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Good day, everyone, and thank you for joining this Farmland Partners Inc. Q3 2025 Earnings Call. My name is Jim, and I'll be your operator for today's session. [Operator Instructions] Also a reminder, today's session is being recorded. It is now my pleasure to turn the floor over to our host, President and CEO, Mr. Luca Fabbri. Please go ahead, sir.

Thank you, Jim. Good morning, and welcome to Farmland Partners third quarter 2025 earnings conference call and webcast. We truly appreciate you taking the time to join us for this call because we see them as a very important opportunity to share with you our thinking, 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?

Thank you, Luca, and thank you to everyone on the call. The press release announcing our third quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the Investor Relations section of our website under the sub-header 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, October 30, 2025, 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 fronts 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. 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 third quarter 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 October 29, 2025. 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?

Thank you, Christine. Good morning, everyone. This is, again, a very strong quarter for us from the standpoint of AFFO performance. I'll let the rest of the team make some more specific comments about that. I want to make a couple of comments, though. As you all read overnight, appears to be some sort of a China trade deal involving agriculture commodities. I think that, that's obviously going to be beneficial for American farmers. It's a little unclear. It looks like maybe a 1-year deal and quite a bit of soybean sales. I tried to find this morning in the news more detail. There doesn't seem to be much. My sense is if you look back to the last time the Chinese were really aggressive in terms of soybean buying, which was, I think, the ’21 year -- the 2021 year. This will be a material bump in the exports of soybeans from the U.S. to China over the next few months. I don't think it's sort of earth-shattering in terms of positive for farmers. It's certainly good news. But since it's only a 1-year deal, it's hard to see whether it will have a real impact on long-term rents or land values. Land values continue to go up despite the fact it's been a somewhat tough farm economy for operating farmers this year. The other comment I would like to make about this year's AFFO, while we are thrilled with how strong it is, it is based on some very positive operating events that occurred during the year on some of these farms and also the expansion of our loan program with some sort of opportunistic lending. The caution I want to give everyone is while we're thrilled with this year, it's based on some onetime events. So frankly, I think next year, we'll start out next year with kind of the same place we started this year, which is a sort of more modest AFFO than what we're actually ending up with. We'll do our best to find the onetime events next year that bump that number, but you can't promise them since they are onetime events. With that, I'm going to turn it over to you, Luca, to go through things in more detail.

Thank you, Paul. I will, of course, echo Paul's both kind of celebration of a very strong financial performance for the quarter and for the year as well as a little bit of a caution note regarding performance next year as we always strive to do our best to build on top of a very strong bedrock of operating performance, good things every year, but you never know whether we can pull that off. A couple of things that I wanted to highlight for this quarter is number one, the sale of our brokerage and third-party farm management subsidiary, Murray Wise Associates. I think this is a very good outcome for our shareholders in terms of getting a good price for this subsidiary, for this business as well as simplifying significantly our operations. And this is very much in line with our strategy of simplification that we've been pursuing now for several years. This is also a very strong outcome for another set of very important stakeholders in the company, which is the employees. I think that this sale gives the team at MWA a very strong platform to continue their professional growth, while maintaining our access to their collective knowledge and experience and our relationship with them because we plan to continue using their services in the future. The second is a transaction I want to highlight is that we exchanged $31 million worth of our Series A preferred units for a set of properties in Illinois that were actually originally part of the transaction that kind of led to the issuance of the Series A preferred. And I want to highlight that the properties were sold at a much appreciated value compared to the value of 10 years ago, appreciated by about 56%. This, again, is a very tangible proof of the appreciation potential in this asset class that we continue to prove to the market that -- and to deliver -- our efforts to deliver that value to our shareholders. In that vein, we are also announcing that we are planning to issue a special dividend for this year, very much in line with what we did 2 years ago and last year. This year, we are targeting a range of between $0.18 and $0.22 per share to be issued in January 2026 alongside with the regular dividend. Again, this is very much in line with our commitment to deliver value to our shareholders. And with that, I will turn over the call to our CFO, Susan Landi, for her overview of the company's financial performance. Susan?

