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Dec 31, 2023
Farmer Mac Q4 2023 Earnings Report
Recorded double-digit earnings growth, record net effective spread, and outstanding business volume.
Key Takeaways
Farmer Mac reported a successful year in 2023, with double-digit earnings growth and record net effective spread. The company's strategic initiatives and organizational alignment drove consistent performance. Farmer Mac's marketing and branding approach positions it well for future growth.
Net interest income grew 21% year-over-year.
Net effective spread increased 28% from the prior-year period to a record.
Net income attributable to common stockholders increased compared to the same period last year.
Core earnings reflected growth year-over-year.
Farmer Mac
Farmer Mac
Forward Guidance
Management's expectations for Farmer Mac's future necessarily involve assumptions and estimates and the evaluation of risks and uncertainties.
Positive Outlook
- Farmer Mac's future success depends on factors such as the availability of debt and equity financing.
- Legislative or regulatory developments could affect Farmer Mac.
- The level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac is important.
- The general rate of growth in agricultural mortgage and rural infrastructure indebtedness is a factor.
- Developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac is a factor.
Challenges Ahead
- Fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries can impact results.
- Economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or rural infrastructure lending, borrower repayment capacity, or collateral values can be a factor.
- The degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes can impact results.
- The effects of the Federal Reserve’s efforts to achieve monetary policy normalization to respond to inflation and employment levels is a factor.
- 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.