Federal Agricultural Mortgage (AGM)

Jalpa Nazareth Director, IR & Finance Strategy
Bradford Nordholm President & CEO
Aparna Ramesh EVP & CFO
Zachary Carpenter EVP & Chief Business Officer
Marla Backer Sidoti & Company
John Szabo Flint Ridge Capital
Call transcript
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Good day, and welcome to the Farmer Mac Fourth Quarter and Full Year 2021 Earnings Conference Call. [Operator Instructions]. I'd now like to turn the conference over to Jalpa Nazareth, Director of Investor Relations and Finance Strategy. Please go ahead.

Jalpa Nazareth

Good afternoon, and thank you for joining us for our fourth quarter and full year 2021 earnings conference call. of and Director at Strategy Nazareth, Mac. Farmer Jalpa Investor Finance Relations here I'm

statements to from could are actual cause please the company's to are note results of this begin, These can XXXX on XX-K Farmer we website, As those the that XXXX be risks discussion and in measures expectations the Disclosures Information also to annual be contain for and the prospects, are found a assumptions. and section. statements today's release management's report and of current on call Mac's earlier information forward-looking full Farmer performance and guarantee will of Form about reconciliations Form we discussing materially strategies the XX-K business projected. certain our refer which based On farmermac.com Please filed may a during and Mac's factors. on not differ under future portion subject uncertainties posted that Financial call, SEC the these with non-GAAP Investors earnings of the provided the financial non-GAAP risk company's today measures.

the us and greater objectives; who to Aparna President Joining detail Officer, over highlights Brad? Nordholm, joining period. team the for Executive on Brad afternoon I'll call be quarter our will CEO, financial also provide will who financial question-and-answer turn Ramesh, performance. this Select management members and of strategic President business will our Nordholm. us discuss are and At and and time, our Brad Chief fourth Officer, from this management Chief Financial

Bradford Nordholm

provide year. us agricultural securitization for execution of loan and strong the team, our Mac. in combined and to to quarter. successfully a to a in the last our structured performance really year I'm financial on accomplishments, the multiyear plan and greater of extremely for initiatives thank our seamless. bring good notable continuing function their and the strategic internal were and we our Jalpa, to today. how afternoon, Farmer integration thank lenders Well, agribusiness of The our strong These I everyone. mortgage-backed benefit has our capabilities quality, fourth farm us and of loan servicing even transformative of with the mission credit expand of consistent to in confidence ability quarter the Two more successful strategic to infrastructure financing want execute you execute provide internal expansion was the acquisition joining our initiatives ranch our launched in customers. over rural new XXXX that performance proud servicing we and third our continued our for been efficiency the you,

allowed expertise as view interruption. opportunity efficiencies us create Our acquisition has our greater across service customers to same this to the quality We without offer servicing team's deep our loan an platforms.

also while to to excited ranchers as We control of for will the loan in efficiently our example is governance of larger, important opportunities rural of to benefit America giving of broaden lender service competitive customer an and maturity. acquisition credit farmers, access will harness it direct growth customers. The as provide to to move enable for strategic us and increasing mission agriculture XXXX from financial talent visibility America's the and us issuance high-quality with is into complex believe this and strong a to security, And commercial dual our with the relationships loans enable is oversight for deepening the key of resilience the existing and success will to better better October also over We're and evidence infrastructure milestone important more effectively our service more country's a well equip our our data the business portfolio, of Mac's as and Farmer of that transaction performance driver our it This and strategies long-term rural farmers more consistent Mac. increased sheet of ranchers. that support capital access network for timely security over residents. growth. performance and our an part more was enhanced this our and will inception Farmer mortgage-backed strategic opportunity the to of opportunities We ultimately credit, us of deliver balance our large support

near be are program. a ramp the dynamics a term, frequent months, to for last time, support monitoring eventually been align per few our the expect market program number year we the market of we the and closely the changing to Over building to with foundation in infrastructure focus up securitization to Over said, we have With enhancing plan a on the is marketplace. the as focused that strong issuer on issuances in expectations.