Thank you, Luca. I'm going to cover a few items today, which includes a summary of the 3 and 9 months ended September 30, 2025, a review of our capital structure, a comparison of year-to-date revenue and updated guidance for 2025. I'll be referring to the supplemental package, which is available in the Investor Relations section of our website under the subheader Events and Presentations. First, I will share a few financial metrics that appear on Page 2. For the 3 months ended September 30, 2025, net income was $0.5 million or $0 per share available to common shareholders, which was lower than the same period for 2024, largely due to the recognition of deferred gains from 2023 property dispositions of $2 million versus the current period dispositions resulting in a loss of $0.5 million. Note that the decrease in disposal gains is partially offset by interest savings associated with our lower average debt balance. AFFO was $2.9 million or $0.07 per weighted average share, which was higher than the same period for 2024. AFFO was positively impacted by significantly lower interest expense as a result of debt reductions, lower property operating costs and increased interest income due to a higher average balance on loans under the FPI loan program. For the 9 months ended September 30, 2025, net income was $10.4 million or $0.18 per share available to common shareholders, which was higher than the same period for 2024, largely due to net gains on dispositions of 35 properties that occurred in the current year, significant debt reductions resulting in interest savings, as well as increased interest income due to the higher balance under -- on loans under the FPI loan program. AFFO was $6.5 million or $0.14 per weighted average share, which was higher than the same period for 2024. AFFO was positively impacted by lower property taxes, lower general and administrative expenses and lower interest expense as a result of significant debt reductions. Next, we'll review some of the operating expenses and other items shown on Page 5. Gain on disposition of assets was higher during the 9 months ended September 30, 2025, than the same period in 2024 due to the dispositions of 35 properties in 2025 with aggregate consideration of $85.5 million, which resulted in a net gain on sale of $24.5 million compared to a gain of $1.9 million in 2024. The net loss on disposition of assets during the 3 months ended September 30, 2025, was due to the sale of a West Coast property. As a result of significant reductions in debt that have occurred since October of 2024, interest expense decreased $3.2 million for the 3 months ended September 30, 2025, and $8.4 million for the 9 months ended September 30, 2025. In addition, the dispositions resulted in lower property operating expenses and depreciation expense. General and administrative expenses decreased $0.4 million for the 3 months ended September 30, 2025, primarily due to the accelerated stock compensation that was recognized during the prior year period. General and administrative expenses decreased $1.7 million for the 9 months ended September 30, 2025, compared to the same period in the prior year due to a onetime severance expense of $1.4 million plus the accelerated stock-based compensation that was recorded in the prior year. Next, moving on to Page 12. There are a few capital structure items to point out. Having repaid our lines of credit in full with repayments totaling $23 million in July, we had full undrawn capacity on the lines of credit of approximately $159 million at the end of Q3 2025. We have no debt subject to interest rate resets in 2025 and as a result of our swap, no exposure to variable interest rates. Page 14 breaks down different revenue categories with comments at the bottom to describe the differences between periods. A few points that I'd like to highlight include fixed farm rent decreased as expected because of the dispositions in Q4 of 2024 and thus far in 2025. Solar, wind and recreation increased primarily due to proceeds from a solar revenue sharing arrangement with the tenant in the first quarter of 2025, but that was also partially offset by dispositions. Management fees and interest income increased primarily due to the increase in loan issuances under the FPI loan program. And finally, direct ops, which is a combination of crop sales, crop insurance and cost of goods sold. Crop sales did increase as a result of higher prices and yield on citrus and avocados as well as sales occurring earlier in 2025 than in 2024, while the cost of goods sold increased due to higher maintenance costs. This increase in cost of goods sold was partially offset by lower impairment on inventory. Page 15 has our updated outlook for 2025. You can find the assumptions listed at the bottom of the page. On the revenue side, changes from the July guidance include an increase in management fees and interest income as a result of the higher loan balance under the FPI loan program. Increases in variable payments, crop sales and crop insurance as a result of updated outlook on properties with variable rent and properties that we directly operate. The decrease in other items is primarily due to less auction and brokerage revenues as a result of the upcoming sale of Murray Wise & Associates. On the expense side, changes from the July guidance include an increase in impairment related to the current period, impairment expense for certain properties on the West Coast as a result of updated market information, and this was primarily offset by a decrease in property operating and depreciation expenses related to property dispositions. The forecasted range of AFFO is $14.5 million to $16.6 million or $0.32 to $0.36 per share, which is an increase from the prior quarter on both the high and low end of the range. 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.

