Federal Agricultural Mortgage Corp (AGM) Stock Analysis and Metrics

Federal Agricultural Mortgage

NYSE: AGM

$206.57 ▲ +10.48 (+5.34%)

At close: Jul 16, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap1.90 Bn

P/E9.96

P/S4.48

Div. Yield0.05

ROIC (Qtr)0.00

Add ratio to table…

About

Federal Agricultural Mortgage Corp is a stockholder-owned, federally chartered corporation that provides a secondary market for loans to borrowers in rural America. It purchases eligible loans directly from lenders, guarantees and purchases securities backed by pools of eligible loans, issues and guarantees securities representing interests in such pools, services eligible loans, and provides long-term standby purchase commitments for eligible loans. Its mission is to increase the accessibility of financing for American agriculture and rural infrastructure by attracting additional capital sources to these markets.

Federal Agricultural Mortgage Corp generates revenue primarily through net interest income on loans and securities held on its balance sheet and through guarantee and commitment fees received for outstanding guaranteed securities and long-term standby purchase commitments. It funds its purchases of eligible loans and securities by issuing debt obligations in the public capital markets and uses debt issuance proceeds for liquidity investments that comply with board policies and Farm Credit Administration regulations.

The company operates through the following segments: Farm & Ranch, Corporate AgFinance, Power & Utilities, Broadband Infrastructure, Renewable Energy, Funding, and Investments.

• The Farm & Ranch segment includes the financial results of AgVantage securities, USDA Securities, and Farm & Ranch loans.

• The Corporate AgFinance segment includes loans and AgVantage securities to larger and more complex farming operations, agribusinesses focused on food and fiber processing, and other supply chain production.

• The Power & Utilities segment includes Power & Utilities loans and AgVantage securities secured by those types of loans.

• The Broadband Infrastructure segment includes Broadband Infrastructure loans to telecommunications facilities such as rural fiber, cable/broadband, tower, wireless, local exchange carrier, and data center projects.

• The Renewable Energy segment includes Renewable Energy loans to rural electric solar and wind energy projects and renewable gas projects.

• The Funding segment manages the company's debt issuance and liquidity investments to support its operations.

• The Investments segment oversees the company's investment activities related to its secondary market operations.

Federal Agricultural Mortgage Corp is the only federally-chartered corporation established to provide a secondary market for agricultural mortgage loans, infrastructure loans, and USDA Securities, but faces competition from commercial and investment banks, insurance companies, other Farm Credit System institutions, financial funds, and certain government programs. It competes by offering a variety of products, competitive funding structures, and pricing that meet the varied needs of lending institutions related to capital requirements, liquidity, credit risk, and management of sector and geographic concentrations.

Federal Agricultural Mortgage Corp serves lenders including banks, insurance companies, Farm Credit System institutions, national and regional banks, and other financial institutions that originate or purchase eligible loans. It also provides wholesale funding for institutional investors in agricultural assets that qualify as eligible collateral under its charter.

Investment Thesis

▲ Bull case

The company reported record outstanding business volume of $34.8 billion at quarter end reflecting $1.5 billion in net new volume for the period. This growth was broad based with Farm & Ranch loan purchase activity surging to $384 million net growth versus $54 million in the same quarter last year and Farm & Ranch applications approaching $1 billion nearly thirty% above the prior record. Infrastructure Finance posted sequential volume growth of $717 million to $12.6 billion driven by all three segments while Renewable Energy expanded $445 million to $2.9 billion and Broadband Infrastructure added $158 million to $1.7 billion with nearly seventy% of new volume tied to data center demand. The diversified model across agriculture agribusiness broadband power utilities and renewable revenue streams provides resilience against sector specific headwinds and positions the firm to capture ongoing capital intensive opportunities in rural America.
Capital strength remains a core advantage with core capital rising $27 million to $1.7 billion exceeding statutory requirements by $663 million or sixty two% and the Tier 1 capital ratio holding at thirteen%. Return on equity reached seventeen% for the quarter and management expressed intent to maintain performance within that range going forward. Revenue growth outpaced expense growth by nearly four percentage points year over year supporting an efficiency ratio target of thirty%. The company returned $32 million of capital through dividends and modest share repurchases demonstrating confidence in cash generation and commitment to shareholder value while retaining ample liquidity for future investments.
A hidden catalyst is the tax benefit derived from renewable energy investment tax credits where a $4.2 million income tax benefit was recorded related to the purchase of $45 million in credits with approximately $30 million of additional carryback capacity expected to be utilized in the second quarter. The portfolio layer method hedging strategy introduced this quarter is designed to accrete net effective spread over time as the impact compounds with the growing hedged layer. Callable debt actions executed during the quarter provided an annualized pick up of over three million dollars in spread accretion beginning in Q2. These balance sheet maneuvers combined with a rate neutral posture and innovative hedging initiatives are expected to enhance spread durability and earnings power without increasing funding risk.
Structural growth drivers are evident in the data center and renewable energy pipelines where over eighty% of data center tenant exposure is to two to four top investment grade hyperscalers and eighty seven% of newly approved broadband deals are linked to data center projects. Renewable Energy growth is supported by transactions approved in late 2025 closing in 2026 and ongoing construction activity tied to regulatory incentives with management noting that underlying economics remain competitive even as tax incentives phase out. Farm & Ranch AgVantage securities portfolio increased $325 million following a new $4.3 billion facility funding with a large counterparty initiated in late 2025 signaling deepening relationships with financial institutions. Management disclosed that CEO succession is progressing ahead of schedule indicating stable leadership continuity and reinforcing confidence in the firm’s strategic execution.

