Federal Agricultural Mortgage Corporation (AGM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Farmer Mac 2025 Annual Shareholder Meeting. [Operator Instructions] This call is being recorded on Thursday, May 15, 2025. I would now like to turn the conference over to Lowell Junkins, Board Chair. Please go ahead.

Good morning, ladies and gentlemen. I'm Lowell Junkins, Farmer Mac's Board Chair. I'm pleased to welcome all of you to the Farmer Mac 2025 Annual Meeting in accordance with the notice of the meeting, I call this annual meeting to order. We understand that some stockholders who may have wanted to participate in this meeting in person may not have been able to travel to Washington D.C., so we've made it possible for you to participate by teleconference and webcast. If you're a voting stockholder participating in the meeting by teleconference, plan to vote outside the regular proxy process today and have not yet received a blank proxy card, please e-mail a request right now to [email protected]. We intend to follow the meeting agenda that was available to you as you entered the room and has also been posted on the Farmer Mac's website. We will provide a general question-and-answer session for stockholders after the formal meeting is concluded. I'd like to begin by introducing our director nominees and the directors appointed by the President of the United States, all of whom are present in person this morning. Farmer Mac has 2 classes of voting stockholders, each of which elect 5 directors. Class A stockholders are banks, insurance companies and other financial institutions. Class B stockholders are the farm credit system institution. The other 5 directors are appointed by the President of the United States. Farmer Mac's proxy statement dated April 16, 2025, contains a biographical information on each of these nominees and presidential appointees on Page 14 through 22. Copies of the 2025 proxy statement are available at the registration desk for the meeting and on the Farmer Mac's website. Following individuals have been nominated for election as Class A directors. Jim Engebretsen, Mitchell Johnson, Eric McKissack, Jeffrey Plagge and Todd Ware. The nominees for director to be elected by the Class B stockholders are Richard Davidson, Amy Gales, Kevin Riel, Robert Sexton and Daniel Shaw. Members appointed by the President of the United States and confirmed by the U.S. Senate are Chester Culver, Sara Faivre, Charles Stones, LaJuana Wilcher and myself. I would like to introduce the executive officers of Farmer Mac here today. Pages 29 to 30 of the proxy statement contain more information about the background and expertise of each of these officers: Brad Nordholm, President and CEO; Brian Brinch, Executive Vice President and Chief Risk Officer; Zachary Carpenter, Executive Vice President, Chief Business Officer; Stephen Mullery, Executive Vice President, General Counsel and Secretary; Aparna Ramesh, Executive Vice President, Chief Financial Officer and Treasurer; Marc Crady, Senior Vice President and Chief Credit Officer; Sean Datcher, Senior Vice President, Chief Information Officer; Robert Maines; Senior Vice President, Operations; Kerry Willie, Senior Vice President and Chief Human Resource Officer. I'd like to ask Steve Mullery, our Corporate Secretary, to report on the mailing of the meeting notice and the presence of a quorum.

Mr. Chairman, this meeting is held in accordance with the printed notice note on April 15, 2025, to each voting stockholder of record as of March 24, 2025. Farmer Mac transfer agent, Equiniti Trust Company, reports that the holders of a quorum of Farmer Mac's voting common stock are present in person or are represented by proxy at this meeting. For those voting stockholders present today in person or by teleconference, who returned profitably completed and signed proxies, the proxy committee will vote the shares represented in those proxies as directed on all matters coming before the meeting. Unless you want to change your vote, you need not submit ballots on matters already voted by proxy. Please raise your hand or contact the call operator if you plan to vote personally at the meeting.

We have a quorum, so I declare the Farmer Mac 2025 Annual Meeting of Stockholders to be officially convened. On behalf of the Board of Directors, I would like to express my appreciation to all stockholders participating today, either in person or by teleconference and those who returned their proxy. Before beginning the election phase of this meeting, I would like for Mr. Mullery to advise about some of the statements that we may be making at this meeting. Mr. Mullery?

During this meeting, representatives of Farmer Mac may make forward-looking statements that reflect current expectations for Farmer Mac's future and financial results. Our expectations for Farmer Mac's future performance necessarily involve assumptions, estimates and the evaluation of risks and uncertainties. Various factors could cause Farmer Mac's actual results to differ materially from our current expectations. A detailed discussion of these factors can be found in Farmer Mac's SEC filings including Farmer Mac's annual report on Form 10-K for 2024 and Farmer Mac's quarterly report on Form 10-Q filed last week. The forward-looking statements you made here today represent current expectations. We undertake no obligation to update them, except as otherwise required by law.

Thank you, Mr. Mullery. I have prepared some brief written remarks that I would like to submit for the official record of this meeting. I do not have any further remarks that I would like to make orally at this time. Now I'd like to turn to the election page of the meeting. First matter to be voted on is the election of the directors to serve until the next annual meeting or until their successors are duly elected and qualified. To facilitate the election of the directors, the Board of Directors uses the Corporate Governance Committee consisting of directors from each of the Board's 3 constituent groups. Corporate Governance Committee has recommended 5 individuals for the Class A nominees, 5 individuals for the Class B nominees. The Board approved those recommendations. Mr. Mullery, would you place before the meeting the Board's nominations for directors to be elected by the Class A stockholders.

The Board's nominees for election as directors to be elected by Class A stockholders who are identified in the proxy statement are now formally placed for this meeting as follows: James R. Engebretsen, Mitchell A. Johnson, Eric T. McKissack, Jeffrey L. Plagge and Todd P. Ware.

Mr. Mullery, would you place before the meeting, the board nominations for directors to be elected by Class B stockholders.

