Q4 2025 Farmland Partners Inc Earnings Call

February 19, 2026

Speaker #1: Ladies and gentlemen, thank you for standing by. Hello and welcome to Farmland Partners Incorporated fourth quarter and fiscal year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise.

Speaker #1: Thank you. I would now like to turn the conference over to our president and CEO, Luca Fabbri. Please go ahead.

Speaker #2: Thank you, Dustin. Good morning, everybody, and welcome to Farmland Partners' fourth quarter and full year 2025 earnings conference call and webcast. We truly appreciate your taking the time to join us for these calls because we see them as a very important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press releases.

Luca Fabbri: Thank you, Dustin. Good morning, everybody, and welcome to Farmland Partners Q4 and full year 2025 earnings conference call and webcast. We truly appreciate your taking the time to join us for these calls, because we see them as a very important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press releases. I will now turn over the call to our General Counsel, Christine Garrison, for some customary preliminary remarks. Christine?

Speaker #2: I will now turn over the call to our General Counsel, Christine Garrison, for some customary preliminary remarks. Christine, thank you. Luca, thank you, and thank you to everyone on the call.

Christine Garrison: Thank you, Luca, and thank you to everyone on the call. The press release announcing our Q4 earnings was distributed after market close yesterday. The supplemental package has been posted to the investor relations section of our website under the subheader Events and Presentations. For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today, 19 February 2026, and will not be updated subsequent to this call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions, and financing activities, business development opportunities, as well as comments on our outlook for our business rents and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDARE, and adjusted EBITDARE.

Speaker #2: The press release announcing our fourth quarter earnings was distributed after market close yesterday. The supplemental package has been posted to the Investor Relations section of our website, under the subheader 'Events and Presentations.'

Speaker #2: For those who listened to the recording of this presentation, we remind you that the remarks made herein are as of today, February 19th, 2026, and will not be updated subsequent to this call.

Speaker #2: During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, the impact of acquisitions, dispositions, and financing activities, business development opportunities, as well as comments on our outlook for our business, rents, and the broader agricultural markets.

Speaker #2: We will also discuss certain non-gap financial measures including net operating income, FFO, adjusted FFO, EBITDA, RE, and adjusted EBITDA, RE. Definitions of these non-gap measures, as well as reconciliations to the most comparable gap measures, are included in the company's press release announcing full year 2025 earnings, which is available on our website, farmlandpartners.com, and is furnished as an exhibit to our current report on Form 8K dated February 18th, 2026.

Christine Garrison: Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the company's press release announcing full year 2025 earnings, which is available on our website, farmlandpartners.com, and is furnished as an exhibit to our current report on Form 8-K, dated February 18, 2026. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC. I would now like to turn the call to our Executive Chairman, Paul Pittman. Paul?

Speaker #2: Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control.

Speaker #2: These risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC.

Speaker #2: I would now like to turn the call to our executive chairman, Paul Pittman. Paul.

Speaker #3: Thank you, Christine. So it was a very, very good quarter and a very good year for the company. Luca, we'll go through many of these things in detail.

Paul Pittman: Thank you, Christine. So it was a very, very good quarter and a very good year for the company. Luca will go through many of these things in detail, but super strong AFFO, very strong asset sale program. We've continued to simplify the business with the sale of Murray Wise. We reduced our debt and our leverage overall, particularly when you consider that we have now paid off the preferred. Those senior claims to common shareholders have been reduced substantially, and now we have increased the dividend by 50%. This is, you know, something that's taken us a long time to get here, but it's driven by disciplined cost control and sort of disciplined strategic thinking with regard to what assets to own and what assets not to own.

Speaker #3: But super strong AFFO, very strong asset sale program. We've continued to simplify the business with the sale of Murray Wise. We reduced our debt and our leverage overall, particularly when you consider that we have now paid off the preferred.

Speaker #3: So senior claims to common shareholders have been reduced substantially. And now we have increased the dividend by 50%. This is something that's taken us a long time to get here, but it's driven by disciplined cost control and sort of disciplined strategic thinking with regard to what assets to own and what assets not to own.

Speaker #3: That process is driven at this point largely by Luca and the rest of the management team in Denver. But as you all know, I'm still pretty involved as well.

Paul Pittman: That process is driven at this point, largely by Luca and the rest of the management team in Denver. But as you all know, I'm still pretty involved as well. So with that, I'll turn it over to Luca to be a little more specific about the events of the past year.

Speaker #3: So with that, I'll turn it over to Luca. He'll be a little more specific about the events of the past year.

Speaker #2: Thank you, Paul. I will actually pass the ball here to Susan Landi, our CFO, to walk you guys through more specific details about our performance, both in the quarter and the year.

