Federal Agricultural Mortgage (AGM)

Stephen Mullery Executive Vice President, General Counsel and Secretary
Brad Nordholm President and Chief Executive Officer
Zachary Carpenter Chief Business Officer
Jackson Takach Director of Economic and Financial Research
Aparna Ramesh Executive Vice President and Chief Financial Officer
Gregory Pendy Sidoti & Company
Call transcript
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Good day and welcome to the Farmer Mac Third 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. [Operator Instructions] 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 Call. I’m pleased very Good the Nordholm Third welcome to Conference Quarter to afternoon. and XXXX Investor

We have to of Steve. for began, have comment Mac’s on our report use But that to well an I management as statements before Farmer may General you Counsel measures. I as ask non-GAAP first today. like financial forward-looking Steve today, Mullery, would exciting on

Stephen Mullery

Brad. Thanks

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

Brad Nordholm

joining Thanks thank you Mac healthy record and Steve net uncertainty pandemic. Farmer families earnings Amidst hope much of your and metrics. healthy stable for and ratios good on safe We and many remain strong during you quarter us. expense operating very delivered and the afternoon growth, effective spread, continuing a credit fronts,

a basis loan year-to-date, modest liability and was and towards XX compared the have as quarter excellent composition the disciplined growth. focus prior most we third basis that business and our XX economy to Our points strength some periods as that purchase beginning in increase our the performance were portfolio the a and of shift a an we asset reflecting our our is of XX% on year-over-year a approach, million, among sector record earnings us. of Net Core the management, resilient reflects spread see products. in are as the from sustains higher $XX.X food to well spread benefited points effective model agriculture essential, funding

COVID-XX. monitor are million and to credit. with $XXX of payment are total principal that underwriting XXth approved conservative have XXX portfolio. a we also deferment have X.X% from on We our of and That as October quality the for was March, is credit through requests overall approvals, to pleased and we total Since maintained borrowers our guidelines continuing with credit closely COVID-XX consistent impact we related or of outstanding the balance

their $XXX.X of in trend. million million deferments that is deferral positive COVID not and XX% of delinquent. have deferments, they a full, another October period farm As is of million have and $XXX ranch and farm ended compared $X.X This or of repaid XXth, that ranch and are and been loans to deferred

focusing continue and normal. efficient that and find ourselves are our they challenging borrowers effective this customers serve more our ways and the their in need to needs the customers to serving new We assistance with of flexibility on to provide

Although the remain flow maintain particularly our environment will credit and remains American steadfast fluid, and of in availability rural communities. the we to commitment to agriculture

to to XXXX. of gross $X.X in billion volume, business credit a Turning third America we new have number. is quarter in provided This rural the

of standby in businesses quarter institutional commitments repayments just quarter, credit under modestly second billion our purchase outpaced by net our loans and $XX of downs million in outstanding at maturities long-term and line business the volume from However, to $XX decreased pay new end. under business quarter

reinforced strong noteworthy objectives continue as transactions. two both quarter in as plan strategic our for To strong last very volume, another in continued ranch for execute This and farm in builds their loan growth examples and year-to-date. customers wealth Exceptional billion over proactive We our in three provided XXXX. million in ranch completion put this focus on see $XXX rural focus reaching new strategic loan we to out third and on attributable business in we to foundation loan continue our purchases first with being and future did way, gross in farm plan. on retaining and identified quarter, the of to ranch farm much ranch nearly year in our growth largely that the purchased the of we compares origination $X.X utilities We loan our the are and farm as To to first and growth this XXXX. in business million quarters nine from significant long-term our upon the purchase months quarter, our $XXX business. of already the

our agricultural as energy two our market team’s I’m Mac long-term. loan. broaden of And initiative. our proud wind mission this highlight volume, project new us second, a the renewable project purchased a development our syndication to These completed completed transactions all time. first share Farmer the and finance part our we in especially and and growth and our of strategic objectives efforts First of of financing deepen significant be extremely over business are expected challenging this execution and to for opportunities dedication

of I Before I all to have have have to to to it been reiterate strategies, and what out deliver, employees immense daily our this appreciation and do three in how much determination last that focused strategic our Mac, perspective turn worked to reporting my today. the want ranch customers you puts quarters opportunity tirelessly dedication When at and I to unprecedented this plan. have who on multi-year They service shown over thanks volume quarter and think the equals carrying first the we Farmer on just delivering consider to XXXX, exceptional take do farm and executing of required work has circumstances. in Zach, our

