Record net effective spread fuels increased shareholder returns
The Federal Agricultural Mortgage Corporation (Farmer Mac) announced a record year in 2023, marked by strong earnings and significant growth in key financial metrics.
The company experienced significantly higher earnings, increased profitability margins, and continued its streak of rising dividends. Farmer Mac functions as a secondary market for agricultural lending, providing capital to farmers and rural communities.
Key financial results included:
- Net interest income climbed 21% to $327.5 million, while net income attributable to common stockholders grew to $172.8 million.
- Net effective spread jumped 28%, reaching an all-time high of $327 million.
- Core earnings rose 38% year over year to $171.2 million.
“In 2023, Farmer Mac recorded another year of remarkable success, marked by double-digit earnings growth, record net effective spread, and outstanding business volume,” Brad Nordholm, president and CEO of Farmer Mac, said in a release. “This achievement builds on our consistent performance over the past several years, with a dedication to strategic initiatives and organizational alignment. Our team’s disciplined execution of our strategy, effective asset-liability management decisions, and successful business development efforts have driven our success.”
The company, which plays a vital role in the agricultural lending market, also increased its dividend payout for the 13th consecutive year. Farmer Mac raised its quarterly common stock dividend by 27% to $1.40 per share.
Solid capital position
Farmer Mac ended 2023 with a Tier 1 capital ratio of 15% – providing a healthy buffer of capital to absorb potential losses and support future growth.
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“The health and resilience of our business model, combined with our recent efforts to expand our marketing and branding approach, positions us well in 2024 to highlight our distinctive position as a secondary market partner that fuels growth, innovation, and prosperity in America’s rural and agricultural communities,” Nordholm said.
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