AGM Federal Agricultural Mortgage

Bradford Nordholm President & CEO
Stephen Mullery EVP, General Counsel & Corporate Secretary
Zachary Carpenter EVP & Chief Business Officer
Aparna Ramesh EVP & CFO
Jackson Takach Chief Economist & Senior Director
Gregory Pendy Sidoti & Company
Call transcript
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Good day, ladies and gentlemen, and welcome to the Farmer Mac First Quarter 2021 Earnings Results. [Operator Instructions]. At this time, it is my pleasure to turn the floor over to your host, Brad Nordholm. Sir, the floor is yours.

Bradford Nordholm

Good afternoon. I'm Quarter to Investor and our you Nordholm, First XXXX Conference Brad very welcome pleased to I'm Call.

measures. I'd but We a have to use make I comment today, we statements General Farmer Mac's today number and ask financial begin, before may of positive on of Mullery, a developments to Counsel, great our like to report as that as Steve forward-looking discuss non-GAAP well

Stephen Mullery

Thank you, Brad.

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

Bradford Nordholm

everyone, detailed with first environment. financial Officer, you, for who Today, our you to overview good conclude Jackson market Chief Chief thank and of a provide I thank over Steve. results. will and results. update us. Chief high-level to like turn would Well, Then our I'm to will Ramesh, Officer, to our And Carpenter, more joining our call an quarter going customer the provide Zack agricultural going our of discuss afternoon, Takach, Business And is Financial Economist, review on the developments. Aparna a with you current

core quarter model, business the strength Our same a increase of reported a in consistent period last into points with and of and XX% of basis the in earnings year pandemic. performance stability demonstrates net We that's quarter million, effective year. first $XX.X points, compares the the which the XX over of and first full results XX a basis XXXX our XXXX spread

year-end, to products. portfolio our of the the changed asset excellent towards maintain disciplined in in benefit funding, While spread a portfolio continue was see and loan higher our of composition compared management quarter continue we size little our to overall to purchase shift the from liability

balance expect have The condition as business As revert levels capitalized ways mission first to reduce historic overall Farmer of finding a to market with do, a basis remains X result, the capital innovative has high of the the real however, or quarter, to remains estate our of points, furthering points, We net standards adjusts. provided agricultural economy rural our recovers strong minus previously XX positive. access plus cost levels well mix Mac provided. of to effective funding credit remained we and America above spread basis credit and the quality. guidance our the to We've increase new and sheet credit. solid in $X.X our liquidity, billion in

stimulus distribution, vaccine impact closely our are the to While to monitor there we is our on due optimism widespread of economy COVID-XX continuing the portfolio. and for fiscal

we As of deferments million. principal approximately March $XX we of in XX, That about million XXXX, with that have the peak still balance unpaid of approved. compares $XXX

less the So it's XX% the of of now Farm & of than less business. and peak than line Ranch X.X%

rural during region. are not effects of effect February to or on monitor our continuing the power the extreme infrastructure the we've ag in Texas, seen significant the in cold event we ERCOT that any results and occurred Although on financial ongoing portfolios, weather

maintain is Our fuel and a It financial Rural position split increases. electric distribution of Rural risk Throughout believe and ratemaking generating communities. unknown Mac We today. appropriate in rural portfolio as additional to stress in that availability of amortized. electric cooperatives. our our which time beyond, this cooperatives assess electric largely or we and in depend to fluctuations. Farmer their cost XXXX. the are have are current to of into absorb flexibility $XXX magnitude period entered the that of these is flow And that for the strong farmer price XX, internal market governance the to are believe portfolio in risk we March it cost And or that that business at exposure period and is pass-through will in that be power are We over systems, required costs steadfast located as these energy recouped time electric portfolio transmission this pass-throughs to credit costs. remain of recovery between Texas Utilities in we approximately That and provide and have million at commitment pay the cooperatives will ratings $XXX on this these what able ERCOT cooperative Infrastructure many for recoup of which provisions to million applied will cost our