The Board's nominees for election as directors to be elected by Class B stockholders who are identified in the proxy statement are now formally placed before this meeting as follows: Richard H. Davidson, Amy H. Gales, Kevin G. Riel, Robert G. Sexton and Daniel L. Shaw.

Only persons who are electable holders of Class A or Class B voting common stock as of March 24, 2025, are entitled to vote at this meeting. Under Farmer Mac's bylaws, any Class A or Class B stockholder who wishes to make a director nomination for consideration at the annual meeting was required to do so by February 15, 2025. And so the nominations for directors are now closed. Is there any discussion on the nomination? Thank you. Now, let's continue. The next matter to be submitted for action is the ratification of selection of the Audit Committee PricewaterhouseCoopers as the independent auditors for Farmer Mac for 2025 as described on Page 64 of the proxy statement. Farmer Mac's bylaws require that the Audit Committee shall annually select independent auditors and that, that selection should be submitted to the stockholders for ratification. The Audit Committee and the Board recommends ratification of this selection by the stockholders, only persons entitled to both Class A or Class B stock may vote on this proposal. Mr. Mullery, please place before the meeting that proposal.

The Audit Committee unanimously selected PricewaterhouseCoopers to serve as Farmer Mac's independent auditors for 2025, subject to stockholder ratification. This selection is now submitted to the holders of the common stock for their ratification.

Are there any questions or discussion on the ratification of PricewaterhouseCoopers to serve as Farmer Mac's independent auditors for 2025? Next matter to be voted -- excuse me, to be submitted for action is the advisory vote on Farmer Mac's executive compensation as described on Page 65 of the proxy statement. This is also known as say-on-pay vote. The advisory vote is nonbinding vote on the compensation of Farmer Mac's named executive officers as presented on Pages 31 through 60 of the proxy statement. It is not a vote on Farmer Mac's general compensation policy, the compensation of the Board of Directors of Farmer Mac's compensation policies as they relate to this management. Farmer Mac is required to hold an advisory vote on executive compensation at least once every 3 years and has made a practice of holding the vote on an annual basis. Only persons entitled to vote on Class A or Class B stock may vote on the Farmer Mac executive compensation practices. Mr. Mullery, will you please place before the meeting this proposal.

An advisory vote is requested on the motion that Farmer Mac's voting stockholders approve on an advisory basis, the compensation of Farmer Mac's named executive officers as described in the 2025 proxy statement.

Are there any questions or discussions on the advisory vote for Farmer Mac's executive compensation? And now the Secretary please report the preliminary results of the voting.

The ballots have been counted the following candidates received the highest number of votes from holders of Class A voting common stock. James R. Engebretsen, Mitchell A. Johnson, Eric T. McKissack, Jeffrey E. Plagge and Todd P. Ware.. The following candidates received the highest number of votes from holders of Class B common stock. Richard H. Davidson, Amy H. Gales, Kevin G. Riel, Robert G. Sexton and Daniel L. Shaw. More than a majority of the shares of voting common stock represented at this meeting has been voted in favor of the ratification of the selection of PricewaterhouseCoopers LLP as Farmer Mac's independent auditors for 2025. More than a majority of the shares of voting common stock represented at this meeting has voted in favor of the advisory vote approving the compensation of Farmer Mac's named executive officers.

Subject to verification of the ballots, I declare that the following directors have been duly elected. James R. Engebretsen, Mitchell A. Johnson, Eric T. McKissack, Jeffrey L. Plagge and Todd P. Ware as the 5 directors elected by holders of the Class A voting common stock. Richard H. Davidson, Amy H. Gales, Kevin G. Riel, Robert G. Sexton and Daniel L. Shaw as the directors elected by the holders of the Class B voting stock. Also subject to verification of the ballots, I declare that the selection of PricewaterhouseCoopers LLP as Farmer Mac's independent auditors for 2025 has been duly ratified. And the compensation paid to Farmer Mac's named the Executive Officer has been approved on an advisory basis. Farmer Mac's Board of Directors will take into consideration the results of this advisory vote going forward. All of these results are preliminary. Every ballot will be checked against our stockholder records and the exact vote count determined for the record. This concludes the formal business portion of our meeting. There will be a general question-and-answer period for stockholders after adjournment of this meeting. I'll now entertain a motion for adjournment. Ms. Ramesh.

My name is Aparna Ramesh, a member of the Proxy Committee. On behalf of the proxies held by that committee, I move adjournment.

Mr. Mullery?

My name is Stephen Mullery, a member of the Proxy Committee. I am voting all the proxies held by the Proxy Committee, which represent more than a majority of all outstanding shares of voting common stock in favor of adjournment.

I would again like to express my appreciation to the stockholders who participated in this meeting as well as those who submitted their proxies but were not able to be present. Farmer Mac's 2025 Annual Meeting is now adjourned. Before I open the floor to stockholders' questions. I would like to remind you that Mr. Mullery's earlier cautionary statements about forward-looking statements that might be made. We're now ready for an open floor. So open the floor for stockholder questions and discussions. So I'll turn the microphone over to Mr. Nordholm.

Thank you, Mr. Chairman. The management team and I commented on Farmer Mac's financial performance last week during our conference call to discuss first quarter 2025 earnings. That call concluded with an open forum for questions but I will be happy to entertain any other questions from anyone here in person or participating on the conference call. I will recognize you for participation 1 person at a time. Please raise your hand or contact the call operator, if you have a question. I haven't seen or been notified of any questions. Thank you again for participating in our annual meeting of our stockholders.