Farmer Mac (AGM) Announces First Quarter 2025 Earnings Results

Federal Agricultural Mortgage Corporation (AGM) today announced its financial results for the most recent quarter. The company reported earnings per share of $4.01, slightly missing analysts’ expectations of $4.06. However, AGM delivered a strong performance in revenue, generating $381.4 million, which significantly exceeded the revenue estimate of $94 million by over $287 million.

Key Highlights:

• Outstanding business volume reached $29.8 billion.
• Provided $1.8 billion in liquidity and lending capacity to rural lenders.
• Net interest income increased by 5% year-over-year to $90.9 million.
• Record net effective spread of $90.0 million, an 8% increase from the prior year.
• Net income attributable to common stockholders was $44.0 million.
• Record core earnings of $46.0 million, or $4.19 per diluted share, reflecting a 6% year-over-year growth.
• Maintained a strong capital position with total core capital of $1.5 billion, exceeding statutory requirements by 65%.

Farmer Mac reported strong financial results for the first quarter of 2025, highlighting the effectiveness of its long-term growth strategy. President and CEO Brad Nordholm stated, “I’m pleased to report that we delivered another outstanding quarter, surpassing previous records in revenue, net effective spread, and core earnings.” The company provided significant liquidity to lenders serving rural America, demonstrating its commitment to enhancing access to financing in the agricultural sector. The results reflect a resilient business model supported by diversified revenue streams and a strong capital position, which enables Farmer Mac to navigate market volatility effectively.

Looking ahead, Farmer Mac’s management emphasized the importance of maintaining a solid foundation to address evolving credit conditions and market challenges. The company remains focused on its mission to provide vital liquidity for American agriculture and rural infrastructure, which is crucial for fostering growth and innovation in these sectors. The management’s outlook suggests confidence in sustaining growth, despite potential risks associated with economic fluctuations and regulatory changes.

Federal Agricultural Mortgage Corporation (AGM) has recently experienced a notable uptick in its stock price, with a 1.25% increase over the past week and a more substantial 7.15% rise in the last month. However, this positive momentum comes on the heels of a more challenging three-month period, where the stock declined by 9.67%, and a six-month drop of 13.41%. Despite these fluctuations, AGM’s fundamental metrics present a compelling picture; the company boasts a price-to-earnings ratio of 10.84, suggesting it may be undervalued relative to its earnings potential. The two-year compound annual growth rate (CAGR) for earnings per share stands at an impressive 17.05%, while revenue growth has surged at a remarkable 39.88% CAGR. However, the free cash flow has seen a decline, indicating potential liquidity concerns. With a net profit margin of 41.06%, AGM demonstrates strong profitability, yet the return on invested capital remains relatively low at 0.94%. Investors will be keen to see if the recent price recovery can be sustained, especially in light of the company’s robust revenue growth and profitability metrics.

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Farm & Ranch, USDA (United States Department of Agriculture) Guarantees, Rural Utilities, and Institutional Credit. The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments (LTSPC) on designated eligible mortgage loans. The USDA Guarantees segment purchases portions of certain agricultural and rural development loans guaranteed by the USDA. The Rural Utilities segment purchases and guarantees securities that are backed by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and purchases eligible rural utilities loans and guarantees of securities backed by those loans, as well as LTSPCs for pools of eligible rural utilities loans. The Institutional Credit segment guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of loans eligible under the Farmer Mac’s Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business. Federal Agricultural Mortgage Corporation was founded in 1987 and is headquartered in Washington, District of Columbia.