particularly Credit its continuing so ag to strengthen after designed on developing new that our that shareholders our to a can those Officer, growth, and standards. in integral role development finance that to of achieve in Chief it of complex strengths while with large our maintaining we to than to already new business and the Mac, growth. joined And have and an value Marc technology deliver our long-term and objectives to decade in Marc food underwriting leveraged complementary for initiatives Crady, spending us play and March Bank areas relates we He core transactions. Farmer groups. continue will our brings Third our end, are as Fifth underwriting particularly prudent standards more at We profitability enhance focus will our our

to thrilled developments. team grow Carpenter, our Business his that, Marc our executive our Zack? have turn to give support are join to With to We Officer, for you Chief and the update call business. and like our market on an customer efforts Zack I'd our to

Zachary Carpenter

business The was in sheet Thanks, modest This and $XXX.X Credit held XXXX we as reduced saw Ranch partially of March such half of to moderately purchase $XXX from letting securities by $XX.X moment. specifically $XX.X our business, as primarily the large of business decreased products, billion a reflecting fee-based certain XXXX, as XXXX, Brad. purchase its long-term of primarily of volume outstanding pass-through the decrease credit of million million due which offset in million $XX.X Total second trust review commitments. other decrease XX, line trends standby of off-balance in was Farm securitization net loans one in & million, exceptional Institutional I by a counterparty products in decrease a amount will growth December continuation XX, AgVantage outstanding or mature.

while managing of our million and AgVantage ability effective counterparty successfully transactions net impact added to $XXX However, another, million securities execute $XXX spread. reflects we our with with volume did the of new refinance one which to tactically

do to portfolio levels As about Institutional we we for see Credit favorable AgVantage and business funding counterparties. alternative as liquidity. the we of strong many our prospects elevated markets in remain long the Credit as Institutional continue market by incremental into And access a continued of maintains XXXX, could capital environment decrease our given cautious

is in product and set offset our to and success fee-based our the million reflect off-balance products. & $XXX.X our to efficient in initiatives, purchase customer growth loan rates decrease of of Farm net our more other our growth The the increase to interest purchase business. of Ranch & and retention net The loan acquisition effective continues Ranch across sheet Farm which volume, loan competitive and a quarter-over-quarter purchase execution approval line X% than $XX.X portfolio ability our the in and attributable Turning to million provide in process.

seasonally Our once the with loan to portfolio. reflect associated results again prepayment X primarily date heavy our also payment the our overcome to ability related majority of January a quarter

resulting in purchase $X.X purchase XX% net loan Our from first over in the quarter XXXX, has portfolio volume. Farm increased of Ranch loan billion & over

agri added Ranch this a potential growth favorable support In quarter's purchase of other and a proportion loan growth exposures This and given And & spreads supply the addition, is to included to food chain production. agribusinesses growing its loans area agricultural growth those producers and production, are for about Farmer we new bring. fiber diversification processing in excited continues that Mac. market Farm reflect and net of

Farm borrower that and to continue yields. & and Ranch and at provide with broaden diversity Our across all Farmer sector remains relationships pipeline we Mac levels portfolios as deepen will accretive healthy

positions $XXX.X Ranch million loan our purchase offsetting held loans in standby partially $XX.X product. discussed, in trust in continued these resulting of business previously were in million As products. the our activity & as risk decreases capital commitment strong purchase strong long-term of and reflect reducing for net growth loan of Farm lending well need primarily utilizing favorable the the as our customers, decreases refinancing environment levels These increased mitigation

spread lower continues to do However, & core agricultural our Ranch outpace not Overall, fee-based broader purchased same thus to revenue credit degree and our markets. the as impact affect and due Farm generally growth generate these our earnings net do the structure the loan effective products product. to not

