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DATE

Thursday, July 30, 2026, at 11 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer - Luca Fabbri
• General Counsel - Christine Garrison
• Executive Chairman - Paul Pittman
• Chief Financial Officer - Susan Landi

TAKEAWAYS

• Net Income -- $3.1 million ($0.07 per share), compared to $7.8 million ($0.15 per share) in 2025, primarily due to a decrease in the net gain on disposition of assets.
• AFFO -- $1.7 million ($0.04 per share), increasing from $1.3 million ($0.03 per share) in 2025, reflecting higher interest income and lower operating expenses.
• Net Operating Income -- $7.1 million, representing a 2.9% increase year over year.
• Total Operating Revenues -- $9.4 million, declining 5.7% from $10.0 million in the prior year, as lower rental income from asset dispositions offset higher interest income and royalty proceeds.
• Rental Income -- $5.7 million, down from $6.0 million in 2025, driven by the impact of property dispositions occurring in the prior year.
• Interest Income -- Management reported higher interest income driven by increased average balances on loans under the FPI loan program and financing receivables.
• Crop Sales -- $1.1 million, down from $1.4 million in 2025, reflecting softening markets and lower yields in citrus due to weather events in California.
• Operating Expenses -- $6.7 million, declining from $24.1 million in Q2 2025, primarily because of a significant reduction in property impairment charges.
• General and Administrative Expenses -- $1.7 million, a reduction from $2.4 million in the prior year, reflecting a leaner corporate structure and streamlining efforts.
• Legal and Accounting Fees -- $312,000, decreasing from $657,000 in Q2 2025, with approximately 2/3 representing audit and tax fees rather than litigation.
• Provision for Credit Loss Allowance -- $782,000, increasing from zero in the same quarter last year, as the company builds reserves against a specific borrower in its loan program.
• Asset Dispositions -- The company completed one property sale in the second quarter for $7.0 million, resulting in a gain of $3.5 million from a farm in Illinois sold for solar development.
• Debt Outstanding -- $224.8 million as of June 30, 2026, compared to $161.6 million at the end of 2025, including $68.2 million used to redeem Series A preferred units in February 2026.
• Liquidity -- $133.8 million, consisting of $11.4 million in cash and $122.4 million in undrawn availability under credit facilities.
• 2026 AFFO Guidance -- $13.5 million to $15.3 million ($0.31 to $0.35 per share), with management raising the low end of the range from $0.30 per share.
• Loan Program Size -- Approximately $60 million total, involving high-risk loans carrying interest rates between 15% and 20%.
• MetLife Loan Interest Rates -- The average rate on certain loans decreased from 5.64% to 5.25% following a rate reset and a one-year extension.
• Debt to Enterprise Value -- Approximately 35% as of June 30, 2026, reflecting the company focus on maintaining a disciplined balance sheet.
• Common Stock Outstanding -- 43,923,735 shares on a fully diluted basis as of July 24, 2026.
• Solar Income -- $0.5 million for the six months ended June 30, 2026, generated as a result of a lease arrangement with a tenant.
• Common Stock Dividend -- $0.09 per share, declared for the third quarter of 2026 and payable on Oct. 15, 2026.

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RISKS

• Pittman stated, "Our loan program, as you all know, is frankly a relatively high-risk program. We're making loans to people who are in distress," noting that reserves are being built in case borrowers lose control of their situations through bankruptcy.
• Pittman noted regarding California, "California agriculture is in a terrible, terrible spot. I mean it's in the worst spot I've seen it, frankly, in my lifetime (and I'm 64)," citing a combination of bad policy, declining water availability, and rising labor costs.

SUMMARY

Farmland Partners (FPI -0.40%) management raised the low end of its fiscal year 2026 AFFO guidance, citing improved visibility in variable lease payments and a leaner corporate structure. The company continues to execute a strategy of liquidating noncore assets, particularly in California, while reinvesting in the Midwest or utilizing proceeds for debt reduction and stock buybacks. Strategic focus remains on maintaining high-quality tenants and managing the loan program risk profile through conservative provisioning.

