Farmer Mac Reports 2024 Results
PR Newswire
WASHINGTON, Feb. 21, 2025
- Announces 7% Dividend Increase -
- Outstanding Business Volume of $29.5 Billion -
WASHINGTON, Feb. 21, 2025 /PRNewswire/ -- The Federal Agricultural Mortgage Corporation (Farmer Mac; NYSE: AGM and AGM.A), the nation's secondary market provider that increases the accessibility of financing for American agriculture and rural infrastructure, today announced its results for the fiscal quarter and year ended December 31, 2024.
"We are very pleased with our 2024 results, and believe we are well-positioned to deliver on our multiyear strategy as we head into 2025 with good momentum, strong liquidity and capital levels, a diversified business mix, highly effective risk management practices, and most importantly, a talented team of dedicated professionals," said President and Chief Executive Officer, Brad Nordholm. "Through our work, we strengthen the economic framework that supports Rural America and enables families, businesses, and entire communities to thrive. We are optimistic about the future and will maintain our singular focus on fulfilling our mission efficiently, innovatively, and profitably."
Full Year 2024 and Recent Highlights
-- Net interest income grew 8% year-over-year to $353.9 million
-- Net effective spread1 increased 4% from the prior-year period to $339.6
million
-- Net income attributable to common stockholders was $180.4 million,
compared to $172.8 million in the same period last year
-- Core earnings1 of $171.6 million, or $15.64 per diluted common share
-- Total core capital of $1.5 billion and a Tier 1 Capital Ratio of 14.2% as
of December 31, 2024
-- As of December 31, 2024, Farmer Mac had 264 days of liquidity
-- On February 20, 2025, Farmer Mac's Board of Directors raised the
quarterly common stock dividend by 7% to $1.50 per share, the fourteenth
consecutive annual increase
Quarter Ended Year Ended
-------------
$ in
thousands,
except per
share December December YoY % December December YoY %
amounts 31, 2024 31, 2023 Change 31, 2024 31, 2023 Change
------------- ---------- --------- ------- ---------- ---------- -------
Net Change in
Business
Volume $1,054,727 $819,013 N/A $1,052,006 $2,548,942 N/A
------------- ---------- --------- ------- ---------- ---------- -------
Net Interest
Income
(GAAP) $93,368 $82,169 14 % $353,867 $327,547 8 %
------------- ---------- --------- ------- ---------- ---------- -------
Net Effective
Spread
(Non-GAAP) $87,528 $84,551 4 % $339,564 $326,980 4 %
------------- ---------- --------- ------- ---------- ---------- -------
Diluted EPS
(GAAP) $4.63 $3.73 24 % $16.44 $15.81 4 %
------------- ---------- --------- ------- ---------- ---------- -------
Core EPS
(Non-GAAP) $3.97 $4.10 (3) % $15.64 $15.65 -- %
------------- ---------- --------- ------- ---------- ---------- -------
(1) Non-GAAP Measure
Dividends
On February 20, 2025, Farmer Mac's Board of Directors declared a quarterly dividend of $1.50 per share on all three classes of common stock - Class A voting common stock $(AGM.A)$, Class B voting common stock (not listed on any exchange), and Class C non-voting common stock $(AGM)$. This quarterly dividend, which represents an increase of 7% in Farmer Mac's quarterly dividend rate on a year-over-year basis, will be payable on March 31, 2025 to holders of record of common stock as of March 14, 2025. This is the fourteenth consecutive year that Farmer Mac has increased its quarterly common stock dividend, and this increase is supported by Farmer Mac's earnings potential and overall capital position.
Farmer Mac's Board of Directors also declared a dividend on each of Farmer Mac's four classes of preferred stock. The quarterly dividend of $0.35625 per share of 5.700% Non-Cumulative Preferred Stock, Series D (NYSE: AGM.PR.D), $0.359375 per share of 5.750% Non-Cumulative Preferred Stock, Series E (NYSE: AGM.PR.E), $0.328125 per share of 5.250% Non-Cumulative Preferred Stock, Series F (NYSE: AGM.PR.F), and $0.3046875 per share of 4.875% Non-Cumulative Preferred Stock, Series G (AGM.PR.G), is for the period from but not including January 17, 2025 to and including April 17, 2025. The preferred dividends will be payable on April 17, 2025 to holders of record as of April 1, 2025.
Earnings Conference Call Information
The conference call to discuss Farmer Mac's fourth quarter and full year 2024 financial results will be held beginning at 8:30 a.m. eastern time on Friday, February 21, 2025, and can be accessed by telephone or live webcast as follows:
Telephone (Domestic): (800) 836-8184
Telephone (International): (646) 357-8785
Webcast: https://www.farmermac.com/investors/events-presentations/
When dialing in to the call, please ask for the "Farmer Mac Earnings Conference Call." The call can be heard live and will also be available for replay on Farmer Mac's website for two weeks following the conclusion of the call.