Our around opportunities way make that are the update Officer will in Board our market years stronger to Chief to give an healthy Zack? would you the only us, developments. united are and of our and come. that a over I in Business Zack, And turn ahead and us culture to now to on growing Management is like customer

Zachary Carpenter

Brad. Thanks,

Our the despite headwinds of team the during solid delivered the current environment. quarter, results

and our key loan purchase capabilities focused elements remained as trends opportunities. of continue and strategic with plan market have grow volumes line to forward on up well our We moving

their our in decreased volume driver decreases quarterly to standby and important and market business million note, mentioned, trust volume commitments is and of decrease conditions billion modestly $XX.X Brad base levels. are It third securitization the asset these to held that purchase in products, reflects million. driven the sheet certain $XXX.X by loan to of quarterly in loans quarter a generally specifically XXXX. combined continued off-balance certainly in $XX.X long-term As needs Changes manage customer’s origination pass-through of reflect of products a to pertaining levels and volumes concentration activity our

does the with Farmer impact Mac degree our same not affect effective volume products, these spread, spread fee-based net purchase sheet given and addition, does income, affect In earnings core loan as products. on our receives the quarterly higher not in the generally

farm net basis, the net ranch, was on-balance to driven combined USDA volume Net million, On growth loan and growth during XX-months, the And than $XXX.X quarter, infrastructure. business by during products. a consistent our growth quarter in $XXX.X farm business and year-to-date exceeded of our sequential the compared and the in we XXXX. mentioned, I ranch a discuss XXXX. securities securities quarter purchase This later. Turning loan overcame quarters $XXX.X these in and over core lines three will Loan XX.X% the on foundational growth growth and the million, farm seen in purchases and over during as growth three and have growth reflects strong loan purchases quarter, significant of of net same volume learn line greater decrease and acquisition ranch the year-to-date over million by $XXX.X sheet first $XXX.X purchase farm in last of ranch The period line which detail and aggravated the XXXX, more of million. million, our purchase were was business in was in retention customer single in times up and rates $XXX initiatives. respectively. large products rural in million, our our Brad X.X% in The to success net volume volume of net grow purchase volume

the ability our and execution purchase our and efficient competitive product loan and across set to in provide interest rates process. effective Our approval

credit markets, total the over outpaced to of specifically has grew year-over-year loan Mac’s loan agricultural last rate growth growth agricultural volume June, portfolio through X.X% business the strong Farmer last of agricultural XXXX. our mortgage over market broader year approximately XX.X% the Additionally, XX-months, compared the mortgage the

to help invest with is developing strategic across which commercial credit This functions added our customers. organization, for system. commercial As facilitate order in managing lines our capital business, flows markets of become a part in enhancing also cultivating capital relationships and to infrastructure function efforts our for includes a responsible of and we farm the team new syndication to the more

This million completed for this a quarter, system. As $XX.X a in Mac to was made Farmer Brad $XX a the sell-down key milestone partner syndication loan. million mentioned, team the a of agricultural newly purchased credit syndication farm completing

our still integrating about into it While are prospects agricultural across the ramping the rural team and lending the broadening is we of and excited relationships model, spectrum. business our utilities up

volume the by purchases Bill. our scheduled reflecting provide, issued growth volume this quarter A in year-to-date modestly retention and $X.X during amortization Farm to of Turning and million increased of able of line line of $XX.X authorized the quarter, consistent acquisition USDA loan reflects $XXX.X the strategies, million. in by We new reliable purchase loan limits customer in million increased were offset maturities. our gross $XX net loan Net business of the by million, purchases utilities business. $XXX focus loan our increase volume million, XXXX net on and to and director securities resulting liquidity USDA rural

energy Mac an as renewable the utilities our of player finance team project with part wind Farmer been has rural the renewable doing project and a financing. a strategic infrastructure energy outstanding million in connection $XX remains a its in loan a As in of energy pipeline as our job market. foundation enhancing build reputation initiative, renewable purchased strong key The to sector