formed and better loan developed with agriculture analytics. which millions the of analyze Mac's has leader portfolio. proud Analytics, as and newly to identify, initiative, addition part we track a us data-driven for and this alliance & Farmer accomplishments, in of Ag enabled collection innovative these be In Farm acres a We're Ranch data pledged collateral a to to

this stages capabilities management. focused collateral value our collection While on of data, early are and are modeling robust to of approach we farmland enhancing in our the we mining

our results. to Turning

of strong a importantly, investment XXXX. Our lenders of This capacity X at fundamentally, serving that year-end. of performance of XXXX, subsegments which realignment to generated our lending business operating and substandard and people drive ratios portfolio lines introduced year, lines business be continued our very stable volume More focus quarter-over-quarter. gross strategic have to and business: and outstanding with the billion and and America resulted of a under on resulted in we XX-day plan most we delinquencies of X rural strategy business business. $X.X $XX our remains also Agricultural our and X credit We've in consolidated an asset and in a level specifically, provided operating Finance, reporting to moving Infrastructure core from liquidity earnings Finance strong technology a segments of our nearly business favorably and with in segments. and lines Rural continued X of record billion We X lines

more did. we company. clearly how as of Our we reflect business We our the simplified they format of that evaluating to and new are we the the drive market offer operating present reporting businesses overall according the than will our managing, around lines for customer how centers the contributions product distinct value the and that believe type of serving rather previously business and

of expand and volume estate and mature make of our of these comprises total line utility must billion it by all Finance disclosures company, guaranteed comprised largely purchase in XXXX. half our are programs year-over-year. outstanding align Farm The AgVantage Agricultural increase on transparency the agriculture loans. our and products our This USDA secured that which & all of with liens approximately and we As the securities driven for our stakeholders and short-term first of Ranch believe business, results. digest evaluate easier plus scale of was business just XX% to we by loan over in changes real will is to growth all opportunistic $X primarily expected first It bonds AgVantage grew and the securities

a volatility volume, to nature impact create net some we may anticipate to short-term near-term effective those of the material not While do securities our spread.

in Our be believe strong market innovation knowledge, business flexibility throughout cycles. in remains of our our strong to this have we pipeline line adaptive, relationships, as resulted and ability

net business competitively increase to grew with line XXXX, Finance Infrastructure million This customers. structures, $X.X also Farmer is a our of key a execute AgVantage Rural offer in testament to while or financing securities demonstrating in billion Our to net to priced our of due the a ability and needs a counterparty. meet ability effectively $XXX Mac's growth primarily

the quarterly to take requirements. stock share regulatory Board dividend Directors earnings given our loans directly of in Mac facilitated telecommunication that That of payout business also announce that transport cable, maintain tangible an increase our XXXX, consistency $XX consecutive as of Farmer increased considered purchased of provide starting financing deploy to opportunity part the Farmer ongoing broadband organizational $X.XX strategic renewable quarter Farmer energy of companies renewable per XXXX. support common and its also power services in approximately and our and from to per I'm rural that capital share mission generation. first shareholders strong growing quarterly This energy a wireless, a During sectors our years X% Mac's XXth $X.XX of our to Farmer target, all the In and initiatives and fiber our increase Farmer interest for to electric million dividend. and the or in it as the and America We stock and industry. loans. our common over to broadband to telecommunication it's dividend of to deciding Mac greater and of represents $XXX Mac position our its success. of rural services to of pleased year both financial exceed Mac view support few invest the cooperatives the our for the develop indication next to tie outlook significant level will million

our as foundation believe execute the provides to we strategic we well As future and great visibility we performance look XXXX to growth for XXXX objectives. a beyond, on and our into continue

underlying with we business to strong turn cycles, returns and We as our model, to in financial confident commitment our the historically. our consistent detail. customers that, across the over generate are I'll to various our call capital ability to our continue discuss our And more strength of and will market Aparna to Aparna? environments support done that economic have position results throughout

Aparna Ramesh

you I'm execution record Thank organization. throughout of share the reflecting pleased focused afternoon, another to good Brad, and with you, year earnings results, everyone.

our earnings XXXX. to $XX Before quarter per like highlights I'd $X.XX fourth I share compared results. our as provide million few in Core quarter or into third annual million around $XX.X delve a to results, was

securitization Our effective to shortly. modestly and million segment. I'll from with volume the loan the in Ranch $XXX.X that of Farm outstanding in $XX.X Farm net and detail sale AgVantage declined associated growth loans more due new & XX, the billion & transaction, XXXX, strong finally, Ranch increased business due describe spread volume to September mortgage to And sequentially