More complete information about Farmer Mac's performance for 2024 is in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, filed today with the SEC.
Use of Non-GAAP Measures
In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends. The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.
Core Earnings and Core Earnings Per Share
The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and core earnings per share, which is consistent with Farmer Mac's historical treatment of any losses on the retirement of preferred stock.
Net Effective Spread
Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of those assets. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain.
Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.
Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "Gains on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in
Farmer Mac's calculation of net effective spread.
Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.
More information about Farmer Mac's use of non-GAAP measures is available in "Management's Discussion and Analysis of Financial Condition and Results of Operations--Results of Operations" in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, filed today with the SEC. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, and net interest income and net interest yield to net effective spread, see "Reconciliations" below.
Forward-Looking Statements
Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the forward-looking statements in this release, including uncertainties about:
-- the availability to Farmer Mac of debt and equity financing and, if
available, the reasonableness of rates and terms;
-- legislative or regulatory developments that could affect Farmer Mac, its
sources of business, or agricultural or infrastructure industries;
-- fluctuations in the fair value of assets held by Farmer Mac and its
subsidiaries;
-- the level of lender interest in Farmer Mac's products and the secondary
market provided by Farmer Mac;
-- the general rate of growth in agricultural mortgage and infrastructure
indebtedness;
-- the effect of economic conditions stemming from disruptive global events
or otherwise on agricultural mortgage or infrastructure lending, borrower
repayment capacity, or collateral values, including inflation,
fluctuations in interest rates, changes in U.S. trade policies,
fluctuations in export demand for U.S. agricultural products and foreign
currency exchange rates, supply chain disruptions, increases in input
costs, labor availability, and volatility in commodity prices;
-- the degree to which Farmer Mac is exposed to interest rate risk resulting
from fluctuations in Farmer Mac's borrowing costs relative to market
indexes;
-- developments in the financial markets, including possible investor,
analyst, and rating agency reactions to events involving
government-sponsored enterprises, including Farmer Mac;
-- the effects of the Federal Reserve's efforts to achieve monetary policy
normalization to respond to inflation and employment levels; and
-- other factors that could hinder agricultural mortgage lending or borrower
repayment capacity, including the effects of severe weather, flooding and
drought, or fluctuations in agricultural real estate values.
Other risk factors are discussed in "Risk Factors" in Part I, Item 1A in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, filed today with the SEC. Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this release. The forward-looking statements contained in this release represent management's expectations as of the date of this release. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements included in this release to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this release is not necessarily indicative of future results.
About Farmer Mac
Farmer Mac is driven by its mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to our nation's agricultural and infrastructure businesses, supporting a vibrant and strong rural America. We offer a wide range of solutions to help meet financial institutions' growth, liquidity, risk management, and capital relief needs across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Additional information about Farmer Mac (including the Annual Report on Form 10-K referenced above) is available on our website at www.farmermac.com.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
December 31, 2024 December 31, 2023
-------------------------- --------------------------
(in thousands)
Assets:
Cash and cash
equivalents (includes
restricted cash of
$16,190 and $5,111,
respectively) $ 1,024,007 $ 888,707
Investment securities:
Available-for-sale,
at fair value
(amortized cost of
$6,105,116 and
$5,060,135,
respectively) 5,953,014 4,918,931
Held-to-maturity, at
amortized cost 9,270 53,756
Other investments 11,017 6,817
-------------------------- --------------------------
Total Investment
Securities 5,973,301 4,979,504
-------------------------- --------------------------
Farmer Mac Guaranteed
Securities:
Available-for-sale,
at fair value
(amortized cost of
$5,835,658 and
$5,825,433,
respectively) 5,514,546 5,532,479
Held-to-maturity, at
amortized cost 2,717,688 4,213,069
-------------------------- --------------------------
Total Farmer Mac
Guaranteed
Securities 8,232,234 9,745,548
-------------------------- --------------------------
USDA Securities:
Trading, at fair
value 818 1,241
Held-to-maturity, at
amortized cost 2,370,534 2,354,171
-------------------------- --------------------------
Total USDA
Securities 2,371,352 2,355,412
-------------------------- --------------------------
Loans:
Loans held for sale,
at lower of cost or
fair value 6,170 --
Loans held for
investment, at
amortized cost 11,183,408 9,623,119
Loans held for
investment in