Our incremental during liquidity provided institutional decrease $XXX.X during credit the markets. experienced a of capital significant to part large million the quarter the A of of to net experienced in counterparties business first line of decrease quarter. the reflects XXXX of due volatility the unwinding

volatile has lessened, let as need to returned these to markets a As counterparties liquidity chose less incremental mature. the have bonds for state,

to of the in result see market, of a to federal liquidity facilitate markets. continue We the the capital flow significant to which continue actions functioning direct reserve the is

As large financial from institutions grade remain at credit low historically spread levels. investment such,

pipeline Looking our remains ahead, of the year. remainder the strong for

transactions, many impacts which deployment the pandemic, financial the and rural with agricultural capital continue competitive Although cases causing paused facilitate some is the structure given growth have has the to in utilities associated compete increased Farmer to terms for price, Mac, we volume may and miners sectors in helped institutions of execution. for pressures to core serve, which

penetration in we upon that more and improved continue to way volume will deliver to base markets. satisfaction, has dynamic responsive an our business and build mission. existing a model the transformed retention and upon our It new work We customer led alongside growing and customer

decision. loan in During assess to that say, our limited, recently well offer Farmer sellers Express this launched Since can day doubling of as it and of average better loan effort $XXX,XXX our as scorecard support and have interaction proud eligible application from or product their size. with Ag benefited relationship I’m same product to credit with pandemic our generally Mac increased Ag from in where the set Ag an volume process, has seen launched, a borrowers continually Express travel as $X.X our the that and an we customers. we to investments for already will Express record simplified has have flagship have made enhancements application face-to-face infrastructure, strategies product million, month a been is the we size

enhancements. this We continue opportunities before many the a believe oriented continually And helping Lastly, and to understand business focus our product and processes into how as drive us. say to focus, well products, as record Farmer our about survey our relationships survey results is recent focus significantly thrilled positive that customers proud we better to of we more to as enhance processes Mac institution we that our an most to interactions. can organization and pertaining integrate model. and on the customer these becoming our relationship results customer optimistic I’m I’m look results. quarter indicated forward

executing customer for And that, enable profitability and back focused focused strategy. turn I growth, of a believe will this With are of our you will we create value Brad. on straightforward strategy it execution long-term We stakeholders. continued all to

Brad Nordholm

you would on like Chief Takach, current much provide Jackson Farmer economic to is turn Thank now you our here, an Mac. I conditions. for to and with to Economist credit very update And Jackson. that. going Jackson

Jackson Takach

Thanks, Brad.

XXXX of Claims XX to boost or year remains XXth uncertainty according an Bureau for U.S. in Unemployment approximately third elevated, improved states by national close up spend data GDP, strong the and on-track helped the to increases October in four X% Analysis. released in of the October, unemployment fell to Bureau XX.X% Economic pace The Labor U.S. inventories basis. indicators of Statistics release. U.S. While quarter, inflation at the general reports consumer gross to many quarter US on to annualized improved economic product in their the domestic quarter that and across weeks levels third data X.X% continuing The below leading historic rate adjusted the improving

