Federal Agricultural Mortgage (AGM)

Brad Nordholm President and CEO
Steve Mullery General Counsel
Zack Carpenter Chief Business Officer
Jackson Takach Chief Economist
Aparna Ramesh EVP and CFO
Greg Pendy Sidoti
David Eidelman Eidelman Virant Capital
Eric Hagen KBW
Keith Rosenbloom Cruiser Capital
Call transcript
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Good day and welcome to the Farmer Mac's First Quarter 2020 Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Brad Nordholm, President and CEO. ahead. go Please

Brad Nordholm

Brad you I’m conference I’m pleased very Good Farmer Nordholm Mac welcome to investor XXXX to morning. and first call. quarter

our non-GAAP on began, ask well may as I need Mac's General as Mullery, Counsel use Farmer of Before make today, to measures. statements forward-looking I comment on that financial management Steve to

Steve Mullery

Brad. Thanks,

United call SEC discuss also information on A in release for In portion are to to can Actual measures information about farmermac.com this these these update Some and the forward-looking future pandemic, two be described in are expectations as the quarterly securities today. analyzing under found States, as non-GAAP posted Investors the website, starting on of forward-looking Evaluating non-GAAP maybe in accordance the forward-looking financial statements current presented Disclosures Mac's Form performance. business related and updated not statements the materially accounting may the recent those Form and statements. Farmer differ after uses with under later of you filed Mac's results risks known well obligated with Mac our as We annual events Farmer its made by call. statements February of accepted of XXXX make weeks subject COVID-XX XX-K And and call SEC and be will from not should you of that our on reconciliations and section. filed on on the report caution to the financial Farmer We uncertainties. Form measures most available and sometimes uncertainties principles consider results XX-Q assumptions website Farmer earnings these XX-Q this on conference may report be that this based laws. statements expressed Mac risks recording our we our statements financial of risks the or yesterday. implied performance in measures. generally to with as

Brad Nordholm

operating with morning I an Early uninterrupted to been our start secure ways. thoughts front financing will all on are us. crisis. since believe those those to COVID-XX, Farmer pandemic. most affected XXX% morning, that thanks much. our us challenging and that processors priorities, March particularly that to report the working I'm note ourselves Mac XXth. and and And to that new with challenged businesses, we've on and really of is work of focus be successful, approved time by I'd helping employees employees. agriculture doing all good And thank for And and through think. and rural Steve, team us. the on for very this for American are immediate these especially environment our and such to I a positive the a joining this line like frontline if Farmer extremely to by happy has producers you everyone. get successfully recognizing communities, that as been would safe, has priorities of been in our terrible for support leadership of I provide this nation Mac At can we've remotely. Like collaborate communicate we And

our been our the customers us organization. has functions allowed all recent and functioning designed and with our communication in as in to investments of Our business technology suppliers. within in organization And continuity supportive have plan stay

of regulators capital and ensure Farmer been with to liquidity active and continued also And cooperatively the has remained Board Our market our meetings. our and safety, its help oversight weekly have working They've role. in done soundness very teleconference through that effectively Mac. we investors

Let me now results. turn to

required products business resilient credit $X.X we've ultimately has March We've Zack pivoted and and fulfilling finetune and billion rural to model to to of XXXX dynamically. a outreach Farmer new few is mission. execute to We to more customer America Our Mac mission. order some that. of enabled details presented challenges into beginning in XXXX. in strong provided our continue to people going us really approach on fundamentals In operations our on of respond first in quarter is Carpenter The continue minutes, our that our successfully how underlying the go done

capital Our remained market has strong volatility. access despite the markets to ongoing

and in asset to continued discipline, that have on to been management have debt policies practices long issue daily liability place. a maintain our We basis and

with has that remained need of above have of position most liquidity any or the at with unexpected to strong flow billion This couple disruption. position capitalized We last us well been a $X cash months. strong operational enables meet for minimal liquidity

additional million precautionary As $XX liquidity measures. our reserve we early noted, have to previously repurchase indefinitely share capital on suspended we program as March, and in

in uptick first remained quality our delinquencies credit, to seasonal the economic has quarter, this Turning product healthy. and