Luca Fabbri: Thank you, Paul. I will actually pass the ball here to Susan Landi, our CFO, to walk you guys through more specific details about our performance, both in the quarter and the year. So I will stick also to some kind of broader general comments. We had a very, very strong Q4 in the context of a very strong year. I just want to remind everybody that this is kind of as expected. We historically have a very strong seasonality emphasis on Q4, especially on the revenue side, because of the nature of some revenue streams that we recognize only when we actually have actual cash, cash receipts.

Speaker #2: So I will stick also to some kind of broader general comments. We had a very, very strong Q4 in the context of a very strong year.

Speaker #2: I just want to remind everybody that this is kind of, as expected, we historically have a very strong seasonality emphasis on Q4, especially on the revenue side, because of the nature of some revenue streams that we recognize only when we actually have actual cash receipts.

Luca Fabbri: We, as Paul also mentioned, we had embarked in an effort to really strengthen our balance sheet and our liquidity access, preparing for the repayment of our Series A equity that we just repaid here in February. So we were able to do so as a cash repayment rather than an common stock conversion, which would have been very dilutive. So we are very happy that we were able to strengthen our balance sheet and preserve the value embedded in our stock for our shareholders. We sold our brokerage, auction, and asset management subsidiary, MWA, to Peoples Company, but we continue to have a very close working relationship with the buyer and with our former team over there.

Speaker #2: We, as Paul also mentioned, we had embarked in an effort to really strengthen our balance sheet and our liquidity access, preparing for the repayment of our Series A equity that we just repaid here in February.

Speaker #2: So, we were able to do so as a cash repayment rather than a common stock conversion, which would have been very dilutive. So, we are very happy that we were able to strengthen our balance sheet and preserve the value embedded in our stock for our shareholders.

Speaker #2: We sold our brokerage and auction and asset management subsidiary, MWA, to People's Company, but we continue to have a very close working relationship with the buyer and with our former team over there.

Speaker #2: So we essentially got a double benefit of simplifying our business and streamlining a little bit while not really losing access truly to the market intelligence that we derived from having that team within our organization.

Luca Fabbri: So we essentially got a double benefit of simplifying our business and streamlining a little bit while, not really losing access truly to the market intelligence that we derived from having that team, within our organization. A quick word about the 2026 outlook. It is also very strong. You know, our approach, especially at the beginning of the year, given the comment that I just made about seasonality, we try to be realistic, but and provide the best possible, kind of picture, to our investors as to what we expect for the year. But, you know, agriculture is a very, uncertain business until you actually go and harvest the fruit and sell it in some cases.

Speaker #2: A quick word about the 2026 outlook. It is also very strong. Our approach, especially at the beginning of the year, given the comment that I just made about seasonality, we try to be realistic, but provide the best possible kind of picture to our investors, as to what we expect for the year.

Speaker #2: But agriculture is a very uncertain business until you actually go and harvest the fruit and sell it in some cases. So we tend to remain somewhat cautious at the beginning of the year.

Luca Fabbri: So we tend to remain, somewhat cautious at the beginning of the year, given that seasonality is still far away from us. As far as dispositions are concerned, in 2026, we expect to continue, doing little marginal improvements to our portfolio, with some emphasis in California, for example. And we will do so whenever we have the opportunity to do it at what we consider fair prices that reflect the, intrinsic value of the, assets that we are disposing. Given all of that, we felt very comfortable in raising our current dividend by 50%, to $0.09, per share per quarter.

Speaker #2: Given that seasonality, there is still far away from us. As far as dispositions are concerned, in 2026, we expect to continue doing little marginal improvements to our portfolio.

Speaker #2: With some emphasis in California, for example. And we will do so whenever we have the opportunity to do it at what we consider fair prices that reflect the intrinsic value of the assets that we are disposing.

Speaker #2: Given all of that, we felt very comfortable in raising our current dividend by 50% to $0.09 per share per quarter. And we look forward to proving to the market that that was a very strong choice, a very, very good choice, and in possibly, hopefully, outperforming the performance that we are expecting for the year.

Luca Fabbri: We look forward to proving to the market that that was a very strong choice, a very, very good choice, and, possibly, hopefully, outperforming the performance that we are expecting for the year. With that, I will turn the call to Susan Landi, our CFO. Susan?

Speaker #2: And with that, I will turn the call to Susan Landi, our CFO. Susan.

Speaker #4: Thank you, Luca. I'll be covering the financial results from 2025 and guidance for 2026. I'll be referring to the supplemental package, which is available on the Investor Relations section of our website, under the subheader 'Events and Presentations.'

