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Farmer Mac Reports First Quarter 2023 Results

AGMAGM.A

- Outstanding Business Volume of $26.5 Billion -

WASHINGTON, May 9, 2023 /PRNewswire/ -- The Federal Agricultural Mortgage Corporation ((Farmer Mac, NYSE:AGM), 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 ended March 31, 2023.

"We delivered another strong quarter, with new all-time records achieved for revenue, earnings, and net effective spread," said President and CEO, Brad Nordholm. "Our results this quarter not only highlight the resiliency of our business model, our disciplined approach to asset liability management, and our successful efforts over the last few years to grow and diversify our revenue streams, but also the alignment of our team with our long-term strategic objectives and commitment to fulfilling our mission throughout changing market cycles."

First Quarter 2023 Highlights

  • Added $1.7 billion of gross business volume, resulting in net growth of $0.6 billion
  • Net interest income grew 21% year-over-year to $79.1 million
  • Net effective spread1 increased 33% from the prior-year period to a record $77.2 million
  • Net income attributable to common stockholders was $40.2 million, compared to $44.7 million in the same period last year
  • Record core earnings1 of $38.9 million, or $3.56 per diluted common share, reflecting 51% growth year-over-year
  • 90-day delinquencies were 0.27% across the entire $26.5 billion portfolio as of March 31, 2023
  • Maintained strong capital position with total core capital of $1.4 billion, exceeding statutory requirement by 65% and a Tier 1 Capital Ratio of 15.7% as of March 31, 2023
  • Closed the third structured securitization transaction involving approximately $300 million of agricultural mortgage loans

$ in thousands, except per

share amounts

Quarter Ended

Mar. 31,

2023

Dec. 31,

2022

Mar. 31,

2022

Sequential

% Change

YoY

% Change

Net Change in

Business Volume

$562,036

$595,444

$628,947

N/A

N/A

Net Interest Income (GAAP)

$79,058

$73,635

$65,538

7 %

21 %

Net Effective Spread

(Non-GAAP)

$77,173

$71,103

$57,839

9 %

33 %

Diluted EPS (GAAP)

$3.69

$3.36

$4.10

10 %

(10) %

Core EPS (Non-GAAP)

$3.56

$3.16

$2.37

13 %

50 %



1 Non-GAAP Measure



Earnings Conference Call Information

The conference call to discuss Farmer Mac's first quarter 2023 financial results will be held beginning at 4:30 p.m. eastern time on Tuesday, May 9, 2023, and can be accessed by telephone or live webcast as follows:

Telephone (Domestic): (888) 346-2616

Telephone (International): (412) 902-4254

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 first quarter 2023 is in Farmer Mac's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed today with the SEC.

Use of Non-GAAP Measures

In the accompanying analysis of its financial information, 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.

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.

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 these 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, 2022, filed February 24, 2023 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 and 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 rural 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 rural infrastructure indebtedness;
  • the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or rural infrastructure lending, borrower repayment capacity, or collateral values, including rapid 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, volatility from the recent commercial banking failures, 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 and slow inflation; and
  • other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, climate change, 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, 2022, as filed with the SEC on February 24, 2023. 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 a vital part of the agricultural credit markets and was created to increase access to and reduce the cost of credit for the benefit of American agricultural and rural communities. As the nation's secondary market for agricultural credit, we provide financial solutions to a broad spectrum of the agricultural community, including agricultural lenders, agribusinesses, and other institutions that can benefit from access to flexible, low-cost financing and risk management tools. Farmer Mac's customers benefit from our low cost of funds, low overhead costs, and high operational efficiency. More information about Farmer Mac (including the Annual Report on Form 10-K referenced above) is available on Farmer Mac's website at www.farmermac.com.

* * * *

 

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)



As of



March 31, 2023



December 31, 2022



(in thousands)

Assets:







Cash and cash equivalents

$                     864,594



$                     861,002

Investment securities:







Available-for-sale, at fair value (amortized cost of $4,788,254 and $4,769,426, respectively)

4,647,464



4,579,564

Held-to-maturity, at amortized cost

45,032



45,032

Other investments

3,672



3,672

Total Investment Securities

4,696,168



4,628,268

Farmer Mac Guaranteed Securities:







Available-for-sale, at fair value (amortized cost of $8,565,328 and $8,019,495, respectively)

8,225,454



7,607,226

Held-to-maturity, at amortized cost

993,966



1,021,154

Total Farmer Mac Guaranteed Securities

9,219,420



8,628,380

USDA Securities:







Trading, at fair value

1,405



1,767

Held-to-maturity, at amortized cost

2,358,928



2,409,834

Total USDA Securities

2,360,333



2,411,601

Loans:







Loans held for investment, at amortized cost

8,915,656



9,008,979

Loans held for investment in consolidated trusts, at amortized cost

1,468,357



1,211,576

Allowance for losses

(15,673)



(15,089)

Total loans, net of allowance

10,368,340



10,205,466

Financial derivatives, at fair value

25,099



37,409

Accrued interest receivable (includes $9,885 and $12,514, respectively, related to consolidated trusts)

196,368



229,061

Guarantee and commitment fees receivable

46,670



47,151

Deferred tax asset, net

7,961



18,004

Prepaid expenses and other assets

154,994



266,768

Total Assets

$                 27,939,947



$                27,333,110









Liabilities and Equity:







Liabilities:







Notes payable

$                 24,837,391



$                24,469,113

Debt securities of consolidated trusts held by third parties

1,374,332



1,181,948

Financial derivatives, at fair value

166,963



175,326

Accrued interest payable (includes $6,170 and $8,081, respectively, related to consolidated trusts)

141,938



117,887

Guarantee and commitment obligation

46,114



46,582

Accounts payable and accrued expenses

79,188



68,863

Reserve for losses

1,636



1,433

Total Liabilities

26,647,562



26,061,152

Commitments and Contingencies







Equity:







Preferred stock:







    Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding

73,382



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, 9,288,482 shares and 9,270,265

shares outstanding, respectively

9,289



9,270

Additional paid-in capital

130,004



128,939

Accumulated other comprehensive loss, net of tax

(59,862)



(50,843)

Retained earnings

726,892



698,530

Total Equity

1,292,385



1,271,958

Total Liabilities and Equity

$                 27,939,947



$                27,333,110

 

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)





For the Three Months Ended



March 31, 2023



March 31, 2022



(in thousands, except per share amounts)

Interest income:







Investments and cash equivalents

$                      59,703



$                        5,716

Farmer Mac Guaranteed Securities and USDA Securities

136,537



42,920

Loans

119,032



67,247

Total interest income

315,272



115,883

Total interest expense

236,214



50,345

Net interest income

79,058



65,538

Provision for losses

(547)



(56)

Net interest income after provision for losses

78,511



65,482

Non-interest income/(expense):







Guarantee and commitment fees

3,933



3,695

Gains on financial derivatives

399



16,988

Gains/(losses) on trading securities

25



(63)

(Provision for)/release of reserve for losses

(203)



110

Other income

1,201



675

Non-interest income

5,355



21,405

Operating expenses:







Compensation and employee benefits

15,351



13,298

General and administrative

7,527



7,278

Regulatory fees

835



812

Operating expenses

23,713



21,388

Income before income taxes

60,153



65,499

Income tax expense

13,118



14,046

Net income

47,035



51,453

Preferred stock dividends

(6,791)



(6,791)

Net income attributable to common stockholders

$                      40,244



$                      44,662









Earnings per common share:







Basic earnings per common share

$                          3.73



$                          4.15

Diluted earnings per common share

$                          3.69



$                          4.10

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



March 31, 2023



December 31, 2022



March 31, 2022



(in thousands, except per share amounts)

Net income attributable to common stockholders

$                   40,244



$                   36,627



$                   44,662

Less reconciling items:











Gains on undesignated financial derivatives due to fair value changes

916



1,596



2,612

(Losses)/gains on hedging activities due to fair value changes

(105)



(148)



5,687

Unrealized gains on trading assets

359



31



94

Net effects of amortization of premiums/discounts and deferred gains

on assets consolidated at fair value

29



57



20

Net effects of terminations or net settlements on financial derivatives

523



1,268



15,512

Income tax effect related to reconciling items

(362)



(590)



(5,024)

Sub-total

1,360



2,214



18,901

Core earnings

$                   38,884



$                   34,413



$                   25,761













Composition of Core Earnings:











Revenues:











Net effective spread(1)

$                   77,173



$                   71,103



$                   57,839

Guarantee and commitment fees(2)

4,654



4,677



4,557

Other(3)

1,067



390



514

Total revenues

82,894



76,170



62,910













Credit related expense (GAAP):











Provision for/(release of) losses

750



1,945



(54)

REO operating expenses

—



819



—

Total credit related expense

750



2,764



(54)













Operating expenses (GAAP):











Compensation and employee benefits

15,351



12,105



13,298

General and administrative

7,527



8,055



7,278

Regulatory fees

835



832



812

Total operating expenses

23,713



20,992



21,388













Net earnings

58,431



52,414



41,576

Income tax expense(4)