Ranch Our of loan months last rate to X% XXXX. market through portfolio loan purchases growth & held or agricultural in the loan net over XX.X% December agricultural our line the in Farm business, of including approximately total the grew year-over-year XX loans compared of trusts, mortgage mortgage

have months and relationship reflect Excluding & of share over last loans in larger, increased well Ranch large our loan the complex Farm loans. XX and XX held our purchase we producer customer and agribusiness consistent as XX% strategies trusts, rate more our purchase growing in as last our seen over approximately to growth continues agri retention the This portfolio months. loan

the the of the $XX.X Utilities Rural quarter, business The results net growth compared during XXXX, Both this first Brad spoke Our to with customers during that during Texas the freeze payments loan which interest and quarter coupled higher to line close on million earlier. scheduled environment of reflects reflects transactions the looking XXXX the about Arctic slowed rate primarily primarily decreased quarter. maturities. quarter in the of impacts and events execute achieved

auction, ahead, However, Rural looking Commission's overall within given the of Digital subsidies in as deploy ongoing for the prospects cost to broadband expenditures who awarded cooperatives Federal operating well seek with Utilities capital growth broadband-related line catalyst and December to which loan assets provide service. rural investments bidders generation, winning distribution transmission from Rural This capital be $X.X Opportunity the billion a and as electric may for in positive Communications appear Fund business for in XXXX. demand to develop

have cooperatives, where proceeds for infrastructure loan to develop loans the distribution utilized in were We million of to approximately electric America. $XXX rural broadband made portions

next few area the to focus Mac years. a We of growing be this for expect over Farmer

outstanding the remains total quarter, relationships renewable in As and build The an enhance reputation our to purchase energy the of a player key strong renewable $XX.X March our continue additional we energy market. and XX, renewable million build energy closed pipeline renewable $XX.X balance commitment. XXXX, our in we during the million, to as was infrastructure as loan portfolio energy of

economic Our recovery optimism conversations with customers ongoing further about growth. reflect and

on focused execute back our which enable value to strategy, stakeholders. I'll for it you, continuing create straightforward and to all a we long-term customer-oriented And believe are We that, Brad. of turn will growth with

Bradford Nordholm

Zack. much, very Thanks

Jackson? current economic to like to you Chief an credit I'd our conditions. update the Jackson, and call on give to Now turn Economist,

Jackson Takach

and values Thank than of conditions levels general Higher USDA XXXX agricultural $XX marked as round America's showed economy improvements XXXX, quarter and XXXX payments direct Brad. By the the fiber sectors, the well you, quarter incomes lifted the for of prices more economy. of strong agricultural in in and demonstrating The support demand, of most Western first In of the general record support, commodity in first fourth to strong during and supplies is also released combined market unemployment in as XXXX. a measures, commitment XXXX, economy and land farm XXXX. March and another to XXXX. vital the quarter food, government the rates of These in details a indices markets. economies for metrics. limited in fuel the dedicated the payments in support support billion particularly with quarter and of Consumer several political of improve continue conditions challenging healthy showing experienced manufacturing rural a spending, of performance to above-average first these after signs quarter resiliency the and with have

the spreads XX% continue and but year. energy with projects to high-speed overall the to community annually, and start markets Internet, a values interest climbed Finance of showing opportunity business in rose the XXXX and connectivity conditions. pace the approximately XXXX, credit the outlook S&P values in quarter first strength the improving Housing rates financial data quarter, from Efforts to Asset CoreLogic. through the according housing level in rural increase and The Federal of at to access rising for broadband investment continued tightened, Authority February strong during

of a the consumer bulk shadow Furthermore, rural and The export consistently U.S. complete, impact mobility, and on still agricultural recession. some financial to these food COVID-XX fiber distributed. recovery, products there like is farmers there economic evenly food, tree yet the ranchers and the are outlook the risks are global fruits economic producers pre-pandemic cast in economic fuel continues on reliant nuts industries. ag, and experiencing not the sectors news increasing, And and While more some was and markets pandemic on for remain the connectivity stress and XXXX for the not the is demand. also back food to thus, of from not were recovery to levels. while positive,

providers, forward together is continuing volatility a and remain regional overall Despite of standard elevated effect of to this Artic vortex and of the positive rural earlier, risks of the to Mac's below portfolio. of example freeze on of Portfolios event are risk. the but lawmakers rates electric a Brad net Farmer were markets. headwinds, ag the described work put these default which fell to polar portfolio, loans and prime much rating weather the back regulators or loans had performance the the a Texas, conditions permanent Texas quality XXXX. market. immediate with substandard Electricity rated Finally, narrative financial rating substandard in improved. fourth plantings The also Loans energy source uptick in as few solve to represented burden historical of levels X.X% to from improvements economic slight these for and or the in rates credit But rates crop a risk quarter. February total driving downgrades at and