consolidated
trusts, at
amortized cost 2,038,283 1,432,261
Allowance for losses (23,223) (16,031)
-------------------------- --------------------------
Total loans, net
of allowance 13,204,638 11,039,349
Financial derivatives,
at fair value 27,789 37,478
Accrued interest
receivable (includes
$28,563 and $16,764,
respectively, related
to consolidated
trusts) 310,592 287,128
Guarantee and
commitment fees
receivable 50,499 49,832
Deferred tax asset,
net 1,544 8,470
Prepaid expenses and
other assets 128,786 132,954
-------------------------- --------------------------
Total Assets $ 31,324,742 $ 29,524,382
========================== ==========================
Liabilities and Equity:
Liabilities:
Notes payable $ 27,371,174 $ 26,336,542
Debt securities of
consolidated trusts
held by third
parties 1,929,628 1,351,069
Financial derivatives,
at fair value 77,326 117,131
Accrued interest
payable (includes
$12,387 and $9,407,
respectively, related
to consolidated
trusts) 195,113 181,841
Guarantee and
commitment
obligation 48,326 47,563
Accounts payable and
accrued expenses 212,527 76,662
Reserve for losses 1,622 1,711
-------------------------- --------------------------
Total Liabilities 29,835,716 28,112,519
-------------------------- --------------------------
Commitments and
Contingencies
Equity:
Preferred stock:
Series C, par value
$25 per share,
3,000,000 shares
authorized, issued
and outstanding as of
December 31, 2023
(redemption value
$75,000,000) -- 73,382
Series D, par value
$25 per share,
4,000,000 shares
authorized, issued
and outstanding 96,659 96,659
Series E, par value
$25 per share,
3,180,000 shares
authorized, issued
and outstanding 77,003 77,003
Series F, par value
$25 per share,
4,800,000 shares
authorized, issued
and outstanding 116,160 116,160
Series G, par value
$25 per share,
5,000,000 shares
authorized, issued
and outstanding 121,327 121,327
Common stock:
Class A Voting, $1 par
value, no maximum
authorization,
1,030,780 shares
outstanding 1,031 1,031
Class B Voting, $1 par
value, no maximum
authorization,
500,301 shares
outstanding 500 500
Class C Non-Voting, $1
par value, no maximum
authorization,
9,360,083 shares and
9,310,872 shares
outstanding,
respectively 9,360 9,311
Additional paid-in
capital 135,894 132,919
Accumulated other
comprehensive loss,
net of tax (12,147) (40,145)
Retained earnings 943,239 823,716
-------------------------- --------------------------
Total Equity 1,489,026 1,411,863
-------------------------- --------------------------
Total Liabilities and
Equity $ 31,324,742 $ 29,524,382
========================== ==========================
FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Years Ended
---------------------------------------- --------------------------------------
December 31, December 31, December 31, December 31,
2024 2023 2024 2023
------------------- ------------------- ------------------ ------------------
(in thousands, except per share amounts)
Interest income:
Investments and cash
equivalents $ 87,160 $ 77,715 $ 345,501 $ 287,144
Farmer Mac Guaranteed
Securities and USDA
Securities 139,350 147,601 628,828 590,250
Loans 169,255 126,057 629,187 514,894
------------------- ------------------- ------------------ ------------------
Total interest income 395,765 351,373 1,603,516 1,392,288
Total interest expense 302,397 269,204 1,249,649 1,064,741
------------------- ------------------- ------------------ ------------------
Net interest income 93,368 82,169 353,867 327,547
(Provision for)/release of
losses (3,773) 626 (11,579) (858)
------------------- ------------------- ------------------ ------------------
Net interest income
after (provision
for)/release of losses 89,595 82,795 342,288 326,689
------------------- ------------------- ------------------ ------------------
Non-interest
income/(expense):
Guarantee and commitment
fees 4,009 3,770 15,738 16,712
Gains/(losses) on
financial derivatives 4,290 (1,881) 2,636 2,882
Losses on sale of mortgage
loans -- -- (1,147) --
Gains on sale of
available-for-sale
investment securities -- -- 1,052 --
(Provision for)/release of
reserve for losses (99) (51) 89 (278)
Other (expense)/income (312) 942 3,029 4,195
------------------- ------------------- ------------------ ------------------
Non-interest income 7,888 2,780 21,397 23,511
------------------- ------------------- ------------------ ------------------
Operating expenses:
Compensation and employee
benefits 15,641 15,523 63,975 58,914
General and administrative 12,452 8,916 38,236 34,963
Regulatory fees 1,000 725 3,175 3,222
Real estate owned
operating costs, net -- -- 196 --
------------------- ------------------- ------------------ ------------------
Operating expenses 29,093 25,164 105,582 97,099
------------------- ------------------- ------------------ ------------------
Income before income
taxes 68,390 60,411 258,103 253,101
Income tax expense 11,876 12,792 50,910 53,098
Net income 56,514 47,619 207,193 200,003
Preferred stock dividends (5,666) (6,791) (25,146) (27,165)
Loss on retirement of
preferred stock -- -- (1,619) --
------------------- ------------------- ------------------ ------------------
Net income attributable
to common stockholders $ 50,848 $ 40,828 $ 180,428 $ 172,838
=================== =================== ================== ==================
Earnings per common share:
Basic earnings per
common share $ 4.67 $ 3.77 $ 16.59 $ 15.97
Diluted earnings per
common share $ 4.63 $ 3.73 $ 16.44 $ 15.81
Reconciliations
Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings for the periods indicated:
Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
For the Three Months Ended
December 31, 2024 September 30, 2024 December 31, 2023
---------------------------- ---------------------------- ---------------------------