Bank Reserve data indicates from financial that XXXX. the Finally, July credit stabilized Louis Federal has spreads of St. since

quarter. the distributed improved in increased has grain U.S. first averages industry seasonal led country at stimulus outstanding increase in soybean for cooperatives by the into access their Statistics, businesses forestry, more in business. aside $X.X X.XX% September. driving involved July and grain essential with portfolio Continuing billion of due the over rural is of over lines Once stable Credit some continues widespread more To USDA ranch the operating payments Assignment in across USDA further although again, these healing the challenges losses by the heading payments, historical third Furthermore, improvements as August fully and of rates this life guarantees. loans is the counties PPP throughout around of $XX.X October electric across volume city remain programs testament U.S. spend face fourth remain of set have dining. prices. Farmer the have chain be food was and loans agriculture, XXXX Labor million billion supply resurgence processing, of and agricultural total delinquencies most high that an quarter, ranchers have This all coronavirus the farm farm the XX exhibited plants had sector millions challenge. food, the and XXXX. the half of researched substandard in quarter. restaurant unique year. American data over program. of been ratings between outside nature rural and nature that to With during XX% is unemployment XXX dark stress infrastructure third across the the increased and net up the in Loans experienced cash the USDA the XXXX food real critical shows that as to the it in land the industries And is Conditions quarter XXXX, from on in combat the output several to commodity scheduled X.X% then tracked that, XXth, spread farmers, home $XX of XX overseas and loan guarantees. a commitments U.S. which of October to industry improved, quarter the of XXXX. future the the not third back of end in agricultural small to protection generated And financial levels. is fuel of through government or muted yet COVID-XX sectors its the lack rural all in of and steady third economy and as no uncertainty and loans conditions to quarter. marks X. of could The typical well typical that the past and in strong direct to across a its and other as and reasons across has program economic above any ambiguity. as of quality or second economy the the administration commodities employees were portfolio current There through stimulus In Mac USDA October here in Individual farmers increase a Historically, haze stalwart fiscal the $X.X of due payment consumers date patterns and lines and and corn, The ranchers increase demonstrates for into and to significantly food the XXXX, also during assistance different loan CFAP additional from paycheck as beverage at landscape. June of more XXXX unwind clarity climate and that with have prices to the conditions recover farm by fourth $XXX one This than Bureau economic the food no billion a billion distributed fishing have payment the in date. the Protein in food business income of in program distributed loans you, create The wheat risk lowest quarter to has coronavirus continues and fiber of the round and maintain payments September, an hunting. levels summer, a or levels. stores this additional a COVID-XX end business. second to Brad. allocated and in without counties case are purchases XX-days of support. to continue totaling in quarter metrics I farm of the industry major major or pre-pandemic levels at Xst XX-days processing and is four in CFAP heightened ranch, from and loan all forecast states. and of will we announced held rural the are payments, in a lines political of turn October values supported USDA with in patchwork percentage support the

Brad Nordholm

Jackson. Thanks

like call more the would to detail. financial Aparna. turn over in Aparna to to discuss I our results Now,

Aparna Ramesh

everyone. afternoon, Brad you, good and Thank

markets the stable in growth pleased strong of We earnings performance to debt quarter face capital another pandemic. credit accompanied the of are uninterrupted and report by access to

substantially costs. Our quarter control earnings business and continued by disciplined funding expense spread driven strong in were this volume, highest and extremely lower growth

strong. has markets Our access capital to remained

basis and to We policies asset our have continued a daily issued practices. disciplined management and maintain liability on debt

disciplined of debt significantly and issue have ongoing all within GSE the effective. dropped selectively to across are tenants, historical low And maintained been an rate or in costs to giving thereby environment. continue few callable using the points spread our spreads actually widened to very have instruments prepayments our issuance. approach rate of ranges to This other past We Callable funding and have basis. debt, over opportunity also resulted allows continue that we effective mitigate a debt funded net months, and us using in match increase our callable the our from an on to have while debt we price us portfolio spreads opportunistic approach overall

remain range $XXX We minus continue points. cash position strong a maintained well meet in million and XX a with or total plus capitalized the few over September basis XXth. of liquidity to in of spreads points as basis of We