December points the a liability and result management to that shift was higher of $X.X effective billion XX% a our percentage increase XX, of Mac's results. Turning $XXX In outstanding to business million, terms, on billion XXXX. process. execution to due in by in or NES, funding effective points is to earning net debt competitive basis X $XX.X as primarily represents Net $XXX.X to million which compared continued full asset spread volume this XX from disciplined assets and is the improved spread XXXX. year XXXX basis our prior grew Farmer year,

introduced by allocates the methodology. expense newly well segment, allows each & business the provides a are the transparency business and to funding net us portfolio insight both the strategies, net as to Our replace The We volume we've segment. positive and Farm rates in earlier, is into spread purposes. funding we the between our process allocate to benefits driven have believe risk. hedging reporting implemented match-funded new interest segment offer contributes as in the and assumes more discussed results lower and construct asset us past, benefits liability funding the callable it the expensive shift segments, for use reporting new highlighted growth This much rates also of effective for operating since described new by The various operating strategies primarily Brad and to year-over-year the that transfer approach, basis segment. at compositional also operating as components demonstrates which as held Ranch a was debt in strategies the the in into and as well the cost how more including in contributing of eliminate of each impact We the this apparent allow accompanied discussed funding to costs. it in of early a NES the dynamic segment, segment these bonds accurately XXXX leveraging clearer more relationship profitability. allocates the particularly decrease pricing portfolio to fund management to outstanding frequently derivatives of how This it's volume, liquidity from as non-GAAP of investment Funding the

NES our would is levels relative greater long-dated example, segment our AgFinance of has Utilities segment, of comprised spread. of low-risk Corporate net a Rural levels lower assets risk For which generate but credit higher effective to

our the interest a falling environments. sources was on issuances faced duration increase release to a factors preferred for of a in net XXXX. end diluted our and prove a and to as consistent execution The our of of around XXXX a long provide driving successful a year. a million rate to after-tax with rate remain tranches, or mortgage-backed earnings net allows Securitization, This for spread investment was mission common after-tax funding, community, to overall or cushioned rates The a general, of well carefully convexity dividends. and share our of compared million low-cost year-over-year guaranteed has diversified the by increase was senior in rate liquidity disciplined remains increase diluted core will partially long earlier, earnings for rise. will our prepare results especially steepening this if provision delivering of this due are million were and share of duration offset minimize in us capability effective effectively. approach are $XX.XX well against we Mac optimize performance Farmer source and decreases. attractive our curve, larger our draw and stock very options against the be to tranche. $XX.X with net building, help even our analyzing help we As long-term managing to very end both strategy and will from spread if portfolio will a convexity and deal a mentioned or with expenses the increase issuances when rates. curve, at widening to In $X.X XX% should a investor $X.XX in to $XXX.X The operating mortgage after-tax flat curve. rates agricultural hedge Core opportunity, risk be yield contributor at we $X.X a loans. a the or October spread, unguaranteed us NES prepayments transaction that effective and it which base. The was $XXX.X the these environment rising rise, base, callable a $XXX.X us past more is net tranche investor good million a diversified It per also $X.X funding now securitization our in increased in an common funding earnings I us diversified X received have gain of effective The an million by million million per provided as sale more even on $X.X core key subordinate million These in structured after-tax primarily fulfill matches

transactions similar headcount as programmatic of We return with future. few make due to XXXX. to year increased have and this the potentially including in market XX XXXX of spent more strategic ways to the new seek efficiently, by we in identifying rights connection last described as loan execute another Operating increased for year, these occurred expect XXXX, with us we to Brad we months securitization the employees more a expenses this that and primarily that this the to net new this employees third in in the acquisition quarter hired compared is XX% servicing to XX effort

will long-term this Our revenue, period are offset headcount The strategy. that make brought and we Ranch to neutral should, third the the be will multiyear of for therefore, technology hires & us support higher spreads in drive be by will a our additional loan expected Farm remaining the in The And initiative where a be servicing for to and now additional as to volume service. our year-end. over additional not on in we expenses was paying growth party servicing were segment XXX loans midterm. reflected accretive this

to energy revenue into and add our as over renewable business, support organization, We investments, XXXX our enter talent and will in and headcount and of the risk These to technology be telecom. XXXX. both also continue such well technology to primarily as continue enhance new areas infrastructure, scale across plan modernize our we and strategies as to platforms in especially mitigate in relevant as

we these XX and innovate XX and monitor ratio. While our efforts to will we to the continue, business, increase we closely over expect months as to we've mentioned as efficiency continue our next previously, grow

end at Our of XXXX efficiency ratio the was XX%.

expect that do a below increase always consistent expenses efficiency noted we revenue level. to commensurately range to our stay forward, operating operating But XX% with Going we've within as averages we a intend historical is with growth. remain previously, that

profile credit continued be Our over to strong XXXX.

of loan of decrease attributable $X.X to total of facility a processing in rural This been million $XX.X million allowance economic losses on was was conditions partially due for and XXXX XXXX. that XXXX. to XX, Partially and storage related was impact February Texas XX, off infrastructure recovery allowance charged had offsetting the agricultural for As the improving Arctic December from a $X.X decrease of decrease release poultry specialized by secured the losses the to payoff this a million loan Freeze. XXXX, to $X.X a December million, a the the provision

