AGM

Farmer Mac is a well-capitalized, mission-driven secondary-market lender to US agriculture and rural infrastructure, and the franchise is quietly growing even though the headline number looks flat. Business volume crossed $30B, net interest income rose $36.9M (to $390.7M, +~10%) and net effective spread widened from 1.15% to 1.20%, which the MD&A attributes to net new business volume and greater use of non-interest-bearing funding. Core earnings (their fair-value-adjusted measure) rose $11.3M to $182.9M (+~7%), a cleaner read on the operating trend than GAAP net income, which was flat at $207M largely because the company raised $100M of 6.500% Series H preferred to fund growth — pushing preferred dividends up and holding net income to common at $182.5M. Book value compounded fast: equity +15.4% to $1.72B and retained earnings +11% to $1.05B.

Valuation is the core of the buy case. At $194.44 the stock trades at 11.7x FY2025 diluted EPS of $16.62 for a business earning a steady ~12% ROE and growing book value double-digits, with management citing $0.7B of capital above the regulatory minimum and a 301-day liquidity buffer versus a 90-day requirement. That is a fortress balance sheet for a lender, and the 19.58x liabilities/equity ratio — which looks alarming in isolation — is normal leverage for a GSE-style funder that matches assets with debt-market funding and has 'maintained uninterrupted access to the debt capital markets.' A low-double-digit multiple on a growing, well-capitalized franchise leaves room for both continued book-value compounding and a modest re-rating.