12,756



11,210



9,024

Preferred stock dividends (GAAP)

6,791



6,791



6,791

Core earnings

$                   38,884



$                   34,413



$                   25,761













Core earnings per share:











  Basic

$                       3.60



$                       3.19



$                       2.39

  Diluted

$                       3.56



$                       3.16



$                       2.37





(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



March 31,

2023



December 31,

2022



March 31,

2022



(in thousands, except per share amounts)

GAAP - Basic EPS

$               3.73



$               3.39



$               4.15

Less reconciling items:











Gains on undesignated financial derivatives due to fair value changes

0.09



0.15



0.24

(Losses)/gains on hedging activities due to fair value changes

(0.01)



(0.01)



0.53

Unrealized gains on trading securities

0.03



0.01



0.01

Net effects of amortization of premiums/discounts and deferred gains on assets

consolidated at fair value

—



0.01



—

Net effects of terminations or net settlements on financial derivatives

0.05



0.11



1.44

Income tax effect related to reconciling items

(0.03)



(0.07)



(0.46)

Sub-total

0.13



0.20



1.76

Core Earnings - Basic EPS

$               3.60



$               3.19



$               2.39













Shares used in per share calculation (GAAP and Core Earnings)

10,802



10,801



10,767

 

Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings Diluted Earnings Per Share



For the Three Months Ended



March 31,

2023



December 31,

2022



March 31,

2022



(in thousands, except per share amounts)

GAAP - Diluted EPS

$               3.69



$               3.36



$               4.10

Less reconciling items:











Gains on undesignated financial derivatives due to fair value changes

0.09



0.15



0.24

(Losses)/gains on hedging activities due to fair value changes

(0.01)



(0.01)



0.52

Unrealized gains on trading securities

0.03



0.01



0.01

Net effects of amortization of premiums/discounts and deferred gains on assets

consolidated at fair value

—



0.01



—

Net effects of terminations or net settlements on financial derivatives

0.05



0.11



1.42

Income tax effect related to reconciling items

(0.03)



(0.07)



(0.46)

Sub-total

0.13



0.20



1.73

Core Earnings - Diluted EPS

$               3.56



$               3.16



$               2.37













Shares used in per share calculation (GAAP and Core Earnings)

10,918



10,894



10,887

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



March 31, 2023



December 31, 2022



March 31, 2022



Dollars



Yield



Dollars



Yield



Dollars



Yield



(dollars in thousands)

Net interest income/yield

$  79,058



1.14 %



$  73,635



1.08 %



$  65,538



1.06 %

Net effects of consolidated trusts

(1,055)



0.02 %



(1,195)



0.02 %



(1,018)



0.02 %

Expense related to undesignated financial derivatives

(1,626)



(0.02) %



(2,122)



(0.03) %



(994)



(0.02) %

Amortization of premiums/discounts on assets consolidated at fair value

(23)



— %



(53)



— %



(16)



— %

Amortization of losses due to terminations or net settlements on financial

derivatives

714



0.01 %



688



— %



356



0.01 %

Fair value changes on fair value hedge relationships

105



— %



150



— %



(6,027)



(0.10) %

Net effective spread

$  77,173



1.15 %



$  71,103



1.07 %



$  57,839



0.97 %

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 March 31, 2023:

Core Earnings by Business Segment

For the Three Months Ended March 31, 2023



Agricultural Finance



Rural Infrastructure



Treasury



Corporate











Farm &

Ranch



Corporate

AgFinance



Rural 

Utilities



Renewable

Energy



Funding



Investments





Reconciling

Adjustments



Consolidated

Net Income



(in thousands)

Net interest income

$      33,511



$      7,148



$      5,540



$        858



$    32,544



$        (543)



$         —



$             —



$       79,058

Less: reconciling

adjustments(1)(2)(3)

(1,046)



—



(33)



—



(806)



—



—



1,885



—

Net effective spread

32,465



7,148



5,507



858



31,738



(543)



—



1,885



—

Guarantee and

commitment fees

4,292



53



281



28



—



—



—



(721)



3,933

Other

income/(expense)(3)

1,067



—



—



—



—



—



—



558



1,625

Total revenues

37,824



7,201



5,788



886



31,738



(543)



—



1,722



84,616





































Release of/(provision

for) losses

128



(4,301)



3,484



138



—



4



—



—



(547)





































(Provision for)/release

of reserve for losses

(577)



—



374



—



—



—



—



—



(203)

Operating expenses

—



—



—



—



—



—



(23,713)



—



(23,713)