Tier level as in Farmer compares XX, inflationary increase of capital of of an the we're securitization $XXX capital X year-end of stock the statutory May issuance Series XXXX. to of by XXXX. year transaction retained December XX.X% or capital. The $X.X $X required of well that preferred earlier due core preferred us and of improvement also G core capital the seeing. XXXX the the of positions contributed to of this exceeded stock billion in to increase environment efficiency The issuance in G in earnings. in XX.X% The from our our for billion excess Mac's Series as XX, capital requirement to of Turning as was capital XXXX, This to XX%. million primarily minimum December capital the

further this immediate of in to the reduces more preferred do stock issuance. All the future need

dividend a common us supports mentioned, a believe core sheet dividend, set share, first XX% our Brad earnings XXXX our pleased We is consistent position to getting very optimized. to and an that in share As balance our a target this X% increase we In strong stock well from conclusion, earnings. long-term at $X.XX per of increase ago. are our $X.XX capital per of announce which quarter this increase represents year ratio, also is and payout and total

we're rates And that that, accretive. earnings rising capital We access let also for growth to positioned me markets that with to at loan fund back Our levels are turn believe strong. remain you. well Brad, to future it and

Bradford Nordholm

Aparna. I'm diverse and you, delivered Thank the further of earnings levers. incredibly entire these team multiple results. with enhanced we that built incredibly service, of we've I'm enabled a XXXX results, We proud our operational infrastructure, the customer and has growth greater stream Farmer proud Mac's

to our continue to and how we tremendous opportunity even and a of ahead bring to greater lenders provide ranch, and agribusiness the additional in infrastructure XXXX Looking operator, see coming we beyond, any on the for financing rural farm And their benefit strategic efficiencies looking questions on line quarters. have in customers. updates anyone We're that, to forward with I'd from the growth we if see to sharing like our initiatives to today.


Marla Today's from comes [Operator Backer question Instructions]. first Sidoti. with

Marla Backer

on continues us think you levels? business of kind any that from or changes these could Can inflationary you your in volume? impact if how How think give escalates pressure you color

Bradford Nordholm

call nice today. on Yes. have Good you it's the afternoon. to Marla, very

and to implications on what to CFO, as comment dimensions we there I'm we're liability book interest partner, and a neutral as the both Chief in Aparna Business management. about interest from a general, of on what comment well Officer, are the of out how been way for ask But talking position. us our we've this, likelihood a of almost in manage now our asset the actually seeing the pretty management for rising couple puts to think rates, Carpenter, Zack Ramesh, I going our countryside asset standpoint, a in an year rate-sensitive are liability

but are the the and on card let U.S. coming on dimensions speaking global ag what in on is which impact commodity natural just fairly But fuel me increases though, just the have will perspectives monitoring turn week now their also correlated recently in question. last that, from to probably We closely that Generally Aparna economy, especially favors the Zack pressures example. inputs, gas different fuel flows. farm, of the on to for agricultural have the we Ukraine also more not offer fertilizers, with and been wild of prices, the The situation diesel your think inflationary

Zachary Carpenter

Yes. Thanks, great That's Brad. a question.

and where it view & inflationary And terms huge Farm the disruptions gas farmer and seeing in operation. Ranch input costs biggest pressure And with fertilizer. that continued largest made are comment a we're in supply poses to the market. terms the of see inflationary the that's those nat rancher in their there, the On is of terms pressures. running side, of we component And Brad I the big across think chain

I'd interest dimension other that rates short-term environment. projected The interest and say, the rates is to mentioned increasing, Brad that the in see seeing or we're

say And the in speeds the of Farm environment input and Ranch little harvest So a fund over X that or overall, ground. prepayment attribute rates. years to costs, in terms the and the probably and to fertilizer & the we costs a more the to on interest lower everything draw see to lower last have seen increase refinancing foundational harvest we revolving we given I'd see bit a anticipate for getting perspective, than credit, preparing the lines a in input especially the of heavy for then anticipate

moderated perspective of from in the commodity a volatility a still I given strong from transition environment say maybe So but a overall, would economic refinancing, very terms prices. farm

equity out. see in new with coupled of some a of values could loan So transactions lot and acquisitions increasing of farm in terms taking land that of strong

Aparna Ramesh

Zack. environment, long duration our the quick, between and look look of curve. on on liability the when thanks, management. end and this what tensions for real the means we you as jump convexity Great. our this And Marla, us just all Certainly, at short in got And I'll we've asset at some

substantial out a you curve or an implying as is year. inversion I flattening a look think the forward even