(in thousands, except per share amounts)
Net income
attributable to
common
stockholders $ 50,848 $ 42,312 $ 40,828
Less reconciling
items:
Gains/(losses) on
undesignated
financial
derivatives due to
fair value
changes 3,084 (1,064) (836)
Gains/(losses) on
hedging activities
due to fair value
changes 5,737 205 (3,598)
Unrealized
(losses)/gains on
trading assets (83) 99 (37)
Net effects of
amortization of
premiums/discounts
and deferred gains
on assets
consolidated at
fair value (39) 27 88
Net effects of
terminations or
net settlements on
financial
derivatives 534 (503) (800)
Issuance costs on
the retirement of
preferred stock -- (1,619) --
Income tax effect
related to
reconciling items (1,939) 260 1,089
---------------------------- ---------------------------- ---------------------------
Sub-total 7,294 (2,595) (4,094)
---------------------------- ---------------------------- ---------------------------
Core earnings $ 43,554 $ 44,907 $ 44,922
============================ ============================ ===========================
Composition of Core
Earnings:
Revenues:
Net effective
spread(1) $ 87,528 $ 85,396 $ 84,551
Guarantee and
commitment
fees(2) 5,086 4,997 4,865
Other(3) (491) 1,133 767
---------------------------- ---------------------------- ---------------------------
Total revenues 92,123 91,526 90,183
Credit related
expense (GAAP):
Provision
for/(release of)
losses 3,872 3,258 $(575.SI)$
REO operating
expenses -- 196 --
Total credit
related
expense/(income) 3,872 3,454 (575)
Operating expenses
(GAAP):
Compensation and
employee benefits 15,641 15,237 15,523
General and
administrative 12,452 8,625 8,916
Regulatory fees 1,000 725 725
---------------------------- ---------------------------- ---------------------------
Total operating
expenses 29,093 24,587 25,164
---------------------------- ---------------------------- ---------------------------
Net earnings 59,158 63,485 65,594
Income tax
expense(4) 9,938 12,681 13,881
Preferred stock
dividends (GAAP) 5,666 5,897 6,791
---------------------------- ---------------------------- ---------------------------
Core earnings $ 43,554 $ 44,907 $ 44,922
============================ ============================ ===========================
Core earnings per
share:
Basic $ 4.00 $ 4.13 $ 4.14
Diluted $ 3.97 $ 4.10 $ 4.10
(1) Net effective spread is a non-GAAP measure. See "Use of Non-GAAP
Measures" above for an explanation of net effective spread. See below for
a reconciliation of net interest income to net effective spread.
(2) Includes interest income and interest expense related to consolidated
trusts owned by third parties reclassified from net interest income to
guarantee and commitment fees to reflect management's view that the net
interest income Farmer Mac earns is effectively a guarantee fee on the
consolidated Farmer Mac Guaranteed Securities.
(3) Reflects reconciling adjustments for the reclassification to exclude
expenses related to interest rate swaps not designated as hedges and
terminations or net settlements on financial derivatives, and reconciling
adjustments to exclude fair value adjustments on financial derivatives
and trading assets and the recognition of deferred gains over the
estimated lives of certain Farmer Mac Guaranteed Securities and USDA
Securities.
(4) Includes the tax impact of non-GAAP reconciling items between net income
attributable to common stockholders and core earnings.
Reconciliation of Net Income Attributable to Common Stockholders to Core
Earnings
For the Years Ended
December 31, 2024 December 31, 2023
--------------------------- --------------------------
(in thousands, except per share amounts)
Net income
attributable to
common
stockholders $ 180,428 $ 172,838
Less reconciling
items:
Gains on
undesignated
financial
derivatives due to
fair value
changes 3,344 5,142
Gains/(losses) on
hedging activities
due to fair value
changes 11,548 (5,394)
Unrealized
(losses)/gains on
trading assets (85) 1,979
Net effects of
amortization of
premiums/discounts
and deferred gains
on assets
consolidated at
fair value 45 175
Net effects of
terminations or
net settlements on
financial
derivatives (1,666) 227
Issuance costs on
the retirement of
preferred stock (1,619) --
Income tax effect
related to
reconciling items (2,769) (447)
--------------------------- --------------------------
Sub-total 8,798 1,682
--------------------------- --------------------------
Core earnings $ 171,630 $ 171,156
=========================== ==========================
Composition of Core
Earnings:
Revenues:
Net effective
spread(1) $ 339,564 $ 326,980
Guarantee and
commitment
fees(2) 20,321 18,928
Gain on sale of
investment
securities (GAAP) 1,052 --
Loss on sale of
mortgage loan
(GAAP) (1,147) --
Other(3) 2,200 3,299
--------------------------- --------------------------
Total revenues 361,990 349,207
Credit related
expense (GAAP):
Provision for
losses 11,490 1,136
REO operating
expenses 196 --
Total credit
related expense 11,686 1,136
Operating expenses
(GAAP):
Compensation and
employee benefits 63,975 58,914
General and
administrative 38,236 34,963
Regulatory fees 3,175 3,222
--------------------------- --------------------------
Total operating
expenses 105,386 97,099
--------------------------- --------------------------
Net earnings 244,918 250,972
Income tax
expense(4) 48,142 52,651
Preferred stock
dividends (GAAP) 25,146 27,165
--------------------------- --------------------------
Core earnings $ 171,630 $ 171,156
=========================== ==========================
Core earnings per
share:
Basic $ 15.78 $ 15.80
Diluted $ 15.64 $ 15.65
(1) Net effective spread is a non-GAAP measure. See "Use of Non-GAAP
Measures" above for an explanation of net effective spread. See below for
a reconciliation of net interest income to net effective spread.
