Federal Agricultural Mortgage Corporation

Thank you for standing by. At this time, I would like to welcome everyone to the FarmerMac second quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. I would now like to turn the conference over to Jalpa Nazareth, Senior Director of Investor Relations. The floor is yours.

Good afternoon, and thank you for joining us for our second quarter 2026 earnings conference call. I'm Jalpa Nazareth, Senior Director of Investor Relations and Finance Strategy here at Farmer Max. As we begin, please note that the information provided during this call may contain forward-looking statements about the company's business, strategies, and prospects. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. All forward-looking statements are based on information available to PharmaMac as of today, and PharmaMac assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Please refer to Pharmac's 2025 annual report on Form 10-K and subsequent SEC filings for a full discussion of the company's risk factors. On today's call, we will also be discussing certain non-GAAP financial measures. Disclosures and reconciliations of these non-GAAP measures can be found in the company's most recent Form 10-Q and earnings release posted on Pharmac's website. Joining me today are our President and Chief Executive Officer, Zach Carpenter, and our Chief Financial Officer and Treasurer, Matt Pullins. At this time, I'll turn the call over to our CEO, Zach Carpenter.

Thanks, Jalpa, and good afternoon, everyone. Thank you for joining us today. I'm pleased to report that PharmaMac delivered record results in the second quarter, with volume, revenue, and core earnings reaching all-time highs, supported by the strength of our mission-driven franchise and the disciplined execution of our strategy across every aspect of our business. These results were powered by broad-based business volume growth, as we continue to be a critical part of the financial ecosystem through providing liquidity in support of agriculture and rural infrastructure. We surpassed $37 billion in outstanding business volume and strengthened our already robust capital base for a very successful preferred stock issuance, further supporting our long-term growth objectives. A focus on expense management while simultaneously making strategic investments for growth resulted in our expense efficiency ratio remaining below our 30% strategic target, as we also provided over $4 billion of liquidity to critical sectors of the American economy in the second quarter. Outstanding business volume ended June at a record $37.2 billion, an increase of $2.4 billion in the second quarter after taking into account all new business volume, maturities, sales, and paydowns on existing assets. Our agricultural finance outstanding business volume grew $1.8 billion in the second quarter, primarily due to a $1.1 billion increase in our farm and ranch advantage wholesale finance securities portfolio. That growth was driven by new business volume from several counterparties, reflecting the strength of our growing relationships, including a $750 million issuance from a new counterparty. We continue to see strong interest in wholesale finance reflecting the competitiveness of our product versus other funding alternatives and believe we are on track to see incremental net growth in the second half of the year due to minimal scheduled maturities as well as the relative value of this product provides our customers. Farm and ranch loan purchase activity remained at elevated levels during the second quarter, building on the strong momentum that began in the fourth quarter of 2025 and continued throughout the first half of 2026. Specifically, We saw net growth of $867 million for the first half of the year, almost double the farm and ranch loan purchase net growth in the same period last year. We are operating at an elevated pace for new volume and expect loan purchase growth to continue as lenders seek liquidity driven by the need to diversify from high-cost deposits amid strong loan growth, a focus on capital efficiency and returns, and ongoing volatility that many sectors of the agricultural economy are experiencing. Our growth this quarter was also supported by the improvements that were made to our AgExpress product in 2025, reflecting our continued investment in improving our products, processes, and platforms. The product improvements resulted in wider engagement with a variety of lending institutions that serve all facets of the agricultural mortgage financing market. We remain proactive in discussions with our customers to ensure we find the right solutions to support their funding and capital needs, as well as understanding their borrower's liquidity needs in a challenging operating environment that is characterized by ongoing uncertainty and broader market volatility. I'm also pleased to announce the launch of PharmaMac Loan Exchange, or FLEX, our new farm and ranch loan platform this past week. FLEX introduces a unified digital platform for farm and ranch loans across all of our loan purchase products. The platform improves process efficiency, documentation management, and operational flexibility. Flex is a significant technology modernization initiative that creates a more efficient, scalable, and user-friendly experience across PharmaMax farm and ranch business, which we believe will serve as the foundational platform to launch future innovative products and customer solutions. Flex is the latest example of our commitment to incorporate innovation and technology modernization which we expect will continue to differentiate PharmaMac and transform the agricultural mortgage market, allowing us to provide liquidity in a more efficient and scalable way. The corporate act