But our a market advantage of has standpoint. did We've implications a asset of We taking last lot obviously opportunities. from cushioned. advantage over securities we're think management pretty long-dated all from liability the issue of X taken I years, So standpoint, well an things. of debt that few

New the prepayments, described, were bit. about looking But widened X/X callable out, that in impact book at go even have environment actually business. have be slowing callable spreads in security. if won't a in Zack down, pretty this we'll a cushioned year we've got to because well quite as current on our And rates and a material of our fixed-rate

So or the whichever if cushioned And on next or up obviously, to the there. [indiscernible], slight well really going be anticipating Fed we're I rates we'll pretty I inflationary think short do whether we end We're that. think the of be plays what the into even a well curve might flatten inversion impact positioned. go year, see over

Marla Backer

you comprehensive Thank bit. answer. that switching Okay. for Switching gears topics, a little

large related you areas, a that Can some think us into those some in part areas business? become moving about of energy. prepared bit could how renewable as of the total talked telecom, remarks You trends give your you sense little complementary

Bradford Nordholm

to, be I'd Yes, happy Marla.

finance. into we've all, moving of been First energy slowly renewable project

I you active more in know, think company the we And this third as year, finance. our now. have last been in telecommunication is year

We organization. are a mission-driven

And confines within our is very America of and needs focusing the of charter. purposeful We rural are America of the access. in big issues the broadband rural and other one telecommunication on

& the those underwriting in we've over to years, prioritization and credit But on say, They looking year, a into it's of agribusiness Renewable the I on been last project finance, for this area Farm origination forward, energy have And we've last solely need that the standards corporate of year would building within credit in Ranch of area, over and $X opportunities. attractive energy renewable is kind in reflected last look we market about moving and numbers. been couple project box. per we've our annual an that finance, to this expanding credit the So partially us. our the profile billion of as more growth placed team. slowly the X the policy, that's we years fit actively do

become broaden market. probably origination next that we this that because And year. secondary Our becoming I we XX% could if for is but channels you'll projected to have that would business, more years, to biggest a volume, think some meaningful upwards are bit on of year part take number double of challenge And kind of of get emphasis, increased will of our see little XX%, a or year, a of the to. the every then X emphasis X with we it volume years

Marla Backer

when about talking between X And spaces volume, you're in XX%, aggregate of said you the XX% Great. been the different about? we've talking

Bradford Nordholm

Versus the of annual and originations. that's the an rest portfolio,

because portfolio of terms longer composition, up. ramp take less In that would will be it to


from comes today question Gordon Private next our of Gary And Investor.

Unidentified Analyst


of the couple a So year. things. One, charge-offs in fourth quarter the for

Bradford Nordholm

on at poultry during had and processing quarter discussed charge-offs collection ago, going and small collection. it. and loan we X X.X years, some a exited position over the length We fourth the taken we had The some a and completely loan. that a back that no on we actually there X.X were last had Gary, write-downs years that

were, anything. charged charge-offs collected we say you'd negative. They charge off more and off, guess, didn't So than we -- I we

Aparna Ramesh

of CapEx, million $X.X about just that on It's one.

Unidentified Analyst

Super. Okay.

that. up Okay. most Two, that, was the servicing $X quarter operating expenses about I of quarter. million buying the were quarter-to-quarter, of part to just guess third business fourth

Bradford Nordholm

is business that. part servicing of The

some We elaborate in also do month the you the of almost last want to on IT that? had expenses hit year. Aparna, that

Aparna Ramesh

the systematic nail acquisition areas. as the X in of third servicing been hit there. doing head X you business. We've on think or No, Yes. was area, the Brad the then And the investment I noted, Gary,

over of of headcount or most so, we XX acquired most was about the that So that latter came the half. through that in

a end IT of the as towards consulting then And contributor. in some our of investments we've up platforms some So that noted, and made November. Brad wrapped fees the was

consulting uptick well fees So as in saw in an December. we

third So factors the just quarter. contributed. first to that year, of of would primarily I most some pushed plans say, the quarters, fourth those the but also had but hiring of and fourth the two the got And for half We then our hiring. out

So from that's but X, all those [indiscernible]. contributing really of factor

Unidentified Analyst

of the loans. securitization gain the sale related Okay. Is was actual to And that sale? that on or

Aparna Ramesh

was pretax we've $X amount in described detail. fourth episodic. fair in Yes, that is quarter the that and is that resulted to event little sale And it million. a a But really over the securitization. related of a And nutshell, of a in

happens right away. it So

a So sale interest nominal sell when depending where on are. gain rates you book you it, on

