Federal Agricultural Mortgage Corporation has recently released its 10-K report, providing a detailed look at its financial performance and operations for the year ended December 31, 2024. The corporation operates through four segments: Corporate AgFinance, Farm & Ranch, Rural Utilities, and Renewable Energy, and its mission is to increase the accessibility of financing to provide vital liquidity for American agriculture and infrastructure. In 2024, Federal Agricultural Mortgage Corporation provided $7.0 billion in liquidity and lending capacity to lenders serving rural America and issued over $0.6 billion in FARM securitization certificates while maintaining strong liquidity in its investment portfolio well above regulatory requirements.
The net income attributable to common stockholders for the year ended December 31, 2024, was $180.4 million, a $7.6 million increase from the previous year. This increase was primarily due to a $20.8 million after-tax increase in net interest income, a $2.6 million federal income tax benefit from the purchase of renewable energy investment tax credits, and a $2.0 million decrease in preferred stock dividends. However, there was an $8.2 million after-tax increase in the provision for credit losses and a $6.6 million after-tax increase in operating expenses.
The net interest income for the year ended December 31, 2024, was $353.9 million, marking a $26.3 million increase from the previous year. This increase was primarily due to a shift in the composition of new business volume toward higher-yielding loans and an increase in the fair value of derivatives designated in fair value hedge accounting relationships. The net effective spread for the same period was $339.6 million, representing a $12.6 million increase from the previous year, primarily due to a shift in the composition of new business volume towards higher-yielding loans.
Federal Agricultural Mortgage Corporation's outstanding business volume was $29.5 billion as of December 31, 2024, reflecting a net increase of $1.1 billion from the previous year, primarily attributable to a net increase of $1.1 billion in the Infrastructure Finance line of business.
As of December 31, 2024, the corporation's core capital was $1,501.2 million, and the credit quality of its Agricultural Finance portfolio showed an increase in on-balance sheet substandard assets, primarily driven by credit downgrades in various agricultural sectors.
The corporation's critical accounting estimates include the estimation of the fair value of AgVantage Securities, which are classified as held-to-maturity and available-for-sale. The fair value of AgVantage Securities had net unrealized losses as of December 31, 2024, indicating the significance of these estimates in the company's fair value disclosures and financial statements.
Federal Agricultural Mortgage Corporation's 10-K report provides a comprehensive overview of its financial performance, business operations, and critical accounting estimates, offering valuable insights into its activities and outlook for the future. The market has reacted to these announcements by moving the company's shares 5.2% to a price of $205.79. If you want to know more, read the company's complete 10-K report here.