• CEO Fabbri noted that the company is holding back on lease renewals for the upcoming year because "financial conditions are not ideal" among tenants, though he described the current tenant pool as very strong.
• Pittman stated that the company will borrow to execute "a disciplined buyback program from time to time," but prefers a "sell assets to backfill mentality" to avoid negative spreads between borrowing costs and dividend yields.
• The $3.5 million gain on disposition was achieved by selling an Illinois farm to a solar developer at a value Pittman noted was "much higher than the agricultural value."
• Pittman noted the company is "long-term bearish on California outlook" due to labor costs and water policy, leading to a strategy of gradually liquidating those properties.
• CFO Landi reported that direct operations experienced a slight decline in expectations for crop sales due to softening citrus markets and yields impacted by weather events in California.
• Pittman explained that the company builds credit reserves because "it's better to build those reserves and reverse them later than, frankly, not to build any reserves and then get caught holding the bag."

INDUSTRY GLOSSARY

• AFFO: Adjusted Funds From Operations, a non-GAAP financial measure used by REITs to measure operating performance by adjusting FFO for recurring items like stock-based compensation and preferred unit distributions.
• EBITDAre: Earnings Before Interest, Taxes, Depreciation, and Amortization for real estate, a standardized performance measure for the REIT industry.
• Nareit: The National Association of Real Estate Investment Trusts, the worldwide representative voice for REITs and publicly traded real estate companies.
• NOI: Net Operating Income, a measure of the property-level profit of a real estate portfolio before corporate-level expenses like interest and general and administrative costs.
• REIT: Real Estate Investment Trust, a company that owns, operates, or finances income-producing real estate.
• Series A Preferred Units: A class of ownership in the operating partnership that typically pays a fixed dividend and has priority over common units.
• Variable Lease Payments: Rent payments that fluctuate based on factors like crop yields or commodity prices rather than being fixed.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us, and welcome to the Farmland Partners, Inc. Q2 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Luca Fabbri, President and Chief Executive Officer. Luca, please go ahead.

Luca Fabbri: Thank you, Erica, and good morning, and welcome to Farmland Partners Second Quarter 2026 Earnings Conference Call and Webcast. We fully appreciate you 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?

Christine Garrison: Thank you, Luca, and thank you to everyone on the call. The press release announcing our second quarter earnings was distributed after market closed 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, July 30, 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. 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 second quarter 2026 earnings, which is available on our website, farmlandpartners.com and is furnished as an exhibit to our current report on 8-K dated July 29, 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?

Paul Pittman: Thank you, Christine. This was actually a pretty good quarter for us and frankly, a very mundane quarter. No real surprising events. Everything is kind of performing as expected and as projected. So you'll hear me back at the Q&A, but I'm going to turn it over to Luca, so we don't end up repeating the same things.

Luca Fabbri: Thank you, Paul. This was a pretty strong quarter performance-wise to the extent that we actually even marginally adjusted guidance upwards on the low end for the remainder of the year for AFFO. But as Paul said, a relatively uneventful quarter as typically Q2 and Q3 of the year are in the middle of the year. We continue evaluating asset dispositions through the end of the year, especially noncore assets like in California. And we're also actively monitoring the conditions in our -- in the agriculture world as far as timing of our lease renewals.

We have held back so far in pushing lease renewals for the next year because financial conditions are not ideal to say the least, in -- among our tenants. But we do have very, very strong tenants in our pool. So -- and this is not the first year of relatively middling performance in their financials. So there is nothing particularly new that we expect, but we are hoping for a little bit of better news before we kick off the lease renewal cycle in higher gear. And with that, I will now turn the call over to our CFO, Susan Landi, for her overview of the company's financial performance. Susan?

Susan Landi: Thank you, Luca. I'm going to cover a few items today, including the summary of the 3 and 6 months ended June 30, 2026, a review of our capital structure and updated guidance for 2026. 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 want to share a few metrics that appear on Page 2. For the 3 months ended June 30, 2026, net income was $3.1 million or $0.07 per share available to common stockholders versus $7.8 million or $0.15 per share available to common stockholders for the same period in 2025.