We credit new have COVID-XX the consistent maintained underwriting for applications. and impact closely are guidelines of on monitoring same approvals

provide customers. borrowers. We increase to closely services deferment rural customers and norm. provide these efficient and with their challenging on remain credit. XX ways we percent balance to than through subject any We of terms one And COVID-XX closely less serving quarter total expect flexibility are $XX.X we've deferment as we May the to our have related impacted that borrowers find of those of to over our impacted effective more are specifically, been working payment work in not requirements ourselves focused outstanding to an them of payments, our see assistance we needs COVID-XX with of adapt and continuing regulatory principal to payment that's that by borrowers requests million, relief loan While forbearance been providing next to would the have require on are do requests new X to needed. flexibility this half the with appropriate to More and to with the need to approved a we're

uncertainty our availability the While a development. and distribution turn And to we and know remain rural credit Officer in now an update to Chief I'd our flow outcomes you to Zack, give that broader of the agriculture, maintain of we possible customer future, like commitment, market to and steadfast to Business communities. with American we will Zack? acknowledged introduction, in and on

Zack Carpenter

financing the work to steps mitigate borrowers offer initiatives flexible our optionality remain know for diligently protect to measures their and end, closures to our In risk enacting to products any Well, this unprecedented to To time. have due continues but we office navigate wellbeing to prices available social competitive customers continue our These and and taken Brad. the Farmer offer provide loans support Thanks, we services, needs employees. ability that that the team their help more management importantly Mac loan requirements. challenges challenges world specific customers of distancing wake the transitioned rate and to their to they Continuing to include, of solutions. closing global and we pandemic, flexibility during approved may for and all lock are face. this meet to customers' operation, companies that customers alternative to even new have adaptable around ensure extended

environment. markets Given during volatile our capital uninterrupted continued ability to to manage the this and access

loans well As and purchase payments or impacted customer for requests as providing standby for guaranteed rural a commitment long-term deferral backing borrowers well by pandemic supporting the principal as securities as products. and interest

continue unprecedented rural will customers, Mac assess that environment. during to and source initiatives We and our Farmer to as a rural allow this stable incorporate serve borrowers capital America of

rural net a this growth off good USDA decrease is volume offset Now of long-term $XXX.X to in by business is and a lines growth business four guaranteed & standby outstanding a securities as purchase purchase all $XXX.X million in start contributed volume. which This partially combined of net turning to XXXX business of million, quarter. Farm to net and growth commitments in Farmer Ranch, Mac, utilities million. reflects sequential $XXX.X loan volume for of

is needs March. these ability In be loan in markets our $XXX.X by million net $XXX.X to to purchase short net growth month effective two ability rural This We purchase one CoBank. XXXX volume utilities that loan to Farmer participations our also testament volume million period increases in and $XXX.X of the of liquidity grow saw business, most of XXXX in loans $XXX.X capital lines first million competitive a quarter of volatile portfolio year. large the compared of of million purchase transaction, from quarter It also during which same last included during being term to environment seasoned customers. credits, utilities execution unique a institutional driven the our rural counterparties in of in largely first provide the growth note the largest meet for the important the of price while in grew to Mac's to is

transaction acquisition XXXX strong of given retention underwriting first The prepayment a Rural USDA for well the teams. strength reflects from and in primarily loan in portfolio. results Ranch The Farmer was volume rural quarter and quarters versus payment competitive of business, quarter from of XXXX. growth & Mac's the date, and CoBank levels across one and $XXX purchase volume Farmer the XXXX Xst net Farm net and product purchase increased closing our interest line principal scheduled of of as Farm net Utilities quarter million during their $XXX.X Corporation. loan Finance customer our initiatives, the related quarter, steady had purchases approval million the primarily for our of National Ranch impact efficient the largest by in during first XXXX Excluding as foundational of in Cooperatives utilities reflects decline primary set XXXX. $XX.X our largest growth the purchase first growth Loan execution of million rates volume January volume demand amortization overcoming Mac’s other on-boarding the net loan the loan quarter effective and over the CoBank of counterparty and first of $XXX.X unique to our quarter million decreased business lines & same of of

as continue business model deliver a retention new satisfaction, way that and pipeline volume the we penetration Looking markets. in has robust ahead, our dynamic improved remains our build customer upon we mission upon to responsive transformed existing and more and and