The company reported record outstanding business volume of $34.8 billion at quarter end reflecting $1.5 billion in net new volume for the period. This growth was broad based with Farm & Ranch loan purchase activity surging to $384 million net growth versus $54 million in the same quarter last year and Farm & Ranch applications approaching $1 billion nearly thirty% above the prior record. Infrastructure Finance posted sequential volume growth of $717 million to $12.6 billion driven by all three segments while Renewable Energy expanded $445 million to $2.9 billion and Broadband Infrastructure added $158 million to $1.7 billion with nearly seventy% of new volume tied to data center demand. The diversified model across agriculture agribusiness broadband power utilities and renewable revenue streams provides resilience against sector specific headwinds and positions the firm to capture ongoing capital intensive opportunities in rural America.
Capital strength remains a core advantage with core capital rising $27 million to $1.7 billion exceeding statutory requirements by $663 million or sixty two% and the Tier 1 capital ratio holding at thirteen%. Return on equity reached seventeen% for the quarter and management expressed intent to maintain performance within that range going forward. Revenue growth outpaced expense growth by nearly four percentage points year over year supporting an efficiency ratio target of thirty%. The company returned $32 million of capital through dividends and modest share repurchases demonstrating confidence in cash generation and commitment to shareholder value while retaining ample liquidity for future investments.
A hidden catalyst is the tax benefit derived from renewable energy investment tax credits where a $4.2 million income tax benefit was recorded related to the purchase of $45 million in credits with approximately $30 million of additional carryback capacity expected to be utilized in the second quarter. The portfolio layer method hedging strategy introduced this quarter is designed to accrete net effective spread over time as the impact compounds with the growing hedged layer. Callable debt actions executed during the quarter provided an annualized pick up of over three million dollars in spread accretion beginning in Q2. These balance sheet maneuvers combined with a rate neutral posture and innovative hedging initiatives are expected to enhance spread durability and earnings power without increasing funding risk.
Structural growth drivers are evident in the data center and renewable energy pipelines where over eighty% of data center tenant exposure is to two to four top investment grade hyperscalers and eighty seven% of newly approved broadband deals are linked to data center projects. Renewable Energy growth is supported by transactions approved in late 2025 closing in 2026 and ongoing construction activity tied to regulatory incentives with management noting that underlying economics remain competitive even as tax incentives phase out. Farm & Ranch AgVantage securities portfolio increased $325 million following a new $4.3 billion facility funding with a large counterparty initiated in late 2025 signaling deepening relationships with financial institutions. Management disclosed that CEO succession is progressing ahead of schedule indicating stable leadership continuity and reinforcing confidence in the firm’s strategic execution.

▼ Bear case

Net effective spread percentage showed modest compression declining to 116 basis points from 117 basis points a year earlier and from 122 basis points in the prior quarter primarily due to fewer days in the period and a mix shift toward lower spread Farm & Ranch AgVantage securities. Management acknowledged that while the mix shift dilutes the spread percentage it remains accretive to return on equity suggesting that reliance on lower yielding assets could pressure spread stability if the trend continues. The company’s focus on maintaining ROE around seventeen% may require continued allocation to lower spread products which could limit upside in net interest income. Investors may be underestimating the potential for ongoing margin pressure as the balance sheet evolves toward higher volume lower margin segments.
Credit quality metrics displayed deterioration with the provision for credit loss rising to $4.3 million from $1.6 million in the same quarter last year and the allowance for losses increasing $14.7 million year over year to $40.1 million. Substandard assets rose to 1.87% of the total portfolio from 1.71% at year end driven by credit migration in agricultural storage and processing and permanent plantings exposures. Ninety day delinquencies increased to 52 basis points from 40 basis points in the prior quarter reflecting seasonal patterns but also indicating potential stress in the farm economy. While management attributes these changes to portfolio growth and seasonal payment schedules the upward trend in impaired assets warrants closer scrutiny for possible material deterioration.
Concentration risk exists in the data center and broadband businesses where over eighty% of data center tenant exposure is to two to four top investment grade hyperscalers making the segment vulnerable to any slowdown in hyperscaler expansion or changes in tenant credit quality. The renewable energy pipeline faces uncertainty as tax incentives referenced in H.R. 1 are set to expire and management noted that while underlying economics remain competitive the transition to a market driven environment could affect deal flow and pricing. Global trade tensions and input cost volatility including higher fuel and fertilizer prices could compress farm margins and increase credit stress particularly for borrowers who have not locked in input costs ahead of the season. These macro factors are acknowledged but not quantified in the outlook leaving investors exposed to unmodeled downside scenarios.
Capital ratios while still strong show a slight decline with the Tier 1 ratio falling from 13.3% at prior year end to 13.0% at quarter end despite the issuance of $100 million of Tier 1 perpetual preferred stock which may dilute existing equity holders. Reliance on callable debt actions and hedging initiatives to sustain spread may become less effective if the interest rate environment shifts abruptly or if hedging costs rise. Expansion into lower spread AgVantage and Infrastructure Finance assets increases balance sheet complexity and could elevate interest rate risk management challenges. The company’s disciplined underwriting framework will be tested as it pursues higher volume in segments that carry different risk profiles potentially leading to underestimation of future credit or market risk.

