | |
(Provision for)/release of losses | (1,684) | 1,801 | |
Net interest income after (provision for)/release of losses | 89,255 | 88,169 | |
Non-interest income/(expense): | |||
Guarantee and commitment fees | 4,479 | 3,917 | |
(Losses)/gains on financial derivatives | (2,636) | 2,079 | |
Release of reserve for losses | 101 | 69 | |
Other income | 1,436 | 1,249 | |
Non-interest income | 3,380 | 7,314 | |
Operating expenses: | |||
Compensation and employee benefits | 17,752 | 18,257 | |
General and administrative | 10,758 | 8,255 | |
Regulatory fees | 1,000 | 725 | |
Operating expenses | 29,510 | 27,237 | |
Income before income taxes | 63,125 | 68,246 | |
Income tax expense | 13,474 | 14,500 | |
Net income | 49,651 | 53,746 | |
Preferred stock dividends | (5,666) | (6,791) | |
Net income attributable to common stockholders | $ 43,985 | $ 46,955 | |
Earnings per common share: | |||
Basic earnings per common share | $ 4.04 | $ 4.33 | |
Diluted earnings per common share | $ 4.01 | $ 4.28 | |
Reconciliations
Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings for the periods indicated:
Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings | |||||
For the Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands, except per share amounts) | |||||
Net income attributable to common stockholders | $ 43,985 | $ 50,848 | $ 46,955 | ||
Less reconciling items: | |||||
(Losses)/gains on undesignated financial derivatives due to fair value | (2,573) | 3,084 | 1,683 | ||
Gains on hedging activities due to fair value changes | 1,099 | 5,737 | 3,002 | ||
Unrealized gains/(losses) on trading assets | 9 | (83) | (14) | ||
Net effects of amortization of premiums/discounts and deferred gains | 28 | (39) | 31 | ||
Net effects of terminations or net settlements on financial derivatives | (1,070) | 534 | (192) | ||
Income tax effect related to reconciling items | 526 | (1,939) | (947) | ||
Sub-total | (1,981) | 7,294 | 3,563 | ||
Core earnings | $ 45,966 | $ 43,554 | $ 43,392 | ||
Composition of Core Earnings: | |||||
Revenues: | |||||
Net effective spread(1) | $ 89,990 | $ 87,528 | $ 83,044 | ||
Guarantee and commitment fees(2) | 5,488 | 5,086 | 4,982 | ||
Other(3) | 1,315 | (491) | 1,077 | ||
Total revenues | 96,793 | 92,123 | 89,103 | ||
Credit related expense/(income) (GAAP): | |||||
Provision for/(release of) losses | 1,583 | 3,872 | (1,870) | ||
Loss on sale of REO | 68 | — | — | ||
Total credit related expense/(income) | 1,651 | 3,872 | (1,870) | ||
Operating expenses (GAAP): | |||||
Compensation and employee benefits | 17,752 | 15,641 | 18,257 | ||
General and administrative | 10,758 | 12,452 | 8,255 | ||
Regulatory fees | 1,000 | 1,000 | 725 | ||
Total operating expenses | 29,510 | 29,093 | 27,237 | ||
Net earnings | 65,632 | 59,158 | 63,736 | ||
Income tax expense(4) | 14,000 | 9,938 | 13,553 | ||
Preferred stock dividends (GAAP) | 5,666 | 5,666 | 6,791 | ||
Core earnings | $ 45,966 | $ 43,554 | $ 43,392 | ||
Core earnings per share: | |||||
Basic | $ 4.22 | $ 4.00 | $ 4.00 | ||
Diluted | $ 4.19 | $ 3.97 | $ 3.96 | ||
(1) | Net effective spread is a non-GAAP measure. See "Use of Non-GAAP Measures" above for an explanation of net effective spread. See below for a reconciliation of net interest income to net effective spread. |
(2) | Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. |
(3) | Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. |
