Federal Agricultural Mortgage (AGM) - 2024 Q4 - Annual Report

Business Volume and Financial Performance - As of December 31, 2024, Farmer Mac's total outstanding business volume was $29.5 billion, an increase from$28.5 billion in 2023, representing a growth of approximately 3.6%[36] - The Agricultural Finance line of business accounted for $20.5 billion of the total outstanding business volume, while Infrastructure Finance contributed$9.0 billion[36] - Farmer Mac's on-balance sheet loans in the Farm & Ranch segment increased to $5.4 billion in 2024 from$5.1 billion in 2023, reflecting a growth of 5.5%[36] - The Corporate AgFinance segment's loans rose to $1.4 billion in 2024, up from$1.3 billion in 2023, marking an increase of 9.7%[36] - In the Power & Utilities segment, loans increased to $2.9 billion in 2024 from$2.6 billion in 2023, showing a growth of 10.3%[36] - The Renewable Energy segment saw loans grow to $1.3 billion in 2024, up from$440 million in 2023, indicating a significant increase of 192.5%[36] Funding and Capital Structure - Farmer Mac had $2.2 billion of discount notes and$25.4 billion of medium-term notes outstanding as of December 31, 2024[28] - The issuance of long-term standby purchase commitments (LTSPCs) and unfunded loan commitments reached $3.1 billion and$426 million respectively, reflecting a stable source of funding for lenders[36] - As of December 31, 2024, the maximum loan size was $17.4 million, with a cumulative direct credit exposure limit of 10$150.1 million[42] - Farmer Mac's risk-based capital requirement as of December 31, 2024 was $175.1 million, with regulatory capital of$1.5 billion exceeding this requirement by approximately $1.4 billion[132] - Farmer Mac is authorized to borrow up to$1.5 billion from the U.S. Treasury through the issuance of debt obligations, but has not utilized this authority as of December 31, 2024[120] Underwriting Standards and Loan Characteristics - Farmer Mac's underwriting standards for Agricultural Finance mortgage loans require a loan-to-value ratio not exceeding 80% and sufficient cash flow to service the loan[45] - Corporate AgFinance loans typically exceed $10 million and are secured by all business assets, with a focus on enterprise value and recurring positive cash flow[47] - The collateralization level for AgVantage securities secured by Agricultural Finance mortgage loans ranges from 103$25 million or more to individual borrowers, which could negatively impact its financial condition[153] - The company has $4.5 billion in contingent liabilities related to LTSPCs and securities guaranteed by Farmer Mac, which could exceed available funds for payment if defaults occur[156] - Farmer Mac's capital planning policy restricts Tier 1-eligible dividends if Tier 1 capital falls below specified thresholds[189] - Farmer Mac's board of directors oversees a policy requiring annual approval of a capital plan that addresses capital adequacy and projections under stress scenarios[138] - Farmer Mac's charter requires compliance with SEC periodic reporting requirements, including annual and quarterly financial reports[124] Employee and Organizational Structure - As of December 31, 2024, Farmer Mac employed 191 people, reflecting a net increase of 6 employees (3.24$1.40 per share for each quarter, with a scheduled increase to $1.50 per share in 2025[109] - Farmer Mac declared a quarterly dividend of$1.50 per share for Q1 2025, representing a 7% increase from the previous year's dividend of $1.40 per share[214] - The board of directors considered Farmer Mac's strong capital position and consistent earnings outlook when deciding to increase the dividend payout[214] - Farmer Mac's Class A voting common stock is listed on the New York Stock Exchange under the symbol AGM.A[79] Cybersecurity and Operational Risks - Farmer Mac has implemented a comprehensive cybersecurity risk management program, including annual assessments and regular training for employees[196] - The Chief Information Security Officer (CISO) manages the cybersecurity program, which aligns with industry standards and is reviewed annually by the board[203] - The company relies heavily on technology and information systems, increasing vulnerability to cybersecurity threats and operational disruptions[167] - Farmer Mac's reliance on third-party service providers for data management exposes it to potential cybersecurity risks, which could significantly impact its operations[170] Market and Economic Conditions - In 2024, the U.S. experienced 27 separate billion-dollar weather disasters, impacting agricultural producers and infrastructure[148] - Approximately 70% of the United States was classified as experiencing some level of drought or dryness at the end of 2024[148] - Economic stress from global events may adversely affect Farmer Mac's borrowers' ability to repay loans, increasing credit risk[145] - Political and external factors could impair borrowers' profitability, affecting Farmer Mac's financial condition[149] Regulatory and Legislative Risks - The organization is subject to legislative and regulatory risks that could materially impact its business operations and financial condition[190] - Regulatory changes could impose additional compliance costs and limit business opportunities for Farmer Mac, adversely affecting its profitability[185]