Net effective spread percentage showed modest compression declining to 116 basis points from 117 basis points a year earlier and from 122 basis points in the prior quarter primarily due to fewer days in the period and a mix shift toward lower spread Farm & Ranch AgVantage securities. Management acknowledged that while the mix shift dilutes the spread percentage it remains accretive to return on equity suggesting that reliance on lower yielding assets could pressure spread stability if the trend continues. The company’s focus on maintaining ROE around seventeen% may require continued allocation to lower spread products which could limit upside in net interest income. Investors may be underestimating the potential for ongoing margin pressure as the balance sheet evolves toward higher volume lower margin segments.
Credit quality metrics displayed deterioration with the provision for credit loss rising to $4.3 million from $1.6 million in the same quarter last year and the allowance for losses increasing $14.7 million year over year to $40.1 million. Substandard assets rose to 1.87% of the total portfolio from 1.71% at year end driven by credit migration in agricultural storage and processing and permanent plantings exposures. Ninety day delinquencies increased to 52 basis points from 40 basis points in the prior quarter reflecting seasonal patterns but also indicating potential stress in the farm economy. While management attributes these changes to portfolio growth and seasonal payment schedules the upward trend in impaired assets warrants closer scrutiny for possible material deterioration.
Concentration risk exists in the data center and broadband businesses where over eighty% of data center tenant exposure is to two to four top investment grade hyperscalers making the segment vulnerable to any slowdown in hyperscaler expansion or changes in tenant credit quality. The renewable energy pipeline faces uncertainty as tax incentives referenced in H.R. 1 are set to expire and management noted that while underlying economics remain competitive the transition to a market driven environment could affect deal flow and pricing. Global trade tensions and input cost volatility including higher fuel and fertilizer prices could compress farm margins and increase credit stress particularly for borrowers who have not locked in input costs ahead of the season. These macro factors are acknowledged but not quantified in the outlook leaving investors exposed to unmodeled downside scenarios.
Capital ratios while still strong show a slight decline with the Tier 1 ratio falling from 13.3% at prior year end to 13.0% at quarter end despite the issuance of $100 million of Tier 1 perpetual preferred stock which may dilute existing equity holders. Reliance on callable debt actions and hedging initiatives to sustain spread may become less effective if the interest rate environment shifts abruptly or if hedging costs rise. Expansion into lower spread AgVantage and Infrastructure Finance assets increases balance sheet complexity and could elevate interest rate risk management challenges. The company’s disciplined underwriting framework will be tested as it pursues higher volume in segments that carry different risk profiles potentially leading to underestimation of future credit or market risk.

Peer Comparison

Companies in the Credit Services

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	V	Visa Inc.	587.74 Bn	26.43	13.66	23.98 Bn
2	MA	Mastercard Inc	465.55 Bn	29.90	13.72	18.96 Bn
3	AXP	American Express Co	238.39 Bn	21.25	3.21	1.69 Bn
4	PYPL	PayPal Holdings, Inc.	40.24 Bn	7.95	1.19	9.41 Bn
5	AFRM	Affirm Holdings, Inc.	28.27 Bn	73.93	13.56	2.42 Bn
6	SOFI	SoFi Technologies, Inc.	23.54 Bn	40.79	5.97	-
7	ALLY	Ally Financial Inc.	14.34 Bn	11.15	1.69	4.13 Bn
8	CACC	Credit Acceptance Corp	7.51 Bn	17.71	6.20	5.16 Bn

Research Tools

Developers

About

Investment Thesis

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Peer Comparison

Create an account

Sign In

Reset Password