(4) | Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings. |
Reconciliation of GAAP Basic Earnings Per Share to Core Earnings Basic Earnings Per Share | |||||
For the Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands, except per share amounts) | |||||
GAAP - Basic EPS | $ 4.04 | $ 4.67 | $ 4.33 | ||
Less reconciling items: | |||||
(Losses)/gains on undesignated financial derivatives due to fair value | (0.23) | 0.28 | 0.16 | ||
Gains on hedging activities due to fair value changes | 0.10 | 0.53 | 0.28 | ||
Unrealized (losses)/gains on trading securities | — | (0.01) | — | ||
Net effects of amortization of premiums/discounts and deferred gains on | — | — | — | ||
Net effects of terminations or net settlements on financial derivatives | (0.10) | 0.05 | (0.02) | ||
Income tax effect related to reconciling items | 0.05 | (0.18) | (0.09) | ||
Sub-total | (0.18) | 0.67 | 0.33 | ||
Core Earnings - Basic EPS | $ 4.22 | $ 4.00 | $ 4.00 | ||
Shares used in per share calculation (GAAP and Core Earnings) | 10,896 | 10,889 | 10,847 | ||
Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings Diluted Earnings Per Share | |||||
For the Three Months Ended | |||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||
(in thousands, except per share amounts) | |||||
GAAP - Diluted EPS | $ 4.01 | $ 4.63 | $ 4.28 | ||
Less reconciling items: | |||||
(Losses)/gains on undesignated financial derivatives due to fair value | (0.23) | 0.28 | 0.15 | ||
Gains on hedging activities due to fair value changes | 0.10 | 0.52 | 0.28 | ||
Unrealized (losses)/gains on trading securities | — | (0.01) | — | ||
Net effects of amortization of premiums/discounts and deferred gains on | — | — | — | ||
Net effects of terminations or net settlements on financial derivatives | (0.10) | 0.05 | (0.02) | ||
Income tax effect related to reconciling items | 0.05 | (0.18) | (0.09) | ||
Sub-total | (0.18) | 0.66 | 0.32 | ||
Core Earnings - Diluted EPS | $ 4.19 | $ 3.97 | $ 3.96 | ||
Shares used in per share calculation (GAAP and Core Earnings) | 10,983 | 10,982 | 10,969 | ||
The following table presents a reconciliation of net interest income and net yield to net effective spread for the periods indicated:
Reconciliation of GAAP Net Interest Income/Yield to Net Effective Spread | |||||||||||
For the Three Months Ended | |||||||||||
March 31, 2025 | December 31, 2024 | March 31, 2024 | |||||||||
Dollars | Yield | Dollars | Yield | Dollars | Yield | ||||||
(dollars in thousands) | |||||||||||
Net interest income/yield | $ 90,939 | 1.15 % | $ 93,368 | 1.21 % | $ 86,368 | 1.15 % | |||||
Net effects of consolidated trusts | (1,010) | 0.02 % | (989) | 0.02 % | (1,052) | 0.02 % | |||||
Expense related to undesignated financial derivatives | 318 | — % | 2 | — % | (34) | — % | |||||
Amortization of premiums/discounts on assets consolidated at | (25) | — % | 42 | — % | (27) | — % | |||||
Amortization of losses due to terminations or net settlements on | 867 | 0.01 % | 842 | 0.01 % | 791 | 0.01 % | |||||
Fair value changes on fair value hedge relationships | (1,099) | (0.01) % | (5,737) | (0.08) % | (3,002) | (0.04) % | |||||
Net effective spread | $ 89,990 | 1.17 % | $ 87,528 | 1.16 % | $ 83,044 | 1.14 % | |||||
The following table presents core earnings for Farmer Mac's reportable operating segments and a reconciliation to consolidated net income for the three months ended March 31, 2025:
Core Earnings by Business Segment | |||||||||||||||
