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About Federal Agricultural Mortgage Corporation (Farmer Mac)
The Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac (NYSE: AGM), is a stockholder-owned, government-sponsored enterprise (GSE) established by Congress to enhance the availability of long-term credit for America's agricultural and rural sectors. Farmer Mac plays a pivotal role in the U.S. financial ecosystem by providing a secondary market for qualified agricultural mortgage loans, rural housing loans, rural utilities loans, and USDA-guaranteed portions of agricultural and rural development loans. Through its mission-driven approach, Farmer Mac supports the economic vitality of rural America by offering liquidity, risk management, and capital relief to lenders.
Core Business Model
Farmer Mac operates primarily by purchasing eligible loans, securitizing them into Farmer Mac Guaranteed Securities, and facilitating "swap" transactions where lenders exchange loans for securities. These activities provide lenders with increased lending capacity and reduced risk exposure. The company's diversified revenue streams include interest income from its loan portfolio, guarantee fees from securitized loans, and earnings from its investment activities. Farmer Mac’s business segments include:
- Farm & Ranch: Purchases and securitizes loans secured by agricultural real estate and rural housing.
- Corporate AgFinance: Offers financing solutions to agribusinesses and agricultural cooperatives.
- Power & Utilities: Supports rural electric cooperatives and renewable energy projects.
- Broadband Infrastructure: Expands access to high-speed internet in rural areas.
- Renewable Energy: Facilitates financing for sustainable energy projects in rural communities.
Market Position and Competitive Landscape
As the nation’s premier secondary market provider for agricultural credit, Farmer Mac is uniquely positioned to address the financial needs of rural America. Its GSE status allows it to access low-cost capital, enabling competitive financing solutions. Farmer Mac’s focus on rural infrastructure and agricultural finance differentiates it from traditional financial institutions, while its diversified portfolio mitigates risks associated with economic cycles and commodity price volatility. The company is also committed to innovation, leveraging financial instruments and partnerships to expand its market reach.
Significance and Impact
Farmer Mac’s operations contribute to the economic framework of rural America by ensuring the availability of affordable credit for farmers, ranchers, rural homeowners, and businesses. Its efforts support job creation, infrastructure development, and sustainability in rural communities. By providing liquidity and stability to agricultural lenders, Farmer Mac plays a critical role in fostering growth and resilience in the agricultural and rural sectors.
Farmer Mac (NYSE: AGM and AGM.A), the secondary market provider enhancing financing accessibility for American agriculture and rural infrastructure, has announced the release of its Q2 2024 financial results on August 5, 2024, after market close. A conference call to discuss the results is scheduled for 4:30 p.m. eastern time on the same day.
Investors can access the call via phone or webcast. The call will also be available for replay on Farmer Mac's website. As a secondary market for agricultural and rural infrastructure credit, Farmer Mac supports a broad spectrum of customers in rural America, including agricultural lenders, agribusinesses, and rural electric cooperatives.
Farmer Mac (NYSE: AGM, AGM.A) has been awarded the 2024 Top Workplaces recognition by The Washington Post. This honor is based on an independent survey of employee engagement and sentiment, with Farmer Mac being recognized for its exceptional workplace culture. This is the 12th time Farmer Mac has received an award from the Top Workplaces program, including two national awards and multiple cultural excellence accolades. CEO Bradford T. Nordholm and Chief HR Officer Kerry Willie emphasized the importance of employee dedication and a supportive workplace culture in achieving this recognition.
Farmer Mac (NYSE: AGM) announced plans to redeem all 3,000,000 shares of its 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C. The redemption price is set at $25.00 per share, plus any declared and unpaid dividends until the redemption date of July 18, 2024. Post-redemption, dividends will cease to accrue on these shares. The shares are held in book-entry form through The Depository Trust Company (DTC), and the redemption process will follow DTC's procedures. Equiniti Trust Company will act as the transfer agent for the redemption.
On May 16, 2024, Farmer Mac (NYSE: AGM and AGM.A) announced the election of Jeffrey L. Plagge and Kevin G. Riel to its board of directors. Plagge, with extensive banking experience, and Riel, a hop farmer and financial institution board member, replace Dennis Brack and Everett Dobrinski. Board Chair Lowell L. Junkins emphasized their contributions to Farmer Mac's mission of enhancing rural America's financial accessibility. Plagge and Riel expressed enthusiasm for their roles, aiming to leverage their expertise to support Farmer Mac's objectives. Additional details are in Farmer Mac's 2024 proxy statement on their website.
Farmer Mac's board of directors has announced a second quarter dividend of $1.40 per share for its common stockholders, payable on June 28, 2024. The dividend pertains to Class A Voting Common Stock (NYSE: AGM.A), Class B Voting Common Stock, and Class C Non-Voting Common Stock (NYSE: AGM). Additionally, dividends for five classes of preferred stock have been declared, with payments scheduled for July 17, 2024.
Farmer Mac also plans to redeem all 3,000,000 shares of its Series C Preferred Stock (NYSE: AGM.PR.C) valued at $75 million. Holders will receive a written notice between 30 and 60 days before the redemption date, which will not affect the dividend payments declared for July 17, 2024.
Farmer Mac continues its mission to provide accessible financing to American agriculture and rural infrastructure, supporting various customers including agricultural lenders and rural electric cooperatives.
Farmer Mac reported strong first-quarter 2024 results with outstanding business volume of $28.8 billion. The company provided $1.4 billion in liquidity, saw a 9% increase in net interest income, and achieved 17% growth in net income. Farmer Mac maintained a solid capital position and core earnings grew by 12%. The company's performance reflects its commitment to rural America and stockholder value.
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