Unidentified Analyst


cash from earnings will be the So loans forward. earnings in operating those going

Aparna Ramesh

goes do an well, that loan. there servicing of the we well off life that that earnings with to there as then And retain so really are profile of [indiscernible] earnings books. then $XXX some million over it. associated the occurs an the that is fees have -- are The cash continues our And

over of will the years all X par. at the that pool, is about license loan So which go

Unidentified Analyst

spread, -- that Okay. -- interest it minus details, from Is which quarter. The plus went fair but value down of basis X is was earnings, quarter, basis this points. X is, the what's X interest the I've changes, what looking about no was sort last points spread operating And idea normal? at X it

Aparna Ramesh


if competitive other portfolio that a you're as book securitization in the competitive also result factor. the between looking a the a ask quarter-over-quarter. shift bear to been can on would little of Zack, That's the NES bit our created came And like then within there what CX some result the just at nonsecuritization-related more would pressures NES So Brad they NES But decrease change our on have of definitely and I were the aggregate, pricing pressures. a to just some comment of quarter-over-quarter.

Unidentified Analyst


quarter indicator what So this better the if ... ongoing better year, of looking XXXX third quarter fourth or indicator I'm at a an the a

Bradford Nordholm

margins XXXX want NES we'd know until business or of and would or into off tail I this third guidance up second, minus Gary, fourth reasons quarter. why say bit X go reflected of third to is thinking a that shift -- basis basis I with bit that higher always guidance at kind with some was and of quarter that we NES or that. we instead into XX line plus in points. in just got even tie in or provided and minus we've either prior our saw say, fourth expectations higher year would little Yes, then going to points plus basis is new What as least the reporting the expectation. around you least is the XX our saw What I possibly the provided you in don't quarter. points net X well at associated guidance the XXXX, plus X XXXX, for line about see points you strategy, being What and a And than X

Unidentified Analyst

last... One Okay.

Aparna Ramesh


Unidentified Analyst

go sorry, I'm ahead.

Aparna Ramesh

we used think to XX Yes. but Gary, you anchor differently, to points. about No, previously basis I

So X that level. think shifted points basis as about having up of

Unidentified Analyst


Okay. Last thing on the dividend.

up payout earnings earnings on So operating be would operating a X%. up XX%. year, dividend were the doing you say for dividend up was XX% ratio. And you're a based about still this year said X% XX% also The this would payout if

anything to it dividend figure like been should if seems I'm I'm behind trying more. the that. And So there's out, wondering have up

Bradford Nordholm

an Gary. not X it's year, strict absolute mean portfolio for Yes. I precisely

We're and once of than we growth have an advisable opportunity just we a were sure felt that capitalization continue in that growth a we going see environment we that yes, was We this discussed can of maintain previously year. that earnings may make ahead. make to our not actually with nice we throughout we want Board, to have When want in So that strong consume capital. step today XX% we higher really a again, 'XX where some some looking about more earnings. because target deliver strongly to this up sure And that payout. explained

Unidentified Analyst


Aparna Ramesh

Yes. And just one more Gary, point. and

you and XXXX, rates. amount XXXX volatility nominal of when from now fair to a also at subject either think interest we're look I

got we've that. so guard against to And

the credit that. So as which on effects, well going to gain based are some natural as of some noncash the of result fluctuations as a there's be sale,

we're want opposed cash to we a business of about sure from other So come flow make to model. shift baselining some of the a that result in as this fluctuations that our perspective as


from John with Capital. Flint Ridge comes today Szabo question next Our

John Szabo

charter. in My advantage of you've regarding competitive a the growth I volume you've least ag the a your also business, question to the described at have funding is company. company a think has low the outstanding defined past And standpoint relatively market from it, you that the finance the for business due Brad, way share

you actual And factors around a either rate be be consider would particular normalized year growth growth rate? in then would sort drive what higher would business So the what that your lower volume results of a in net? normalized outstanding to a or that

Bradford Nordholm

Yes. John -- thanks for getting on with us today, John.

up the the market that note is it's follow think secondary Mac important market. share to with low Farmer I the

only system. competitively a platforms share good farm initiate of including of the calling aggressive liquidity of finance our technology a agricultural it's and credit in overall finance And companies is growth companies we not and independent the product, can the priced function function and banks, the insurance so through that commercial level with and market also system,

factor more that's of kind to and additional So growth that customers. to when direct rates taken be let consideration. response rates working caveat, to But Zack offer of me into some with with another that growth turn influences we're has out to

