Federal Agricultural Mortgage (NYSE:AGM), known as Farmer Mac, reported record outstanding business volume of $38.5 billion at the end of the third quarter of 2026, driven by growth in renewable energy and other rural infrastructure financing.
The company reported quarterly revenue of $122.7 million and core earnings of $52.6 million, or $4.82 per diluted share. For the first nine months of 2026, revenue rose 18.3% from a year earlier to $357.9 million, while core earnings increased 14.1% to $163.1 million.
President and CEO Zack Carpenter said Farmer Mac was on track to reach $40 billion in business volume this year, two years ahead of the timeline outlined at its 2026 Investor Day. The company continues to expect average annual business volume growth of approximately 8% to 11% through 2030.
Infrastructure Financing Leads Growth
Outstanding business volume rose $1.3 billion during the third quarter after maturities, sales and paydowns. Infrastructure finance accounted for $920 million of the increase, bringing its outstanding volume to more than $14 billion.
Renewable Energy contributed $586 million in net growth, its largest quarterly increase on record. Carpenter said the company provided more than $1 billion in gross loan purchases and unfunded commitments in the segment during the quarter, and its pipeline was approaching $1 billion.
Carpenter attributed infrastructure demand in part to data center construction, digitization, onshore manufacturing and grid upgrades. He said demand for power generation should support renewable energy projects even as the industry adjusts to the phase-out of tax credits beyond 2027 and supply-chain challenges.
Broadband Infrastructure grew by $169 million to just over $2 billion in outstanding volume. Power & Utilities added $165 million in net business volume, while Corporate AgFinance ended the quarter at $2.14 billion after modest growth.
In Farm & Ranch, net loan purchases grew $228 million during a seasonally slower period. Carpenter said Farmer Mac approved nearly $700 million in loans during the quarter, a record for any third quarter, and expects a strong fourth quarter. Results also benefited from an acquisition of servicing rights associated with $1.4 billion of loans, including $280 million in new loans serviced for others.
Credit Provision and Portfolio Quality
Farmer Mac recorded an $11.1 million provision for credit losses. Executive Vice President and CFO Matt Pullins said approximately $5 million related to reserves on new loan purchases, while $4.4 million was tied to a telecommunications exposure in Broadband Infrastructure.
The telecommunications borrower filed for bankruptcy after liquidity challenges associated with an unsuccessful fiber network build-out intensified. Farmer Mac had previously recognized approximately $5.2 million in credit loss provisions on the exposure and recorded an $8.2 million charge-off during the third quarter.
The allowance for loan credit losses stood at $48.3 million at quarter-end. Loans 90 days delinquent represented 54 basis points of the portfolio, up 17 basis points from the second quarter but down 3 basis points from a year earlier. Pullins said the sequential increase was generally consistent with seasonal patterns.
Substandard assets increased to 2.1% of the portfolio from 1.7% in the prior quarter, primarily because of credit migration in Farm & Ranch. Carpenter cited pressures affecting apples and grapes in the Northwest and drought conditions in the Southwest. He said the affected loans had average loan-to-value ratios of about 50%, while Pullins said management did not currently see the increase as a significant driver of credit-loss provisions.
Capital, Spreads and Data Center Exposure
Net effective spread was $113.9 million, up 16% from a year earlier. As a percentage, it was 116 basis points, down from 120 basis points a year earlier and an adjusted 118 basis points in the second quarter. Carpenter cautioned against treating the third-quarter percentage as a consistent guide because of portfolio mix and seasonal non-accrual activity.
Farmer Mac’s efficiency ratio was 27.5% for the quarter, below its long-term target of 30%. Pullins reaffirmed expectations for a full-year ratio of 27% to 29%.
Core capital rose $38 million to more than $1.9 billion and exceeded the statutory minimum by $735 million. The Tier 1 capital ratio declined to 12.9% from 13.2% in the prior quarter as risk-weighted assets grew faster than capital.
Pullins said Farmer Mac is advancing risk-transfer initiatives, including a potential credit-linked note transaction as early as the fourth quarter. The company is discussing potential regulatory capital relief with the Farm Credit Administration, he said.
Asked about data center lending, Carpenter said all projects in the company’s portfolio were under construction and approximately three-quarters were on track or near completion. He described delays in part of the portfolio as typical and said the company had not seen anything significant that raised concern about completion.
About Federal Agricultural Mortgage (NYSE:AGM)
Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac, is a federally chartered corporation that provides a secondary market for agricultural and rural lending. Established by Congress in 1988, the company is intended to improve the availability of credit for American agriculture and rural communities.
Farmer Mac purchases, guarantees and finances agricultural real estate loans, rural housing loans and loans supporting rural utilities and infrastructure. Its products and services also include financing for agricultural production and equipment, as well as liquidity and credit support for lenders through loan purchases, guarantees and securitization programs.
The company serves agricultural lenders, rural utilities, cooperatives and other eligible financial institutions across the United States.