(2) Includes interest income and interest expense related to consolidated
trusts owned by third parties reclassified from net interest income to
guarantee and commitment fees to reflect management's view that the net
interest income Farmer Mac earns is effectively a guarantee fee on the
consolidated Farmer Mac Guaranteed Securities.
(3) Reflects reconciling adjustments for the reclassification to exclude
expenses related to interest rate swaps not designated as hedges and
terminations or net settlements on financial derivatives, and reconciling
adjustments to exclude fair value adjustments on financial derivatives
and trading assets and the recognition of deferred gains over the
estimated lives of certain Farmer Mac Guaranteed Securities and USDA
Securities.
(4) Includes the tax impact of non-GAAP reconciling items between net income
attributable to common stockholders and core earnings.
Reconciliation of GAAP Basic Earnings Per Share to Core Earnings Basic Earnings Per Share
For the Three Months Ended For the Years Ended
----------------------------------------
December 31, September 30, December 31, December 31, December 31,
2024 2024 2023 2024 2023
-------------------- -------------------- -------------------- ------------------- -------------------
(in thousands, except per share amounts)
GAAP - Basic EPS $ 4.67 $ 3.89 $ 3.77 $ 16.59 $ 15.97
Less reconciling
items:
Gains/(losses) on
undesignated
financial
derivatives due to
fair value
changes 0.28 (0.09) (0.08) 0.31 0.49
Gains/(losses) on
hedging activities
due to fair value
changes 0.53 0.02 (0.33) 1.06 (0.50)
Unrealized
(losses)/gains on
trading
securities (0.01) 0.01 -- (0.01) 0.18
Net effects of
amortization of
premiums/discounts
and deferred gains
on assets
consolidated at
fair value -- -- 0.01 -- 0.02
Net effects of
terminations or
net settlements on
financial
derivatives 0.05 (0.05) (0.07) (0.15) 0.02
Issuance costs on
the retirement of
preferred stock -- (0.15) -- (0.15) --
Income tax effect
related to
reconciling items (0.18) 0.02 0.10 (0.25) (0.04)
-------------------- -------------------- -------------------- ------------------- -------------------
Sub-total 0.67 (0.24) (0.37) 0.81 0.17
-------------------- -------------------- -------------------- ------------------- -------------------
Core Earnings -
Basic EPS $ 4.00 $ 4.13 $ 4.14 $ 15.78 $ 15.80
==================== ==================== ==================== =================== ===================
Shares used in per
share calculation
(GAAP and Core
Earnings) 10,889 10,883 10,841 10,874 10,829
Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings Diluted Earnings Per Share
For the Three Months Ended For the Years Ended
----------------------------------------
December 31, September 30, December 31, December 31, December 31,
2024 2024 2023 2024 2023
-------------------- -------------------- -------------------- ------------------- -------------------
(in thousands, except per share amounts)
GAAP - Diluted EPS $ 4.63 $ 3.86 $ 3.73 $ 16.44 $ 15.81
Less reconciling
items:
Gains/(losses) on
undesignated
financial
derivatives due to
fair value
changes 0.28 (0.09) (0.08) 0.30 0.47
Gains/(losses) on
hedging activities
due to fair value
changes 0.52 0.02 (0.33) 1.05 (0.49)
Unrealized
(losses)/gains on
trading
securities (0.01) 0.01 -- (0.01) 0.18
Net effects of
amortization of
premiums/discounts
and deferred gains
on assets
consolidated at
fair value -- -- 0.01 -- 0.02
Net effects of
terminations or
net settlements on
financial
derivatives 0.05 (0.05) (0.07) (0.14) 0.02
Issuance costs on
the retirement of
preferred stock -- (0.15) -- (0.15) --
Income tax effect
related to
reconciling items (0.18) 0.02 0.10 (0.25) (0.04)
-------------------- -------------------- -------------------- ------------------- -------------------
Sub-total 0.66 (0.24) (0.37) 0.80 0.16
-------------------- -------------------- -------------------- ------------------- -------------------
Core Earnings -
Diluted EPS $ 3.97 $ 4.10 $ 4.10 $ 15.64 $ 15.65
==================== ==================== ==================== =================== ===================
Shares used in per
share calculation
(GAAP and Core
Earnings) 10,982 10,966 10,952 10,975 10,937
The following table presents a reconciliation of net interest income and net yield to net effective spread for the periods indicated:
Reconciliation of GAAP Net Interest Income/Yield to Net Effective Spread
-------------------------------------------------------------------------------------------------------------------------