related and on portfolio. XX-day by rise of XX is the XXXX. past performance observed The in fourth further first the March the were loans loan or top evidence the seasonal in of consistently X.XX% X.XX% half year to borrower the in quarter increase total with quarter the payment of those of XXXX, March as growing strong of That There XX% that total There Farmer due XXXX. the XX, charge-offs December each portfolio remains However, portfolio from delinquencies as concentration as to seriously XXXX is of January of of off line XX, delinquent Mac's a represent XXXX. rate date exposures paid first the by quality which quarter, or during overall credit days no of XX, cured of loans. XX, rose delinquency during the March XX than more loans the first more

food, quarter, quickly, Farmer back experienced and energy a that sectors on Brad. agricultural conditions positioned While XXXX you, well momentum. build Mac now cycles the sectors rural to help and it first to economic and has can healthy taught I'll is the And have us change that turn

Bradford Nordholm

like I'd detail. to Thanks in very much, more discuss our to Jackson. financial now Aparna turn results And Aparna? to

Aparna Ramesh

costs and underlying access spread to driven our Thank of strong higher strong quarter environment. growth business first and were markets. given our and business capital adapt our in the XXXX volume model Earnings lower changing by substantially Brad. debt you, Farmer earnings to continued strength reflects funding the market ability to Mac's

mentioned, the daily, debt as liability access our I capital disciplined maintain asset We've continue management Our strong. to remains to markets, we issued practices. and

shift first to XX Ranch average year. and $XX.X decrease in callable This The effectively of our was XX, mentioned the in that's purchase same rate from interest-earning period of of quarter in environment. dollars business primarily This In increase prepayment reflects to due XXXX in $X.X the as basis a billion was and Farm NES quarter and $X.X new represents billion, securities. $XX.X to As the about agribusiness an compared debt cash worth overall in from and comprised first Brad. XXXX, assets points million continuing terms, in spread million. that balance and XXXX. percentage compositional $X.X resulted and million And products the risks last by volume to March year-over-year loans this our a net million the increase result basis $X.X interest instruments billion spread $XX.X increase of net from & loan was was improved non-GAAP Mac's funding use to points Farmer effective XX costs. $XX.X low million of investments of mitigate a for effective of to XX%

As to $X.XX for our share also that extending pricing or per for our We're environment. XXXX. per successfully that our in risks very our XX% earnings ensure what due million preparation curve earnings rate minimize the diluted we travel by yield initiatives. $X.X $XX.X quarter attractive. interest increase primarily are also the seeing information million primarily were increased consultants to was steepens, quarter liabilities for higher common and levels rising Core this to rates a increase provision lower analyzing convexity after-tax a year-over-year year-over-year, matches in rise. this first actively $X.X And increase we're due in was we're to first are core grew $X.XX common a million The compared share $X.X or as $XX.X This to rate diluted duration of support stock million decrease and spending and a increase software headcount Operating and and in total after-tax and core to losses. licenses offset operating after-tax by in credit related increased $X.X strategic million in XX% expenses levels to consulting increase increases partially and on fees, was dividends. conferences. These and both expenses offset expenses million NES for XXXX technology by preferred

add are future, However, decreases normal expected the likely to relevant and foreseeable temporary once pandemic resume. to travel post and also for revenue investments infrastructure, activities plan primarily strategies support is across and the platforms other modernize talent our organization. We technology enhance to normalize to this the continue our these and to

While quarter. expect the We've to our controlling disciplined tapering as see growth. we increase over personnel a through and monitoring efficiency closely to off results in to our months by next also of rigorous expense and a each innovate expect instituted and review approach our efforts these business, grow XX ratio XX operating we also a to we costs non-personnel

at seasonal out. smoothening XX%. that nature first than of expect the point X efficiency quarter our to Our ratio first quarter, was XXXX occur XX% of which mainly in And the expenses This a see this percentage result as higher level. targeted ended is we

do ultimately and will upgrades historical our position, customer platforms investments complete service and to multiyear period make we improve a these commitments As we our under technology to revert ultimately ratios over expect as stabilize efficiency will competitive that levels and our at that XX%. we

