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1. Company Snapshot

1.a. Company Description

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States.It operates through four segments: Farm & Ranch, USDA (United States Department of Agriculture) Guarantees, Rural Utilities, and Institutional Credit.The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments (LTSPC) on designated eligible mortgage loans.


The USDA Guarantees segment purchases portions of certain agricultural and rural development loans guaranteed by the USDA.The Rural Utilities segment purchases and guarantees securities that are backed by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and purchases eligible rural utilities loans and guarantees of securities backed by those loans, as well as LTSPCs for pools of eligible rural utilities loans.The Institutional Credit segment guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of loans eligible under the Farmer Mac's Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business.


Federal Agricultural Mortgage Corporation was founded in 1987 and is headquartered in Washington, District of Columbia.

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1.b. Last Insights on AGM

The recent negative drivers behind Federal Agricultural Mortgage Corporation's performance include weak Q4 earnings, missing analyst estimates at $3.97 per share, a decline from $4.10 per share in the same period last year. The company's net interest income increased, but this growth was not enough to offset the decline in earnings. Additionally, the rise in non-accruing loans and the company's preference for conservative lending practices may have contributed to the weak earnings.

1.c. Company Highlights

2. Farmer Mac Delivers Strong 2025 Earnings, Driven by Record Revenue and Business Volume

Farmer Mac reported a robust financial performance in 2025, with record revenue of $410 million, a 13% increase from the prior year, and core earnings of $182.9 million, up 6.6% compared to 2024. The company's earnings per share (EPS) came in at $3.66, below analyst estimates of $4.5. The net effective spread was $383 million for the full year, a 13% increase from the prior year, driven by a record $3.8 billion of net new business volume in 2025.

Publication Date: Feb -24

📋 Highlights
  • Record Revenue & Core Earnings: Achieved $410 million in revenue (13% YoY) and $183 million in core earnings (10th consecutive record).
  • Outstanding Business Volume Growth: Total outstanding business volume reached $33.4 billion, driven by $3.8 billion in net new volume (2025).
  • Infrastructure Finance Expansion: Infrastructure finance line grew $2.8 billion in net new business, reflecting strong sector demand.
  • Capital Allocation & Shareholder Returns: Returned $78 million to shareholders via dividends and repurchases, with a 7% dividend increase.
  • Strong Capital Position: Tier 1 capital ratio of 13.3%, core capital of $1.7 billion, and $204 million capital increase exceeding statutory requirements by 66%.

Business Volume and Segment Performance

The company's diversified business model drove broad-based net volume growth in every segment, with the Farm & Ranch segment accounting for nearly all of the net growth. The Corporate AgFinance segment saw a net growth of $63 million, and the infrastructure finance line of business had a net growth of $2.8 billion. As Zachary Carpenter, President and Chief Operating Officer, noted, "Our team delivered another outstanding year of business volume activity, with activity accelerating in the fourth quarter and carrying over into 2026."

Capital Position and Credit Quality

Farmer Mac's strong capital position and robust asset quality metrics position it to capitalize on growth opportunities and navigate the current volatility and uncertainty in the agricultural cycle. The company's Tier 1 capital ratio was 13.3% as of December 31, 2025, and its core capital increased by $204 million in 2025 to $1.7 billion, exceeding its statutory requirement by $678 million or 66%. The company experienced $32.9 million of provision for credit loss expense in 2025, primarily related to certain individually significant credit deteriorations in its Corporate AgFinance and Broadband Infrastructure portfolios.

Valuation and Outlook

With a Price-to-Tangible Book Value (P/TBV) of 1.17, the stock appears reasonably valued. The Dividend Yield is 3.86%, providing a relatively stable source of return. Analysts estimate next year's revenue growth at 10.3%, driven by the company's diversified business model and strong capital position. As the company continues to deliver growth and consistent results, its robust capital position and disciplined risk management are likely to support future growth.

3. NewsRoom

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Captrust Financial Advisors Buys 17,293 Shares of Federal Agricultural Mortgage Corporation $AGM

Mar -19

Source: defenseworld.net

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NYSE Content Update: Snowflake to Unveil AI Platform to Get Work Done Faster

Mar -18

Source: prnewswire.com

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Farmer Mac to Host Investor Day on March 18, 2026

Mar -04

Source: prnewswire.com

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Federal Agricultural Mortgage: Staying The Course And Adding To My (Preferred) Position

Feb -28

Source: seekingalpha.com

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Federal Agricultural Mortgage: Loan Losses Cause Concern, But Growth Should Overshadow Fear

Feb -23

Source: seekingalpha.com

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Federal Agricultural Mortgage (NYSE:AGM) Hits New 12-Month Low After Analyst Downgrade

Feb -22

Source: defenseworld.net

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Federal Agricultural Mortgage Corporation (AGM) Q4 2025 Earnings Call Transcript

Feb -20

Source: seekingalpha.com

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Federal Agricultural Mortgage (AGM) Q4 Earnings Lag Estimates

Feb -19

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.55%)

6. Segments

Farm & Ranch

Expected Growth: 5.5%

The 5.5% growth in Farm & Ranch segment of Federal Agricultural Mortgage Corporation is driven by increasing demand for agricultural loans, favorable interest rates, and government support for rural development. Additionally, rising farm incomes, expanding agricultural exports, and growing demand for sustainable farming practices contribute to the segment's growth.