Susan Landi: Thank you, Luca. I'll be covering the financial results from 2025 and guidance for 2026. I'll be referring to the supplemental package, which is available on the investor relations section of our website under the subheader Events and Presentations. Net income was $32.2 million for 2025 and $21.8 million for the quarter, or $0.65 and $0.49 per share available to common stockholders, respectively, which is lower than the same periods for 2024. AFFO was $17.9 million for 2025 and $11.4 million for the quarter, or $0.39 and $0.26 per weighted average share, respectively, which was higher than the same periods for 2024. There are several key drivers of these variances.

Speaker #4: Net income was 32.2 million for 2025 and 21.8 million for the quarter, or 65 cents and 49 cents per share available to common stockholders, respectively, which is lower than the same periods for 2024.

Speaker #4: AFFO was 17.9 million for 2025 and 11.4 million for the quarter, or 39 cents and 26 cents per weighted average share, respectively, which was higher than the same periods for 2024.

Speaker #4: There are several key drivers of these variances. Total operating revenues declined by approximately 6 million, but this is primarily because of the dispositions that occurred in 2024 and 2025.

Susan Landi: Total operating revenues declined by approximately $6 million, but this is primarily because of the dispositions that occurred in 2024 and 2025. These declines were partially offset by an increase in variable rents during the fourth quarter and increased interest income due to higher average balances on loans under the loan program. Overall, total operating expenses, excluding impairments, were down by approximately $3.6 million. This is primarily due to lower property operating costs and depreciation related to 2024 and 2025 dispositions, and lower G&A expenses due to lower bonus expense in the current year, and a one-time severance expense of $1.4 million, and accelerated stock-based compensation that was recorded in the prior year. Impairment of assets increased by $17 million, which was related to certain West Coast properties that we have concluded had a loss in value.

Speaker #4: These declines were partially offset by an increase in variable rents during the fourth quarter, an increased interest income due to higher average balances on loans under the loan program.

Speaker #4: Overall, total operating expenses, excluding impairments, were down by approximately $3.6 million. This is primarily due to lower property operating costs and depreciation related to 2024 and 2025 dispositions, and lower G&A expenses due to lower bonus expense in the current year and a one-time severance expense of $1.4 million, and accelerated stock-based compensation that was recorded in the prior year.

Speaker #4: Impairment of assets increased by 17 million, which was related to certain West Coast properties that we have concluded had a loss in value. This impairment was recorded in Q2.

Susan Landi: This impairment was recorded in Q2. Other income was lower than prior year due to lower gains on property dispositions, but this was partially offset by a $9.2 million reduction in interest expense as a result of significant reductions in debt that have occurred since October 2024. The increase in AFFO primarily relates to the increased activity under the FPI loan program, lower interest expense from the reduction of outstanding debt, and overall lower operating expenses. There are a few key capital structure items that I'd like to highlight. First, we had undrawn capacity on the lines of credit of approximately $164 million at the end of December 2025. As of today, we have undrawn capacity of approximately $111.7 million.

Speaker #4: Other income was lower than prior year due to lower gains on property dispositions, but this was partially offset by a 9.2 million reduction in interest expense as a result of significant reductions in debt that have occurred since October of 2024.

Speaker #4: The increase in AFFO primarily relates to the increased activity under the FPI loan program, lower interest expense from the reduction of outstanding debt, and overall lower operating expenses.

Speaker #4: There are a few key capital structure items that I'd like to highlight. First, we had undrawn capacity on the lines of credit of approximately $164 million at the end of December 2025.

Speaker #4: As of today, we have undrawn capacity of approximately $111.7 million. The net borrowings subsequent to year-end were primarily utilized to redeem the remaining $68,000 outstanding Series A preferred units.

Susan Landi: The net borrowings subsequent to year-end were primarily utilized to redeem the remaining 68,000 outstanding Series A Preferred Units. This removed the common stock overhang and further simplified our balance sheet. We also successfully amended our Farmer Mac facility in December, which led to an increase in our facility size from $75 million to $89.6 million. Four MetLife loans have resets coming up in 2026 on debt that totals approximately $26 million. One of these loans repriced in January at 5.19%. Page 15 has our outlook for 2026. The assumptions are listed at the bottom of the page. The forecasted net income range is from $8.8 million to $10.9 million.

Speaker #4: This removed the common stock overhang and further simplified our balance sheet. We also successfully amended our Farmer Mac facility in December, which led to an increase in our facility size from $75 million to $89.6 million.

Speaker #4: Format life loans have resets coming up in 2026. On debt that totals approximately $26 million. One of these loans repriced in January at 5.19%.

Speaker #4: Page 15 has our outlook for 2026. The assumptions are listed at the bottom of the page. The forecasted net income range is from $8.8 million to $10.9 million.

