Federal Agricultural Mortgage Corporation Q3 FY2025 earnings call

• Delivered record net effective spread and core earnings. • Diversified loan portfolio into newer lines of business like renewable energy, broadband infrastructure, and corporate Ag finance. • Strengthened capital base via successful preferred stock issuance, core capital at $1.7 billion. • Plan for second prime transaction in Q4 2025. • Repurchased approximately 30,000 shares of Class C common stock for about $5 million. • Zack Carpenter instrumental in diversifying loan portfolio and developing strategic partnerships. • Brad Nordholm to retire in March 2027, with Zack Carpenter to succeed him.

During the third quarter of 2025, Farmer Mac achieved a record net effective spread of $97.8 million and core earnings of $49.6 million. Year-to-date, net effective spread stood at $287 million and core earnings at $143 million, reflecting double-digit year-over-year growth. The portfolio exceeded $31 billion in outstanding business volume. The infrastructure finance line of business grew to $11 billion, with Renewable Energy segment volume over $2.3 billion (doubled year-over-year), Broadband Infrastructure at $1.3 billion (doubled year-over-year), Power and Utilities grew $126 million, and the Farm & Ranch loan purchase portfolio grew $285 million in the third quarter.

• Anticipated retirement of Brad Nordholm in March 2027, with Zack Carpenter to become President and Chief Operating Officer and successor. • Continue evaluation of capital management tools for optimizing capital position. • Work toward second prime transaction in Q4 2025. • Share repurchase of 30,000 Class C common shares completed. • Evaluate organic capital generation and securitization opportunities for growth in accretive segments.

• Episodic credit provision changes due to factors like groundwater regulations in California and volume growth in certain segments. • Market volatility, political developments, government actions, and policy changes that could impact the portfolio. • Credit losses inherent in lending, though moderated by portfolio diversification and allowances.

Q: Bose George asked about the outlook for spreads, including the impact of Fed rate cuts.

A: Brad Nordholm noted Farmer Mac's asset liability management makes it neutral to interest rate changes. Zack Carpenter discussed diversification benefits, strong growth in infrastructure finance segments like broadband and renewable energy, and seasonal impacts on Farm & Ranch spreads.

Q: William Ryan inquired about tariffs and their impact on farmers.

A: Bradford Nordholm noted nuanced story with some crop prices up, and anticipated market facilitation payments. Zack Carpenter highlighted Farmer Mac's national diversity across ag commodities.

Q: Brendan Michael McCarthy asked about prepayment expectations, credit provision breakdown, and share repurchases.

A: Zachary Carpenter discussed low prepayment expectations due to locked-in low rates. Bradford Nordholm explained credit provision was a mix of volume growth and episodic factors like California groundwater regulations. Confirmed share repurchase of 30,000 shares.