markets. capital I'm as calls, new our provides for Farm for that technology, of and this to launch order crucial to in will prior we provide customer sectors platform to new and capital foundational both & future initiatives enhancing launch launched on to serve enhanced existing USDA a is mentioned portal on continue streamlined origination fall, announce infrastructure serve. Express I've score elevated security our portal reliable we will us innovative as and an excited faster As customers portal platform loan Ranch drive product. yesterday. consistent we with to Ag customer and enhanced this Ag interface card we loan and for successfully features to a score continue our origination efficiency, approval platform core the products for loans. Express will incremental Later new card This increased and This platform provide funding

infrastructure with Our continued these two not our investment enhancements. in stop does

for infrastructure. that and initiatives providing XXXX more on beyond forward look We slated several calls. and to elevate We to have future our continuing details

like during moment back Lastly, that, of execute I their and uncertainty, all for in with our continue strategic customers a in liquidity needs customers remain help I'll take supporting to to you, to our turn team priorities that hard its we recognize and to the communities America. flexible dynamic rural times rural dedication Even and Mac and it would is nationwide. credit Brad. And work these imperative and to it meet upon the of Farmer

Brad Nordholm

real Zack, both launch to as plan, working that and under thanks execute well growth from well to able initiative as this very our Farmer commitment note to continuity to business while like to basically team. a is much. I a the think to And deliver I kind major technology just effectiveness new Mac of the home, as as loan be working testament

on I'd current now So, to turn to environment. agriculture update an you congratulations the like give again. to Jackson

that lot lot in headlines a You've a press. the of heard

perspective, Mac fill will detail the Farmer provide Jackson some Now and Jackson? of in the

Jackson Takach

parts This disrupted and important sector consumption and demand has nearly the and also US processing between early all of well, protein costs to half production. last of March, and in credit May. increased XX% the farmers offline. demand precipitously of food market products due cattle pool usage and fallen at products, for confronted capacity retail. of plants corporate of hog hotels stronger these to has many closed business this immune indirect by nature abandoned nearly challenged spreads have more lower Without hospitality to Thanks, consumes offline individual effects roads translated elevated a of protein demand well significant corn of protein uncertainty all system, decline are for supply the XX% March wholesale dollar borrowers and temporarily and and of COVID-XX fuel directly the COVID-XX. months as typically produce fresh Approximately XX and supply shelve both travelers have pandemic to produce. animal Animal Brad. perishable aspects excess April, U.S. and fresh have agricultural ethanol been most in the Schools, plants. resulted take for in annual restaurants XX% wide abandon been animal dramatically reaching closures, buyers significantly and This as The Energy also The was producers as of not as by drop milk gasoline all in few processors reduced drivers prompting commodities. passports. global ethanol XX% dairy economy. COVID-XX oil processing prices, their outbreaks has over but of volatility and in the Ethanol economics our

grain is pressuring lower prices. corn So demand

time. by food U.S. producers, production and dollar the and through dairy, USDA information. & is April, donation exports reopen corn for as protocols additional billion grain soybean growth driven rapidly Agricultural economic stay for creates Food chain crop food headwinds a enhancing challenging announced processors in in a stronger a this and supply during Thankfully, and sales. from XXXX in specialty were March global Farmers safety emergency and exports. of agribusinesses pivoting agricultural cattle, an distribution. already $XX hog, drop or targeting In down XX% are open Finally, direct billion food worker solid. strong result Ranchers aid, are evolving purchases to $X American lower levels and

this authorized Additionally, Act a replenishment CARES several aid the small billion & created also programs March commodity the $XX year. credit Farm CARES that Ranch Act for later direct signed corporation in of possible administration business According by $X could cover round small in to data expenses. businesses the payroll, Protection mortgage interest payments fishing delivered agriculture, general Paycheck and Program of nearly first billion forestry, involved and hunting. other SBA, to the released The

and fertilizer lower offset feed, provide expenses those fuel, a lower Finally, interest prices. commodity needed to