[Operator Instructions] We'll hear first from Rob Stevenson at Janney Montgomery Scott.

When does the '23 farm sale and the retirement of the preferred units close? Is that sometime sooner rather than later in the fourth quarter? Does that extend into early first quarter? How should we be thinking about timing there?

Luca, why don't you handle that question, and I'll comment as necessary. Christine, I think you have the date.

That transaction will close December 10.

Yes. The important additional fact there is that we -- in that negotiation, we were able to agree with the party that we're making the exchange with that we will not have to pay the dividends on that preferred from, I believe it was from August 1, maybe September 1, but we got a little...

August 1.

August 1. So we have a little benefit there in terms of not having to pay the dividend as well.

That's great. And then any additional sales that you guys are expecting to complete in the fourth quarter? Are you basically done with sales for this year with this 23 Farm disposition?

We -- the 23 Farm disposition luckily did not count as our 1 of 7 under the tax law because we're limited to 7 transactions a year under most cases. So it didn't count because of the way it's done as an exchange. So we -- I think we've done maybe 5 or 6 transactions so far. We've got a few other small ones in the hopper. Hopefully, something else happens between now and the end of the year, but not likely to be on the scale of that 23 Farm deal. It will be single-digit million kind of transactions if something else happens.

And would that -- at this point, given that it's small, is that still within -- would be within the special dividend, the range that you guys gave in the...

Yes, we're likely to stick with that range at this point without regard to what happens with one additional acquisition. I mean there is discussion on that.

And then what are you guys planning on doing with the MetLife Term Loan that matures in March?

Luca, do you want to handle that?

Yes. We are planning to renew it probably with MetLife themselves or with one of our other lenders.

And where does pricing today look for you guys relative to the 555 that is currently costing you?

We're still -- kind of interest rates are kind of moving a little bit and that renewal is not in the cards for another couple of months at least. We are expecting spreads to stay fundamentally consistent.

Okay. That's helpful. And then you guys raised the guidance, but I think in the commentary, talked about the guidance decrease for the other items from the sale of Murray Wise. Is that running at somewhere close to $1 million a quarter? How should we be thinking about how we should be looking at that on a quarterly run rate going forward as we adjust our models removing Murray Wise from the expense and revenue lines?

Luca, please handle that, and it may be more detailed than you can do on this call, and we could follow up later. But...

Yes, I'm looking at Susan. She is pulling up some numbers.

Yes. So Murray, so the revenues are somewhat lumpy. So there's not really a good answer for that. I mean it's the nature of auction and brokerage, right? It's not going to be a consistent thing. Usually, that's going to be more of a Q4, Q1 type of activity. So looking at -- so I don't know that it's going to have a significant impact on our bottom line overall with that removal. We haven't -- as far as like more specifics, I'm not sure that I...

Yes. And so let me add to that. In terms of the remainder of this year, it's going to be a little noisy, but truly de minimis given that this transaction is expected to close in November 15. As far as next year is concerned, the -- we were always very cautious in projecting the performance of that business. So with typically revenues only slightly ahead of costs. So overall, the impact of that transaction is going to be, relatively speaking, negligible in the context of the overall P&L in 2026.

Okay. And then last one for me. In the detailed assumptions on the outlook, you guys increased legal and accounting due to increased litigation spend. Is that more stuff off the short and distort stuff? Or is that something else that you guys are litigating at this point? How should we be thinking about that?