For the Three Months Ended March 31, 2025 | |||||||||||||||
Agricultural Finance | Infrastructure Finance | Treasury | |||||||||||||
Farm & | Corporate | Power & Utilities | Broadband | Renewable | Funding | Investments | Total | ||||||||
(in thousands) | |||||||||||||||
Interest income | $ 149,681 | $ 25,122 | $ 64,995 | $ 10,833 | $ 20,315 | $ 32,978 | $ 77,490 | $ 381,414 | |||||||
Interest expense(1) | (114,789) | (16,482) | (59,638) | (7,267) | (15,203) | (1,460) | (75,636) | (290,475) | |||||||
Less: reconciling adjustments(2)(3) | (1,007) | — | (28) | — | — | 86 | — | (949) | |||||||
Net effective spread | 33,885 | 8,640 | 5,329 | 3,566 | 5,112 | 31,604 | 1,854 | 89,990 | |||||||
Guarantee and commitment fees(3) | 4,551 | 197 | 221 | 336 | 183 | — | — | 5,488 | |||||||
Other income/(expense) | 1,222 | — | — | — | — | — | 22 | 1,244 | |||||||
Release of/(provision for) losses | 193 | (828) | (77) | 229 | (1,100) | — | — | (1,583) | |||||||
Operating expenses(1) | (6,595) | (2,133) | (1,123) | (1,052) | (1,708) | (2,800) | (823) | (16,234) | |||||||
Income tax (expense)/benefit | (6,982) | (1,235) | (913) | (647) | (522) | (6,049) | (221) | (16,569) | |||||||
Segment core earnings | $ 26,274 | $ 4,641 | $ 3,437 | $ 2,432 | $ 1,965 | $ 22,755 | $ 832 | $ 62,336 | |||||||
Reconciliation to net income: | |||||||||||||||
Net effects of derivatives and | $ (2,535) | ||||||||||||||
Unallocated (expenses)/income | (13,245) | ||||||||||||||
Income tax effect related to | 3,095 | ||||||||||||||
Net income | $ 49,651 | ||||||||||||||
Total Assets: | |||||||||||||||
Total on- and off-balance sheet | $ 18,094,515 | $ 1,889,363 | $ 7,187,966 | $ 974,835 | $ 1,608,664 | $ — | $ — | ||||||||
Off-balance sheet assets under | (5,071,733) | ||||||||||||||
Unallocated assets | 7,120,329 | ||||||||||||||
Total assets on the consolidated | |||||||||||||||
(1) | The significant expense categories and amounts align with the segment-level information that is regularly provided to the Chief Operating Decision Maker ("CODM") . |
(2) | Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts; the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment; and excludes the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships. |
(3) | Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee. |
Supplemental Information
The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated:
Outstanding Business Volume | ||||||
On or Off | As of March 31, 2025 | As of December 31, 2024 | ||||
(in thousands) | ||||||
Agricultural Finance: | ||||||
Farm & Ranch: | ||||||
Loans | On-balance sheet | $ 5,501,067 | $ 5,414,732 | |||
Loans held in consolidated trusts: | ||||||
Beneficial interests owned by third-party investors | On-balance sheet | 884,234 | 885,295 | |||
Beneficial interests owned by third-party investors | On-balance sheet | 1,121,446 | 1,152,988 | |||
IO-FMGS(2) | On-balance sheet | 8,537 | 8,710 | |||
USDA Securities | On-balance sheet | 2,408,857 | 2,402,423 | |||
AgVantage Securities(1) | On-balance sheet | 4,215,000 | 4,720,000 | |||
LTSPCs and unfunded loan commitments | Off-balance sheet | 3,030,360 | 3,070,554 | |||
Other Farmer Mac Guaranteed Securities(3) | Off-balance sheet | 414,291 | 426,310 | |||
Loans serviced for others | Off-balance sheet | 510,723 | 525,956 | |||
Total Farm & Ranch | $ 18,094,515 | $ 18,606,968 | ||||
Corporate AgFinance: | ||||||
