FEDERAL AGRICULTURAL MORTGAGE CORP Q1 FY2025 earnings call

• Achieved record quarterly revenue, net effective spread, and core earnings with strong capital base. - Infrastructure finance line of business grew by approx. $750 million in Q1 2025. - Broadband infrastructure segment grew 22% since year-end to nearly $1 billion. - Renewable energy segment grew nearly $200 million in Q1 2025, 14% increase since year-end. - Net increase of $86 million in farm and ranch loan purchases in Q1 2025. - Corporate Ag finance segment was approx. $2 billion at quarter end, relatively flat. - Completed major infrastructure platform upgrade and plan to focus on new capabilities for customers. - Disciplined in expense management with efficiency ratio in line with long-term plan.

In the first quarter of 2025, the infrastructure finance line of business grew by approximately $750 million. The broadband infrastructure segment grew 22% since year-end, reaching nearly $1 billion as of the end of the first quarter. The renewable energy segment grew by nearly $200 million in the first quarter, a 14% increase since year-end. In the Farm & Ranch segment, there was a net increase of $86 million in farm and ranch loan purchases in the first quarter. The corporate Ag finance segment was approximately $2 billion at quarter end, relatively flat compared to year-end 2024. Total revenue achieved high single-digit growth, net effective spread and core earnings also saw high single-digit growth. Core earnings increased by 6% to $46 million, net effective spread reached a record 90 million or 117 basis points.

• Anticipate continuing to be a key partner for refinancing and incremental borrowing for AgVantage counterparties. - Expect to remain at or below a long-run average of 30% for efficiency ratio and be disciplined in line with growth expectations. - Plan to roll out new securitization structures and expect to come to market with another farm securitization transaction before the second quarter is up.

• Market uncertainties stemming from interest rates, regulatory shifts, policy changes, and government action. - Potential credit losses inherent in lending, though moderated by diversified portfolio. - Impact of trade policy changes such as tariffs on agricultural business and related credit. - Volatility in AgVantage security bond due to large transaction sizes and scheduled maturities.

Q: Good morning and nice results for the quarter. Macro question about tariffs and what happened in 2017 - 2018 and current situation.

A: Good morning, Bill. Back to first Trump administration, there were market facilitation payments for impacted farmers. Currently, tariffs on China are causing trade shifts, with $10 billion program announced by Secretary of Agriculture and discussion of additional $20 - 25 billion program.

Q: Follow up on spread question, ROE up 5% while spread on Farm & Ranch went up a couple of basis points.

A: Aparna mentioned a reduction in non - accrual activity quarter over quarter was a big driver of the ROE change.

Q: Question on funding cost side and securitization economics.

A: Funding improved dramatically from Q4 to Q1 by taking advantage of narrowing SOFR spreads. Intend to come to market with another securitization transaction before second quarter is up, and see continued strong appetite for the asset class.

Q: Question on renewable energy activity in Q1 2025 and outlook.

A: No activity in Q1 2025 for renewable energy tax credits, but outlook for rest of year is strong, especially related to solar and battery storage.

Q: Question on Farm & Ranch, sequential decline in volume but bulk of net effective spread increase.

A: Zach said about $550 million of new business volume in Farm & Ranch, significant majority was loan purchase volume, pipeline for second quarter appears very strong.

Q: Question on Treasury segment net effective spread revenue dynamics.

A: Aparna said it's due to being opportunistic, narrowing of surface spreads quarter over quarter and taking advantage of yield curve steepening.

Q: Question on AI applications.

A: Brad said internal focus is on process, like using AI to improve processes such as scraping loan documents for pertinent information to improve efficiency.