has as of or and or of XX. at XX% exposure million of $X.X X% the at billion or portfolio performance million processing And or several March While Farmer only degradation. to Ranch million Mac's indicators & show or $XX the only exposure affected or of no like contains to exposure our at Ranch to minor hog hog have Farm portfolio Ranch affected facilities. CADs cattle X.X% dairy million XXst. in Farm indirectly commodities credit $XXX portfolio $XXX The credit soybeans and industries, portfolio. cattle and X% & of of do initial signs dairy portfolio production, processing $XX as direct of credit in and We only corn X.X% March

extremely by and diversified both are exposures geography. these borrower However well

delinquencies across X.XX% across XX around economic lines & business. is in also Individual XXX as trajectory a the of the is by of in percentage commodities $XXX steady is soybean or and But There Farm both are The could in USDA well full or loans of institutional XXXX in quarter standard and XX XX than For spread XXX near of & alter exposures, loans, in more agriculture Ranch percentage infrastructure, loans was significantly the averages XXXX other million of were This of historical days but loan communities. there past metrics quarter no the Ranch guarantees. risk Farm and rural corn states. uncertainty four and These rural across or the Loans the ratings across volume all still of loans a increase first states. handful portfolio with outstanding increasing. guarantees. as spread as all guarantees. total of impacts XX due COVID-XX counties counties totaling first considerable related example, including exists on by driven the loan cycles. and to portfolios, XXXX, held count increased larger more of the disruption This credit, the of in X.XX% portfolio any

exists support any give there augment to help to disruption mechanisms And time rural to heal. strong with turn and that, Fortunately, it back financial Brad. communities I'll you

Brad Nordholm

Jackson, much. very thank you

I'd the Now, to turn like more detail. in results to call the discuss Aparna? Aparna to financial

Aparna Ramesh

our by characterized and outlook. to proved everyone. for year. stable had divided the Mac and start Farmer March good quarter unprecedented be With and to were February Brad. for you, into periods. economic a rising the distinct Thank a two positive macroeconomic markets results however, January very

the this we half volatility saw in and place and COVID-XX significant market of shelter and national dysfunction virus lockdown. As March and orders spread with latter coincided global globally, became the in common,

We continue able capital issue to to across various point antennas issuances. markets have to GSE within price though spread well strong remaining access and were

the there the While of needs. bonds way a and longer the end issued March, flexible investment and curve our to any strain latter base in of with dealer widening and at meet investor worked in was we that existing half initial tail-made was

silver through period the been COVID-XX issued emergency, declared national has we During bonds. long a which

In of and $XXX XX the of in structures, greater approximately silver medium with note fact, total of $X.X GSE one longest to-date. was issuances million billion years issuance them term

Mac lines over high Our higher access for call strong market also issuances, portfolio. business in million as assets funding new assets $XXX to investment cost and liquidity provides and add to our enabled position liquid Brad Farmer to mentioned quality

stable, in Net and $X.X period was our bonus million percentage compared quarter basis remain Mac year-over-year quarter. XXXX loss million XXXX. $X.X million provide earnings points payments highlighted results. Core by efficiently investments executive $XX.X factors effective quarter compared first due that of ultimately XX had first $XX.X an to in both $XX.X related due after result pandemic now was over operating though effective the These Brad. for tax approximately the investment administrative note will as mentioned total adoption standard primarily CECL million effect in meet economic impact in by to provisions new decrease million greater that It's These Particularly spread COVID-XX. also are to earnings, in Losses its enable on forecast. $XX.X were first CECL expenses attributable for well needs recurring reflects due spreads that ongoing to The million to a economic expenses expenses. financial primarily revenue to initiatives This XXXX in in compensation XX% spread as do one higher expenses groups infrastructure results. an me compared Expected Net $X.X provision important at the quarter volatility and were the last total Also $X.X trend compared XXXX impact and year the reflect rest and the customer Farmer first time. first I million the of and our Let of core various for ongoing after to the quarter, was in losses they of million to a plans and Credit COVID-XX the quarter The increased quarter expenses for for implementation Farmer will overview prior first resigned provision $X.X factor seasonal losses more updated in were retention annual employees not to to cash that year. model's these Mac’s expected was who offset time both additional a of the increase enable Zack terms increased net a and tax including the increase periods. of during and year. strategic to short General million Operating the to increase XXXX. resulting as same in benefit or of in spread. higher credit higher an to Current during payments compensation the term under and partially bonus by and immediate and the unemployment higher increased