Zachary Carpenter

last Ranch space. seen execute rate And the I the what in Thanks, And noting over a of in couple Ranch, in component ag big Farm very But growth our to Brad so right? tried base, we've what right the institutions of are is the you've & ultimately, I farmer of diversification customers financial is to so And we're a differs means strong And the the Brad. years Yes. a serving agricultural the it's our Corporate our the right? other it and in looking insurance a customer as instances the the and dominated be to by banks, also more commercial many our & needs Farm focus in you it's on space as of fully business and focus time taken community, farm which in industry more and lenders, we've on few AgFinance areas. energy. the a we support space, companies agricultural dedicated but credit telecom base, key concentrated to look there, grow lenders, in think a ranches context the question. way very system, started think renewable that in And secondary When great the conversation market. of

And so rates increase growth really diversify. there is to focus to our continue to

or in our create Corporate and agribusinesses rate support helps segment change a part larger different many our diversify fashions. mission way and chain larger that different in think focusing or and complex us our value reporting more I in highlights on fact structure lending the AgFinance us growth ultimately of lets a

I'd Lastly, comment like is highly products on to the some our only thing that some of our customers concentrated. are and of

AgVantage, think these I of finances. wholesale think

And and make Farmer many for for appropriate those years, appropriately. sense last low-profitability as to capital in it spread that wanted and we so appropriate we spreads, didn't to we so And we've use, instances, support to the has couple over moderate to Mac. seen credit it's our sure that put make as us mission need of tightened, for

and very But a So we takes the from space, as a the concentrated little market. bit of are gives think ag in making secondary board. across environment ups I inroads a

Bradford Nordholm

increase see upper we necessarily we maybe pretty think strong John, see factors I forward, limit extremely volumes. specific volumes, of XX% and reduce provide but more XX% in X% an If we the don't think terms going X% would range would either. CAGR at is to we're can some that of terms to in that's typical, And don't necessarily that factors I for that us. outlier that,

this. putting in So terms kind around bands of of maybe that's helpful some

John Szabo

dividend. helpful. very -- that's least answered or to And you just follow the Gary's his question question about then way at Yes, on up maybe about the

year these you've acceleration perhaps a putting really mix than more bit initiatives? -- of maybe And in because where of what So past? a expecting the would whatever this new issue you're more is of an you somewhat capital or on intensive some in be maybe done of it growth

Bradford Nordholm

bigger really slow week certainty a that, that. a much new of that slightly there's the including generally, consumes of and the of would challenge see to be line maybe with greater these bit ago, Finance, might rate. in of But In bit more faster creating little rising Corporate a rates because told a growth the you interest business, to a have that and Yes. Rural week Ukraine prepays agriculture interesting the Well, we capital. it's with now, consumption business. situation for certainty And with Utilities Fed yes, capital until some supportive do more last less Agricultural the we were going lines

these we to guess, make some And that decisions, of into that it. are -- fair go so say but the I decisions, we those factors make when we conservative it's

John Szabo

more Right. assets capital-intensive have course, would presumably, would think. And higher of then, those yields, I

Bradford Nordholm

business the reporting for the time, see And they that Indeed, that providing first can we're you do. actually in line you. of new

John Szabo

just thing. then And last one

do a you of growth period able these if Do mid-single-digit ? leverage not So sort as some new be you've over off medium-term to get been some a of investing In you operating could being would of words, grow other horizon you a in assets sort fast the see still sort yourself time the in line. range. as of expenses you'd that? spending grow prolonged the quite of of initiatives in investment think that top Or

Bradford Nordholm

to there, can think that under year, XX%. to the we're We've We now years John. just we of hold going pretty keep XX% point. range. XX%, number specific ratio some last a And provide said I commentary, our in for operating we're that efficiency

to not let going are higher. it go We

of expectation couple been the support lines a refer we have of do investing years, in business. guess, see in business. I or to acceleration have as operating result We more, lines that coming will from new you incremental would decline to people some decline And within technology and some these we operating efficiency and of efficiency it -- this, in leverage in which would ratio

participate takes a to or new you Just the energy, more pricing. Corporate that to underwriting it channels thing that, our does could time. demonstrate couple, agribusiness, and a and to there, capture them our the for say with to some developing deliver for and can expertise developing have to syndicated market-available of same a time, takes volume commented origination banks credibility pricing market-available big take into be take we of deals time with market that, capture able example, all the and club entrant renewable other on to capability and network capabilities to loan

from both as do So it, operating and the takes well as to pricing as put of entering reality in people technology that from that it well a when standpoint. you standpoint together an lines investment as business, expense new of

improvements Looking to out years, you seeing attributable to should X probably two years, X start both.