XX, and release XX, losses million, December reflects March the loan $XX,XXX allowance for XXXX, a this were modest of $XX.X As total XXXX. of from

polar the assumptions. Texas Brad February loan million. impacted the Utility the quarter we bit utilities The to $X a & in negatively multiple a This due release provision little in to a detail that impact offset million allowance total losses of XXXX. mention and Rural earlier. to in were Farm ratings quarter, Utilities on million due downgraded with the that includes vortex by the rating struck During updated to upgrades, exposure special cooperative by recorded to was Ranch loss provision downgrades net $X our during was a for portfolio Rural discussed the portfolio a of approximately in This also default increase rural we single by the $XX

All of by of course, our portfolio. this offset, partially net loan was in growth

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

me turn capital. to Let now

well-capitalized a Brad our of we earlier, exceeded and March As mentioned a balance million billion XX%. robust of sheet. Farmer financial institution XX, XXXX, with statutory remain core requirement strong or $XXX as capital by liquidity Mac's $X

was ratio XXXX. as And from assets X the a our XX% is decline to capital XX, risk-weighted modest during as And this this was of in growth quarter. capital outpaced due year-end. that primarily Tier growth XX.X% March of Our

exceeding end of also $X our billion, by regulatory remained liquidity position as far our evidenced Our requirements. strong quarter

quarter the higher-than-required so to we change. lower first we back pleased into we've done weather can through flow performance today to turn you. flexibility a And that, as filed of any We very Overall, me this we in XXXX level given our Brad, liquidity XX-Q maintain capital market levels maintain continue continuing liquidity also of the expect with this the ample to credit that XXXX about will in our XXXX the complete and information but SEC. More and cash our in we're Farmer shocks conditions unexpected as retain uncertainties, to cash reflected and that let but is quarter, going economic with adequacy. it quality, profitability is results consistency with Mac's

Bradford Nordholm

the way certainly, work, very abruptly the and serve way the our Well, we customers. much. communicate way also Good, pandemic we the we Aparna. Thank you changed

determination last over communities. we results providing changes Our the really and agricultural rural to a think, commend uninterrupted announcing a team a remotely. We'll work the all. partial XXXX, We and for our those to in months reopen mission of be for drive couple success Farmer adjusting experienced have strong who plans reopening I and all reflected our members That's start year, later Mac of, the and year. our fuller to at really, the and continue at of after probably next this office support

We are there executing the on well and consistent see strong performance if from of on with line all financial like are today. are to we anyone operator, shareholders XXXX. well of any believe our returns initiatives, the questions I'd we our and rest to to deliver positioned over that, And


[Operator Instructions].

first comes Greg with question from Pendy Sidoti. Our

Gregory Pendy

but describe, adoption you in historically, been of there, under taking should had losses. I utility potentially One, CECL, given two be Texas the can Just rural losses CECL, know, and haven't you've questions. how about the we you it? exposure just thinking Because

a And So should thinking exposure? incurred if that be would here, basis? for are there losses how about on how it you we change accounting this go-forward be would

Bradford Nordholm

Yes. questions from Great much. Brad. Appreciate hear to It's the very you.

First, for estimating a future keep CECL sophisticated method in that potential losses. very provides mind

a not establishes losses. losses really reserve it realized against They at future estimated So all. are

was were having by They the grade. pay are freeze that was rated investment-grade for and specifically, other of because liquidity more transmission the the way work after transmission agencies. to still case cut. we S&P so the impact rural electric And and their and, electric electricity. strained the freeze borrowers they're and electric high we're And by the cooperative Texas that generation cooperative, the who their generation rating purchase cooperative had models investment of the and loan lowered In were ratings prices

So in we new reserve. the and and higher is - way formulaically that the into the that results and a provides our CECL for model - works to adjustments model