Total non-interest

expense

(577)



—



374



—



—



—



(23,713)



—



(23,916)

Core earnings before

income taxes

37,375



2,900



9,646



1,024



31,738



(539)



(23,713)



1,722

(4)

60,153

Income tax

(expense)/benefit

(7,849)



(609)



(2,026)



(215)



(6,665)



113



4,495



(362)



(13,118)

Core earnings before

preferred stock

dividends

29,526



2,291



7,620



809



25,073



(426)



(19,218)



1,360

(4)

47,035

Preferred stock

dividends

—



—



—



—



—



—



(6,791)



—



(6,791)

Segment core

earnings/(losses)

$      29,526



$      2,291



$      7,620



$        809



$    25,073



$        (426)



$ (26,009)



$        1,360

(4)

$       40,244





































Total Assets

$  14,549,275



$  1,515,976



$  6,444,264



$  286,824



$          —



$ 4,998,854



$ 144,754



$             —



$ 27,939,947

Total on- and off-

balance sheet program

assets at principal

balance

$  17,685,961



$  1,599,982



$  6,889,682



$  308,493



$          —



$            —



$         —



$             —



$ 26,484,118





(1)

Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

(2)

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. 

(3)

Includes 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.

(4)

Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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





On or Off

Balance Sheet



As of March 31, 2023



As of December 31, 2022









(in thousands)

Agricultural Finance:













Farm & Ranch:













Loans



On-balance sheet



$                         4,837,722



$                       5,150,750

Loans held in consolidated trusts:













Beneficial interests owned by third-party investors

(Pass-Through)(1)



On-balance sheet



895,257



914,918

Beneficial interests owned by third-party investors

(Structured)(1)



On-balance sheet



573,100



296,658

IO-FMGS(2)



On-balance sheet



10,189



10,622

USDA Securities



On-balance sheet



2,356,695



2,407,302

AgVantage Securities(1)



On-balance sheet



5,675,000



5,605,000

LTSPCs and unfunded commitments



Off-balance sheet



2,830,071



2,822,309

Other Farmer Mac Guaranteed Securities(3)



Off-balance sheet



488,095



500,953

Loans serviced for others



Off-balance sheet



19,832



20,280

Total Farm & Ranch







$                       17,685,961



$                     17,728,792

Corporate AgFinance:













Loans



On-balance sheet



$                         1,172,864



$                       1,166,253

AgVantage Securities(1)



On-balance sheet



337,685



359,600

Unfunded commitments



Off-balance sheet



89,433



77,654

Total Corporate AgFinance







$                         1,599,982



$                       1,603,507

Total Agricultural Finance







$                       19,285,943



$                     19,332,299

Rural Infrastructure Finance:













Rural Utilities:













Loans



On-balance sheet



$                         2,891,618



$                       2,801,696

AgVantage Securities(1)



On-balance sheet



3,515,385



3,044,156

LTSPCs and unfunded commitments



Off-balance sheet



481,581



512,592

Other Farmer Mac Guaranteed Securities(3)



Off-balance sheet



1,098



1,169

Total Rural Utilities







$                         6,889,682



$                       6,359,613

Renewable Energy:













Loans



On-balance sheet



$                            286,486



$                          219,570

Unfunded commitments



Off-balance sheet



22,007



10,600

Total Renewable Energy







$                            308,493



$                          230,170

Total Rural Infrastructure Finance







$                         7,198,175



$                       6,589,783

Total







$                       26,484,118



$                     25,922,082





(1)

A 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(1)



Agricultural Finance



Rural Infrastructure Finance



Treasury











Farm & Ranch



Corporate

AgFinance



Rural Utilities



Renewable

Energy



Funding



Investments



Net Effective

Spread



Dollars



Yield



Dollars



Yield



Dollars



Yield



Dollars



Yield



Dollars



Yield



Dollars



Yield



Dollars



Yield



(dollars in thousands)

For the quarter ended:























































March 31, 2023(2)

$  32,465



0.97 %



$ 7,148



1.94 %



$ 5,507



0.36 %



$    858



1.53 %



$  31,738



0.47 %



$  (543)



(0.04) %



$  77,173



1.15 %

December 31, 2022

32,770



0.98 %



7,471



1.94 %



4,960



0.34 %



935



1.76 %



27,656



0.42 %



(2,689)



(0.19) %



71,103



1.07 %

September 30, 2022

33,343



1.04 %



7,600



1.99 %



4,220



0.30 %



705



1.97 %



22,564



0.36 %



(2,791)