Instructions]. [Operator

next [indiscernible]. comes from Our question

Unidentified Analyst

and But more that wondering partnerships sort perhaps of pushing capital a where most you perspective, you're you're like how an credit for kind into the that much board-level me sure a the know impact scale. the help from providing these capital that the got loan you charter driving I'm perspective. needs? understand have of users I'm you acute like end smaller of of system are credit and that limits from making I more so might year. sort that the great could are terms of Thanks you corners and of starved hoping in size risk

Bradford Nordholm

happy asked that you I that am really question.

organization. We are a charter and mission-driven

to count. our volume, today small And defined & by as And our Ranch USDA, just and when USDA. we to credit of example, the grown very large point XX% administration, to report percentage in farm that when Congress, whenever for we We at improve Farm is of different defined that. our family key Because that are by that that goes farmers, some and think plans, design include you when metrics take go we sources. how number access California and take seriously. to to as over our market, originate couple as evaluates of rural the we to we seriously. by here to the We a the again, we our really about have financial a annual our program business, credit we're our we outreach proud Whenever institutions look is today. XX% we business Board may America, credit out, availability of through we to from which access farms that refer by for of number Almond when regulator the write us, That also over

to $XXX basis, banks, And you meaningful of we business were on special -- growth on we farm inferring, banks, more farmer, our the multiple take pay to maybe million almond insurance the access market creditworthy, do as We're doing have they in doing be family & I'm the may have you billion. even bank. may We them. compliance and options in focus commercial know it we because an and or to farm And do But serve that credit put a fact credit are to happy we from activity interested all of discriminate. years small we're over that years, million law serve was $XXX from it's You look in our to with from we happy we were farms Ranch if the that. maybe We're company $X.X maybe X secondary purchase This a don't And don't as the they're farmers. availability with credit from Farm at If them. ago, X, attention of companies. X annual maybe really if that. year, proud last originations. insurance

and emphasis increased of improved reflects of -- that technology. So use use

by can farm AgXpress by portion, doesn't handle all institutions and loans the We that but to called system portion of commercial a not an and loan have them. underwriting and the it's and smaller serve large be used used, financial very a and used large family efficiently that is recipients probably have small fast

metrics, hope production corners the American here you also the to passion, but excitement, agriculture. that point can commitment Mac can that we have So of I hear Farmer those for the at we

Unidentified Analyst

sort -- all here there out just of like ESG, basically intersects going secondary by bond this, kind myself your instance, green your is for for absolutely. through feel tie of Yes, the this investing, shareholders be doing, place. are being Do like that? are comes going I'm more ... aren't why here all feel to like celebrating with that your you aspect issuance and effectiveness. the market all over who like you're are the you That of question into in you Do the or, hippie business? appreciated sustainable like it to Is that granola kind on of the reporting trend market And issuances my curious

Bradford Nordholm


we the when in kind to market, at -- for the at investor third it sustainable because investors quarter, If on the was end beginning closed the securitization quite agriculture, end the that, of interesting quarter, of a specifically we are call. getting actually in really corner third the ESG, fourth you're the are roadshow did quarter, of interested had the the few who who they of the

who ESG-only looking now, us have a investors us We year over quarter. in have Farmer at invested and we for some who the starting Mac been last had in recently noted

farm understand American on you those the really are the while lot practices be they inputs. no-till on And out serving have level about. our they going focuses strategies, have When low-till, the consistent agriculture there There choosing very that changes hearing practices the charter, use American a so interested agriculture farmers may precision in in many our there and at organic what's are mission may kind are in agriculture, reduces of investors that just may that which of -- of story are with broadly.

we how all data that and that For going us all the interested about including market in loans that working access, very direction finding in talking about. on telling are those of you're story are we have because our are capturing to access the American but more in the portfolio more don't the is agriculture, we data, secondary to a serve naturally challenge ways the have participant, all of we


remarks. back to the Nordholm for like question-and-answer and closing to Brad our ladies I'd over session. And gentlemen, this concludes turn any conference

Bradford Nordholm

today. us hope you joining Well, thank informative. it's I you, operator, for and been all thank

very earlier, about of we the proud team. are said I'm XXXX. As optimistic I incredibly And very,

you this, questions, with we'll you. you. Mac. to continuing be I with what upward trajectory will follow-up And So forward hope Thank call get in our Farmer and look next if have touch or


today's today's call. This thank We attending concludes conference presentation. all for you

disconnect your day. have wonderful may now You a lines, and