preferred on And as third XX.XX%. CVS XX position once us, through You non-cumulative We we million stock. Series of well will quarter dividends have quarter, Farmer the again and preferred of of for during perpetual used issuance capital to buffers to unforeseen also the related of $XX that, Series note issuance enhanced this but redemption million the outstanding redeem issuance to which Use net of F costs million Mac the position, non-cumulative total preferred initiatives, the stock of XX.XX% outstanding. issuance, growth $XXX deferred in our recognized preferred going the capital of to This stress. X Series XX-days timing has proceeds and for case in the by increased one stock. stock of up from that CVC A positions points also the strengthened both preferred $X.X been basis various stocks info

million Turning XXXX. third to compared XXXX, to $X.X $XX.X quarter for earnings million $XX.X million to as financials, increased core third in quarter

for million due primarily decrease a by basis was $X.X in in exceeded this minus spread. after effective the stock a XX tax to in points were in Our Operating increased benefits net plus $XX.X expenses, expenses increase compared basis $X.X $X.X this funding $X.X increase effective primarily compensation And third increase losses. preferred partially increased to X year that net quarter disclosed terms third due related million due million dividends to primarily was The million quarter project quarter total XXXX support administrative compared environment. increase core expenses the same related incurred gentlemen increase costs, costs points was though, training low volume. printing $XX.X such basis our and related certain the and percentage last our or to range - to to business provision of after are to expenses in earnings period and in deferments growth. points. of And tax lower by previously increase pandemic There operating also other of X% consulting this And tax through in in the in offset from after we current to spread headcount is to million lower the higher XXXX and This G&A third is XXXX. credit fees travel have this increase was spread target by in utilities, spread that million variable for projects. year and XX or offset as

this will the plan organization. investments these in relevant we noted support this add for will future. that in temporary. do I expenses And normalize continue fill we the to strategies. such revenue plan reduction foreseeable And is year technology And primarily We across as this However, expect to to our the be enhance our platforms to to our also infrastructure, talent gaps modernize future.

meet the forward, grow are new to to exceed increase greater retention expenses we and time. we commensurately a will And modernize as Farmer investments our enter with and going enable sense Mac operating thereby revenue growth. more need needs, also lean All expect These We to markets, also customer we enable organization. capabilities. and over revenue efficiently

our historical with to ratios is plan within keep range to Even revenue averages. these our investments, make expenses we that as consistent we

million factors Farm portfolio. the that The standby provision growth provision portfolio, farm the this and portfolio, well continued increase Ranch, & quarter losses. were long-term for to Ranch, commitment ranch downgrades for rural the and to in credit value. partially portfolio. of net maturities portfolio as the largely by loan that & Farm attributable in commodity advantage impacted in and volatility improving was factors The lower the the scheduled impacted utilities positively land improving purchase loan was expected prices as turning economics in economic Now offset uniquely $X.X losses The

results. sequential Turning to our

a effective Our tax was increased by and XXXX. compared tax, to increase $X.X core partially $X.X basis, offset an for second higher in lower on ranch tax the dividends loan net after by volume the in earnings spread the $X.X quarter. after double credit expenses. was million losses purchases, million costs accompanied by in funding million was in and and this million higher operating This after-tax attribute driven third stock $X.X substantially preferred effective increase net growth increase spread and the net of million $X.X by total increase farm after The provision quarter to

the is retained of capital primarily the from to prior The third increase statutory mentioned as to XXXX statutory XXth, XX points in $XXX million from well Mac’s compares prior XX%. quarter million in F preferred quarter. million I of to in previously, which earnings previously capital capital of our core a the continue exceeded of mentioned an June by XX.XX% $XX As million due remain XXth, extremely Series XXXX. a XX%. increase core as basis September ratio of of to from million quarter X as requirement $XXX capital of well-capitalized. a stock we by $XXX Farmer requirement or exceeded XX.XX%, $XXX This Tier as or issuance This the increase brings

extremely remained are and liquidity Our requirements. regulatory strong exceeding we far our

core In asset position that head the we flow continuing this also sheet, fund balance retain required As to Mac conditions earnings allow but uncertainties. shocks, the allow but it stable It will that flexibility of into will economic fourth customer market to level also as management. We weather higher than well-capitalized Farmer the to underlying adequately conclusion, will maintain liability we needs, liquidity. meet us will continue fundamentals us we lower, unexpected ample cash reflect cash need to levels fund the change. any elevated liquidity and maintain and given a quarter, believe to a disciplined of

at us expand levels, successfully to positions of to access our continue our markets bonds deliver and competitive callable capital Our use mission.

