Federal Agricultural Mortgage (US:AGM)2025-05-09 11:02Financial 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].