For the Three Months Ended For the Years Ended
December 31, September 30, December 31, December 31, December 31,
2024 2024 2023 2024 2023
------------------
Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield
-------- -------- -------- -------- -------- -------- --------- -------- --------- --------
(dollars in thousands)
Net interest
income/yield $ 93,368 1.21 % $ 86,791 1.15 % $ 82,169 1.12 % $ 353,867 1.16 % $ 327,547 1.15 %
Net effects of
consolidated
trusts (989) 0.02 % (1,065) 0.02 % (1,048) 0.02 % (4,477) 0.02 % (4,171) 0.02 %
Expense related to
undesignated
financial
derivatives 2 -- % (858) (0.01) % (846) (0.01) % (1,377) -- % (4,845) (0.02) %
Amortization of
premiums/discounts
on assets
consolidated at
fair value 42 -- % (24) -- % (104) -- % (29) -- % (175) -- %
Amortization of
losses due to
terminations or
net settlements on
financial
derivatives 842 0.01 % 757 0.01 % 782 0.01 % 3,128 0.01 % 3,230 0.01 %
Fair value changes
on fair value
hedge
relationships (5,737) (0.08) % (205) (0.01) % 3,598 0.05 % (11,548) (0.04) % 5,394 0.02 %
-------- -------- -------- -------- -------- -------- --------- -------- --------- --------
Net effective
spread $ 87,528 1.16 % $ 85,396 1.16 % $ 84,551 1.19 % $ 339,564 1.15 % $ 326,980 1.18 %
======== ======== ======== ======== ======== ======== ========= ======== ========= ========
The following table presents core earnings for Farmer Mac's reportable operating segments and a reconciliation to consolidated net income for the three months ended December 31, 2024:
Core Earnings by Business Segment
For the Three Months Ended December 31, 2024
-------------------------------------------------------------------------------------------------------------------------------------------------
Agricultural Finance Rural Infrastructure Treasury
------------------------- -------------------------------------------- ------------------------------
Farm & Corporate Power & Broadband Renewable
Ranch AgFinance Utilities Infrastructure Energy Funding Investments Total
------------ ----------- ----------- --------------- -------------- -------------- -------------- --------------
(in thousands)
Interest income $ 149,861 $ 25,063 $ 62,610 $ 10,846 $ 18,760 $ 49,211 $ 79,414 $ 395,765
Interest expense(1) (116,320) (17,172) (57,590) (7,432) (13,901) (13,075) (76,907) (302,397)
Less: reconciling
adjustments(2)(3) (985) -- 39 -- -- (4,894) -- (5,840)
------------ ----------- ----------- --------------- -------------- -------------- -------------- --------------
Net effective spread 32,556 7,891 5,059 3,414 4,859 31,242 2,507 87,528
Guarantee and commitment
fees(3) 4,296 189 232 209 160 -- -- 5,086
Other income/(expense) 473 (959) -- -- -- -- -- (486)
(Provision for)/release
of losses (411) (96) 179 (783) (2,759) -- (2) (3,872)
Operating expenses(1) (6,564) (2,256) (1,126) (1,060) (1,391) (3,620) (1,086) (17,103)
Income tax
(expense)/benefit (6,373) (1,002) (912) (374) (183) (5,801) (298) (14,943)
------------ ----------- ----------- --------------- -------------- -------------- -------------- --------------
Segment core earnings $ 23,977 $ 3,767 $ 3,432 $ 1,406 $ 686 $ 21,821 $ 1,121 $ 56,210
============ =========== =========== =============== ============== ============== ============== ==============
Reconciliation to net
income:
Net effects of
derivatives and
trading securities $ 9,272
Unallocated
(expenses)/income (12,035)
Income tax effect
related to reconciling
items 3,067
--------------
Net income $ 56,514
==============
Total Assets:
Total on- and
off-balance sheet
segment assets at
principal balance $ 18,606,968 $ 1,887,705 $ 6,809,366 $ 802,466 $ 1,416,525 $ -- $ -- $ 29,523,030
Off-balance sheet
assets under
management (4,981,285)
Unallocated assets 6,782,997
--------------
Total assets on the
consolidated balance
sheets $ 31,324,742
==============
(1) The significant expense categories and amounts align with the
segment-level information that is regularly provided to the CODM.
(2) Includes the amortization of premiums and discounts on assets
consolidated at fair value, originally included in interest income, to
reflect core earnings amounts; the reclassification of interest expense
related to interest rate swaps not designated as hedges, which are
included in "Gains on financial derivatives" on the consolidated
financial statements, to determine the effective funding cost for each
operating segment; and excludes the fair value changes of financial
derivatives and the corresponding assets or liabilities designated in
fair value hedge accounting relationships.