Loans | On-balance sheet | $ 1,371,202 | $ 1,381,674 | |||
AgVantage Securities(1) | On-balance sheet | 267,728 | 280,297 | |||
Unfunded loan commitments | Off-balance sheet | 250,433 | 225,734 | |||
Total Corporate AgFinance | $ 1,889,363 | $ 1,887,705 | ||||
Total Agricultural Finance | $ 19,983,878 | $ 20,494,673 | ||||
Infrastructure Finance: | ||||||
Power & Utilities: | ||||||
Loans | On-balance sheet | $ 3,020,475 | $ 2,886,576 | |||
AgVantage Securities(1) | On-balance sheet | 3,796,549 | 3,521,143 | |||
LTSPCs and unfunded loan commitments | Off-balance sheet | 370,942 | 401,647 | |||
Total Power & Utilities | $ 7,187,966 | $ 6,809,366 | ||||
Broadband Infrastructure: | ||||||
Loans | On-balance sheet | $ 657,836 | $ 622,207 | |||
Unfunded loan commitments | Off-balance sheet | 316,999 | 180,259 | |||
Total Broadband Infrastructure | $ 974,835 | $ 802,466 | ||||
Renewable Energy: | ||||||
Loans | On-balance sheet | $ 1,430,679 | $ 1,265,700 | |||
Unfunded loan commitments | Off-balance sheet | 177,985 | 150,825 | |||
Total Renewable Energy | $ 1,608,664 | $ 1,416,525 | ||||
Total Infrastructure Finance | $ 9,771,465 | $ 9,028,357 | ||||
Total | $ 29,755,343 | $ 29,523,030 | ||||
(1) | A type of Farmer Mac Guaranteed Security. |
(2) | An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. |
(3) | Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties |
The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:
Net Effective Spread | |||||||||||||||
Agricultural Finance | Infrastructure Finance | Treasury | |||||||||||||
Farm & Ranch | Corporate | Power & | Broadband | Renewable | Funding | Investments | Net Effective | ||||||||
Dollars Yield | Dollars Yield | Dollars Yield | Dollars Yield | Dollars Yield | Dollars Yield | Dollars Yield | Dollars Yield | ||||||||
(dollars in thousands) | |||||||||||||||
For the quarter ended: | |||||||||||||||
March 31, 2025 | $ 33,885 | $ 8,640 | $ 5,329 | $ 3,566 | $ 5,112 | $ 31,604 | $ 1,854 | $ 89,990 | |||||||
1.01 % | 2.09 % | 0.32 % | 2.27 % | 1.55 % | 0.41 % | 0.10 % | 1.17 % | ||||||||
December 31, 2024 | 32,556 | 7,891 | 5,059 | 3,414 | 4,859 | 31,242 | 2,507 | 87,528 | |||||||
0.96 % | 1.95 % | 0.32 % | 2.34 % | 1.76 % | 0.42 % | 0.15 % | 1.16 % | ||||||||
September 30, 2024 | 35,755 | 6,397 | 4,785 | 2,794 | 3,810 | 30,912 | 943 | 85,396 | |||||||
1.05 % | 1.56 % | 0.30 % | 2.21 % | 1.78 % | 0.42 % | 0.05 % | 1.16 % | ||||||||
June 30, 2024 | 34,156 | 7,866 | 5,253 | 2,393 | 2,999 | 30,268 | 661 | 83,596 | |||||||
0.98 % | 1.91 % | 0.32 % | 2.16 % | 1.86 % | 0.41 % | 0.04 % | 1.14 % | ||||||||
March 31, 2024 | 32,843 | 7,971 | 4,890 | 2,342 | 2,049 | 32,474 | 475 | 83,044 | |||||||
0.95 % | 2.05 % | 0.30 % | 2.08 % | 1.75 % | 0.45 % | 0.03 % | 1.14 % | ||||||||
December 31, 2023 | 33,329 | 8,382 | 4,916 | 2,426 | 1,540 | 33,361 | 597 | 84,551 | |||||||
0.98 % | 2.06 % | 0.31 % | 2.06 % | 1.69 % | 0.47 % | 0.04 % | 1.19 % | ||||||||
September 30, 2023 | 32,718 | 8,250 | 3,979 | 2,383 | 1,150 | 34,412 | 532 | 83,424 | |||||||
0.97 % | 2.05 % | 0.26 % | 2.15 % | 1.46 % | 0.49 % | 0.04 % | 1.20 % | ||||||||
June 30, 2023 | 34,388 | 7,444 | 3,681 | 2,127 | 1,100 | 32,498 | 594 | 81,832 | |||||||
1.03 % | 1.92 % | 0.25 % | 2.25 % | 1.47 % | 0.48 % | 0.04 % | 1.20 % | ||||||||
March 31, 2023 | 32,465 | 7,148 | 3,599 | 1,908 | 858 | 31,738 | (543) | 77,173 | |||||||
