Federal Agricultural Mortgage (NYSE:AGM), known as Farmer Mac, reported what executives described as “another strong year” in 2025, highlighted by record revenue, record annual core earnings, and continued growth in outstanding business volume. Management also pointed to ongoing diversification into higher-spread, mission-aligned businesses—particularly in infrastructure-related lending—as a key driver of net effective spread expansion.
2025 highlights: record revenue, core earnings, and volume
Chief Executive Officer Brad Nordholm said Farmer Mac surpassed $33 billion in outstanding business volume in 2025 and achieved record revenue of $410 million, up 13% from the prior year. The company also generated $183 million in core earnings, which Nordholm said marked the 10th consecutive year of record annual core earnings.
Capital return: dividend raised, repurchases continued
Nordholm announced a $0.10 per share increase in the quarterly dividend to $1.60 per share, calling it Farmer Mac’s 15th consecutive annual increase. He also said the company continued repurchasing shares under a board authorization amended in August to allow up to $50 million in buybacks of Class C common stock. Farmer Mac repurchased $12.9 million of stock in the fourth quarter, leaving $37.1 million remaining under the authorization.
In total, Nordholm said Farmer Mac returned $78 million to shareholders in 2025 through dividends and share repurchases.
When asked about the dividend increase being lower than some prior increases, management pointed to strong growth—particularly in segments that “consume a bit more capital”—as a key factor influencing capital allocation decisions.
Segment trends: farm and ranch momentum and infrastructure finance growth
Carpenter said Agricultural Finance outstanding business volume grew $1 billion in 2025, with the Farm and Ranch segment accounting for “nearly all” of that net growth. He said activity accelerated in the fourth quarter and carried over into early 2026, adding that Farmer Mac expects loan purchase growth to continue as “tighter agricultural conditions” increase producers’ need for liquidity.
Carpenter also highlighted an “inflection point” in the Farm and Ranch AgVantage securities portfolio, which reversed a runoff trend and grew $500 million in the fourth quarter. He attributed the change to anticipated additional fundings after the company closed a new $4.3 billion facility with a large agricultural counterparty and said the company expects momentum to continue into 2026.
In Corporate AgFinance, Carpenter said outstanding business volume increased by $63 million in 2025. He noted expectations for more activity in the first quarter of 2026 due to higher deal flow levels, while also citing ongoing refinancings and maturities as a continuing headwind.
Infrastructure Finance delivered the largest growth, with outstanding business volume rising to $11.8 billion at year-end 2025, up more than $2.8 billion from the prior year, according to Carpenter. He cited continued investment demand tied to:
- Data centers and broader power demand growth
- Broadband expansion
- Construction and completion of renewable energy projects
Carpenter said Power Utilities volume grew by over $1 billion, Renewable Energy also grew by more than $1 billion, and Broadband Infrastructure grew by $700 million, with nearly 90% of broadband volume growth tied to data center-related demand.
On renewable energy, Carpenter acknowledged “increased policy uncertainty,” but said Farmer Mac expects to continue participating in transactions for new projects and refinancings under the same credit standards. He also referenced an anticipated construction-related “rush” in the first half of the year tied to a July 4 deadline included in H.R. 1, while arguing that longer-term activity is expected to be driven more by underlying demand for power generation.
Financial performance: record net effective spread, credit costs rose
New Chief Financial Officer Matt Pullins, who joined in mid-December, reported that fourth-quarter net effective spread rose 16% year over year to a quarterly record $101.4 million. Net effective spread as a percentage was 122 basis points, which he attributed to portfolio mix shifting toward more accretive assets and “disciplined funding execution.”
Fourth-quarter core earnings were $40 million, down $3.6 million from the prior-year quarter, primarily due to credit provisions tied to “a small number of loans” originated from 2021 to 2023 in the Corporate AgFinance and Broadband Infrastructure segments. Pullins said the charges were concentrated within a few borrowers facing business-specific obstacles and were not viewed as indicative of a broader deterioration in portfolio credit quality. He added that if the charges had not been concentrated in the quarter, management estimated core earnings would have increased about 20% year over year.
For the full year, Pullins said Farmer Mac delivered a record net effective spread of $383 million, up $43.5 million or 13%, while core earnings increased to $182.9 million, up 6.6%. He said results reflected strong revenue growth, partially offset by elevated credit expenses and higher operating costs.
Credit-related items discussed on the call included:
- Provision for credit losses of $32.9 million in 2025, including $19.6 million tied to certain individually significant credit deteriorations in Corporate AgFinance and Broadband Infrastructure, plus $9.6 million related to outstanding business volume growth.
- Charge-offs totaling $20.9 million in 2025, with most occurring in the fourth quarter.
- Allowance for losses of $39.7 million at year-end 2025, described as 17% of nonaccrual assets, compared with $25.3 million (or 15%) at the end of 2024.
In the Q&A, management reiterated that the fourth-quarter issues were “very borrower-specific,” not systemic, and noted that while forecasting individual credit events is difficult, they did not see anything at the time of the call that would suggest provision levels were poised to rise further.
Capital, expenses, and other items to watch in 2026
Pullins said core capital increased by $204 million in 2025 to $1.7 billion, exceeding the statutory requirement by $678 million (or 66%). The Tier 1 capital ratio was 13.3% at December 31, 2025, compared with 14.2% a year earlier, which he attributed primarily to strong loan purchase volume growth.
Operating expenses rose 14% in 2025, driven largely by legal costs tied to transactions, technology investments, and hiring-related expenses to support higher volume. Pullins said the company would continue targeted investments while managing to a long-term efficiency ratio target of 30%, noting some seasonality in personnel-related costs early in the year.
Farmer Mac also discussed its use of renewable energy investment tax credits, stating it purchased $61.5 million of such credits in 2025, which resulted in a $4.8 million benefit, and it had approximately $80 million of remaining capacity to use renewable energy tax credits as of year-end.
Nordholm said the company completed its seventh farm securitization transaction during the quarter, describing securitization as a credit risk transfer tool that can help optimize capital and increase liquidity capacity. He also said Farmer Mac anticipates introducing a new product in 2026 to meet investor demand for agricultural assets while aligning with the company’s mission.
Finally, management said Farmer Mac will host an Investor Day on March 18 at the New York Stock Exchange, where it plans to provide a deeper discussion of strategy and growth initiatives.
About Federal Agricultural Mortgage (NYSE:AGM)
Federal Agricultural Mortgage Corporation (NYSE: AGM), commonly known as Farmer Mac, is a government-sponsored enterprise chartered in 1988 under the Agricultural Credit Act of 1987. Headquartered in Washington, DC, Farmer Mac was established to enhance the availability of mortgage credit for the agricultural and rural utility sectors. The corporation operates as a secondary market for agricultural real estate and rural infrastructure loans, providing lenders with liquidity and risk management solutions.
The company’s principal business activities include purchasing and securitizing long-term fixed-rate agricultural mortgage loans and rural utilities loans originated by approved lenders.