March represents we total $X.X basis for million, of As were The points losses increase $XX.X very and million for losses XX, peers. XX, of favorably XXXX. to continue total X allowance billion portfolio allowance Mac’s to $XX.X from compare XXXX of Farmer an industry December

implementation under the on mentioned, As X, adoption well were these reserves XXXX increase. primary as as corresponding the increase I of CECL previously of drivers January and the macroeconomic in conditions this

I capital, of previous the to adoption accounting rural business had line rural which has loss business. line had a historical one note CECL, estimated did incurred it utilities the on an regarding utilities moving never on allowance. to of require utilities losses loss want Under our impact Farmer is And not of which standard, rural the that Mac’s Before based of did line in Farmer on rates, Mac item business. experienced its

to important of rural purchases the model in highly power of or therefore However, of the under our Mac's is long-term estimates actual billion commitments remains the specialized generation It CECL default low. historic $X.X March standard, in significant XX, that and default XXXX, nature Farmer drive note no accounting results utilities have delinquencies. purchase given loan current assumptions, standby that losses, outstanding very even utilities and transmission probability though as

Turning to capital.

strength in in XXXX, Mac's of requirement our us related coinciding volume XXXX, the position as by as capitalized, XX, time decrease various to $XXX.X This or well in this to exceeded move the slight million The Farmer capital is continue a well Farmer from core will $XXX.X XX%. us we prior our factors. statutory in earnings and net capital retained million business by core forward. $XXX.X as primarily of statutory puts growth exceeded challenging capital which we to remain quarter XX%. decrease of Mac's million and requirement as March excess $XXX.X outstanding which due to of December very million We entered or XX, compares serve of

XXXX. billion, March $X.X around exceeded far $X level regulatory a strong, position, and it's and with which liquidity likewise, an position which of through around overall resulted liquidity with on daily accompanied today. of we levels be current hovering by cash billion standpoint, cash by This at XXX to which continued days XX, $X comfortable is from liquidity, are in days. requirements our have approximately our continued was billion also XXX April strong average However,

the us and mandated ample flows noted, weather customer unexpected still liquidity of Brad levels low, our levels than the allow adequately to to change. to cash flexibility higher As market meet as any while cash performance conditions needs, maintain but retaining fund

So the earnings, balance to Farmer conclusion, navigate we markets in back Mac's More I'll quarter it deliver Mac's Brad, sheet, capital and critical about management strong sufficient with Farmer underlying to financial turn upon complete And stable fundamentals, the well-capitalized these performance and times access reflecting a us liability successfully asset core disciplined in to continue mission you. uncertain first SEC. yesterday information is with XXXX filed effectively. XX-Q that, a

Brad Nordholm

America. a and crisis thank the especially to is financial for in true was and XXXXs, times economic Farmer is serving Aparna, to be of rural you created uncertainty. pressure intended in very response Mac back resource This institutions much. during

sectors liquidity We as credit this the source vital are utilities to America's farmers, one rural role of of most of play that and proud a and economy. comprise a ranchers for resilient

look customers. been business We're ahead. produce diligently the challenges to and a who the trade, Our face our remotely commitment the families in innovative company the new ensure last two that invest very & as doing includes are to and safety critical we we've the safety most who identify new months. distribute will team's network the has we those proud to of these work to channels. our other We fluctuating navigate operating and are continue demand new in reach issues. in express who to encouraged This to Farmer to business to to of It infrastructure world institutions, even adjusting connect of electricity of that the technology over market how fact creative rural challenges hard and Ranch remain ability with we to our food weather, remains am to the by to and this people distribution conditions. ongoing ability in In Thanks role continue of I'd continue case efforts And confident the so in food like and who resilient are and who evolving strong certainly our I time labor process model. It our infrastructure, ways financial partners our to serve. people. to who includes during Mac's difficult played who and facing producers adjust encircle and people, efficient, Farm be who and having transport of and the It the includes includes transport. distribute provide working all are the closing,