(3) Includes the reclassification of interest income and interest expense
from consolidated trusts owned by third parties to guarantee and
commitment fees, to reflect management's view that the net interest
income Farmer Mac earns is effectively a guarantee fee.
Supplemental Information
The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated:
Outstanding Business Volume
------------------------------------------------------------------------------------------------------------
As of December 31,
------------
On or Off
Balance
Sheet 2024 2023
------------ ----------------------------------- ---------------------------------
(in thousands)
Agricultural
Finance:
Farm & Ranch:
On-balance
Loans sheet $ 5,414,732 $ 5,133,450
Loans held in
consolidated
trusts:
Beneficial interests
owned by
third-party
investors On-balance
(single-class)(1) sheet 885,295 870,912
Beneficial interests
owned by
third-party
investors On-balance
(structured)(1) sheet 1,152,988 561,349
On-balance
IO-FMGS(2) sheet 8,710 9,409
On-balance
USDA Securities sheet 2,402,423 2,368,872
AgVantage On-balance
Securities(1) sheet 4,720,000 5,835,000
LTSPCs and unfunded Off-balance
loan commitments sheet 3,070,554 2,999,943
Other Farmer Mac
Guaranteed Off-balance
Securities(3) sheet 426,310 452,602
Loans serviced for Off-balance
others sheet 525,956 577,264
----------------------------------- ---------------------------------
Total Farm & Ranch $ 18,606,968 $ 18,808,801
Corporate
AgFinance:
On-balance
Loans sheet $ 1,381,674 $ 1,259,723
AgVantage On-balance
Securities(1) sheet 280,297 288,879
Unfunded loan Off-balance
commitments sheet 225,734 145,377
----------------------------------- ---------------------------------
Total Corporate AgFinance $ 1,887,705 $ 1,693,979
----------------------------------- ---------------------------------
Total Agricultural Finance $ 20,494,673 $ 20,502,780
----------------------------------- ---------------------------------
Infrastructure
Finance:
Power & Utilities:
On-balance
Loans sheet $ 2,886,576 $ 2,616,359
AgVantage On-balance
Securities(1) sheet 3,521,143 3,898,468
LTSPCs and unfunded Off-balance
loan commitments sheet 401,647 464,743
Total Power & Utilities $ 6,809,366 $ 6,979,570
Broadband
Infrastructure:
On-balance
Loans sheet $ 622,207 $ 478,118
Unfunded loan Off-balance
commitments sheet 180,259 23,035
----------------------------------- ---------------------------------
Total Broadband Infrastructure $ 802,466 $ 501,153
Renewable Energy:
On-balance
Loans sheet $ 1,265,700 $ 440,286
Unfunded loan Off-balance
commitments sheet 150,825 47,235
----------------------------------- ---------------------------------
Total Renewable Energy $ 1,416,525 $ 487,521
----------------------------------- ---------------------------------
Total Infrastructure Finance $ 9,028,357 $ 7,968,244
----------------------------------- ---------------------------------
Total $ 29,523,030 $ 28,471,024
=================================== =================================
(1) A type of Farmer Mac Guaranteed Security.
(2) An interest-only Farmer Mac Guaranteed Security retained as part of a
structured securitization.
(3) Other categories of Farmer Mac Guaranteed Securities that were sold by
Farmer Mac to third parties
The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:
Net Effective Spread
-------------------------------------------------------------------------------------------------------------
Agricultural Finance Infrastructure Finance Treasury
------------------------- ------------------------------------------ ------------------------- -----------
Net
Farm & Corporate Power & Broadband Renewable Effective
Ranch AgFinance Utilities Infrastructure Energy Funding Investments Spread
----------- ------------ ------------ -------------- ------------ ----------- ------------ -----------
Dollars Dollars Dollars Dollars Dollars Dollars Dollars Dollars
Yield Yield Yield Yield Yield Yield Yield Yield
----------- ------------ ------------ -------------- ------------ ----------- ------------ -----------
(dollars in thousands)
For the
quarter
ended:
December
31, 2024 $ 32,556 $ 7,891 $ 5,059 $ 3,414 $ 4,859 $ 31,242 $ 2,507 $ 87,528
0.96 % 1.95 % 0.32 % 2.34 % 1.76 % 0.42 % 0.15 % 1.16 %