Speaker #4: The forecasted range of AFFO is 14.4 million to 16.4 million, or 33 cents to 37 cents per share. On the revenue side, fixed farm solar, wind, and recreation rent reflects the full year impact of 2025 dispositions, as well as lease renewals.

Susan Landi: The forecasted range of AFFO is $14.4 million to 16.4 million, or $0.33 to $0.37 per share. On the revenue side, fixed farm, solar, wind, and recreation rent reflects the full year impact of 2025 dispositions, as well as lease renewals. Variable payments, crop sales, and crop insurance is expected to decrease from 2025, partially from our early season outlook on citrus and avocados, and partially from 2025 dispositions. On the expense side, a decrease in property operating expenses and depreciation, depletion, and amortization is due to the dispositions that occurred in 2025. In addition, G&A decreased as a result of lower payroll costs, primarily due to the sale of MWA and due to lower expected credit losses on loans.

Speaker #4: And variable payments crop sales and crop insurance is expected to decrease from 2025 partially from our early season outlook on citrus and avocados and partially from 2025 dispositions.

Speaker #4: On the expense side, a decrease in property operating expenses and depreciation depletion and amortization is due to the dispositions that occurred in 2025. In addition, G&A decreased as a result of lower payroll costs, primarily due to the sale of MWA and due to lower expected credit losses on loans.

Speaker #4: Interest expense did increase as a result of borrowings that have occurred thus far in 2026. This summarizes where we stand today. We will keep you updated as we progress through the year.

Susan Landi: Interest expense did increase as a result of borrowings that have occurred thus far in 2026. This summarizes where we stand today. We will keep you updated as we progress through the year. This wraps up our comments this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Speaker #4: This wraps up our comments this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Speaker #5: Thank you. Quick reminder before we start the Q&A, if you'd like to ask a question, please press star and the number one on your telephone keypad to enter the Q and raise your hand.

Operator: Thank you. Quick reminder before we start the Q&A. If you'd like to ask a question, please press Star and the number One on your telephone keypad to enter the queue and raise your hand. If you'd like to withdraw your question or your question has been answered, simply press Star One again. Thank you. We will take our first question from Stefan Masocca from B. Riley. Please go ahead.

Speaker #5: If you'd like to address a question or your question has been answered, simply press star one again. Thank you. And we will take our first question from Stefan Masocca from B Riley.

Speaker #5: Please go ahead.

Speaker #6: All right. Good morning. Maybe looking at the guidance, you mentioned a little bit of the drivers. As I'm thinking about the change versus variable rent versus 2025, kind of how much of that is asset sales, roughly, and how much of that is just a different look on kind of farm revenue?

John Massocca: Good morning. Maybe looking at the guidance, you mentioned a little bit of the drivers. As I'm thinking about the change versus in variable rent versus 2025, kind, how much of that is asset sales, roughly, and how much of that is just a different look on kind of, you know, farm revenue?

Speaker #5: Luca, you want to take that question, please?

Paul Pittman: Luca, you want to take that question, please?

Speaker #7: May I? I'm going to take it first, possibly, and then I'll hand over to Susan. On the variable payments, there is it's a little bit of both, actually.

Luca Fabbri: May, I'm going to take a first pass at it and then I'll hand it over to Susan. On the variable payments, there is... It's a little bit of both, actually. There is both asset dispositions and the fact that some of our variable payments performed really, really strongly in Q4 of 2025, and we are taking a little bit more cautious approach in forecasting their performance in 2026 in Q4. And to be honest, this is really not based on any hard knowledge, because you know, both crop yields and crop pricing in Q4 is completely unknown to us. It's just a matter of kind of being a little bit more cautious in our forecast. Susan, anything that you want to add to that?

Speaker #7: There is both asset dispositions, and the fact that some of our variable payments performed really, really strongly in Q4 of 2025. And we are taking a little bit more cautious approach in forecasting their performance in 2026 in Q4.

Speaker #7: And to be honest, this is really not based on any hard knowledge because both crop yields and crop pricing in Q4 is completely unknown to us.

Speaker #7: It's just a matter of kind of being a little bit more cautious in our forecast. Susan, anything that you want to add to that?

Susan Landi: No, except that the majority of the decrease does relate to dispositions. We did have, you know, our farm rents were, you know, relatively flat. So we, you know, we did primarily single-year renewals as a result of that. But I'd say the vast majority of that decline would be related to 2025 dispositions.

Speaker #8: No. Except that the majority of the decrease does relate to dispositions we did have our farm rents were a little it was they were relatively flat.

Speaker #8: So, we did primarily single-year renewals as a result of that. But I'd say the vast majority of that decline would be related to 2025 dispositions.

