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Jun 30, 2024
Farmer Mac Q2 2024 Earnings Report
Reported strong earnings driven by revenue diversification and disciplined asset liability management.
Key Takeaways
Farmer Mac reported a strong second quarter with growth in net effective spread, an efficient operating ratio, and a double-digit return on equity. The company provided $1.5 billion in liquidity and lending capacity to lenders serving rural America.
Provided $1.5 billion in liquidity and lending capacity to lenders serving rural America.
Net interest income grew 11% year-over-year to $87.3 million.
Net effective spread increased 2% from the prior-year period to $83.6 million.
Core earnings was $39.8 million, or $3.63 per diluted common share.
Farmer Mac
Farmer Mac
Farmer Mac Revenue by Geographic Location
Revenue by Geographic Location
Total Revenue
CapyFin.com Forward Guidance
Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties.
Positive Outlook
- Availability of debt and equity financing and, if available, the reasonableness of rates and terms.
- Level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac.
- General rate of growth in agricultural mortgage and rural infrastructure indebtedness.
- Effects of the Federal Reserve’s efforts to achieve monetary policy normalization to respond to inflation and employment levels.
- Mission to increase the accessibility of financing for American agriculture and rural infrastructure.
Challenges Ahead
- 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.
- 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 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, and volatility in commodity prices.
- Degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes.
- 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.