Funding

Expected Growth: 5.8%

The 5.8% growth in funding from Federal Agricultural Mortgage Corporation is driven by increasing demand for agricultural loans, government support for rural development, and low interest rates. Additionally, the corporation's expansion into new markets and improved operational efficiency have contributed to its growth.

Corporate AgFinance

Expected Growth: 5.2%

The 5.2% growth in Corporate AgFinance from Federal Agricultural Mortgage Corporation is driven by increasing demand for agricultural loans, favorable interest rates, and government support for rural development. Additionally, the corporation's diversified portfolio and strong risk management practices have contributed to its growth. Furthermore, the growing need for agricultural infrastructure and technology advancements have also fueled the segment's expansion.

Rural Utilities

Expected Growth: 4.8%

The 4.8% growth in Rural Utilities from Federal Agricultural Mortgage Corporation is driven by increasing demand for rural infrastructure development, government initiatives to enhance rural electrification, and rising investments in renewable energy sources. Additionally, the corporation's diversified loan portfolio and favorable interest rate environment contribute to its growth.

Renewable Energy

Expected Growth: 7.0%

Federal Agricultural Mortgage Corporation's 7.0% growth in Renewable Energy is driven by increasing demand for clean energy, government incentives, and declining technology costs. Additionally, the corporation's focus on rural areas and agricultural communities, where renewable energy can provide economic benefits, contributes to its growth. Furthermore, the corporation's access to low-cost capital and its expertise in agricultural lending also support its expansion in the renewable energy sector.

Reconciling Items

Expected Growth: 4.5%

The 4.5% growth of Federal Agricultural Mortgage Corporation is driven by increasing demand for agricultural loans, expansion of rural lending programs, and favorable interest rates. Additionally, the corporation's diversified portfolio and strong risk management practices have contributed to its growth. Furthermore, government support for agricultural development and increasing investments in rural infrastructure have also boosted the corporation's growth.

Investments

Expected Growth: 5.0%

The 5.0% growth in investments from Federal Agricultural Mortgage Corporation is driven by increasing demand for agricultural loans, government support for rural development, and a growing need for farm credit. Additionally, the corporation's diversified loan portfolio and risk management strategies have contributed to its stable financial performance, attracting more investors and fueling growth.

Corporate

Expected Growth: 4.2%

Federal Agricultural Mortgage Corporation's 4.2% growth is driven by increasing demand for agricultural loans, government support for farmers, and a strong rural economy. Additionally, the corporation's diversified loan portfolio and effective risk management strategies have contributed to its growth. Furthermore, the low-interest-rate environment has also boosted loan demand, supporting the corporation's expansion.

7. Detailed Products

Farmer Mac MBS

Mortgage-backed securities (MBS) guaranteed by Farmer Mac, providing liquidity to agricultural lenders and investors

AgVantage

Agricultural loan purchase program for rural utilities and lenders, providing financing for agricultural and rural development

Rural 1st

Agricultural mortgage loan program for rural homeowners, providing financing for rural housing and property development

Farm & Ranch

Agricultural loan program for farmers and ranchers, providing financing for agricultural operations and land acquisition

Timber

Timberland loan program for timberland owners, providing financing for timberland acquisition and management

8. Federal Agricultural Mortgage Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Federal Agricultural Mortgage Corporation as the company operates in a niche market with limited alternatives.

Bargaining Power Of Customers

The bargaining power of customers is medium as Federal Agricultural Mortgage Corporation has a diverse customer base, but some customers may have significant bargaining power due to their size and volume of business.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low as Federal Agricultural Mortgage Corporation has a diverse supplier base and is not heavily dependent on any single supplier.

Threat Of New Entrants

The threat of new entrants is low as Federal Agricultural Mortgage Corporation operates in a highly regulated industry with significant barriers to entry.

Intensity Of Rivalry

The intensity of rivalry is medium as Federal Agricultural Mortgage Corporation operates in a competitive market, but has a strong market position and competitive advantages.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 95.19%
Debt Cost 4.82%
Equity Weight 4.81%
Equity Cost 9.41%
WACC 5.04%
Leverage 1978.81%

11. Quality Control: Federal Agricultural Mortgage Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

140.39$

Current Price

140.39$

Potential

-0.00%

Expected Cash-Flows