Company: AGM-PH
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0000845877-25-000152
Chunk: 179

Company: FEDERAL AGRICULTURAL MORTGAGE CORP
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 8
Chunk 179
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 and a $0.9 million after-tax decrease in unrealized loss on mortgage loan held for sale, partially offset by a $2.6 million decrease in federal income tax benefit from the purchase of renewable energy investment tax credits. 

The $2.6 million year-over-year increase in core earnings for first quarter 2025 compared to 2024 was due to a $5.5 million after-tax increase in net effective spread, partially offset by a $2.7 million after-tax increase in provision for credit losses.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Net Interest Income and Net Effective Spread

The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income.

Table 2For the Three Months EndedMarch 31, 2025December 31, 2024March 31, 2024(in thousands)Net interest income$90,939 $93,368 $86,368 Net interest yield %1.15 %1.21 %1.15 %Net effective spread$89,990 $87,528 $83,044 Net effective spread %1.17 %1.16 %1.14 %

The $2.4 million sequential decrease in net interest income was primarily due to a $4.6 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives) and an increase of $0.6 million in funding costs. These factors were partially offset by a $2.8 million increase from net new business volume. In percentage terms, the sequential decrease was 0.06%, which was primarily attributable to the decrease in the fair value of designated financial derivatives.

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The $4.6