Federal Agricultural Mortgage (AGM_A) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights Farmer Mac reported record Q1 2025 revenue, net effective spread, and core earnings, reflecting a resilient business model and strong capital position Q1 2025 Financial Performance Summary | Metric | Q1 2025 | Q4 2024 | Q1 2024 | Sequential Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income (GAAP) | $90.9M | $93.4M | $86.4M | (3)% | 5% | | Net Effective Spread (Non-GAAP) | $90.0M | $87.5M | $83.0M | 3% | 8% | | Diluted EPS (GAAP) | $4.01 | $4.63 | $4.28 | (13)% | (6)% | | Core EPS (Non-GAAP) | $4.19 | $3.97 | $3.96 | 6% | 6% | - Achieved record core earnings of $46.0 million, or $4.19 per diluted common share, representing a 6% year-over-year growth[5] - Provided $1.8 billion in liquidity and lending capacity to lenders serving rural America during the quarter[5] - Maintained a strong capital position with total core capital of $1.5 billion, which is 65% above the statutory requirement, and a Tier 1 Capital Ratio of 13.9%[5] Financial Statements Consolidated financial statements show total assets grew to $31.8 billion from loan growth, and net interest income increased 5% to $90.9 million Consolidated Balance Sheets Total assets increased to $31.80 billion as of March 31, 2025, driven by loan growth, with total equity rising to $1.53 billion Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Loans, net | $13,623,484 | $13,204,638 | | Total Assets | $31,803,939 | $31,324,742 | | Notes Payable | $27,975,196 | $27,371,174 | | Total Liabilities | $30,278,293 | $29,835,716 | | Total Equity | $1,525,646 | $1,489,026 | Consolidated Statements of Operations Q1 2025 net interest income increased 5% to $90.9 million, with net income attributable to common stockholders at $44.0 million ($4.01 per diluted share) Key Income Statement Items (in thousands, except per share amounts) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $90,939 | $86,368 | | Income Before Income Taxes | $63,125 | $68,246 | | Net Income | $49,651 | $53,746 | | Net Income Attributable to Common Stockholders | $43,985 | $46,955 | | Diluted Earnings Per Common Share | $4.01 | $4.28 | Non-GAAP Financial Measures Farmer Mac uses non-GAAP measures, including core earnings and net effective spread, to provide alternative perspectives on economic performance, adjusting for fair value fluctuations Core Earnings and Core Earnings Per Share Core earnings, a non-GAAP measure, excludes fair value fluctuations from GAAP net income, offering a clearer view of underlying economic performance - Core earnings and core earnings per share are non-GAAP measures that exclude the effects of fair value fluctuations and specified infrequent transactions[9] - Management uses these measures to assess corporate economic performance and develop financial plans, as they are believed to be useful in understanding business trends[8] Net Effective Spread Net effective spread, a non-GAAP measure, quantifies the net spread between interest-earning assets and funding costs, adjusting GAAP net interest income for specific items - Net effective spread is used to measure the net spread earned between interest-earning assets and the related net funding costs[10] - It differs from GAAP net interest income by excluding interest associated with consolidated trusts and fair value changes of financial derivatives in hedge accounting relationships[12] - The measure includes accrual of income/expense on undesignated financial derivatives and the net effects of terminations or settlements on derivatives[13][14] Reconciliations of GAAP to Non-GAAP Measures This section details reconciliations of GAAP to non-GAAP measures, with Q1 2025 GAAP Net Income of $44.0 million reconciled to Core Earnings of $46.0 million Reconciliation of Net Income to Core Earnings Q1 2025 GAAP net income of $44.0 million was reconciled to core earnings of $46.0 million, with a ($2.0 million) net adjustment from derivatives and hedging Reconciliation to Core Earnings (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | Net income attributable to common stockholders (GAAP) | $43,985 | | Less: Reconciling items (net) | ($1,981) | | Core earnings (Non-GAAP) | $45,966 | Reconciliation of