Federal Agricultural Mortgage

First quarter 2026 was record-setting, with business volume approaching $35 billion, revenue of approximately $110 million, and core earnings of approximately $52 million, or $4.74 per diluted share. Total revenues increased 14% year over year, and net effective spread reached a record $102 million, up $12 million year over year; net effective spread margin was 116 basis points versus 117 basis points in the prior-year quarter and 122 basis points in Q4 2025. Net new business volume was $1.5 billion, and quarter-end outstanding volume was a record $34.8 billion. The quarter included a $4.2 million income tax benefit from purchasing $45 million of renewable energy investment tax credits; provision for credit losses was $4.3 million. Looking ahead, management expects to largely use the remaining $30 million of carryback tax credit capacity in Q2, and said core focus remains on maintaining ROE in the 17% range, with spread likely to vary by mix.

Brad Nordholm described the quarter as outstanding and a continuation of the acceleration seen late last year, emphasizing record-scale performance and broad demand across Farmer Mac’s businesses. He highlighted the company’s diversified model, strong capital position, and disciplined risk management as the foundation for serving agriculture and rural infrastructure through economic cycles. He also said CEO succession is progressing well and is a bit ahead of schedule, and stated Farmer Mac has never been in a stronger position.

Matt Pullins said first-quarter core earnings reached $52 million, or $4.74 per diluted share, supported by a record $102 million of net effective spread. He noted that the year-over-year increase in net effective spread was driven by record business volume and disciplined funding, while the quarter-over-quarter dip in the percentage margin reflected mix shift, fewer days in the quarter, and lower contribution from the investment portfolio. He also pointed to a $4.2 million tax benefit tied to $45 million of renewable energy investment tax credits, $4.3 million of provision for credit losses, core capital of $1.7 billion, a Tier 1 capital ratio of 13%, and capital returned of $32 million through dividends and modest buybacks.

Analysts focused on ROE and spread sustainability, and management said it wants to maintain ROE in the 17% range while accepting that net effective spread can move around with asset mix. Questions also centered on ag stress from fertilizer, fuel, tariffs, and geopolitical volatility; management said those factors could pressure borrower margins but could also increase demand for liquidity, and that first-quarter loan purchases had strong credit scores and loan-to-values. On data centers, management said it is being selective, requires signed power purchase agreements and strong counterparties, and has seen very little construction or operating delay in its portfolio.