Yes, we have -- we continue to have some legal costs related to the short and distort but they're frankly modest, certainly compared to where they used to be. And I think we're hopefully getting closer to winning, so to speak, in that regard. Then, we've also got an ongoing legal dispute in Louisiana on one of the farms that has -- it's local counsel, so it's not extremely high numbers, but it's a number we hadn't budgeted for that we're spending defending that situation. Just a small uptick, but a negative surprise, so it wasn't really budgeted for.

[Operator Instructions] We'll hear next from the line of Craig Kucera at Lucid Capital Markets.

I wanted to follow up and get a little more color on the Series A transaction. I know they can convert the remaining preferreds into common OP units in the first quarter. In their discussions with them, have they indicated they're looking to convert? I mean, I'm just trying to figure out from a share count and preferred dividends perspective from a model perspective next year.

They -- it's not that they have the right to convert. It's that we have the right to pay them off or convert them. We will -- I won't say 100%, but I'll say 99% probability that we just pay that off and it does not get converted because I believe the stock price that would get converted at, is below intrinsic value. So that's on the upcoming conversion, Craig. As far as the transaction itself, this is a gentleman that we -- very successful in agriculture, but also other industries, a guy from Illinois that we bought these farms from, it’s been 10 years ago now, basically. And we've maintained a very good relationship with him. He was for a time, a decent sized common shareholder and then certainly has owned his preferred, and he's been a good long-term partner. He, for his own sort of family wealth planning, what he wanted to buy back were the farms closest to his traditional family home because 10 years later, I think he decided he could frankly afford to re-own them and pass them on to his children. And so he did that. And that's where the $31 million of farms came from. And as Luca said earlier, a great transaction for us. We got a 5% to 6% a year kind of appreciation during the hold period. And fundamentally, a lot of that transaction was financed with a 3% coupon preferred, which we're now trading him back for those farms. So a huge win for shareholder value in the transaction.

Just as a follow-up, Craig, of course, we've known that this was coming for a long, long time in terms of the expiration, if you will, of the Series A preferred. So we are very well prepared with our liquidity access to our lines of credit to pay down the -- to extinguish the Series A preferred in cash. Of course, that will have an impact on the P&L, at least for a while because we are trading at 3% preferred with the borrowing on lines of credit and now call it at a blended in the mid-5s, but we're prepared to manage that as well.

Okay. I appreciate that color. That's helpful. Changing gears. There was a mention there, obviously, crop sales were significantly better than we were looking for. And then the footnote it references the sale of a walnut property, which accelerated some recognition of revenue and expenses. Can you give us some color on how much that impacted crop sales revenue and the cost of goods this quarter?

Susan, do you want to handle that one?

Yes. Bear with me for a minute while I pull the figures.

While she's pulling the figures, I'll make a general comment. Basically, when you sell off a farm like that, that has inventory on the tree, you do a transaction related to that inventory. And so it gets done more quickly than it would have been if it had actually waited around to pick the walnuts. I mean that's the big picture on the ground reason it was accelerated. Susan, you can make the financial comments as appropriate.

So we recognized about $0.2 million on the sale of the Blue Heron, our property in California, the walnut property.

Okay. So not that material?

It's accelerated – it’s for the accelerated portion.

Yes. Okay. That's helpful. And just one more for me. Looking at the guidance, one of the main increases in revenue was related to management fees and interest income. It doesn't look like you funded any loans on a net basis here in the third quarter. Does that imply you were seeing a pickup in the loan pipeline expected to close in the fourth quarter or maybe something that you thought was going to pay off, didn't pay off? Just some color there would be helpful.

Yes. It's really the second thing that you said. Somebody came to us and said we'd like to continue to extend this loan subject to us having a strong security position and being comfortable with the loan. We're almost always willing to do that because we are a high-cost lender. And as long as we're comfortable with the security position, we're happy to keep making the money. So we extended somebody out, and that led to the move of the projections.

[Operator Instructions] We'll move forward to John Massocca at B. Riley Securities.

Maybe kind of continuing with the line of questions about the loan portfolio. Are you expecting or are there significant kind of maturities upcoming in kind of the loan receivables in 2026?