have resilience the and because Our in large Mac. team, in our of shown employees at part, their character Farmer Mac Farmer and belief remarkable of the purpose the mission

we on if big today. questions operator like see anyone the have any I'd a now from to thank them And to So you. line


the will Instructions] We session. question-and-answer [Operator begin now

Brad Nordholm

its to Farmer that to time. like need by today because just having And Mac about that's we note I'd beginning X:XX. outside Annual call X:XX, today at it's our Meeting an wrap-up is

accommodate understands everyone that. on hope us will I So, and


Greg comes from go Sidoti. question Pendy ahead. The Please first from

Greg Pendy

all on thanks environment. Hi, taking my color I for guys, appreciate the questions. farming the

a would I by that and now, farmer quick channel? areas essentially certain right whether into or more are of is into shift grocery that higher that's there the mean, more the one going everything be agnostic, impacted less impacted shift grocery Just given they're one. restaurant or shipping channel channel on

Brad Nordholm

have question. why of provide separate. quite a channels That's because historically important Jackson, color those for Hey, But that Greg. bit much very really you don't been Thanks on that?

Jackson Takach


grocery and dairy most impacted probably hotels by So from restaurants, that are fresh schools produce mentioned, the animal the as products, shift channels we store. and the into in the

to change So, model. most they're process having look the pivot the the and who change ones wholesale distribution and are to

folks continuing go change I as summer, to throughout food. the So, figure think probably how out and is reroute to that will be ongoing the

of In the terms lot of grain sector, a separated. bit that little a is

So, network. they're food the away from farther supply

the going less there'll grain side. to there for think, that's so adjust to on time, less or be impact I them And take directly

Greg Pendy

That's more, I helpful. may. And then if one just

win credit with other As some a the banks How relationship? the deeper of we big CoBank. anniversary going discussions about farm possibly are with working

Brad Nordholm

question. Greg strategic really that's a interesting

Over from a the hard have year pour farm worked visible of that the years two pleased credit last of mentioning we with been business. both We've we the now half, year. done cooperative those how really and institutions. rural of types of that today, we're And very we strong with large on were to the has ag flow to do loan way, really some But purchase we're the even have, various side. loans. corporate we Zack, on year, as to partners taking working with a financial of earlier the of really could the portfolio And you partners of the with over related relationships that agricultural have institutions financial early in loans last provide credit that, we're electric stronger kind we turning steps more maybe some more color do

Zack Carpenter

our as key reflects we fully But do well holistically. product credit enhancement lot continue Yes, can on across entities really, our great more and better it's system. farm we capabilities. of to credits focusing set. getting the as associations a out thanks, a system, that relationship and with we've Brad. building system serve outside CoBank. that And in and fund larger provide that Historically, transactions And couple it's products question a just haven't been which there on developed. leveraging to a the ability initiatives really participate credit predominantly to as used look and or of of farm the And leveraging as we expand pursue focused relationships We're we'll how our wholesale

and be meeting we in participate a bigger system. to need time getting as discussing that larger with the lot those well in as our able spent transactions ready infrastructure volume to of relationships, and so And

Brad Nordholm

the just before others to having on I will out comes system, understanding. farm credit that our But entire really relationship improve with we don't a some start so come one system. that build association in success working over Greg, like trying way. that to to with add relationship, friendly the at that to and to to don't note leave just CoBank we're others really team we want a need grow and from with and time the you do starting farm time. that the a from It very credit Zack I from includes

Greg Pendy

a lot. That's helpful. Thanks


from from Please comes Eidelman Eidelman go question Capital. ahead. next The Virant David

David Eidelman

I thank of regarding due million. My balance the equity. $XXX stockholders' a accumulated was Yes, was the And loss to question sheet, you. other comprehensive which assume income, it's

So that extent kind accrue recovered? what process permanent a that be Does I that of that back the will in? wondered, loss is or having of to come what or will

Brad Nordholm

thank you that our And sought, Eidelman, a for statements quarter Keep Thank you. much this and of mind interest liabilities question. in treatment our in accounting you with very Mr. plunge that GAAP assets is the symmetric. reflected of rates. Yeah, of not rapid

flows our market really swap even standpoint. mark have And There derivative from though or a so hasn't an we any through on harm. transactions to statements, been that those financial economic

and that rates bit you reverse? In what to color fact, of But happen were for would been we've add a interest very hedged. to to example, well if want Aparna