Speaker #5: Okay.

John Massocca: Okay.

Speaker #6: That's what the speech.

Luca Fabbri: That's for the fixed farm rent.

Speaker #8: Yeah, for the fixed farm rent.

Susan Landi: Yeah, for the fixed farm rent.

Speaker #6: Yeah.

Luca Fabbri: Yeah.

Speaker #5: And then maybe sticking with guidance a little bit, as I think about kind of the year-over-year decline that's expected in G&A, how much of that maybe is Murray-wise?

John Massocca: And then, maybe sticking with guidance a little bit. As I think about kind of the year-over-year decline that's expected in G&A, you know, how much of that maybe is Murray Wise? How much of that is related to kind of expectations around your loan portfolio, and how much of that is just other kind of efficiencies? And I guess in the longer term, is the 2026 number, you think, close to what the run rate maybe is for you as an operating business?

Speaker #5: How much of that is related to kind of expectations around your loan portfolio, and how much of that is just other kinds of efficiencies?

Speaker #5: And I guess maybe longer-term, is the 2026 number you think close to what the run rate maybe is for you as an operating business?

Speaker #6: So a large part of it sorry.

Luca Fabbri: So a large part of it-

Paul Pittman: Sorry, let me, let me handle that, that one, if you don't mind. So Murray Wise is a significant reduction in the G&A costs because we had quite a few employees, which we no longer have on the payroll. So it's a big chunk of it. But we are also making some other cost reductions in the company and into our general overhead costs. So it's a combination of all of those things, and, you know, frankly, think that's sustainable and ongoing run rate is where we are at, for the 2026 year.

Speaker #5: Luca, let me handle that one if you don't mind. So, Murray-wise, it's a significant reduction in the G&A costs because we had quite a few employees, which we no longer have on the payroll.

Speaker #5: So it's a big chunk of it. But we are also making some other cost reductions in the company and into our general overhead costs.

Speaker #5: So it's a combination of all of those. And frankly, I think that's sustainable and ongoing run rate is where we are for the 26-year.

Speaker #5: Okay. And then on the disposition side, how should we kind of think about the runway for dispositions? How much of that is maybe contingent on the California market becoming more open and having more transaction activity?

John Massocca: Okay. And then on the disposition side, how should we kind of think about the runway for dispositions? You know, how much of that is maybe contingent on the California market becoming, you know, more open and having more transaction activity? You know, are there other things kind of in your portfolio that you think are kind of salable today or, you know, beyond some of your core Corn Belt holdings?

Speaker #5: Are there other things, kind of in your portfolio, that you think are scalable today beyond some of your core Corn Belt holdings?

Speaker #6: Yeah, so everything in the portfolio is scalable. I mean, there’s nothing that wouldn’t sell. As far as California goes, the market there is now open again.

Paul Pittman: So everything in the portfolio is salable. I mean, there's no, you know, nothing that wouldn't sell. As far as California goes, the market there is now open again. The pricing isn't great, by the way, but the market is open again. It went through sort of a catharsis of buyers and sellers being super separated in terms of expectations of value, but that's now, gaps now closed out, so there's transactions occurring again. We will continue to weed out California. We have soured on California, full stop. The very best properties we have in the almonds, in particular, almonds and other tree nuts, likely to hold those. That Olam transaction is incredibly good for us, but for most of the rest of it, we will gradually liquidate it.

Speaker #6: The pricing isn't great, by the way, but the market is open, open again. You went through sort of the catharsis of buyers and sellers being super separated in terms of expectations of value, but that's now gaps now closed out.

Speaker #6: So there are transactions occurring again. We will continue to weed out California—we have soured on California, full stop. The very best properties we have are in the almonds in particular—almonds and other tree nuts—are likely to hold those.

Speaker #6: That Olam transaction is incredibly good for us. But for most of the rest of it, we will gradually liquidate it. But we're disciplined in terms of achieving the highest reasonable prices that we can get under current market conditions.

Paul Pittman: But, you know, we're disciplined in terms of achieving the highest reasonable prices that we can get under current market conditions. As far as the rest of the country goes, you know, the overwhelming majority outside of California is now based in Illinois. We will continue to sort of whittle down exposure in other states as much as anything, for efficiency reasons at this point. If you're down to just one or two farms in a state, you either got to grow again or you need to, frankly, liquidate those. And then, you know, things in Illinois are for sale if somebody wants to pay top dollar. We are super, super bullish on Illinois. A lot of those assets are up 30% or more since we purchased them.

Speaker #6: As far as the rest of the country goes, the overwhelming majority outside of California is now based in Illinois. We will continue to sort of whittle down exposure in other states as much as anything for efficiency reasons at this point.

