FEDERAL AGRICULTURAL MORTGAGE CORP Q3 FY2024 earnings call

• Total revenues YTD up over $10M to $270M due to higher net effective spread. • Core earnings YTD up $1.8M to $128M, with core earnings excluding credit expense up nearly $7M (+5% Y/Y). • Operating efficiency better than long-term target of 30% in 2024. • Launched STARS platform, the largest systems and process implementation project in Farmer Mac's history. • Strong activity in Renewable Energy and Farm & Ranch segments with higher spread loan purchase volume. • Working towards fifth Farm's series securitization transaction and exploring new securitization product.

Total revenues year-to-date improved over $10 million to $270 million compared to the same period last year, primarily due to higher net effective spread. Core earnings year-to-date improved $1.8 million to $128 million. In the Renewable Energy segment, over $1 billion of new business volume was closed in the third quarter. The Farm & Ranch segment closed nearly $1 billion of new loan purchase volume year-to-date. Offsetting volume growth were maturities with several large AgVantage counterparties.

• Confident in underlying business model, strong capital position, and access to debt capital markets to continue partnering with customers. • Monitoring election results to assess potential policy effects on business, but no immediate material changes foreseen. • Expect to continue delivering on long-term strategic priorities.

• Market uncertainty and potential regulatory policy change. • Credit market spreads tightening leading to reduced liquidity needs. • Borrower-specific credit events and charge-offs (e.g., single permanent planting loan delinquent).

Q: What drove the increase in Farm & Ranch yields and the decline in Corporate AgFinance spreads?

A: Farm & Ranch spread increase due to accretive loan pool purchases; Corporate AgFinance spread decline solely related to a single delinquent permanent planting loan.

Q: If rates remain range bound, what's the earnings profile?

A: If rates are range bound, earnings could still be flat to higher due to proactive bond reissuing and business compositional shift to accretive loans.

Q: Thoughts on tariffs and their potential effect on Farmer Mac?

A: Difficult to speculate on tariffs, but factors like strong dollar and proposed federal policies affecting agricultural demand are monitored.

Q: Details on new securitization program?

A: Pivot from financing strategy to product strategy, converting revenue from net effective spread to fee income, with potential for lower borrowing costs to end borrowers.

Q: Operating efficiency and 30% target?

A: STARS project and other initiatives have some capitalized and expensed components; 30% target still prudent for safety and soundness.

Q: Farm & Ranch volume and interest rates?

A: Lower interest rates boost loan volume growth, along with tightening ag space requiring liquidity for farmers and financial institutions needing capital efficiency.