Aparna Ramesh


I permanent. the you relationships income. flow financial are is what's of And encapsulated hedge other well. in expected very be fluctuations really they and cash causing that think, to designated The are derivatives do this not with in comprehensive these to have it's interest really it Essentially, rates. Brad, recorded

management. it's up these see purposes for to going to our rates move and are purposes. But fluctuations. them derivatives for speculative risk interest think We down, hold note important as some don't we I we hold also of of that

pointed is fundamental Brad much to driven. as really not risk anything just market a this It's business. So, more out, our

Brad Nordholm

assets, Eidelman experts be do symmetry how in see here, in what an who work. because reduction value offsetting the you certain that Mr. we of real coupons are which derivatives value if accounting of standpoint, more work. loan But have increase we worth from great Yeah. of would not that's would this my had team than par. But their actually of standards a

any under impact, said an really it treatment but the don't GAAP so, And I as standpoint. see from has earlier had We or does. economic this financial

Aparna Ramesh

would these income in in might effect, don't on you that for any derivatives core are fluctuations likewise, Yeah. see but our that just of And hedge earnings take I relationships. a really those add basis into we not net

David Eidelman

go you to extent -- what you answer do would away? would over be that Okay. But be could know $XXX to predict… likely that million time could We

Brad Nordholm

We probably come back…

David Eidelman

With the shareholders equity.

Brad Nordholm


would answer aren't We on Why that? on that call, you hand. on the back we have know the off team who to don't people get who

David Eidelman

Thank you.

Brad Nordholm

the But you And dimension absolute to the back we'll that. and with I is think one just to other rates that it temporal increasing information. interest change come or would do that take

David Eidelman

you. Thank


comes ahead. go from Hagen question Please from KBW. Eric The next

Eric Hagen

Hey, guys you morning. hey, conditions you what might funding to issue in to and the you of kind asset spreads out be the can kind institutional And markets? to taking of thanks. near box, Farm the And amendments any made things speak & think you're over Good have credit you Hey, credit? term? my able seeing the question. Ranch guys side both like for of Thanks the credit on and do in what

Brad Nordholm

question second me the turn to Eric, let and Yeah. for Aparna the start first. with then

box On We as well cash flow, really the underwriting the second collateral as credit for interesting. always is question, quite the haven't emphasized we've our -- of loans.

so debt no coverage so example of lines that that four been adjusting look that have haven't we much. to. business we And really for different service durations, We given

hold that But of have to how looking really focus, has meeting markets. through explanation have the you we well But historical the extreme But just we March. a market on There And the don't market? as Aparna And been markets. changed of early first been And our Aparna, seen since a volatility some are further not the have her may well. interesting team X morning borrowers and as well. financial about that market done why share done results fewer very up regarding We information held remarkably markets we've of has o'clock standards a how developments. point of realized within provide increased and volatility But projections the call standards every be up prism question well. them. at who at have

Aparna Ramesh

you. Thank excellent definitely. question. an That's Yes,

income in see peak went bullet its very asset liability commentary, we my noted, widen, spreads did through treasury when we've fairly teams, significantly I teams. strategy As our coordination March. into had the fixed good between and crisis, But reaching we really

this of with existing been set with we has We quite prices And size Because good investors also terms into obviously one, a have us. various funding. our in and our antennas of dealers. actually balanced a very advantage relationships for went

XX tailored we a that to shorter So really able you have unique was for were obviously a us, seen one as good successfully We've structures, any actually a not of end particular very in GFCs the piece give some that years access across did the And pretty other such investor. really just issue in but structure to this globe had like the a disruption examples, through really time. structures. we variety structures of custom at helped curve. But we general,

able much looking of And been ahead auctions so so well as of get even needs, able as we've funding our that XX-days. out take advantage to we've actually been to

to And continue, as our that with fund our short and we'll investor dealer if continue that So long but to various we the such counties confident, short-end the access existing levels access robust. I base, give work by and feel answer further be the we very markets terms mean what at the the end can examples, access. of, with. so, and pretty existing we for capital And cities have to is remain curve relationships of optimistic next you remains actually both we we at or least month or that in able very have