AFFO was $1.7 million or $0.04 per weighted average share compared to $1.3 million or $0.03 per weighted average share for the same period in 2025. For the 6 months ended June 30, 2026, net income was $3.8 million or $0.08 a share available to common stockholders versus $9.9 million or $0.18 a share available to common stockholders for the same period in 2025. AFFO was $3.8 million or $0.09 per weighted average share compared to $3.6 million and $0.08 per weighted average share for the same period of 2025. Page 5 shows a more comprehensive look at the main drivers of these changes year-over-year.

On the revenue side, we were positively impacted by higher interest income, which is due to higher average balance on the loans under the FPI loan program and financing receivables, an increase in the amortization of points and higher proceeds from oil and gas royalties. These increases were partially offset by lower rental income due to asset dispositions occurring in the prior year. Operating expenses declined on a quarter-to-date and year-to-date basis over prior year. Some of these declines are to be expected with the property dispositions that occurred in the prior year, but there were also other reductions to G&A and legal fees, including a reduction in property impairment charges.

These declines were partially offset by an increase in the provision for credit loss allowance related to loans under the FPI loan program. Overall, we saw a reduction in net income and EPS for both quarter-to-date and a year-to-date basis. The primary driver for the reduction relates to a decrease in the net gain on disposition of assets as a result of fewer property dispositions in the current year versus the prior year. AFFO per weighted average share is up by $0.01 for the 3 and 6 months ended period of the current year. On Page 12, there are a few capital structure items that I'd like to point out.

The first is that we had undrawn capacity on the lines of credit of approximately $122 million at the end of Q2 2026. There were repayments of $8 million during the quarter, but no borrowings. We had one MetLife loan with a rate reset occurring during the second quarter. In addition, one loan was extended by 1 year. The average rate on these loans decreased from 5.64% to 5.25%. Moving on to Page 15. It will show you the updated outlook for 2026. The assumptions are listed at the bottom of the page. On the revenue side, changes from the April guidance include an increase in our outlook on variable lease payments.

On the expense side, changes from the April guidance include increases as a result of additional provision for credit loss allowances on loans receivable and an increase in impairment related to updated market valuations in connection with one of our West Coast properties, and these were partially offset by a $3.6 million gain on a property disposition. The forecasted range of AFFO is $13.5 million to $15.3 million or $0.31 to $0.35 per share, which is an increase from the prior quarter on the low end of the range. The high end of the range remains unchanged. This summarizes where we stand today. We will keep you updated as we progress through the year.

This does wrap up our comments for this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Paul Pittman: So operator, while you're compiling that roster, this is Paul. I'm just going to chime in on a couple of questions that we got via e-mail and give those answers, and then we'll go to questions and answers from the audience. So we got a question regarding kind of how we're managing the building of reserves as it relates to credit losses. And while we, frankly, as a business matter, think we will collect 100% of all of our outstanding loans, our loan program, as you all know, is frankly a relatively high-risk program. We're making loans to people who are in distress. We're often getting 15% or 20% interest rates.

And so we believe it's prudent to gradually build those reserves with a certain hope to reverse them. But it's better to build those reserves and reverse them later than, frankly, not to build any reserves and then get caught holding the bag. So it's really nothing unusual. The size of our loan program today is reasonably large, a little -- its about $60 million total. And so that's why you're seeing these reserves build. In this particular quarter, I don't think the additional reserve was particularly high.

The other question we got in the -- over the Internet or I mean, over the e-mail was a question about legal expense, which shows up on the P&L, legal and accounting at about $312,000. And is that indicative of some significant litigation that's going on? And the answer to that question is no. That $312,000 is 2/3 either audit or tax fees, which show up in the second quarter. That's when we get those. And so that's really the bulk of it. The litigation was only about $25,000 of that $312,000. We continue to have a litigation on a farm in Louisiana with some prior tenant dispute.