performance liquidity is you. that Mac’s about the strong effectively. I very and will turn complete to in filed times previously navigate should have And with today XX-Q the mentioned, We and capital we uncertain enable it to as SEC. with Farmer XXXX third back More these positions, Brad, information these quarter us I

Brad Nordholm

Thanks, we business with current have for the Aparna. their In upon model closing, success we remained resilient increased built economic well-positioned needs. environment on in our as customers and focus

tough generated have backdrop, X%. environment the against benchmark strong only consistent, around interest not world near with rates earnings a investing at We COVID core

somewhat balance and our operations, remain times, While the diligent, in about the of economic that uncertain, continue trajectory power we core sheet is of the strategic focused our team, of on of and our the because and even remain these an recovery future, the the and optimistic primarily remains future. abilities to will timeline very of uncertain strength I

I Farmer is a intended Mac America. response times As economic to And institutions is these financial created in said uncertainty. a prior for true this serving to especially have rural and on resource during be pressure, was calls, of crisis, and

see have So, on to questions now anyone Operator. today. from we if the like any line I would


are now Speakers, open. your lines

will begin the come instructions] Pendy Our now with will Please from ahead. We go question-and-answer [Operator Greg Sidoti. question session. first today

Gregory Pendy

Just a couple.

is a I type second, then attracted the you XX-day you How should rise delinquencies XXXX you rookie that touch just can lock us some on this the that on kind just there win as got that something well will where about give is just can I context, this you as deal some out. solar guess, year I believe still loans. you of maybe be deferred something XX-years for over similar we think spread? spread? that was And that one, kind outstanding? thinking And as of is I could is that that? in delinquencies First did. you the mean

Brad Nordholm

you Jackson the Brad important today, and Greg. color have that joining some is to thanks the loans here. additional will Greg, right Hey, in recognize are not delinquency And on I very it much but for included delinquencies deferred, numbers. give Yes. us deferred now, the

So, separate. they are

the and it some think I relates on contracts after of to also on had but PTCs and conversely, you the value a color schedule ones those tax have fixed already. between down. is the in we resume have wind after is the the will first the large that of revenue projects note quarter also, wind year, And fairly projections as solar. on the wind it win both revenue back as They schedules scheduled the and as of purchase are more goes the are price, that that credits, deferment as lot are important Yes, third slog of up. over, multiyear you production many power give is contracts, But A know, of remaining have you that, to payments a more we time And find period a have that tax those level a for pricing. more well loans fairly the a to function it from of gotten blows between XX. production, there cases, those consistent. goes fixed

not carefully consistent. Although quite as

this there is is of solar As with than projects. solar, cooperating with production variation is less wind. there portfolio But the

that So, had history. based, wasn’t history, much performance and underwritten is were operating basis. we so projections on the payment it on they historical performance, It wasn’t

certainty of of the of degree coverage So, those very a ratios. padded, debt we cover ability the to high cash flow have well service projects there, and

are excited that. about We

we a pipeline additional deals. solar good do Going have of forward, just comment,

over be in kind in And incredibly finance out be the is Texas solar just year, will common. Dakotas wind we has doing U.S. projects through while the Midwest, of in next become places than more the is that I more of think wind. will because, project for Looking solar we to economic the that use anticipate many probably debt we particularly doing

forward. solar more from we probably And so, expect but opportunities, both going

where So little overall it Jackson, there? a are bit performance, as of can we portfolio color to relates going add back delinquency to trends, you kind of with

Jackson Takach

have government will pattern happen fall. in a third some the out following Sure. the is we There payment. tend so quarter, pattern, the follow I’m of July quarter, additional to that out to. that typical very the got Xst the in that in Delinquency happy there lot typically fourth that seasonal pop seasonal curing is This coming payments. a is funds year in a us trends of throughout