Brad Nordholm

our funding I of the on the features think new call funded that basis I of model so is of pricing or every we're resilient features We one comes guess mash and a interesting that's in. loan you'd to that cost that proven that business marginal fund really to note, loan.

funds say XX XX at increase our volatility plus year time, premium that pricing the of X X in year basis late XX cost transaction a we that we're period to So, that the time. of let's of additional just, or pricing range, loan to for XX-hour over If XX loan, let's and in would points. increased, on March, say execution in for an the a

right see So, has XX reflected number, just continues in net us basis around quarter to basis and you point the hover XX points. that helped that really interest rate, it end

Aparna Ramesh

Yes. the of important to And callable we've taken debt one mention thing advantage that market. is

So to again, callables very as hedge us prepayment. good a we issue versus for well, continue is which

Eric Hagen

Thank my you much Stay, question. very taking well. guys for


Capital. Rosenbloom question from next ahead. go The from Please Keith Cruiser comes

Keith Rosenbloom

Hi, guys.

record, to of on First commentary all, the say is helpful. I just Jackson's wanted very

couple the mature, to clarify that saying losses market. losses of what -- That's ultimately cash to that difference loans of side the Is you're the you're In to basically points. there earnings are would you or lowered. hedging thank guys. your are a to demand effectively So, to be and question. keep any for first gross of providing that just you And your reverse you to marked neutral they're maybe I wanted reconciliation to side? second demand But low seems the to expect the And on non-cash, core the And effective. rates your will you seeing maturation? that at as interest them those. we it going as on the like NIM stay equation, continue the is, question start pretty environment, speak could you with on regard to guys rate are able overall are

Brad Nordholm

to first to is bring get want much quick to full you the will. question do it And and your up answer And if a technical yes, you Yeah, a team. into discussion, set time in that more happy yes. to we're for

at Zack and we've term things rates. the because in point, here second doing should one with been are is the today's On I But them too. refinances, such. strong propose rates interest in share of particular perspective demand who credit you today's And we his seeing, fund of think for of them request for anticipating proactive that and more of loans customers have to market. waiting and that getting refinance above front than actually get being And or rather are and repricing to

the share. I'll So as credit on why our frankly, that elaborate is amount quickly of market that aggregate let as Zack is. increasing not and

Zack Carpenter

off, Thanks for on I mathematics question. the first absolutely. Yeah, And our think commentary.

of in overall the you strength months, and that first widening reflecting a of The space, the of see to spreads, the significant economy. just was the of stories. January the it kind areas tighter corporate March, first In tale credit mean And there two I the really served. across including credit and communities spreads a was quarter agricultural fill continue we've February

spreads curve we X-X as in approved rate is clear context compare price and through the funds that this that context. market. pricing reflect widening market forward, new credit market us we the to in volume context That the were narrow on to our side. Fed mentioned focus want focusing see So is portfolio still well that and loans our that and perspective, from to go Brad results said, appropriately, of and and and in as yield environment. volatility From lower years And communities do pricing booked out that on still transactions spreads volatile be still the we and are of even as business to this we seller volatile ago being the to in business we're when working being appropriate retaining and allowed prior widened. rate as significantly. on given competitive and I so And, attain are by the months even tight loans get pricing lock though on able the credit look there demand trying maintain the But the with the in credit refinancing widen proactive spreads you well our the

Keith Rosenbloom

you. Helpful. Thank


closing to I This back concludes the turn like our to Brad Nordholm conference any over question-and-answer would for remarks. session.

Brad Nordholm

our very and And thank what's of in Well, we'll are we agriculture performance. get touch some answer going who further. very of had for with the are you, And call Jalpa. follow-up And one open objectives. that in operator. is there about We fact questions, today. Having some you in and very others a relieved, with much or and please fantastic you this who concerned dialogue interested you if any fantastic. thought are you of our pleased up that's Thank on didn't questions participation. And to on American we the set discuss call getting generally with assumed have

the months very interest safe So that shape. for again, stay much navigate hope you Thank everyone. in and your next thanks good you. I very very,


now concluded. conference for attending is Thank presentation. The today's you

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