Federal Agricultural Mortgage Corporation (AGM) Q3 2025 Earnings Call Transcript

Net Effective Spread $97.8 million for Q3 2025, reflecting double-digit year-over-year growth. Growth driven by higher average loan balances and a shift to higher spread business.

Core Earnings $49.6 million for Q3 2025, reflecting double-digit year-over-year growth. Growth attributed to higher net effective spread and diversification into newer lines of business.

Renewable Energy Investment Tax Credits $24.2 million purchased, resulting in a $1.5 million benefit in Q3 2025.

Operating Expenses Increased due to headcount, technology investment, and higher transaction-related legal expenses. Majority of headcount additions were to support increased business volumes and new technology projects.

Credit Expense $7.4 million net provision for Q3 2025. Factors include increased loss estimates on certain assets, groundwater regulation impacts in California, and volume growth in agricultural and infrastructure finance. Offset by a $2.2 million recovery and $4.4 million charge-offs.

Total Allowance for Losses $37.2 million as of September 30, 2025, or 12 basis points of total outstanding business volume.

Core Capital Increased by $131 million to $1.7 billion as of September 30, 2025, exceeding statutory requirements by $723 million or 75%. Increase driven by $100 million Series H preferred stock issuance and strong earnings.

Tier 1 Capital Ratio Improved to 13.9% in Q3 2025 from 13.6% in the previous quarter, supported by preferred stock issuance and earnings growth.

Outstanding Business Volume $31.1 billion as of Q3 2025, with $500 million net new business volume growth. Growth driven by infrastructure finance, renewable energy, and broadband infrastructure segments.

Renewable Energy Segment Volume $2.3 billion as of Q3 2025, more than doubled year-over-year. Growth driven by new projects, refinancing, and tax credit phaseouts.

Broadband Infrastructure Segment Volume $1.3 billion as of Q3 2025, doubled year-over-year from $600 million. Growth driven by demand for data centers and rural connectivity.

Power and Utilities Segment Growth $126 million growth in Q3 2025, driven by loan purchases for rural electric generation, transmission, and distribution cooperatives.

Farm & Ranch Loan Purchase Portfolio Grew by $285 million in Q3 2025, offset by scheduled maturities of large AgVantage facilities.

AgVantage Securities Faced large maturities over the last year, but a new facility with $4.3 billion borrowing capacity was closed in Q3 2025.