At Trade With Beta , we discuss ideas like this as they happen in more detail. All active investors are welcome to join on a free trial and ask any question in our chat room full of sophisticated traders and investors.Public-sector financial institutions provide key access to capital in rural areas. This review examines the structure, performance, and investment profile of one such organization. Let us introduce you to the Federal Agricultural Mortgage Corporation (Denislav leads the investing group Trade W ...

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Federal Agricultural Mortgage Corporation (NYSE:AGM) Q1 2025 Earnings Conference Call May 9, 2025 8:30 AM ET Company Participants Jalpa Nazareth - Senior Director, IR & Finance Strategy Brad Nordholm - President & CEO Aparna Ramesh - EVP, CFO & Treasurer Zack Carpenter - EVP, Chief Business Officer Conference Call Participants Bill Ryan - Seaport Research Partners Bose George - KBW Brendan McCarthy - Sidoti Operator Good morning, ladies and gentlemen, and welcome to the Farmer Mac 2025 Earnings Results Conf ...

Federal Agricultural Mortgage (AGM) Q1 2025 Earnings Call May 09, 2025 08:30 AM ET Company Participants Jalpa Nazareth - Senior Director of Investor Relations & Finance StrategyBradford Nordholm - President & CEOAparna Ramesh - Executive VP, CFO & TreasurerZachary Carpenter - Executive VP & Chief Business OfficerBose George - Managing Director Conference Call Participants William Ryan - Senior AnalystBrendan McCarthy - Equity Research AnalystNone - Analyst Operator Good morning, ladies and gentlemen, and we ...

Federal Agricultural Mortgage (AGM) Q1 2025 Earnings Call May 09, 2025 08:30 AM ET Company Participants Jalpa Nazareth - Senior Director of Investor Relations & Finance StrategyBradford Nordholm - President & CEOAparna Ramesh - Executive VP, CFO & TreasurerZachary Carpenter - Executive VP & Chief Business OfficerBose George - Managing Director Conference Call Participants William Ryan - Senior AnalystBrendan McCarthy - Equity Research AnalystNone - Analyst Operator Good morning, ladies and gentlemen, and we ...

Financial Data and Key Metrics Changes - The company achieved record quarterly revenue, net effective spread, and core earnings in Q1 2025, with core earnings increasing by 6% year-over-year to $46 million [4][15] - Gross new business volume reached $1.8 billion, with outstanding business volume growing by $232 million to $29.8 billion [5][15] - Net effective spread reached a record of $90 million or 117 basis points, with sequential and year-over-year improvements of $2.5 million and $6.9 million respectively [15][22] Business Line Data and Key Metrics Changes - The infrastructure finance line of business grew by approximately $750 million, with significant contributions from the power and utility segment and broadband infrastructure segment growing by 22% [6][8] - Renewable energy segment grew by nearly $200 million, a 14% increase since year-end 2024 [8] - Farm and ranch loan purchases saw a net increase of $86 million despite $500 million in scheduled maturities [9][10] Market Data and Key Metrics Changes - The company noted a strong demand for farm and ranch assets, with a focus on liquidity and working capital needs due to tightening agricultural economic conditions [60] - The overall credit profile remained strong, with 90-day delinquencies at 54 basis points, up from 37 basis points at year-end 2024 [18][19] Company Strategy and Development Direction - The company continues to focus on mission-based profitable growth, diversifying its portfolio to create opportunities in various interest rate environments [5][12] - Strategic investments and talent acquisition in infrastructure finance and renewable energy are prioritized to build expertise and capacity [8][12] - The company plans to enhance its securitization program to optimize the balance sheet and target new asset opportunities [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating broader market uncertainties related to interest rates, regulatory shifts, and government actions [5][12] - The company anticipates continued growth in the farm and ranch segment due to ongoing agricultural economic tightening and potential government support programs [10][61] - Management highlighted a strong liquidity position with 289 days of liquidity and approximately $1 billion in cash and short-term instruments [22][23] Other Important Information - Operating expenses increased by 8% year-over-year due to investments in infrastructure technology and higher licensing fees [16] - The company’s core capital of $1.5 billion exceeded statutory requirements by $601 million or 65% as of March 31, 2025 [19][20] Q&A Session Summary Question: Impact of tariffs on agricultural shipments to China - Management discussed historical support programs for farmers during tariff disruptions and noted current shifts in trade patterns towards Mexico [28][30] Question: Dynamics of net effective spread across business lines - Management explained that the net effective spread increase was driven by strong loan activity in the farm and ranch segment, while broadband and renewable energy segments experienced slight declines [34][36] Question: Changes in funding costs and upcoming securitization - Management indicated improved funding dynamics from Q4 to Q1 and expressed optimism about the upcoming securitization transaction [48][50] Question: Outlook for renewable energy and tax credits - Management confirmed no new tax credit activity in Q1 but remains optimistic about future opportunities [54][55] Question: Applications of AI within the company - Management highlighted the focus on using AI to improve internal processes, particularly in loan document management [70][72]

Equity Investor Presentation First Quarter 2025 Forward-Looking Statements In addition to historical information, this presentation includes forward-looking statements that reflect management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Management's expectations for Farmer Mac's f ...