(0.21) %



65,641



1.03 %

June 30, 2022

32,590



1.05 %



6,929



1.87 %



3,733



0.27 %



468



1.78 %



18,508



0.30 %



(1,282)



(0.10) %



60,946



0.99 %

March 31, 2022

30,354



1.02 %



7,209



1.96 %



3,159



0.23 %



375



1.69 %



16,738



0.28 %



4



— %



57,839



0.97 %

December 31, 2021

28,998



0.99 %



6,321



1.84 %



2,521



0.19 %



356



1.53 %



15,979



0.28 %



158



0.01 %



54,333



0.94 %

September 30, 2021

28,914



1.06 %



7,163



1.80 %



2,067



0.16 %



236



1.09 %



17,386



0.31 %



159



0.01 %



55,925



0.99 %

June 30, 2021

29,163



1.06 %



6,676



1.65 %



1,759



0.14 %



378



1.80 %



18,449



0.33 %



126



0.01 %



56,551



1.01 %

March 31, 2021

26,461



0.98 %



6,921



1.67 %



1,720



0.14 %



249



1.28 %



18,394



0.33 %



114



0.01 %



53,859



0.97 %





(1) 

Farmer Mac excludes the Corporate segment in the presentation above because the segment does not have any interest-earning assets.

(2) 

See above for a reconciliation of GAAP net interest income by line of business to net effective spread by line of business for the three months ended March 31, 2023.

The following table presents quarterly core earnings reconciled to net income attributable to common stockholders:

Core Earnings by Quarter Ended



March

2023



December

2022



September

2022



June

2022



March

2022



December

2021



September

2021



June

2021



March

2021







(in thousands)

Revenues:



































Net effective spread

$   77,173



$   71,103



$   65,641



$  60,946



$  57,839



$   54,333



$   55,925



$  56,551



$  53,859

Guarantee and commitment fees

4,654



4,677



4,201



4,709



4,557



4,637



4,322



4,334



4,240

Gains on sale of mortgage loans

—



—



—



—



—



6,539



—



—



—

Other

1,067



390



473



307



514



241



687



301



451

Total revenues

82,894



76,170



70,315



65,962



62,910



65,750



60,934



61,186



58,550





































Credit related expense/(income):



































Provision for/(release of) losses

750



1,945



450



(1,535)



(54)



(1,428)



255



(983)



(31)

REO operating expenses

—



819



—



—



—



—



—



—



—

Losses on sale of REO

—



—



—



—



—



—



—



—



—

Total credit related expense/(income)

750



2,764



450



(1,535)



(54)



(1,428)



255



(983)



(31)





































Operating expenses:



































Compensation and employee benefits

15,351



12,105



11,648



11,715



13,298



11,246



10,027



9,779



11,795

General and administrative

7,527



8,055



6,919



7,520



7,278



8,492



6,330



6,349



6,336

Regulatory fees

835



832



812



813



812



812



750



750



750

Total operating expenses

23,713



20,992



19,379



20,048



21,388



20,550



17,107



16,878



18,881





































Net earnings

58,431



52,414



50,486



47,449



41,576



46,628



43,572



45,291



39,700

Income tax expense

12,756



11,210



10,303



9,909



9,024



9,809



9,152



9,463



8,520

Preferred stock dividends

6,791



6,791



6,791



6,792



6,791



6,792



6,774



5,842



5,269

Core earnings

$   38,884



$   34,413



$   33,392



$  30,748



$  25,761



$   30,027



$   27,646



$  29,986



$  25,911





































Reconciling items:



































Gains/(losses) on undesignated

financial derivatives due to fair value

changes

$        916



$     1,596



$     6,441



$    2,846



$    2,612



$   (1,242)



$      (405)



$  (3,020)



$   3,236

(Losses)/gains on hedging activities

due to fair value changes

(105)



(148)



(624)



428



5,687



(2,079)



1,818



(5,866)



4,317

Unrealized gains/(losses) on trading

assets

359



31



(757)



(285)



94



(76)



36



(61)



(14)

Net effects of amortization of

premiums/discounts and deferred gains

on assets consolidated at fair value

29



57



24



(62)



20



71



23



20



16

Net effects of terminations or net

settlements on financial derivatives

523



1,268



(3,522)



2,536



15,512



(429)



(351)



109



1,165

Income tax effect related to reconciling

items

(362)



(590)



(327)



(1,148)



(5,024)



789



(236)



1,852



(1,831)

Net income attributable to common

stockholders

$   40,244



$   36,627



$   34,627



$  35,063



$  44,662



$   27,061



$   28,531



$  23,020



$  32,800

 

 

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SOURCE Farmer Mac