Given we in the comments, these quality think losses. said expecting our customers, high I we're not actually of as

actually for And have current not and our expect point information ratings Those the this be works, those result at we're to what them reserve, is investment-grade outlook and on best to work dealing We to we in today, how formulaic. automatic upgraded. losses credits. But it's the them. an and and with. on do given through recover any absolutely model based in CECL we - That that's increase their take eventually downgrades expect this

some our So associated comments, less was as parts than those in the very credits attributable you've largely those economic we and of in of portfolio, additional - that lower portfolio that had offset conditions. reserving in - heard with reserve to other a by positive

even netted we from the of have in had or losses clear, Texas we kind are realized date nothing credits to just losses to But the be it So seen that that we've caused have that think out. the either imminent to or likely. portfolio realized us

Gregory Pendy

Great. And just then one more.

that funding What you've this quarters spreads been can get is I now. in levels? normalized to called Just row environment out, funding have costs. the in very seen for X those Because - you but think the you've I more lower second lower quarter talk to - a us lower your funding might - the good, costs guess,

us So just could talk you through?

Bradford Nordholm

you that NES, to mean, I a the assets. in show in see in Absolutely. Aparna. part that improvement part small When to to the composition part higher-margin portfolio up and also shift NES in in to of And going attributable in I'm turn the to is a

markets we precision being given that opportunistic But loan the when debt spreads, favorable. considerable capital we're have very how and it cost manage can virtually to every I having the been we price debt market think but based out the we've current past, we funding on with a that bit. current expanded make discussed of that, in we said

at me record to and Treasuries to credit you reverse. cause change been U.S. such been dramatic Our how widely has could to color have just on spreads provide And Aparna some it turn what followed as indices that to let levels.

Aparna Ramesh

giving you call the successfully And Thank the rightfully point consistent debt as come some to for recently, absolutely. this. been prepayments. very of there One, as you you [indiscernible] of past our were what But been noncallable in in spreads year. market, Yes, things. an treasury. and the benchmark issuances volatile working we think the is especially the overview is just some we about overall how to And just on that's yield extremely last the noted that market couple of that moved a low more we're continue callable question. conditions very to up has I'll and so, supply our market volatility in out those response been But versus there's seeing curve and debt near our recent steepens, a what's tight levels favor level kept in more have bit. issuance actually really able

give a sense of just to to yield what our is our extend approach the So curves we're do here, trying as steepen, really trying duration. liability we're to you really

liability will be maintain the issuances Brad compositional still up were favorable have NES low, shifts, that will our noted XXXX assets XXXX. terms those we we in environment duration terms that gone and of in very in in our addition will, rate So our higher keeping the believe help where have a to and our that, and factors interest us And shorter of other to because help funding that costs spreads. actually and relative higher duration repriced to us as

when a there, stop you we little a just [indiscernible]. gives me let of that sense mean and we better of So what bit say hopefully,

Bradford Nordholm

I just know there get you out cutting Greg, all Aparna of her bit. Did little comments? was a

Gregory Pendy

you're I liabilities to looking yield if mean, it lengthen out correctly, so as Yes, curve essentially, I I steepens, to... in heard the think order so. your

Aparna Ramesh

correct. That's

Gregory Pendy


funding I mean, of as spread understanding the bit from it well. also just side understand little that of majority coming your - is fully I to But a I wanted business mix, of the Okay.

Aparna Ramesh

Yes, additional maybe I'll just at absolutely. you one you point. look give Yes, if -

are about terms where it X.X to XXXX, issuance was years X.X medium-term years. average Our relative

the in think if should to see on duration you start to to asset start of relationship that about think So shortening more through. benefit I side, we really come that


Instructions] comes from question [ph]. Gary [Operator Our next Gordon

Unidentified Analyst

what expected first my two year three there, after but you on seen months you the credits. Okay. have would the decline Most questions what your for institutional have to of questions ago? what related from - growth you've - change quarter have the volume this with in answered, the or would one full One, been in outlook year would for loan expected the

Bradford Nordholm

in participation much. the Appreciate your very call Yes.

