AGM-PG — Federal Agricultural Mortgage Corporation

Farmer Mac Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Outstanding Business Volume: Approached $35 billion, setting a new record.
• Revenue: Approximately $110 million, a 14% year-over-year increase.
• Core Earnings: Approximately $52 million, equating to $4.74 per diluted share.
• Net Effective Spread: Reached $102 million, with a percentage of 116 basis points, slightly down from 117 basis points year-over-year.
• Provision for Credit Losses: $4.3 million, reflecting new volume growth and credit migration.
• Allowance for Losses: Increased to $40.1 million, representing 15.4% of nonaccrual assets.

2. Strategic Updates and Business Highlights:

• Business Volume Growth: Notable growth in the Farm & Ranch segment, with loan approvals nearing $1 billion, a 30% increase from the previous record.
• Infrastructure Finance: Outstanding business volume increased to $12.6 billion, driven by demand in renewable energy and broadband sectors.
• AgVantage Securities Portfolio: Grew by $325 million, reflecting a new $4.3 billion facility with a large agricultural counterparty.
• Customer Relationships: Strengthened through proactive engagement and support for liquidity needs amid challenging agricultural conditions.

3. Forward Guidance and Outlook:

• Continued Growth: Anticipated sustained growth in loan purchases and business volume, particularly in Farm & Ranch and Renewable Energy segments.
• Market Conditions: Expectation of robust deal flow in the second quarter, especially in refinancing transactions.
• Long-term Positioning: Confidence in maintaining strong capital levels and credit quality, with a focus on strategic capital deployment.

4. Bad News, Challenges, or Points of Concern:

• Agricultural Conditions: Borrowers face tighter conditions due to rising input costs, trade issues, and low commodity prices, which could impact loan performance.
• Credit Migration: Some deterioration noted in agricultural storage and processing sectors, necessitating additional reserves.
• Geopolitical Risks: Ongoing global tensions may affect the agricultural economy and loan activity, particularly concerning input costs and margins.

5. Notable Q&A Insights:

• Return on Equity (ROE): Achieved 17% in Q1; management aims to maintain this level amidst varying net effective spreads.
• Loan Purchase Dynamics: Increased competition for loans noted, with financial institutions seeking liquidity amid high-cost deposits.
• Data Center Construction: Strong demand persists, with Farmer Mac focusing on high-quality counterparties to mitigate risks associated with delays.
• Tax Credit Utilization: Expectation to utilize $30 million in investment tax credits in Q2, with ongoing evaluation of additional opportunities.

Overall, Farmer Mac reported a strong start to 2026, driven by record business volumes and strategic growth across its segments, while remaining vigilant about external economic pressures and credit risks.