Business Context and Reporting Period
Company: Federal Agricultural Mortgage Corporation (Farmer Mac)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Filing Date: February 19, 2026
Farmer Mac is a federally chartered instrumentality of the United States and a government-sponsored enterprise (GSE) established to provide a secondary market for agricultural and rural infrastructure loans. Its primary mission is to increase the accessibility of financing for American agriculture and rural infrastructure. The company operates through two main lines of business: Agricultural Finance (Farm & Ranch, Corporate AgFinance) and Infrastructure Finance (Power & Utilities, Broadband Infrastructure, Renewable Energy).
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Net Income Attributable to Common Stockholders | $182.5 million | $180.4 million |
| Core Earnings (Non-GAAP) | $182.9 million | $171.6 million |
| Net Interest Income (NII) | $390.7 million | $353.9 million |
| Net Effective Spread (NES) | $383.0 million | $339.6 million |
| Total Assets | $35.4 billion | $31.3 billion |
| Total Liabilities | $33.7 billion | $29.8 billion |
| Total Equity | $1.7 billion | $1.5 billion |
| Outstanding Business Volume | $33.4 billion | $29.5 billion |
| Provision for Credit Losses | $32.9 million | $11.6 million |
| Operating Expenses | $119.8 million | $105.4 million |
Material Changes vs. Prior Period
- Revenue Growth: Net Interest Income increased by $36.9 million (10.4%) and Net Effective Spread increased by $43.5 million (12.8%), driven primarily by a $34.3 million increase from net new business volume and increased use of non-interest-bearing funding.
- Expense Increases: Operating expenses rose by $14.4 million, largely due to increased headcount and bonus accruals. The provision for credit losses increased significantly by $21.3 million, primarily due to individually significant credit deteriorations in the Corporate AgFinance and Broadband Infrastructure segments.
- Balance Sheet Expansion: Total assets grew by $4.0 billion (13%), fueled by new loan volume and a larger investment portfolio. Total liabilities increased by $3.8 billion, primarily due to notes payable issued to fund loan acquisitions.
- Capital Position: Total equity increased by $230 million, driven by the issuance of $96.8 million in Series H preferred stock and an increase in retained earnings.
- Credit Quality: Substandard assets increased to $570 million (up from $441 million), though as a percentage of the portfolio, the increase was proportionately smaller due to volume growth. 90-day delinquency rates remained relatively flat at 0.40% of total outstanding volume.
Guidance, Outlook, and Risks
Outlook and Management Commentary: Management expects continued opportunities for profitable growth in Infrastructure Finance, particularly in data centers, broadband expansion, and renewable energy projects, driven by the need to complete projects before the sunset of certain tax credits. In Agricultural Finance, strong loan purchase portfolio growth is expected to continue due to muted refinance incentives and a tightening agricultural economy creating liquidity needs. Operating expenses are anticipated to increase over the next several years to support investments in technology and human capital.
Dividends: The Board declared a quarterly dividend of $1.60 per share for the first quarter of 2026, an increase of $0.10 (7%) over the 2025 payout. The company also repurchased 78,481 shares of Class C non-voting common stock in 2025 for approximately $12.9 million.
Risks and Contingencies:
- Credit Risk: Exposure to borrower defaults in agricultural and infrastructure sectors due to economic stress, weather events, and commodity price volatility. Significant credit deteriorations were noted in Corporate AgFinance and Broadband Infrastructure.
- Interest Rate Risk: Sensitivity to changes in interest rates affecting net interest income and the fair value of assets and liabilities. The company maintains a positive effective duration gap of 3.7 months.
- Regulatory Risk: As a GSE, Farmer Mac is subject to legislative and regulatory changes that could impact its charter, capital requirements, or operations. It is regulated by the Farm Credit Administration (FCA).
- Counterparty Risk: Concentration of AgVantage securities with three major counterparties representing approximately 90.6% of the outstanding balance.
Key Facts for Investor Verification
- Capital Adequacy: Verify the company's Tier 1 capital ratio of 13.3% and its classification as Level I (highest compliance level) under FCA capital standards.
- Credit Provisioning: Review the details of the $32.9 million provision for credit losses, specifically the impact of individually significant credit deteriorations in the Corporate AgFinance and Broadband Infrastructure segments.
- Business Volume Growth: Confirm the $3.8 billion net increase in outstanding business volume, with $2.8 billion attributed to the Infrastructure Finance line of business.
- Liquidity Position: Note the maintenance of 277 days of liquidity as of December 31, 2025, significantly exceeding the regulatory minimum of 90 days.
- Preferred Stock Issuance: Verify the impact of the August 2025 issuance of 4.0 million shares of Series H preferred stock on the company's capital structure.