of pretty I show the things - saw credits, with last AgVantage particularly are side quarter, runoff in that. this and some institutional our X consistent up that standbys for about that think seeing we we've it some months been of now with our you in

in it you of we've on a very, But XXXX, detrimental balance the some this of been the And that it's think of the not be Some those very or certainly outlook of rolling it conclusion year. for give competitive, is for challenges I seeing over the willing renewing customers he's Ranch. but color opportunities why & seeing because for numbers to I is Zack a to we've business don't some strong just both turn and and the we're Farm portfolio the how very evaluated let to in whether have. our spreads and pursuing rollover And kind to remainder of the won't. low relationship, or would our go

Zachary Carpenter

appreciate in did back in I first XXXX, the and Brad, optimistic reflecting Credit the couple the Thanks, in [ph]. on question, we Gary did market. were liquidity the of over mean, line roll-offs speak are business. fairly see say will looking we quarter. quarters of Institutional the last sizable purely the and I We there Yes.

While roll our upside as well it we did some as counterparties. large exposures, as large noted was our one securities XXX, down of in

agri where that in with quarters seeing the liquidity nice But competitive But So them we which and I things can, not the bottom, our the them, listen, the and cautious we're we're see we're with Ranch being to & us and market. Shifting Farm tactically can last side, very market, roll given growth work we XXXX. as strong noted. working in first expect again, business. support it to that the be the and for of tenors to of the if and finding to to quarter, keep chasing business the consistent very in counterparties Brad some is X continue

spread the space. & pipeline we our business the a our see Farm feel strong growth large rates continue looks the to from Ranch model are and and loan execution loan So in the in market - perspective, It's pretty credit purchase competitive tight can there. but

Unidentified Analyst

more those & it like then Farm is sounds will And even Good. lines, the Ranch, along new be business Okay. your mix same spreads. which higher

maybe, little months expect. ago, you asset So X, yield I'd be that the again, X let's a could higher say, assume versus, than

will that on You're worse. saying maybe a the it little side, be funding

there is So any maintained reason for current that spread be won't the future? the foreseeable

Bradford Nordholm

Yes. spreads thing good that is the off That will funding be mix. The we an interesting those. about price

automatically we we when by gets transaction. happens. the where on something and it then just situation a It's the new price put that squeezed considered when not books it's So

that you referred So yes, Farm what that XX helps and risk that, start higher energy balance, defend higher give our that we On that's But institutional could coming is on to be should just you noted the X. as we on Ranch as that best during today we the we can spread. based think, portfolio, To point, AgVantage, business back, have we can what renewable of that mix, actual above spread. minus grow that The basis I continue slightly call, dilutive. & some to is narrowing guidance from you extent probably plus us or mentioned. that the been see spread

at Specifically, we point, end good or where the I look plus is next for of two think the the two XX top probably we've might pretty Gary, X point basis been that above quarter basis And now. range, quarters a just of out the as we XX estimate land. being


for our That it Brad I'll was back question. over remarks. turn to closing final

Bradford Nordholm

you I and all for Good. on know line. thank Well, thank joining. there you, are operator, the more

call. answered questions your that So I the during hope have we

get agricultural that and Of have be we us heard continue the have the bullish you with our happy up call, with in hope we about questions economy. to overall in discussions voices, later. our - to always answer continue you've very if I after just not, come today, maybe report But we touch offline we're in course, it

to horizon economy nice pandemic or our today, of coming the year the over we improve some in last the that so of have made but be and States. the identify out as optimism, profitability one overall We creating when of of nice up And to organization. Mac the of those the show it's very initiatives Farmer continue about and bullish X that starting any is and is on of times can't huge the institution threats sense condition situations, of the agricultural a overall United we are

today, at it. So Mac. And we continued growth you it think for enjoying room no guarantee but I our we're do, too. Farmer that hope there's lasts,

call. that, conclude this operator, with And participation. well, thank your will for So our you


call. This We participation. today's conference your you. you Thank thank for concludes

disconnect may and day. You your a this lines great time, at have

Bradford Nordholm

you. Thank