And we also have, of course, the litigation regarding Sabrepoint continues to go on. But as you can see from that $25,000 spend, there's not a whole lot happening right now in either of those cases. With that, we can go to whatever Q&A came in with you, operator.

Operator: The first question comes from the line of Craig Kucera with Lucid Capital.

Craig Kucera: I appreciate the color on the credit loss provision. But I'm curious, that was affiliated with one operator that I think you mentioned had some trouble. Was this for the same borrower or a different line?

Paul Pittman: No, we're building it related to the same borrower for -- we evaluate every borrower, but the bulk of it is related to the same borrower we've talked about in the past. And we just -- we're continuing to monitor the situation. One of the things you're up against in any of these -- any sort of distressed situations, as long as the principal that we deal with, meaning the individual human beings that we're dealing with, keep control of the situation, we're making loans with some relatively steep terms with strong -- what we think is strong collateral and with people strong, strong intent to pay it back.

And so far in our loan program, we've been doing this now a dozen years. We haven't had anybody not pay us. But the risk you face is that someone loses control of their situation to bankruptcy, for example, or something else. And then you're dealing with not a loan made to a person who we know, who has intent of paying us back, you're just kind of dealing with a nameless, faceless court process. And that's really where and why we feel it prudent to build reserves over time as we're watching these borrowers in some sort of trouble.

Our fear is that they lose control of their situation and then our security position from a legal standpoint doesn't really change, but from a moral standpoint, if you will, does change. And that's what's going on here.

Craig Kucera: Okay. That's helpful. I appreciate that. So I know you guys mentioned you're looking to do more dispositions out of California, but where was the disposition this quarter? Was that on the West Coast? Or was that elsewhere?

Paul Pittman: Luca, do you want to take that one?

Luca Fabbri: Yes. No, it was elsewhere. It was actually the strong gain was related to the fact that this is a solar development on the farm, and we actually sold the farm to the developer itself. And the value to them was much higher than the agricultural value. So we locked in that gain.

Paul Pittman: That was in Illinois, correct?

Luca Fabbri: That is correct.

Paul Pittman: In Illinois farm.

Craig Kucera: Okay. Now I was going to be impressed if you had booked a $3.5 million gain out of California. So I just wanted to double check that.

Paul Pittman: We would have celebrated as well, trust me, Craig.

Craig Kucera: Right. So there was an increase in your expectations regarding citrus and avocado revenue flowing through the guidance on variable payments. Is that more of a pricing or a volume situation that you're expecting?

Luca Fabbri: The increase in variable rent is actually more related to almonds is -- and in particular, as the year moves along, we get better visibility on both yield and pricing. So we tend to be on variable rents, very cautious at the beginning of the year. We've had some pretty bad performances a couple of years ago on almonds, for example. And then as I said, as the year goes along, we have a little bit more visibility into the expected performance, and that's exactly what happened in this case.

Operator: The next question comes from the line of John Massocca with B. Riley.

John Massocca: Maybe sticking with the assets that have a little bit more of a variable revenue stream. Just to kind of clarify then, is the commentary around some of the citrus and avocado, what's driving the slight decrease in maybe expectations for crop sales and a little bit of crop insurance coming into the guidance?

Luca Fabbri: Susan, do you want to chime in on the specific details because the big mover this quarter was on the almond side.

Susan Landi: Yes. I mean, as far as the direct ops go, there was a little bit of a decline due to a softening market within the citrus and yields being down a little bit due to weather events in California.

John Massocca: Okay. That makes sense. And then given the kind of capacity you have today with regards to kind of debt availability versus kind of how the stock has performed, how are you thinking about the buyback? Is that something that's more levered to disposition proceeds? Or would you be comfortable kind of using leverage to kind of reactivate that program?

Paul Pittman: Our buyback program is first driven by stock price and then by cash availability. We can, at any point in time, enter the market for buybacks if we think the price is highly accretive to the remaining shares outstanding. At this price, we frankly think it is pretty accretive. But it's -- we -- the borrowing cost here is reasonably steep, mid-5s, give or take, a few basis points either way. And so we're always struggling with the -- you want to borrow money to buy back a stock that's yielding on the dividend 3.5% or something like that, maybe 3.4% versus a 5.5% borrowing.