September
30, 2024 35,755 6,397 4,785 2,794 3,810 30,912 943 85,396
1.05 % 1.56 % 0.30 % 2.21 % 1.78 % 0.42 % 0.05 % 1.16 %
June 30,
2024 34,156 7,866 5,253 2,393 2,999 30,268 661 83,596
0.98 % 1.91 % 0.32 % 2.16 % 1.86 % 0.41 % 0.04 % 1.14 %
March 31,
2024 32,843 7,971 4,890 2,342 2,049 32,474 475 83,044
0.95 % 2.05 % 0.30 % 2.08 % 1.75 % 0.45 % 0.03 % 1.14 %
December
31, 2023 33,329 8,382 4,916 2,426 1,540 33,361 597 84,551
0.98 % 2.06 % 0.31 % 2.06 % 1.69 % 0.47 % 0.04 % 1.19 %
September
30, 2023 32,718 8,250 3,979 2,383 1,150 34,412 532 83,424
0.97 % 2.05 % 0.26 % 2.15 % 1.46 % 0.49 % 0.04 % 1.20 %
June 30,
2023 34,388 7,444 3,681 2,127 1,100 32,498 594 81,832
1.03 % 1.92 % 0.25 % 2.25 % 1.47 % 0.48 % 0.04 % 1.20 %
March 31,
2023 32,465 7,148 3,599 1,908 858 31,738 $(543.SI)$ 77,173
0.97 % 1.94 % 0.24 % 2.53 % 1.53 % 0.47 % (0.04) % 1.15 %
December
31, 2022 32,770 7,471 3,271 1,689 935 27,656 (2,689) 71,103
0.98 % 1.94 % 0.24 % 2.39 % 1.76 % 0.42 % (0.19) % 1.07 %
The following table presents quarterly core earnings reconciled to net income attributable to common stockholders:
Core Earnings by Quarter Ended
------------------------------------------------------------------------------------------------------------------------------
December September June March December September June March December
2024 2024 2024 2024 2023 2023 2023 2023 2022
---------- ---------- ---------- --------- ----------- ---------- --------- --------- ----------
(in thousands)
Revenues:
Net effective
spread $ 87,528 $ 85,396 $ 83,596 $ 83,044 $ 84,551 $ 83,424 $ 81,832 $ 77,173 $ 71,103
Guarantee and
commitment fees 5,086 4,997 5,256 4,982 4,865 4,828 4,581 4,654 4,677
Gain on sale of
investment
securities -- -- 1,052 -- -- -- -- -- --
Loss on sale of
mortgage loan -- -- (1,147) -- -- -- -- -- --
Other (491) 1,133 481 1,077 767 1,056 409 1,067 390
---------- ---------- ---------- --------- ----------- ---------- --------- --------- ----------
Total revenues 92,123 91,526 89,238 89,103 90,183 89,308 86,822 82,894 76,170
Credit related
expense/(income):
Provision
for/(release of)
losses 3,872 3,258 6,230 (1,870) (575) (181) 1,142 750 1,945
REO operating
expenses -- 196 -- -- -- -- -- -- 819
Total credit
related
expense/(income) 3,872 3,454 6,230 (1,870) (575) (181) 1,142 750 2,764
Operating expenses:
Compensation and
employee benefits 15,641 15,237 14,840 18,257 15,523 14,103 13,937 15,351 12,105
General and
administrative 12,452 8,625 8,904 8,255 8,916 9,100 9,420 7,527 8,055
Regulatory fees 1,000 725 725 725 725 831 831 835 832
---------- ---------- ---------- --------- ----------- ---------- --------- --------- ----------
Total operating
expenses 29,093 24,587 24,469 27,237 25,164 24,034 24,188 23,713 20,992
---------- ---------- ---------- --------- ----------- ---------- --------- --------- ----------
Net earnings 59,158 63,485 58,539 63,736 65,594 65,455 61,492 58,431 52,414
Income tax expense 9,938 12,681 11,970 13,553 13,881 13,475 12,539 12,756 11,210
Preferred stock
dividends 5,666 5,897 6,792 6,791 6,791 6,792 6,791 6,791 6,791
---------- ---------- ---------- --------- ----------- ---------- --------- --------- ----------
Core earnings $ 43,554 $ 44,907 $ 39,777 $ 43,392 $ 44,922 $ 45,188 $ 42,162 $ 38,884 $ 34,413
========== ========== ========== ========= =========== ========== ========= ========= ==========
Reconciling items:
Gains/(losses) on
undesignated
financial
derivatives due to
fair value
changes $ 3,084 $ (1,064) $ (359) $ 1,683 $ (836) $ 2,921 $ 2,141 $ 916 $ 1,596
Gains/(losses) on
hedging activities
due to fair value
changes 5,737 205 2,604 3,002 (3,598) 3,210 (4,901) (105) (148)
Unrealized
(losses)/gains on
trading assets (83) 99 (87) (14) (37) 1,714 (57) 359 31
Net effects of
amortization of
premiums/discounts
and deferred gains
on assets
consolidated at
fair value (39) 27 26 31 88 29 29 29 57
Net effects of
terminations or
net settlements on
financial
derivatives 534 (503) (1,505) (192) (800) (79) 583 523 1,268
Issuance costs on
the retirement of
preferred stock -- (1,619) -- -- -- -- -- -- --
Income tax effect
related to
reconciling items (1,939) 260 (143) (947) 1,089 (1,638) 464 (362) (590)
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