Well, we -- as we have -- we've mentioned this in the prior conference calls, so I'll mention it again. We are gradually shrinking the portfolio because it's -- we're arbitraging private market value to -- against public market discount and through stock buybacks or special dividends, distributing that cash back to our shareholders or that profit back to our shareholders. So in that process, obviously, we're shrinking the revenue line of the company. And so we've focused on expanding this loan program a little bit because it's high current yield, right? You don't get the appreciation, but you get quite a bit of high current yield from doing that. And so we've done that intentionally, and we'll kind of continue to do it because as we shrink portfolio size, we still have to frankly cover the overheads. And that loan program helps us do that. So that's -- so we're pretty intentional about actually expanding that loan program gradually as time moves on. We don't want to take on too much risk, of course, but with loans with good assets underneath them, happy to do it.

Okay. And maybe switching gears a little bit, like bigger picture, what's the exposure in the portfolio either by acreage or rent or however you want to measure it to soybean farms and farmers?

Well, that -- so when you look in the corn belt, which is now with the exception of California the overwhelming majority of what we own, meaning Illinois, mostly, a little bit in Missouri. Those farms are, generally speaking, on an every other year rotation between corn and soybeans. So the quick answer would be approximately 50%. Now corn is -- for the farmer, corn is a consistently more profitable crop. And so it's really not 50-50. It's probably more like 60% corn in any given year, 40% soybeans because corn -- most of those row crops, corn, soybean farmers will occasionally do corn on corn to increase the percentage of corn acres they have. It just -- it's an overall revenue and profitability, a slightly more profitable crop in 9 out of 10 years. So if they can get away with it, they'll do corn 2 years in a row in some fields. So it shifts that -- it shifts it from the 50-50 to something slightly more weighted to corn.

John, I know you're very familiar with the concept I'm about to explain. So I'm saying this more for the benefit of other listeners. The -- I think the 100% of our row crop leases with farmers that would farm soybeans are fixed cash rents. So our exposure to soybean and especially trade wars and so on and so forth is very much indirect. It's not through crop shares and so on and so forth. It is through the overall financial health and strength of the farmers, which is, in any case, backed by crop insurance.

Okay. But as we think about kind of maybe the exposure to any distress in that space or any kind of recovery in that space, it really touches on pretty much everything from a commodity crop basis in your row crop portfolio just because they are potentially rotating that planting in a given year...

Yes, it's actually -- so what Luca said is an incredibly important point. We have no direct exposure to speak of to soybean prices. But we have significant indirect exposure to farmer profitability and soybean prices are a piece of that. So -- but it's not really a story about soybeans. It's a story about farmer profitability. And so, if the Chinese reenter the market and the Chinese are the world's largest consumer of soybeans, that will be good for U.S. farmers. Now it's not as good as you might think, however, and I've said this earlier in other conference calls. If the Chinese are buying all their soybeans from Brazil, somebody else used to be buying from Brazil that shifted to buying from the U.S. So the negative impacts of what China does vis-a-vis the U.S. share of our exports, it mutes it because other buyers come back into the market to replace the soybeans that got pushed out. And then the flip side is also true. If they start buying here, it will modestly elevate pricing. but it's going to shift to -- they're just not -- there's a kind of a defined universe of soybeans in the world, and you're really kind of moving the shelves around on the board, not fundamentally making massive changes in overall demand. On the margin, don't get me wrong. When the Chinese stop buying from the U.S., that is marginally bad. And when they start buying from the U.S., it is marginally good because there's such a power in the marketplace. But it's not massive dramatic shift. The other thing is, and that's why I said it's about profitability, not about soybeans per se. If soybeans become more profitable to farm, the corn market through the Chicago Board of Trade basically has to buy corn acres by increasing the profitability of corn farming. It's Econ 101. And so because it's -- those 2 crops are competing for the land base in the Midwest. And so soybean prices go up, it will move corn prices up. Corn prices go up and move soybean prices up. So again, this is all a good thing. But the story for us and our company is always this global food demand just keeps gradually increasing and global demand for the commodity, for the products made from corn and soybeans in particular, just keeps increasing, whether it's ethanol or food. And there is a scarce and gradually declining land base of the really high-quality soils, and we own a lot of it. And that's why you see back to the transaction we did with the preferred, that's why you see this kind of 5% to 6% per annum appreciation of those farms. And it kind of goes on no matter what because it's not connected to soybean prices. It's connected to long-term farmer profitability. And you cannot turn the world's bread basket to negative margin for very long. Don't believe everything you read in the press. There's not much farmer bankruptcy, by the way, as an example. There just isn't.

