Financial Data and Key Metrics Changes - The company generated net investment income (NII) and realized gains of $0.44 per share in Q1 2025, down from $0.54 per share in Q4 2024, comprised of $0.40 of NII and $0.04 of realized capital gains [5][20] - The NAV per share decreased to $14.16 as of March 31, 2025, from $14.99 as of December 31, 2024, representing a 5.5% decline [7][22] - Recurring cash flows for Q1 2025 were $16,500,000 or $0.71 per share, compared to $16,100,000 or $0.82 per share in Q4 2024 [8][9] Business Line Data and Key Metrics Changes - The decline in NII was primarily due to a significant drop in SOFR and spread compression on syndicated loans, adversely impacting earnings from the CLO equity portfolio [6][15] - The company deployed approximately $120,000,000 of gross capital across 27 CLO debt purchases and nine CLO equity purchases during Q1 2025 [13] - The trailing twelve-month default rate decreased slightly to 80 basis points as of March 31, remaining well below the historical average of 2.6% [16][17] Market Data and Key Metrics Changes - CLO issuance in Q1 2025 was $49,000,000,000, down from $59,000,000,000 in Q4 2024, but still healthy by historical standards [18] - The S&P UBS Leveraged Loan Index generated a total return of 60 basis points during Q1 2025, with a recent increase of 1.8% for the year as of May 23 [14] Company Strategy and Development Direction - The company is focused on capitalizing on market volatility by purchasing CLO debt and equity at discounted prices, which is expected to yield positive returns over time [11][24] - The management aims to extend the weighted average remaining reinvestment period of the CLO equity portfolio and seeks longer reinvestment period opportunities [18] Management's Comments on Operating Environment and Future Outlook - Management indicated that the decline in NII is largely driven by the drop in short-term rates, and the new distribution rate reflects the company's near to medium-term earnings potential [24] - The company believes it is well-positioned to continue generating strong returns for shareholders despite current market conditions [25] Other Important Information - The company declared three monthly distributions of $0.13 per share for the third quarter of 2025, a decline from previous distributions [9][21] - As of April 30, 2025, the company had $33,000,000 of cash and undrawn revolver capacity available for investment [19][22] Q&A Session Summary Question: About the reduction in dividend distribution - Management clarified that the reduction in dividend distribution is due to changes in SOFR and not related to capital losses, emphasizing that the majority of the portfolio is CLO BBs which fluctuate with rates [26][36] Question: Clarification on CLOs and default rates - Management confirmed that the change in distribution rate is principally driven by the change in SOFR, with no credit-related issues affecting the portfolio [35][37]

Financial Data and Key Metrics Changes - For Q1 2025, net income was $2.1 million, or $0.03 per share, an increase compared to the same period in 2024, driven by higher interest income and lower interest expenses [29] - Adjusted Funds from Operations (AFFO) was $2.3 million, or $0.05 per weighted average share, which was lower than the same period in 2024 [29] - Interest expense decreased by $2.4 million due to a reduction in debt of $189.4 million in Q4 2024 [30] Business Line Data and Key Metrics Changes - Fixed farm rent decreased due to property dispositions in 2024, while solar, wind, and recreation revenues increased due to a solar lease arrangement [32] - Management fees and interest income rose due to increased loan issuances under the FPI loan program [32] - Direct operations revenue increased due to higher walnut prices, offset by increased costs for water and maintenance [32] Market Data and Key Metrics Changes - The portfolio's NAV is estimated to be in the mid-$14 range, reflecting a decrease due to dividend payouts [19] - The market for row crop land values remains stable, with no significant frothiness observed [45] - California land values are not recovering, with some capitulation among sellers indicating potential market stabilization [16][18] Company Strategy and Development Direction - The company plans to continue selective capital deployment, focusing on small acquisitions and loan programs [27] - There is an emphasis on stock buybacks due to the perceived undervaluation of the company's shares compared to farmland values [52] - The company aims to maintain liquidity and flexibility in capital deployment strategies [62] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of farmland, particularly in the context of global food demand and population growth [26] - The potential impact of tariffs on the agricultural market was discussed, with management noting that while there may be short-term pressures, long-term fundamentals remain strong [7][11] - The company anticipates modest rent increases in the row crop segment, reflecting a pause in rental growth [9] Other Important Information - The company won part of a legal case in Texas, which may have implications for future operations [13] - A compensation advisory vote did not pass, attributed to ISS recommendations, which management believes were misinformed [21][22] Q&A Session Summary Question: Can you provide details on the amortization of the FPI loan points? - Management indicated that approximately $2.4 million is expected to be recognized as amortization of points income for the year [40] Question: Is the increase in solar, wind, and recreational rent recurring? - Management clarified that while the arrangement with a solar tenant is recurring, it may not be at the same scale as the current year [42] Question: How have cap rates moved year-to-date? - Management noted that cap rates for row crop land values are stable, with no significant changes observed [45] Question: What is the company's stance on stock buybacks versus land purchases? - Management expressed a preference for stock buybacks due to the significant discount of the stock price compared to its perceived value [52] Question: How do tariffs affect core row crop assets versus permanent crops? - Management explained that many specialty crops are consumed domestically, which may provide some benefits amid tariff pressures [56]

Financial Data and Key Metrics Changes - For Q1 2025, net income was $2.1 million, or $0.03 per share, an increase compared to the same period in 2024, driven by higher interest income, proceeds from a solar lease, and lower interest expenses [28] - AFFO was $2.3 million, or $0.05 per weighted average share, which was lower than the same period in 2024 [29] - Interest expense decreased by $2.4 million due to a reduction in debt [29] Business Line Data and Key Metrics Changes - Fixed farm rent decreased due to property dispositions in 2024, while solar, wind, and recreation revenues increased due to a solar lease arrangement [31] - Management fees and interest income rose due to increased loan issuances under the FPI loan program [31] - Direct operations revenue increased due to higher walnut prices, offset by increased costs for water and maintenance [31] Market Data and Key Metrics Changes - The portfolio NAV is estimated to be in the mid-$14 range, reflecting a decrease due to dividend payouts [18] - The market for row crop land is stable, with no significant frothiness observed, and high-quality land remains strong [46][49] Company Strategy and Development Direction - The company plans to continue selective capital deployment, including small acquisitions and loan programs [26] - The focus remains on maintaining high cash flows and AFFO while considering stock buybacks due to perceived undervaluation [55] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about tariffs and stagflation, noting that while tariffs could impact exports, stagflation historically boosts farmland values [6][11] - The company anticipates modest rent increases in the short term but remains optimistic about long-term demand for agricultural land [9][25] Other Important Information - The company won part of a legal case in Texas, which may have implications for future operations [13] - A compensation advisory vote did not pass, attributed to ISS recommendations, which management believes were incorrect [20][21] Q&A Session Summary Question: What is the amortization amount for the FPI loan points in Q1? - The company expects to recognize approximately $2.4 million in amortization of points income for the year [39] Question: Is the increase in solar, wind, and recreational rent recurring? - The arrangement with the tenant is recurring but not at the same scale as the current year [41] Question: How were the April 25 debt maturities repaid? - The company drew about $14 million from its line of credit and used operational funds for the remainder [45] Question: How have cap rates moved year-to-date? - Cap rates for row crop land values are stable, with no significant changes observed [46] Question: Will the Farmer Mac facility be renewed? - The company is likely to keep the facility in place for liquidity purposes [63][64]