Financial Performance - Net income attributable to common stockholders for Q1 2025 was $43.985 million, a sequential decrease of $6.9 million from Q4 2024 and a year-over-year decrease of $3.0 million from Q1 2024[137][140]. - Core earnings for Q1 2025 were $45.966 million, reflecting a sequential increase of $2.4 million and a year-over-year increase of $2.6 million[136][141][142]. - Total revenues for the three months ended March 31, 2025, were $96,793,000, compared to $89,103,000 for the same period in 2024, reflecting an increase of 8.6%[165]. - Operating expenses for the three months ended March 31, 2025, totaled $29,510,000, compared to $27,237,000 in the same period of 2024, marking an increase of 8.4%[165]. - Basic core earnings per share increased to $4.22 for the three months ended March 31, 2025, from $4.00 in the same period of 2024, a rise of 5.5%[165]. - Diluted core earnings per share rose to $4.19 for the three months ended March 31, 2025, compared to $3.96 in the same period of 2024, an increase of 5.8%[166]. - Net earnings for March 2025 were $65,632 thousand, compared to $59,158 thousand in December 2024, representing an increase of 10.00%[320]. Interest Income and Spread - Net interest income for Q1 2025 was $90.939 million, down $2.4 million sequentially and up $4.6 million year-over-year[145][146]. - The net effective spread for Q1 2025 was 1.17%, a sequential increase of 0.01% and a year-over-year increase of 0.03%[145][147]. - The net effective spread for the three months ended March 31, 2025, was $89,990,000, up from $83,044,000 in the same period of 2024, indicating a growth of 8.5%[165]. - The net effective spread reached $89,990 thousand for the quarter ended March 31, 2025, an increase from $87,528 thousand in December 2024, representing a growth of 1.67%[319]. Business Volume and Assets - Outstanding business volume as of March 31, 2025, was $29.8 billion, a net increase of $0.2 billion from December 31, 2024[148]. - Total interest-earning assets increased to $30,839,656 thousand for Q1 2025, up from $29,086,382 thousand in Q1 2024, reflecting a year-over-year growth of 6.03%[173]. - Farmer Mac's total assets increased by 2% to $31.8 billion as of March 31, 2025, primarily due to new loan volume and a larger investment portfolio[236]. - The outstanding business volume for Agricultural Finance as of March 31, 2025, was $18,094,515,000, showing a slight decrease from $18,606,968,000 as of December 31, 2024[316]. Delinquencies and Credit Quality - 90-day delinquencies for on-balance sheet Agricultural Finance assets increased to $155.438 million, or 1.75% of the portfolio, from 1.15% as of December 31, 2024[152]. - The 90-day delinquencies for Agricultural Finance mortgage loans increased to $160.0 million (1.29% of the portfolio) as of March 31, 2025, up from $108.9 million (0.88%) as of December 31, 2024[240]. - The number of 90-day delinquent loans rose to 99 as of March 31, 2025, compared to 62 as of December 31, 2024, primarily due to increased delinquencies in permanent plantings and crops concentrated in the Southwest region[240]. - As of March 31, 2025, Farmer Mac's Agricultural Finance mortgage loans categorized as substandard assets totaled $466.0 million (3.8% of the portfolio), an increase from $398.3 million (3.2%) as of December 31, 2024[249]. Operating Expenses and Provisions - The provision for losses for the three months ended March 31, 2025, was $1,583,000, compared to a release of losses of $1,870,000 in the same period of 2024[165]. - The total credit-related expense for March 2025 was $1,651 thousand, down from $3,872 thousand in December 2024, indicating a decrease of 57.40%[320]. - Operating expenses for March 2025 totaled $29,510 thousand, slightly higher than $29,093 thousand in December 2024, marking an increase of 1.43%[320]. Liquidity and Capital - The company maintained strong liquidity in its investment portfolio, well above regulatory requirements[138]. - Farmer Mac's Tier 1 capital ratio was 13.9% as of March 31, 2025, down from 14.2% as of December 31, 2024[311]. - The company maintained a monthly average of 290 days of liquidity throughout 2025, with 289 days of liquidity as of March 31, 2025[307]. Market Conditions and Outlook - The USDA forecasts a 22% increase in net cash farm income for 2025, potentially reaching the third-highest inflation-adjusted level in history[214]. - U.S. agricultural exports are projected to decline to $170.5 billion in 2025, a 3% decrease from 2024 and a 13% drop from peak levels in 2022[223]. - Farmer Mac anticipates credit demand growth in the agricultural processing and food supply chain sectors if interest rates remain stable and inflation rises[227]. - The Administration's new 10% universal tariff on all countries could lead to higher domestic inventory levels of agricultural commodities, affecting farmers' profitability[233]. Risk Management - Farmer Mac is exposed to market risk from changes in interest rates[321]. - The company manages market risk by entering into various financial transactions, including financial derivatives[321]. - Farmer Mac monitors and measures its exposure to changes in interest rates[322].

