Federal Agricultural Mortgage (AGM) - 2024 Q3 - Quarterly Report

Financial Performance - Net income attributable to common stockholders for Q3 2024 was $42.3 million, a sequential increase of$2.0 million from Q2 2024 but a year-over-year decrease of $9.0 million [190][191]. - Core earnings for Q3 2024 were$44.9 million, reflecting a sequential increase of $5.1 million but a year-over-year decrease of$0.3 million [190][193]. - Total revenues for the quarter were $91.5 million, an increase from$89.3 million year-over-year [220]. - Core earnings for the nine months ended September 30, 2024, increased to $128,076,000 from$126,234,000 year-over-year [224]. - Net income attributable to common stockholders for the nine months ended September 30, 2024, was $129,580,000, a slight decrease from$132,010,000 in the same period of 2023 [224]. Income and Expenses - Net interest income for Q3 2024 was $86.8 million, a slight sequential decrease of$0.5 million and a year-over-year decrease of $0.9 million [197][199]. - Total operating expenses rose to$24.6 million, compared to $24.0 million in the previous year [220]. - Operating expenses for the nine months ended September 30, 2024, totaled$76,293,000, an increase from $71,935,000 in the same period of 2023 [224]. - The provision for losses was$3.3 million, compared to a release of $0.2 million in the same quarter last year [220]. Asset and Liability Management - As of September 30, 2024, total assets increased to$30.62 billion, up 4% from $29.52 billion as of December 31, 2023, primarily due to new loan volume and a larger investment portfolio [312]. - Total liabilities rose to$29.15 billion, a 4% increase from $28.11 billion, mainly driven by an increase in notes payable to fund loan volume [313]. - Total equity reached$1.46 billion, reflecting a 4% increase from $1.41 billion, attributed to higher retained earnings and accumulated other comprehensive income [313]. Loan and Business Volume - Outstanding business volume as of September 30, 2024, was$28.5 billion, a net decrease of $290.0 million from June 30, 2024 [202]. - The$0.4 billion net decrease in Farm & Ranch during Q3 2024 resulted from $1.2 billion of scheduled maturities and repayments, partially offset by$0.8 billion of new purchases, commitments, and guarantees [257]. - Loans, Farmer Mac Guaranteed Securities, and USDA Securities reached $22.93 billion for the three months ended September 30, 2024, up from$21.86 billion in the same period of 2023, marking an increase of 4.9% [237]. Delinquencies and Credit Quality - 90-day delinquencies for on-balance sheet portfolios surged to $138.0 million, or 1.67$57.8 million (0.71%) in the previous quarter [208]. - The total amount of 90-day delinquencies increased to $144.4 million, up from$62.1 million as of June 30, 2024, with 84 delinquent loans reported [315]. - The increase in delinquencies was primarily driven by issues in permanent plantings, crops, livestock, and agricultural storage and processing [315]. Capital and Liquidity - Core capital as of September 30, 2024, was $1.46 billion, with capital in excess of the minimum capital level required at$579.9 million [204]. - Farmer Mac maintained strong liquidity in its investment portfolio, well above regulatory requirements [188]. - Cash and investments amounted to $6.49 billion for the three months ended September 30, 2024, compared to$5.97 billion for the same period in 2023, indicating a growth of 8.7% [237]. Market and Economic Conditions - The USDA estimates that net cash farm income dropped by 21% in 2023 and is expected to decrease another 7% in 2024, impacting the agricultural sector [290]. - Commodity prices are expected to experience increased volatility in 2024 and 2025 due to a rebound in global supply levels [291]. - U.S. agricultural exports are projected to decline to $169.5 billion in 2025, which is 2% lower than 2024 and down 14% from peak levels in 2022 [297]. Risk Management - Farmer Mac's primary strategy for managing interest rate risk involves issuing debt securities across various maturities to align cash flows with forecasted asset cash flows [360]. - The company has established guidelines for interest rate risk management, overseen by its Asset and Liability Committee (ALCO) [357]. - Farmer Mac's interest rate risk metrics are derived from asset/liability models and are based on estimates of implied forward interest rates and interest rate volatility [370].