Farmland Partners Q2 Earnings Call Highlights

Farmland Partners NYSE: FPI reported higher adjusted funds from operations per share in the second quarter of 2026 and modestly raised the low end of its full-year AFFO outlook, while management said it continues to evaluate non-core asset sales and remains cautious about agricultural lease renewals amid pressure on farm-sector finances.

Executive Chairman Paul Pittman characterized the period as “a pretty good quarter” and “a very mundane quarter,” saying portfolio operations performed largely as expected without significant surprises.

For the three months ended June 30, net income available to common stockholders was $3.1 million, or $0.07 per share, compared with $7.8 million, or $0.15 per share, a year earlier. AFFO rose to $1.7 million, or $0.04 per weighted-average share, from $1.3 million, or $0.03 per share, in the prior-year quarter.

For the first six months of 2026, net income available to common shareholders totaled $3.8 million, or $0.08 per share, versus $9.9 million, or $0.18 per share, in the comparable 2025 period. AFFO increased to $3.8 million, or $0.09 per weighted-average share, from $3.6 million, or $0.08 per share.

Revenue Mix and Expense Changes CFO Susan Landi said revenue benefited from higher interest income tied to higher average balances in the FPI loan program and financing receivables, increased amortization of points, and higher oil and gas royalty proceeds. Those gains were partly offset by lower rental income following property dispositions in the prior year.

Operating expenses declined year over year, reflecting the impact of prior asset sales as well as reductions in general and administrative costs, legal fees and property impairment charges. The company also recorded a higher provision for credit losses related to FPI loan program receivables.

Landi said the decline in net income and earnings per share was driven primarily by lower gains on asset dispositions, as the company completed fewer property sales during 2026 than it did in the prior year. During the quarter, Farmland Partners sold an Illinois farm to a solar developer. President and CEO Luca Fabbri said the buyer placed greater value on the property because of its solar-development potential than its agricultural value, enabling the company to recognize a strong gain. Landi said the property disposition produced a $3.6 million gain.

Updated 2026 Outlook Farmland Partners raised the lower end of its 2026 AFFO forecast. The company now expects AFFO of $13.5 million to $15.3 million, or $0.31 to $0.35 per share. The low end increased from the company’s prior outlook, while the high end was unchanged. The revised outlook includes higher expectations for variable lease payments.

Fabbri said the improvement was primarily tied to almonds, where visibility into yields and pricing improved as the year progressed. Management also cited higher credit-loss provisions on loans receivable and increased impairment associated with updated market valuations for a West Coast property. The $3.6 million gain on the Illinois property sale partly offset those costs. Direct operating income expectations for citrus and avocado properties were somewhat softer, according to Landi, reflecting a weaker citrus market and lower yields caused in part by California weather events.

Loan Reserves and Capital Position Pittman said the company is gradually building reserves against potential credit losses even though management believes it will ultimately collect all outstanding loans. He described the FPI loan program as a higher-risk business that lends to borrowers in distress, often at interest rates of 15% to 20%. The loan program totaled slightly more than $60 million, Pittman said. The bulk of the current reserve build relates to the sam...