Appreciate all the detail on that. Just one last one. Apologies if maybe I missed it earlier in the call. On the buyback, I understand it's not in the updated guidance, but any more runway for buyback in 4Q and maybe even heading into 2026 just off the back of kind of capital raise and dispositions done earlier in the year?

Luke, I'll let you handle that.

Yes. So we -- our decisions on buybacks is something that we do on an ongoing basis, if you will. We still see the current stock price and the discount to NAV as being a very, very strong proposition for buybacks. It's our own stock as we unfortunately joke is the cheapest farmland we can buy. But with the expiration of the Series A preferred and rolling that into the lines of credit, we are increasing our interest expense. So that also comes into the equation. Fundamentally, our buyback activity going forward will be driven as usual by potential additional dispositions and therefore, proceeds from those dispositions. And if we -- we're knocking on wood. I mean we are working to increase our stock price, of course, but if we were to see the stock price dip, we would definitely jump in and probably and use our further access to lines of credit to harvest the opportunity.

Yes. Let me just add one thing to that. I mean if you think about this as really distribution of cash to shareholders, I mean, that's what a buyback fundamentally is. And obviously, we try to manage it against low stock price versus higher stock price. With the idea that an upcoming special dividend coming, we're going to trade probably at a slightly elevated basis for the next few months. So, it sort of lessens the probability of buybacks and the flip -- and in addition to that, during this time of year, our methodology of getting money that's out to shareholders based on the profit that we've made from sales, the way to do that is a special dividend. When you get out in the rest of the year, the way to do that is the buyback. And so, at this particular time and for all the reasons Luca said, plus that sort of general view that we’re not likely to be doing a lot of buybacks right on top of the special dividend. I don't think there'll be a lot of that in the next quarter. But as Luca said, if you saw the stock price decline substantially, we'd probably step into the market.

Our next question today will come from the line of Tousley Hyde at Raymond James.

Thanks for taking my question. I just got a quick one here. In the past, you mentioned that the long-term average rate increase is somewhere around 3% to 4%. I was just kind of curious, as you pare down the portfolio, how that average might skew going forward, if at all?

It will stay consistent. These averages are largely -- the nationwide averages are largely dominated, frankly, by row crop Midwest. because that's the biggest piece of the farmland economy overall. California specialty crop and total economic impact to the nation is probably somewhat similar, but much lumpier because it's different crops and every crop has its own cycle. So the -- as our portfolio gets more and more weighted to the Midwest, it probably sticks closer to those kinds of averages rather than further apart.

And do you have any updates you can share on the renewable progress for this year?

Yes. This is a year in which these renewals are largely done by now because you're prepping the soils in many cases for next year's crop already. So the renewals are kind of pretty much behind us or being finished as we speak. It looks to us like in the row crop region of the country where we have rollovers, it will be more or less flat with last year, which is the last few years, we've been getting great big rent increases. We won't get those this year. What we do, though, when we're in a cycle where you're negotiating those rents in a somewhat tough economic cycle for the farmers, we just -- we cut the negotiations of the new rent -- new lease to a 1-year extension. That way, what we're not doing is signing up in a difficult economic negotiating cycle for another 3-year lease. We just extended out 1 year. And then this China news, for example, probably is going to make the negotiation cycle that starts late next summer easier than it was this year, easier, meaning higher rents are possible.

That was our final question in the queue today. Mr. Fabbri, I'm happy to turn it back to you, sir, for any additional or closing remarks.

Thank you, Jim. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Have a great rest of your day.