Speaker #6: If you're down to just one or two farms in a state, you either got to grow again, or you need to, frankly, liquidate those.

Speaker #6: And so we'll see some sales there. And then things in Illinois are for sale if somebody wants to pay top dollar. We are super, super bullish on Illinois.

Speaker #6: A lot of those assets are up 30% or more since we purchased them. But if we can achieve those gains and distribute to shareholders, we certainly, as we've proven in the past, are willing to do that.

Paul Pittman: But if we can achieve those gains and distribute to shareholders, we certainly, as we've proven in the past, are willing to do that.

Speaker #5: Okay. And then, just one kind of maybe technical follow-up. If you did sell a meaningful amount of California assets—I know it would kind of depend farm to farm—but would that have more of an impact on your kind of fixed farm rents, or would that flow through to kind of some of the variable rent opportunities?

John Massocca: Okay. And then just one kind of maybe technical follow-up. If you did sell a meaningful amount of California assets, I know it would kind of depend farm to farm, but would that have more of an impact on your kind of fixed farm rents, or would that flow through to some of the variable rent opportunities?

Speaker #6: It'd be strong—it'd be a bigger impact on a variable rent.

Paul Pittman: It'd be strong. It'd be a bigger impact on a variable rent.

Speaker #5: Okay. That's it for me. Thank you very much.

John Massocca: Okay, that's it for me. Thank you very much.

Speaker #6: Thank you.

Paul Pittman: Thank you.

Speaker #9: Thank you. Our next question comes from the line of Craig Bessert from Lucid Capital Markets. Please go ahead.

Operator: Thank you. Our next question comes from the line of Craig Bucera from Raymond Capital Markets. Please go ahead.

Craig Kucera: Hey, good morning, guys. I believe you had 2 FPI loans that were scheduled to mature at the end of January. Were those repaid, or were there any extensions?

Speaker #10: Hey, good morning, guys. I believe you had two FPI loans that were scheduled to mature at the end of January. Were those repaid, or were there any extensions?

Craig Kucera: Hey, good morning, guys. I believe you had 2 FPI loans that were scheduled to mature at the end of January. Were those repaid, or were there any extensions?

Susan Landi: Yeah, we did extend those to September.

Speaker #8: Yeah. We did extend those to September.

Susan Landi: Yeah, we did extend those to September.

Speaker #10: Extended them to December, to the end of the year. Okay. Great. And it would seem like you've seen a decent pickup in that program over the last year.

Craig Kucera: Extended them to December. It's end of year. Okay, great. And it would seem like you've seen a decent pickup in that program over the last year. Are you still seeing a decent amount of demand?

Speaker #10: Are you still seeing a decent amount of demand?

Speaker #5: Yeah, the opportunity on the loan program is pretty strong these days. The loan program is kind of countercyclical in many ways to land prices and farmer economics.

Paul Pittman: Yeah, the opportunity on the loan program is pretty strong these days. The, you know, the loan program is kind of countercyclical in many ways to land prices and farmer economics. So, you know, we're in an environment where there are some struggling farmers, so therefore, we have some loan opportunities. As long as we're comfortable with the collateral, we frankly would like to keep those loans out as long as we can because the returns are strong. Thus the extension we made. You know, we're not troubled by extending as long as collateral is still solid. And so I would say that program, you know, will be either growing a little bit or a steady state for the next year.

Speaker #5: So we're in an environment where there are some struggling farmers. So, therefore, we have some loan opportunities. As long as we're comfortable with the collateral, we frankly like to keep those loans out as long as we can because the returns are strong.

Speaker #5: That's the extension we made. We're not troubled by extending as long as collateral is still solid. And so I would say that program will be either growing a little bit or a steady state for the next year.

Speaker #10: Okay, that's helpful. Changing gears, I think you mentioned in the supplement that you had a lease that transitioned from fixed to variable. It was fixed and variable, and it became just variable.

Craig Kucera: Okay, that, that's helpful. Changing gears, I think you mentioned in the supplement that you had a lease that transitioned from fixed to variable, or it was fixed and variable, and it became just variable. How meaningful was that to the Q4 variable payments? And was that a-- that lease now gonna be, you know, sort of a standard three-year type of lease, or, or was that one of those one years you discussed?

Speaker #10: How meaningful was that to the fourth quarter variable payments? And was that lease now going to be sort of a standard three-year type of lease, or was that one of those one-years you discussed?

Speaker #6: Luca, I don't know the specifics there, so you and somebody on the team can take that.

Paul Pittman: Luca, you, I don't know the specifics there, so you and somebody in the team can take that.

Speaker #11: Yeah. This was not a very significant movement off the top of my head was a one-year extension on a farm, in California, that we have then disposed of, I believe.

