Federal Agricultural Mortgage Corp (AGM.A) Reports Strong First Quarter 2024 Earnings

GuruFocus Research
3 min read

In This Article:

  • Net Interest Income: Grew 9% year-over-year to $86.4 million.

  • Net Effective Spread: Increased 8% from the previous year to $83.0 million.

  • Net Income: Attributable to common stockholders rose 17% year-over-year to $47.0 million.

  • Core Earnings: Reached $43.4 million, reflecting a 12% growth year-over-year, with EPS at $3.96 per diluted common share.

  • Capital Position: Maintained a strong capital position with total core capital of $1.5 billion, exceeding statutory requirement by 70%.

  • Tier 1 Capital Ratio: Stood at 15.5% as of March 31, 2024.

  • Liquidity Days: Held 295 days of liquidity as of the end of the quarter.

On May 6, 2024, Federal Agricultural Mortgage Corp (NYSE:AGM.A), also known as Farmer Mac, released its 8-K filing, detailing a robust financial performance for the first quarter ended March 31, 2024. The company, a key player in the U.S. secondary agricultural mortgage market, reported a substantial year-over-year increase in net income and continued strategic advancements in its operations.

Company Overview

Federal Agricultural Mortgage Corp operates in the secondary market for agricultural real estate and rural housing mortgage loans in the United States. It functions across seven segments including Farm & Ranch, Corporate AgFinance, and Rural Utilities, among others. The company's primary role is to enhance the availability of agricultural financing by purchasing eligible mortgage loans secured by first liens on agricultural real estate.

Financial Highlights and Performance

The first quarter of 2024 saw Farmer Mac providing $1.4 billion in liquidity and lending capacity to rural America's lenders. Notably, net interest income grew by 9% compared to the same period last year, reaching $86.4 million. The company's net effective spread also saw an 8% increase from the previous year, totaling $83.0 million. Impressively, net income attributable to common stockholders grew by 17% year-over-year to $47.0 million.

Core earnings were reported at $43.4 million, or $3.96 per diluted common share, marking a 12% growth from the previous year. The company maintained a strong capital position with total core capital of $1.5 billion, which exceeds the statutory requirement by 70%. Additionally, the Tier 1 Capital Ratio stood at 15.5% as of March 31, 2024.

Strategic Developments and Management Commentary

According to Brad Nordholm, President & CEO of Farmer Mac, the quarter's success can be attributed to "well-disciplined asset-liability management, development of new markets, and investments to modernize our infrastructure." He emphasized the company's strong capital position and strategic vision, expressing confidence in continuing to deliver value to stakeholders and enhancing rural opportunities.

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