X, payments the throughout the CFAP are CFAP some markets X the to So, offset disruptions year. to helping the of

good got the into commodity prices end the also have of heading You year.

quarter So, prior prices the commodity of parts elevated fourth are to compared year.

the And volatile quarter is a delinquency there support. of you in But is period. it a lot drop market fourth see rates. highly traditionally So,

We have still got in backdrop. coronavirus the

about a the but of you fourth loans they’re I And playing transitioned the very that to paying seasonal payments we are that to if seasonal ability making are their can’t that that percentage quality coming assets of and the of any point is and out a trend. into coming that those will data speaks deferral quarter their very, continue say off follow just delinquency, one through certainty, with period highly but So, being period. well it of not that we will high points deferral trend, released, that once kind is just of and and

Gregory Pendy

a Thanks is That Great. helpful. lot.


go Investments] [Gary question come ahead. from with next Gordon Please Our Gordon Gary (Ph). will

Unidentified Analyst

Hi. zero call. $XXX,XXX that, at couple taking Thanks this A my my quarter, you. least and your were calculation year-to-date. of questions, actually Thank one, is for charge-offs

delinquency loss but trends, third quarter. here didn’t the yes, and So in the result that they single calculating right in are a

Brad Nordholm

Yes. your That to Very is correct, Gary and hear nice here. Brad voice.

When quite a then a loss. and does migration become analysis. owned a bit become and of does XX-day do become a We XX-day estate on does Here the XX-day real estate a real one delinquency

real You XX-day is loans speak delinquencies of estate amount correct, insignificant there those of. to from none migrating owned are really We to statistically to charge-offs. and have absolutely

Unidentified Analyst

Okay, good. Thanks.

of at falls you your current for sort capital ratio, ratio. this the that high the the at middle capital On is end, the XX.X% now about low-end? the is ratio, and said target of range sort Does in

Brad Nordholm

at there. we one, that end there cost and the of is the recognition easy We when minimums, capital But pretty target pandemic, do there minimums ago end That fact our jump our put will well, doing let decision. in still range. the in remarkably with little to sheet, uncertainty regulatory was a is few that. did to performance additional the balance financial minimums, little our opportunity is is preferred, at so, some range. Board our think middle in a the on or a about about is of of we level out in of high comments And a months I now. the right more retire had here to additional recognizing that consistent, the expensive But that we our an are how overall it high Aparna a

hitting have which to our target solid capitalization below We we And also make not want. want we so sure did that, we recognizing that growth some been that numbers. our does dilute ratios growth

And consideration. are our create on markets, little preferred regulatory growth, we with are maybe important been, to little Aparna that. so an in additional they our and in about thinking when sheet, capitalization us, a bit markets about more support on has to to for can balance add cushion the excess putting that our wide you a open and have talking ranges as a the where our been capital

Aparna Ramesh

you got additional this, we the we it reasons we called was It opportunistic. really to get and right expensive and why able capital. weren’t also but Absolutely, capital, the undertook covered was it found timing, more

pretty self So pieces, at a really, extra, capitalized then XX we were on clip. the we about to good million added and able also neck

quarter be need the that we that about to in resulted the just XX to really that XXX from, quarter were minimum of capital, XXX all is we second increase terms, million, and statutory needs million. we in dollar third think about it that highlighted, and our at to we that which it So, to at from be points basis far be exceeded where

minimums. XXX almost So, million we statutory are that above

position, as pretty us a capital for a we noted, XX% grow. So, is to it certainly Tier that secondly, don’t level are pretty continue And we strong, really dilute we right from that puts well to that capitalized. metric. the as as in extremely can’t good XX%. XX% capital remains target And we economic is in The That thing we is to that both, go below between do well environment. still a make we fairly an think both from one to as somewhere credit liquidity internal standpoint, uncertain sure standpoint while Brad really And on be to capital. a