Luca Fabbri: Yeah, this was not a very significant movement. Off the top of my head, it was a one-year extension on a farm in California that we have then disposed of, I believe.

Speaker #10: Okay.

Craig Kucera: Okay.

Speaker #11: In any case, it was not particularly significant to the P&L.

Luca Fabbri: In any case, it was not particularly significant to the PNL.

Speaker #10: All right. Great. You've got the term loan one, which I believe you're in the process of refinancing here this quarter. I think it matures in March.

Craig Kucera: All right, great. You've got the, term loan one, which I believe you're in the process of refinancing here this quarter. I think it matures in March. Can you give us a sense of kind of where you anticipate that might price?

Speaker #10: Can you give us a sense of kind of where you anticipate that might price?

Susan Landi: Uh-

Speaker #5: Go ahead, guys.

Paul Pittman: Go ahead, guys.

Speaker #11: Okay. Susan, you all go ahead.

Luca Fabbri: Okay. Susan, you go ahead.

Susan Landi: We think it's probably going to reprice at some point in about the 5.3 range.

Speaker #8: We think it's probably going to reprice at some point, at about the $5.30 range.

Susan Landi: We think it's probably going to reprice at some point in about the 5.3 range.

Speaker #10: Okay.

Craig Kucera: Okay. Um-

Luca Fabbri: In other words, fairly much, very much in line with the market conditions that we see for these type of loans.

Speaker #11: In other words, fairly very much in line with the other with the market conditions that we see for these type of loans.

Speaker #10: Okay. Great. It sounds like you guys might sell a few assets out of California. Opportunistically, I know there aren't any acquisitions or dispositions in the guidance, but as you look at the market, whether that's in the Midwest or Southeast, are you seeing market pricing where you could accretively acquire at your current cost of capital, or seeing transactions that are attractive?

Craig Kucera: Okay, great. It sounds like you guys might, you know, sell a few assets out of California opportunistically. I know there aren't any acquisitions or dispositions in the guidance, but, you know, as you look at the market, you know, whether that's, you know, in the Midwest or Southeast, are you seeing market pricing where you could accretively acquire at your current cost of capital or, or seeing transactions that are attractive?

Speaker #5: So the answer to that question is pricing is not down any significant amount anywhere in the country. In the core of the Midwest, it might be down 2 or 3 percent at most from the peak.

Paul Pittman: So the answer to that question is, you know, pricing is not down any significant amount anywhere in the country. You know, in the core of the Midwest, it might be down 2 or 3 percent at most from the peak. You know, the other states may be a little bit more. California, of course, is different, but we're not going to be acquisitive there, in any case. So I, you know, I would say when you think about making good, you know, this is an asset class where two-thirds of your return is appreciation and one-third is current yield. So you need to buy high-quality farms, and you need to buy value, and you need to be financed in a way that you can be patient because that increase in value will definitely come.

Speaker #5: The other states may be a little bit more. California, of course, is different, but we're not going to be acquisitive there. In any case, so I would say when you think about making good this is an asset class where two-thirds of your return is appreciation.

Speaker #5: And one-third is current yield. So you need to buy high-quality farms, and you need to buy value and you need to be financed in a way that you can be patient because that increase in value will definitely come.

Speaker #5: It's sometimes a little lumpy, but it's highly certain. So we can find acquisitions where we could expand. Current yield will not be as high as we would want.

Paul Pittman: It's sometimes a little lumpy, but it's highly certain. So, you know, we can find acquisitions where we could expand. Current yield will not be as high as we would want. If interest rates continue to lower, you may be in a place in which you're not running a negative spread between debt and farm yields, which makes expansion easier. You know, that being said, our attitude is, you know, we don't need to grow for growth's sake. Our attitude is to create value for shareholders, whether that's through dispositions or through growth. You know, it's about raising money, growing money, if you will, not growing crops or the size of the business.

Speaker #5: If interest rates continue to lower, you may be in a place in which you're not running a negative spread between debt and farm yields.

Speaker #5: Which makes expansion easier. That being said, our attitude is we don't need to grow for gross sake. Our attitude is to create value for shareholders.

Speaker #5: Whether that's through dispositions or through growth, it's about raising money, growing money, if you will, not growing crops or the size of the business.

Speaker #10: Okay. Thanks. Appreciate it.

Craig Kucera: Okay, thanks. Appreciate it.

Speaker #9: Thank you. Again, if you'd like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Towsey Hyde from Raymond James.

Operator: Thank you. Again, if you'd like to ask a question, please press star and the number one on your telephone keypad. Our next question comes from the line of Telsey Hyde from Raymond James. Please go ahead.

