• Total Revenue Year-to-Date: $270 million, an increase of over $10 million from the same period last year.

• Core Earnings Year-to-Date: $128 million, an improvement of $1.8 million compared to the prior year period.

• Operating Efficiency: Below the long-term target of 30% throughout 2024.

• New Business Volume: $2 billion closed this quarter and $4.9 billion year-to-date.

• Renewable Energy Volume: Surpassed $1 billion in total volume in the third quarter.

• Farm and Ranch Loan Purchase Volume Year-to-Date: Nearly $1 billion compared to $780 million in the full year 2023.

• Outstanding Business Volume: $28.5 billion as of September 30, 2024.

• Core Earnings for Q3 2024: $44.9 million or $4.10 per share.

• Net Effective Spread: Increased from 114 basis points to 116 basis points this quarter.

• Liquidity Position: 309 days of liquidity with approximately $850 million in cash and short-term instruments.

• Operating Expenses: Relatively flat sequentially.

• Total Allowance for Losses: $21.9 million as of September 30, 2024.

• 90-Day Delinquencies: 51 basis points as of September 30, 2024.

• Core Capital: $1.5 billion as of September 30, 2024, exceeding statutory requirements by $580 million.

• Return on Equity: 17% for the quarter.

• Warning! GuruFocus has detected 2 Warning Sign with AGM.

Release Date: November 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Federal Agricultural Mortgage Corp (NYSE:AGM) reported a significant increase in total revenues year-to-date, improving over $10 million to $270 million compared to the same period last year.

• The company achieved a core earnings improvement of $1.8 million to $128 million year-to-date, excluding credit expense, marking a 5% year-over-year increase.

• AGM successfully launched the Securities Treasury accounting reporting system (STARS), a major infrastructure project aimed at enhancing transaction processing and business scalability.

• The company closed $2 billion of new business volume in the third quarter, with a strong focus on renewable energy and farm and ranch segments, surpassing $1 billion in total renewable energy volume.

• AGM maintained an operating efficiency ratio below its long-term target of 30% throughout 2024, reflecting disciplined expense management.

Negative Points

• AGM experienced a net decrease of $290 million in outstanding business volume as of September 30th, 2024, primarily due to scheduled maturities and repayments.

• The company faced a $3.3 million provision to the allowance for losses in the third quarter, attributed to volume growth in telecommunications and renewable energy, and a delinquent permanent planting loan.

• 90-day delinquencies increased to 51 basis points across the portfolio, up from 22 basis points at the end of June 2024, driven by a single delinquent loan.

• The tier one capital ratio decreased from 15.3% to 14.2% due to the redemption of series C preferred stock and increased risk-based assets in renewable energy and telecom sectors.

• AGM's business volume in the farm and ranch segment was impacted by a slower market for loan growth and tightening credit market spreads, leading to reduced liquidity needs.