0.97 % | 1.94 % | 0.24 % | 2.53 % | 1.53 % | 0.47 % | (0.04) % | 1.15 % | ||||||||
The following table presents quarterly core earnings reconciled to net income attributable to common stockholders:
Core Earnings by Quarter Ended | |||||||||||||||||
March | December | September | June | March | December | September | June | March | |||||||||
(in thousands) | |||||||||||||||||
Revenues: | |||||||||||||||||
Net effective spread | $ 89,990 | $ 87,528 | $ 85,396 | $ 83,596 | $ 83,044 | $ 84,551 | $ 83,424 | $ 81,832 | $ 77,173 | ||||||||
Guarantee and commitment fees | 5,488 | 5,086 | 4,997 | 5,256 | 4,982 | 4,865 | 4,828 | 4,581 | 4,654 | ||||||||
Gain on sale of investment securities | — | — | — | 1,052 | — | — | — | — | — | ||||||||
Loss on sale of mortgage loan | — | — | — | (1,147) | — | — | — | — | — | ||||||||
Other | 1,315 | (491) | 1,133 | 481 | 1,077 | 767 | 1,056 | 409 | 1,067 | ||||||||
Total revenues | 96,793 | 92,123 | 91,526 | 89,238 | 89,103 | 90,183 | 89,308 | 86,822 | 82,894 | ||||||||
Credit related expense/(income): | |||||||||||||||||
Provision for/(release of) losses | 1,583 | 3,872 | 3,258 | 6,230 | (1,870) | (575) | (181) | 1,142 | 750 | ||||||||
REO operating expenses | — | — | 196 | — | — | — | — | — | — | ||||||||
Losses on sale of REO | 68 | — | — | — | — | — | — | — | — | ||||||||
Total credit related expense/(income) | 1,651 | 3,872 | 3,454 | 6,230 | (1,870) | (575) | (181) | 1,142 | 750 | ||||||||
Operating expenses: | |||||||||||||||||
Compensation and employee benefits | 17,752 | 15,641 | 15,237 | 14,840 | 18,257 | 15,523 | 14,103 | 13,937 | 15,351 | ||||||||
General and administrative | 10,758 | 12,452 | 8,625 | 8,904 | 8,255 | 8,916 | 9,100 | 9,420 | 7,527 | ||||||||
Regulatory fees | 1,000 | 1,000 | 725 | 725 | 725 | 725 | 831 | 831 | 835 | ||||||||
Total operating expenses | 29,510 | 29,093 | 24,587 | 24,469 | 27,237 | 25,164 | 24,034 | 24,188 | 23,713 | ||||||||
Net earnings | 65,632 | 59,158 | 63,485 | 58,539 | 63,736 | 65,594 | 65,455 | 61,492 | 58,431 | ||||||||
Income tax expense | 14,000 | 9,938 | 12,681 | 11,970 | 13,553 | 13,881 | 13,475 | 12,539 | 12,756 | ||||||||
Preferred stock dividends | 5,666 | 5,666 | 5,897 | 6,792 | 6,791 | 6,791 | 6,792 | 6,791 | 6,791 | ||||||||
Core earnings | $ 45,966 | $ 43,554 | $ 44,907 | $ 39,777 | $ 43,392 | $ 44,922 | $ 45,188 | $ 42,162 | $ 38,884 | ||||||||
Reconciling items: | |||||||||||||||||
(Losses)/gains on undesignated | $ (2,573) | $ 3,084 | $ (1,064) | $ (359) | $ 1,683 | $ (836) | $ 2,921 | $ 2,141 | $ 916 | ||||||||
Gains/(losses) on hedging activities | 1,099 | 5,737 | 205 | 2,604 | 3,002 | (3,598) | 3,210 | (4,901) | (105) | ||||||||
Unrealized gains/(losses) on trading | 9 | (83) | 99 | (87) | (14) | (37) | 1,714 | (57) | 359 | ||||||||
Net effects of amortization of | 28 | (39) | 27 | 26 | 31 | 88 | 29 | 29 | 29 | ||||||||
Net effects of terminations or net | (1,070) | 534 | (503) | (1,505) | (192) | (800) | (79) | 583 | 523 | ||||||||
Issuance costs on the retirement of | — | — | (1,619) | — | — | — | — | — | — | ||||||||
Income tax effect related to reconciling | 526 | (1,939) | 260 | (143) | (947) | 1,089 | (1,638) | 464 | (362) | ||||||||
Net income attributable to common | $ 43,985 | $ 50,848 | $ 42,312 | $ 40,313 | $ 46,955 | $ 40,828 | $ 51,345 | $ 40,421 | $ 40,244 | ||||||||
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SOURCE Farmer Mac
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