Speaker #9: Please go ahead.

Speaker #12: Hey, guys. Thanks for taking the question. With the increase in the dividend, how should we think about the capital recycling strategy and uses of disposition proceeds going forward, particularly as it relates to share repurchases?

Telsey Hyde: Hey, guys. Thanks for taking the question. With the increase in the dividend, how should we think about the capital recycling strategy and uses of disposition proceeds going forward, particularly as it relates to share repurchases?

Tousley Hyde: Hey, guys. Thanks for taking the question. With the increase in the dividend, how should we think about the capital recycling strategy and uses of disposition proceeds going forward, particularly as it relates to share repurchases?

Speaker #5: So I think share repurchases is our stock price continues to appreciate. We'll probably decline. I still think we are trading way below our breakup value or our liquidation value of the portfolio assets.

Paul Pittman: ... So I think, you know, share repurchases as our stock price continues to appreciate will probably decline. I still think we are trading way below our breakup value or our liquidation value of the portfolio assets. But that gap has certainly narrowed, you know, here in Q1. So I think, you know, stock buybacks will be less common than they've been in the past, assuming that stock price holds. As far as increasing the dividend, you know, we're increasing our dividend driven largely by increased AFFO. Obviously, it puts us in a position where we might have to make less special dividends to stay in tax compliance. But, you know, the dividend increase is largely driven by the cash flow expectation, not by asset sales.

Speaker #5: But that gap has certainly narrowed here in the first quarter. So I think stock buybacks will be less common than they've been in the past, assuming that stock price holds.

Speaker #5: As far as increasing the dividend, we're increasing the dividend driven largely by increased AFFO. Obviously, it puts us in a position where we might have to make fewer special dividends to stay in tax compliance.

Speaker #5: But the dividend increase is largely driven by the cash flow expectation, not by asset sales. The dividends, the asset sales drive special dividends, but we don't really want to drive our regular common dividend based on asset sales because they're frankly unpredictable.

Paul Pittman: You know, the dividends, asset sales drive special dividends, but we don't really want to drive our regular common dividend based on asset sales because they're, frankly, unpredictable.

Speaker #12: Gotcha. Okay, that's helpful. Thank you. And then I did have one quick follow-up related to the FPI loan program. I just want to make sure I'm understanding the accounting and kind of the contract terms correctly here with some of these renewals.

Telsey Hyde: Gotcha. Okay. Yeah, that's helpful. Thank you. And then, I did have one quick follow-up related to the FPI loan program. I just want to make sure I'm understanding the accounting and kind of the contract terms correctly here with some of these renewals. If the original terms called for principal and interest due at maturity, is that entire balloon payment kind of being repackaged and extended out? Or is the interest being collected and then just the principal being extended?

Tousley Hyde: Gotcha. Okay. Yeah, that's helpful. Thank you. And then, I did have one quick follow-up related to the FPI loan program. I just want to make sure I'm understanding the accounting and kind of the contract terms correctly here with some of these renewals. If the original terms called for principal and interest due at maturity, is that entire balloon payment kind of being repackaged and extended out? Or is the interest being collected and then just the principal being extended?

Speaker #12: If the original terms called for principal and interest due at maturity, is that entire balloon payment kind of being repackaged in extended out, or is the interest being collected and then just the principal being extended?

Paul Pittman: Usually, we are getting interest along the way, and principal is what's being extended, not just—we don't... We tend not to capitalize interest. I would—I wouldn't say never, but that's not the ordinary course for us in most of our loans.

Speaker #10: Usually, we are getting interest along the way, and principal is what’s being extended. It’s not just a—we tend not to capitalize interest.

Speaker #10: I wouldn't say never, but that's not the ordinary course for us in most of our loans.

Speaker #12: Okay. Got it. Thanks. That's all I had. Crossing the quarter.

Telsey Hyde: Okay, got it. Thanks. That's all I had. Congrats on the quarter.

Tousley Hyde: Okay, got it. Thanks. That's all I had. Congrats on the quarter.

Speaker #9: Thank you. There are no more further questions. I will now send a call back over to our president and CEO, Mr. Fabbri, for closing remarks.

Operator: Thank you. There are no more further questions. I will now send the call back over to our President and CEO, Mr. Fabbri, for closing remarks.

Speaker #11: Thank you, Dustin. And thank you, everybody, for joining us today. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters.

Luca Fabbri: Thank you, Dustin, and thank you, everybody, for joining us today. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters.

Speaker #12: Thank you, Paul. Goodbye.

Paul Pittman: Thank you all. Goodbye now.

Operator: The meeting is now concluded. Thank you all for joining. You may now disconnect.

Speaker #10: The meeting is now concluded.

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