finance statement grew modestly during the quarter to $2.1 billion in outstanding business volume. Deal flow activity in the broader agribusiness market has remained relatively muted during 2026, predominantly reflecting less mergers and acquisitions activity as companies continue to navigate a volatile market coupled with global tensions impacting trade and inflation. Looking ahead, we continue to expect modest growth in this segment and will remain disciplined in pursuing opportunities that meet our underwriting standards and support the food, fuel, and fiber supply chain. Turning to our infrastructure finance line of business, outstanding business volume increased $573 million sequentially to $13.1 billion as of quarter end, with all three segments contributing to net growth. This is a continuation of similar themes we saw in 2025, specifically the strong interest and investment in data center construction, broadband expansion, and the construction and completion of renewable energy projects, reflecting the overall need for significant energy generation and transmission capacity in rural America. Net growth in our power and utilities segment this quarter was $291 million, largely attributable to strong loan purchase activity which included the purchase of $197 million pool of loans from a single customer. This transaction underscores our secondary market track record of providing liquidity and product solutions to support our customers' balance sheet management initiatives. We continue to see a steady demand for capital in this segment as borrowers invest in system upgrades and modernization to support the significant increase in electrification demand. During the quarter, we provided $565 million in renewable energy loan purchases and commitments, reflecting the strength of our deal pipeline and accelerated project construction to meet deadlines included in H.R. 1. After scheduled maturities and repayments, which were elevated this quarter as this portfolio seasons, as well as construction and tax equity loans mature, the overall segment grew $120 million to $3 billion as of quarter end. Looking ahead, we expect growth in this segment to continue well into next year as the substantial need for new power generation drives continued demand more than offsetting the natural runoff from a seasoning portfolio. Currently, deal flow remains robust with our pipeline approaching $1 billion, which allows us to be selective with our capital deployment in the sector to pursue deals that are appropriately structured with strong counterparties that underscores the strength of our reputation in the market. While the industry is adjusting to the phase out of tax credit incentives and navigating supply chain dynamics, we project the growth demand for energy generation to position the industry for continued growth as the underlying economics of these projects remain highly competitive. Alternative generation capacity takes years to develop, and we have seen renewable energy projects, capital structures, and power purchase agreement pricing adjust as tax credit incentives phase out. Accordingly, we expect to continue participating in renewable energy transactions for both new projects and refinancing of existing projects. Beyond 2027, we anticipate continued growth in the segment that is more market-driven rather than policy-driven, as the underlying driver remains an increasing surge in power demand, requiring significant new power generation capacity. Broadband infrastructure also posted another strong quarter with net growth of $162 million, ending the period at $1.9 billion. Given the robust demand for data center investments, 70% of new volume this quarter was data center related business volume, a reflection of the ongoing expansion of artificial intelligence, cloud storage, and enterprise digitization. As of June 30th, our total data center related business volume was approximately $1 billion. are roughly half of our total broadband infrastructure segment. While our data center exposure has grown substantially, we are highly attuned to market dynamics and take a disciplined, deliberate approach to how we manage the portfolio. Specifically, as this portfolio seasons, we have enhanced our focus on portfolio management, maintaining deliberate geographic and sponsor diversification, prioritizing well-capitalized investment-grade hyperscaler tenants, and pursuing a mix of funded products to keep our portfolio well diversified and resilient against potential market headwinds that may arise. In total, we have provided $7.5 billion of liquidity and lending capacity to lenders serving rural America through the first half of this year, exceeding our previous first half gross volume record in 2022 by more than 50%. That figure is the clearest expression of our company supporting our mission. expanding access to competitive liquidity for American agriculture and rural communities. With a robust pipeline and strong capital position heading into the third quarter, we enter into the second half of 2026 focused on disciplined execution that drives durable, high quality earnings in the runway to keep growing. While we are mindful of the macro backdrop and uncertainty stemming from interest rates, trade policy and regulatory shifts, our diversified portfolio Strong capital position and disciplined underwriting give us confidence in our ability to continue delivering consistent results. We are also closely monitoring the spikes in global energy prices, which has pushed fuel and fertilizer costs higher. Regardless of how these dynamics unfold, we believe PharmaMac is well positioned to navigate the environment. With that, I'll turn it over to Matt Pullins, our Chief Financial Officer, to review our financial results in more detail. Matt?