Financial Performance - Outstanding business volume reached $29.8 billion as of March 31, 2025[1] - Net interest income increased by 5% year-over-year to $90.9 million[5] - Core earnings reached a record $46.0 million, or $4.19 per diluted common share, reflecting 6% growth year-over-year[5] - Net income attributable to common stockholders for the three months ended March 31, 2025, was $43,985 thousand, a decrease of 6.3% compared to $46,955 thousand for the same period in 2024[24] - Total revenues for the quarter ended March 31, 2025, reached $96,793 thousand, an increase from $92,123 thousand in the previous quarter, marking a growth of 5.06%[36] - The company reported a net income of $49,651,000 for the three months ended March 31, 2025[31] - Net earnings for March 2025 were $65,632 thousand, compared to $59,158 thousand in December 2024, representing an increase of 10.92%[36] Capital and Assets - Total core capital stood at $1.5 billion, exceeding the statutory requirement by 65%[5] - The Tier 1 Capital Ratio was reported at 13.9% as of March 31, 2025[5] - Total assets increased to $31,803,939 thousand as of March 31, 2025, up from $31,324,742 thousand at December 31, 2024, representing a growth of 1.53%[22] - Total liabilities increased to $30,278,293 thousand as of March 31, 2025, compared to $29,835,716 thousand at December 31, 2024, marking a rise of 1.48%[22] Income and Expenses - Total interest income decreased to $381,414 thousand for the three months ended March 31, 2025, down from $396,317 thousand in the same period of 2024, reflecting a decline of 3.5%[24] - Total operating expenses for the three months ended March 31, 2025, were $29,510 thousand, compared to $27,237 thousand for the same period in 2024, reflecting an increase of 8.4%[24] - The company reported a net interest expense of $290,475 thousand for the three months ended March 31, 2025, down from $309,949 thousand in the same period of 2024, indicating a decrease of 6.3%[24] - Operating expenses for March 2025 totaled $29,510 thousand, slightly up from $29,093 thousand in December 2024, showing an increase of 1.43%[36] Earnings Per Share - Diluted EPS decreased by 13% sequentially to $4.01[5] - Basic earnings per common share for the three months ended March 31, 2025, were $4.04, a decrease from $4.33 in the same period of 2024, reflecting a decline of 6.7%[24] - GAAP diluted EPS for March 31, 2025, was $4.63, an increase of 8.2% from $4.28 for March 31, 2024[29] - Core earnings diluted EPS for March 31, 2025, was $3.97, compared to $3.96 for March 31, 2024, reflecting a slight increase[29] Liquidity and Risk Management - Farmer Mac provided $1.8 billion in liquidity and lending capacity to lenders serving rural America[5] - The company maintained 289 days of liquidity as of March 31, 2025[5] - The allowance for losses increased to $25,056 thousand as of March 31, 2025, compared to $23,223 thousand at December 31, 2024, indicating a rise of 7.9%[22] - The provision for losses for March 2025 was $1,583 thousand, a decrease from $3,872 thousand in December 2024, indicating a reduction of 59.11%[36] - The total credit-related expense for March 2025 was $1,651 thousand, down from $3,872 thousand in December 2024, indicating a decrease of 57.40%[36] Segment Performance - Total outstanding business volume for Agricultural Finance as of March 31, 2025, was $19,983,878,000, down from $20,494,673,000 as of December 31, 2024[32] - Loans in the Power & Utilities segment increased to $3,020,475,000 as of March 31, 2025, from $2,886,576,000 as of December 31, 2024[32] - Segment core earnings for Agricultural Finance were $26,274,000 for the three months ended March 31, 2025[31] - The net effective spread for the agricultural finance segment was 1.01% for March 2025, compared to 0.96% for December 2024, showing an increase of 5.21%[34]

Group 1 - Joseph Jones is a professor with over fifteen years of experience studying the market, focusing on portfolio construction from a dividend growth investor's perspective [1] - The insights expressed in his research are solely his own and do not represent the views or financial interests of his employer [1] Group 2 - The article does not provide specific investment recommendations or advice regarding the suitability of investments for particular investors [3] - It emphasizes that past performance is not a guarantee of future results [3]