Farmer Mac’s third quarter saw a positive market reaction despite missing Wall Street’s revenue expectations, as strong non-GAAP earnings and notable portfolio growth stood out. Management attributed the quarter’s performance to continued expansion in infrastructure finance and renewable energy, as well as disciplined asset liability management. CEO Bradford Nordholm emphasized that the diversification into newer lines of business, such as broadband and renewable projects, offset pressures from seasonal factors in traditional agricultural lending. He noted, “Our strategy-driven decision to diversify our loan portfolio into newer lines of business ... has been a key priority, and that diversification is benefiting us through changing market cycles.”
Is now the time to buy AGM? Find out in our full research report (it’s free for active Edge members).
Farmer Mac (AGM) Q3 CY2025 Highlights:
- Revenue: $94.96 million vs analyst estimates of $101 million (11.1% year-on-year growth, 6% miss)
- Adjusted EPS: $4.52 vs analyst estimates of $4.47 (1.2% beat)
- Operating Margin: 70.2%, down from 72.9% in the same quarter last year
- Market Capitalization: $1.75 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Farmer Mac’s Q3 Earnings Call
- Bose George (KBW) asked about the outlook for net effective spreads given rate cut expectations; CEO Bradford Nordholm explained Farmer Mac’s asset liability structure is designed to be neutral to interest rate shifts, with spreads driven more by business mix than market rates.
- William Ryan (Seaport Global) questioned the impact of tariffs and commodity price volatility on core agricultural borrowers; Nordholm acknowledged headline risk but pointed to portfolio diversity and resilient commodity sectors as mitigating factors.
- William Ryan (Seaport Global) followed up on Farm & Ranch loan volume acceleration, asking if loan structure changes contributed; President Zack Carpenter highlighted broad-based demand across 100+ commodities, driven by both strong and liquidity-seeking borrowers, with consistent underwriting standards.
- Brendan Michael McCarthy (Sidoti) inquired about prepayment trends and whether lower rates might trigger higher refinancing; Carpenter stated that most borrowers locked in low fixed rates in recent years, so he expects prepayments to remain modest.
- Brendan Michael McCarthy (Sidoti) asked about drivers of net effective spread increases; Nordholm cited rapid growth in rural infrastructure and a shift away from lower-spread AgVantage securities as key contributors.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) execution of new infrastructure and renewable energy financings, (2) the pace of diversification in the loan portfolio across both commodity types and geographies, and (3) Farmer Mac’s ability to sustain asset quality and manage credit risks amid evolving agricultural policy and market volatility. Updates on CFO succession and successful capital deployment will also serve as important markers of operational progress.
Farmer Mac currently trades at $163.92, up from $157.69 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
