Federal Agricultural Mortgage Corp., better known as Farmer Mac, reported that its second-quarter earnings climbed 18% on sharply higher net investment gains.

Shares surged 24% premarket, to $11.24. Through Monday the stock had more than doubled year to date, but remained down 72% from a year earlier.

Chief Executive Michael Gerber said the results, announced Monday, reflected the company's continuing efforts to improve its financial condition, reduce risk and bolster its position in the marketplace.

He noted Farmer Mac's capital surplus stands at $100 million, up from $67 million as of March 31 and $13 million as of Dec. 31.

During the quarter, the company added $20 million of capital raised in conjunction with new business, Gerber said.

Farmer Mac was created by Congress in 1988 to buy mortgages and other loans that banks make to farmers and ranchers in rural America. Farmer Mac then repackages the loans into asset-backed securities. Its business model came under pressure as credit markets froze, and the company was rescued by a lending group's $65 million capital injection in October.

Still, Farmer Mac reported a profit of $25.4 million, or $2.49 a share, up from $21.4 million, or $2.13 a share, a year earlier.

Excluding investment impacts, core earnings fell to 69 cents a share from $1.23 a share.

Farmer Mac's 90-day delinquencies were 0.95% of its portfolio as of June 30, or 0.53% excluding ethanol loans. That industry has suffered amid volatile commodity prices. The first-quarter rates were 1.9% and 0.36%, respectively. The reason for the sequential drop in ethanol-included delinquencies was that Farmer Mac took interests in four plants because of their borrowers' bankruptcy.

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