So comments, that helpful. those are hope I additional is and some

Unidentified Analyst

thanks. Yes,

is Okay. mix wider view those loans. would business? your yielding My impression spreads. One question. Farm And a as maybe which headers, let’s of & the loan like say, are, the credit loans more toward more Farm and you to migrate higher little Ranch, you energy compared asset It the to renewable a on trying last & equity sounds are net-net Ranch the return institutional risk

Brad Nordholm

mortgage, too, in does and large Farmer Mac but this, that on and and very loans Ranchers we to to comments secondary couple Jack a Farm market, the agricultural United Ranch Gary, across the do & Farmers all I of, what Yes, here. States. want important jump are on is, this here first and why Providing small definition

mission So, on and creative, over huge why we average, do. a a we for exist. because it last It profitable we so amount year, what put to of have also that emphasis it above the core is our is of is profitability

were wind announced the on kind market ago that do we in overall purchase are making and flexible, our of being to to to to just our a competitive, about that able off It of be loans, more commitments customer elaborate what may see products as we Zack a we he we solar to surely are returns. Renewable as provided improve is XX-months service bit going but that couple accretive good make we energy, also start for that, and slowly we talked and highlights more doing you. So about and start a getting there. to more

year this a could for think I million. we maybe hundred do thought we about

for next couple think probably XX we can, something double are we I come like that. XX every year can maybe to million, the years. going then that of that in million, But

debt to with that costs to drive it the the as And be talked when lower about, particularly margin do, markets in borrowing, customers is that pension we think help could institutional earnings. the in margin, Zack fed some business, I some accretion alternative expectation. past. lower have capital than what, and And those also of incremental our of lower especially may center even the the

hurt business our does deal it this with are are if asking if let roll relationship Does important And question, willing choose mission. those if choose a the hurt to go. We ourselves this to not forward, not we we going answers over to we customer. that renew to it are our no, bond, this

With how Zack, markets. of get debt maybe in color and changed intervention once the seeing mix add back, out will round but slightly we Zack period come of can kind fed of this expectation we you more that it capital some in this the past here are some assets.

Zachary Carpenter

Yes. Absolutely, Brad.

I think market many forces a highlights that instances In relative this drove kind quarter shift. shift. of

the securities incremental our saw We had markets. attributable decreases that a that managed significant capital fairly liquidity this the indicated, and this As in earlier was volatility some primarily to Brad was on year. sizeable quarter, put

quarter basis, Hence we decline improved, of the reversal down that. on were notables the somewhat a slightly a liquidity. year-to-date given more have this things but seen the which of have As unwinding

did was on In loan and that addition, through I noticeable risks Brad focused by the down, purchase a the of syndicated credit in with partner. our made noted farm base, a comments think points base this of highlighted stand well. our it us terms remarks focusing broadening driven pass purchases sheet. own Again in as the there that lot those key come transaction I concentration broadening in securitization, system on and as balance I it product prepared couple commitments. And quarter our our market seller really on increase a about we makes

in, balance are important starting base, return our think our know make to impact state our base more does product You going risk to that we that and broadening base, on income markets and and forward. sheet those products our I help diversify and

Unidentified Analyst

lot. a Thanks


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

Brad Nordholm

the of board. for Spent financials the you, evening. and Monday today in a on day the thank you on Operator and all markets really X to across jumping thanks a at o’clock in for quite Certainly

of right that and I side thanks moving again on So, case. been But hope the the rapidly always you markets. this have is

voices very going on you that [indiscernible]. Farmer and who there and confidence pleased this you excitement additional have and to to very I’m may scheduled follow-on things things hear want said the will. in how If about be is in follow-up will please That days from Farmer touch And and proud responsive is to both We with you going call with be in happy are we our are at doing on. the on the very, very call, your hope are very keep we team best that have. next are going Mac, you of questions going questions with jump this today in a to very can executives of are optimistic I’m I or to how the questions, impromptu to what get that Mac,

So thank you.


The conference today’s for has attending now concluded. Thank you presentation.

You disconnect. may now