GAAP EPS to Core EPS Q1 2025 GAAP diluted EPS of $4.01 was reconciled to Core Earnings diluted EPS of $4.19, reflecting a $0.18 net negative adjustment Reconciliation to Core Diluted EPS (Q1 2025) | Description | Amount | | :--- | :--- | | GAAP - Diluted EPS | $4.01 | | Less: Reconciling items (net) | ($0.18) | | Core Earnings - Diluted EPS | $4.19 | Reconciliation of Net Interest Income to Net Effective Spread Q1 2025 GAAP net interest income of $90.9 million was reconciled to a net effective spread of $90.0 million, with adjustments for consolidated trusts and hedge fair value changes Reconciliation to Net Effective Spread (Q1 2025, in thousands) | Description | Amount | Yield | | :--- | :--- | :--- | | Net interest income/yield (GAAP) | $90,939 | 1.15% | | Adjustments (net) | ($949) | 0.02% | | Net effective spread (Non-GAAP) | $89,990 | 1.17% | Segment Performance Total outstanding business volume grew to $29.8 billion, primarily driven by Infrastructure Finance, with Agricultural Finance contributing $30.9 million to core earnings Core Earnings by Business Segment In Q1 2025, Agricultural Finance generated $30.9 million in core earnings, while Infrastructure Finance contributed $7.8 million, driving overall profitability Q1 2025 Core Earnings by Segment (in thousands) | Segment | Net Effective Spread | Segment Core Earnings | | :--- | :--- | :--- | | Agricultural Finance | $42,525 | $30,915 | | Infrastructure Finance | $13,907 | $7,834 | | Treasury | $33,458 | $23,587 | | Total | $89,990 | $62,336 | Outstanding Business Volume Total outstanding business volume reached $29.8 billion as of March 31, 2025, with Infrastructure Finance growing to $9.8 billion and Agricultural Finance at $20.0 billion Outstanding Business Volume by Segment (in thousands) | Segment | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Agricultural Finance | $19,983,878 | $20,494,673 | | Infrastructure Finance | $9,771,465 | $9,028,357 | | Total | $29,755,343 | $29,523,030 | Net Effective Spread by Business Segment Total net effective spread for Q1 2025 was $90.0 million, demonstrating consistent growth, with the Farm & Ranch segment contributing $33.9 million Quarterly Net Effective Spread (in thousands) | Quarter | Total Net Effective Spread | | :--- | :--- | | Q1 2025 | $89,990 | | Q4 2024 | $87,528 | | Q3 2024 | $85,396 | | Q2 2024 | $83,596 | | Q1 2024 | $83,044 | Supplemental Information This section offers additional detailed financial data, including outstanding business volume and historical quarterly trends for net effective spread and core earnings Quarterly Core Earnings and Reconciliation This table provides a historical view of quarterly core earnings and GAAP net income reconciliation, showing Q1 2025 core earnings at $46.0 million Quarterly Core Earnings Trend (in thousands) | Quarter | Core Earnings | Net Income Attributable to Common Stockholders | | :--- | :--- | :--- | | Q1 2025 | $45,966 | $43,985 | | Q4 2024 | $43,554 | $50,848 | | Q3 2024 | $44,907 | $42,312 | | Q2 2024 | $39,777 | $40,313 | | Q1 2024 | $43,392 | $46,955 | Other Information This section contains disclosures, forward-looking statements highlighting risks like interest rate fluctuations, and a corporate overview of Farmer Mac's mission Forward-Looking Statements The report includes forward-looking statements subject to risks such as financing availability, regulatory changes, interest rate fluctuations, and economic conditions - The company's future results are subject to risks and uncertainties, and forward-looking statements are not guarantees of future performance[16] - Key risk factors include availability of financing, regulatory changes, interest rate fluctuations, and economic conditions impacting borrower repayment capacity[19] About Farmer Mac Farmer Mac's mission is to enhance financing accessibility and provide liquidity for American agriculture and rural infrastructure through its secondary market operations - Farmer Mac's core mission is to provide a secondary market to increase liquidity for lenders in American agriculture and rural infrastructure[18] - The company serves a wide range of markets, including agriculture, agribusiness, power and utilities, broadband infrastructure, and renewable energy[18]