And so that's really the kind of challenge that we kind of face and struggle with there. So to answer your question specifically, we will borrow to kind of -- to run a disciplined buyback program from time to time. But we certainly -- even if we're technically borrowing to execute on a given day, we've really got to sell assets to backfill mentality because we don't want to run that negative spread for a long period of time.

John Massocca: Okay. And then kind of bigger picture, I know we talked about this last quarter, but as some of the macroeconomic volatility and kind of the elevated energy prices have kind of persisted. How is that kind of impacting your tenants? You kind of mentioned that you're holding off a little bit on kind of pushing renewals given the financial situation in the broader farmer industry. But I didn't know if that's something that's changed at all since we last talked or become a little bit more negative since we last talked or if it's just kind of the same theme as maybe from, call it, March of this year?

Paul Pittman: Yes, it's pretty much the same theme, but let me give you a little more context. So if we think that farmers are kind of rolling in dough and they're really happy and exuberant when you get to the, call it, early summer, we will aggressively pursue leasing in the summer. And the reason is you never know what's going to happen come fall. You suddenly have a huge bumper crop, prices go down. To be honest, farmers, even though they may make it back up on volume, they're depressed because corn prices and bean prices went down.

Alternatively, if you find yourself in a situation in the early summer where the crop prices are kind of ho-hum, you kind of hang back and maintain your optionality. We think you're going to see -- we think that this isn't going to be the same kind of bumper crop we've seen in the last couple of years, basically due to weather going on in the United States as well as kind of worldwide weather shocks because it's a global market. So our tendency -- and don't take -- don't go trade commodities based on that statement. It's just we have a strong enough view about that, that we're not rushing to get the leasing process done.

We don't -- we think there's a materially better chance of upside than downside. So why not hang back? I would expect that this year's leasing process is a lot like last year's. It will be a flat year in most cases. It may be up just a little bit. We often have cost of living adjustments in our leases over the term. And so even if you don't bump rent materially in the renegotiation, you leave the COLA clause in there, which gives you an increase over years.

But that's what we think will happen right now with some hope that it actually turns out to be better than that, which is why we're not trying to lock in a kind of leases yet. But by the time we get around to September, we got to get started on it just because we run out of time otherwise.

John Massocca: Okay. And then kind of with regards to some of the West Coast properties, particularly the tree nut assets, -- is there any read-through to kind of the increase in your variable rent expectations and maybe some thoughts that, that market is firming that could loosen up disposition opportunities specifically there? Or is that still kind of a challenged market from a transaction perspective?

Paul Pittman: So it is a challenged market from a transaction perspective, but probably less challenged than it was 6 months ago. I think you've reached in California, I think a prior question -- set of questions kind of brought this up. California agriculture is in a terrible, terrible spot. I mean it's in the worst spot I've seen it, frankly, in my lifetime -- and I'm 64. It is a combination of, frankly, bad policy in the state, actual decline in water availability, but more so political decline in water availability and a state that is not supportive of how farm labor has to work. So the cost of farm labor are going up dramatically in the state.

And so what you're seeing is a real pressure on everybody that owns land in California and the specialty crops in particular. So what you're seeing in terms of almond price adjustment is just simple supply/demand of this year's almond crop or international crops in the last 12 months. That -- I don't think that makes some big dramatic improvement in the market for tree nuts or citrus or anything else in California. But what it does is it certainly helps on the cash flow on those assets this year.

Our perspective is that -- and we've been this way now for several years and compared to other fund managers, we frankly have quite a bit less exposure in California than most of them as a percentage of our total portfolio. So we're still on a process of gradually liquidating those properties in California because we are long-term bearish on California outlook, and we think it's just prudent to cut back our exposure and either use that money to buy back stock or reinvest, frankly, in the core of the Midwest.

Operator: There are no further questions at this time. I will now turn the call back to Luca for closing remarks.

Luca Fabbri: Thank you, Erica, and thank you, everybody. 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.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.