Federal Agricultural Mortgage (AGM) 15th Annual Midwest IDEAS Investor Conference summary

Company overview and strategy

• Operates as a government-sponsored, publicly traded entity focused on rural lending, with a mission to support the farm and rural economy through innovative financing solutions.

• Diversified revenue streams beyond production agriculture into rural infrastructure, renewable energy, and broadband financing, driven by new management since 2018.

• Maintains a lean operational footprint with 185 employees and collaborates with over 700 financial institutions nationwide.

• All employees participate in ownership through the Equity for All program, reinforcing a mission-driven culture.

• Does not lend to foreign entities; focuses exclusively on domestic operators, but welcomes international investors in its debt and securitization offerings.

Financial performance and portfolio

• Manages a nearly $30 billion balance sheet, with the majority in farm and ranch loans, and significant exposure to over 100 commodities across all states.

• Net effective spread has increased to 1.14%, with a historical range of 85-119 basis points, and a consistent 18% CAGR in net effective spread over four years.

• Risk-adjusted gross return on allocated capital (RAGROC) is 28% for farm and ranch, 25% for corporate ag finance, and 20% for rural utilities; renewable energy segment yields 29%.

• Maintains a conservative loan-to-value ratio averaging 45-46%, with average annual credit losses of just two basis points.

• Holds 40-50% more capital than required, supporting dividend growth and resilience against market disruptions.

Growth initiatives and market positioning

• Aggressively expanding market share through increased outreach to financial institutions, participation in loan syndicates, and a growing securitization program.

• Securitization offers high capital efficiency, with gross ROE exceeding 150% for securitized pools, and is a key focus for future growth.

• Renewable energy and rural broadband are the fastest-growing segments, supported by macroeconomic tailwinds and increased electricity demand.

• Investment portfolio management and proactive duration matching have driven profit growth and minimized volatility, even as interest rates fluctuate.

• Consistently outperforms major indices in dividend growth, with a 27% year-over-year increase in 2024 and 13 years of systematic quarterly dividend increases.