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Sep 30, 2023
Farmer Mac Q3 2023 Earnings Report
Reported strong results driven by increased business diversification and proactive balance sheet management.
Key Takeaways
Farmer Mac announced strong Q3 2023 results, marking the sixth consecutive quarter of record earnings and the seventh consecutive quarter of record net effective spread. The company reported a 29% year-over-year increase in net interest income, record core earnings of $45.2 million, and a strong capital position.
Provided $2.3 billion in liquidity and lending capacity to lenders serving rural America.
Net interest income grew 29% year-over-year to $87.6 million.
Net effective spread increased 27% from the prior-year period to a record $83.4 million.
Record core earnings of $45.2 million, or $4.13 per diluted common share, reflecting 35% growth year-over-year.
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 and estimates and the evaluation of risks and uncertainties.
Positive Outlook
- availability to Farmer Mac 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
- Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes
- Farmer Mac was created to increase access to and reduce the cost of credit for the benefit of American agricultural and rural communities
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 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
- developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac
- effects of the Federal Reserve’s efforts to achieve monetary policy normalization and slow inflation