Federal Agricultural Mortgage (AGM) 23 Feb 192018 Q4 Earnings call transcript

Good day, and welcome to the Farmer Mac Fourth Quarter 2018 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]. is event this note, being recorded. Please now Mr. would like to to over conference the turn I President CEO. Nordholm, Brad and Please go ahead.

quarter investor Good but information release positive We Mullery, begin use before today morning. have Mac's slide to comment of Farmer you can today, fourth number statements to throughout welcome found. make slides like our Steve very deck management well forward-looking about pleased that XXXX I'm to I of summarize Brad ask that developments This non-GAAP be I'd do Nordholm, where to Counsel, and to our those, on financial today's our to the the we'll posted as call. call. as includes may discuss We conference I'm a to General measures. website to and a year-end refer XXXX press morning's

Thanks, Brad.

information share measures plans. and for may is per performance measures. Mac these of Farmer similarly are non-GAAP by the develop accounting earnings be financial principles nature. caution core filed Mac's also this expressed on XX-K statements business. uncertainties, about Farmer United call and statements the management's not not under and posted the Mac measures to understanding results be be accordance most net be useful as obligated earnings as with to from, companies. measures We those securities its We financial well measures supplemental financial non-GAAP this the laws. weeks disclosure are Form of In generally Farmer made of as recording measures starting for, we described These presented release on known The These accepted current Some measures or analyzing earnings, information, the uses may that more Financial they call. and uncertainties. corporate Farmer are evaluating Information and that non-GAAP will website, considered call our non-GAAP measure materially on of recent the statements risks to morning. Farmer the core States, isolation other Farmer GAAP. and A forward-looking of as XXXX are Farmer substitute comparable found to XX-K forward-looking meant consider business Farmer you may not Mac section. view, non-GAAP statements uses statements sometimes our differ prepared Mac, spread. annual Mac's on the our effective and important Mac's intended performance, from Form three risks website measures in measures uses In accordance in this for performance the financial after as non-GAAP be events update that of with can SEC In and measures a of two on report non-GAAP these in should in on this labeled farmermac.com, than with expectations these be later make be Disclosures may conference reconciliations today. disclosed based future assumptions subject to implied in Actual statements. these or available to to under alternative Investors not the related are portion you forward-looking and results Mac's by

Steve. Thanks,

year for XXXX. of another earnings report to happy strong I'm While growth

this of in made press also saw a notable release we our morning, announcements. As you couple

prospects. $X.XX This are first of announced we per future than XXXX our First, dividend and in our we to that the quarter confident more in highlights for share. business XX% earnings increase the outlook

with a establish America. with portfolio from our commitments, seasoned cooperatives time and of business Farm rural working reflects really loans pleased seasoned rural Credit CoBank. both Credit missions electric we've done mutual of type a to announced accretive the rural the CoBank, relationship and bank to to book to utility of leading Farm to participations any also highlight first This of constructive loan a CoBank's material System serving System this ours, We're We purchase our and very significant bank.

consistent classes Regarding all or a stock of has dividend XX% increase capital and per common of earnings, annual considered quarterly XXXX Board reflecting the payout XXXX. that and the Mac's consistency board quarter the our in quarterly per our rather stock through should shareholders' dividends represents increase XXXX. and goal dividend a the strategic that for percentage continue example authorized in new developing dividend and payment and I on to share outlook over the innovative metrics be to return long-term of customers plan investments of to The I mentioned seasoned these a capital of and express to all Mac's on capital subsequently that ratio and master providing target, our regulatory $XXX our CoBank to this the This purchased XX, Board actions entered February of during dividend competitive cash Farmer is with comparable on of common further strong And Index the XXXX, objectives of Farmer of also rural an the fund dividend position significant of the with $X.XX our in has for into the of of to for new stock NASDAQ outlined target. XX% Directors in increases increase participation. first dividend, Financial core declared Index. in agreement Directors. of a deciding the million organization stock payout our two of established announcement common our our capital common its our Board And A $X.XX earnings, institutional XXXX, their the meet target, Bank within strategic for have that that mission. for products add S&P our the purchase plan made just payout those stock a balanced against loan we with we've XX% acquiring of objectives share strong the earnings which require our common and our and utility three an core more years. past payout of of In and Directors in significant peers common as many by need requirements identified to are institutions growth financial those from line

Credit our record System is with this mentioned, first I CoBank institution. any or As Farm participation

to my mentioned and financing them. we as of needs their customers Mac's serve As November to meet how I better last I some traveling understand can organization and time key CEO, investor Farmer first spending President have with been call on the

have Farmer Over four an to of financial current which allowed determine needs opportunity I've serve in many customers the evolving the changing customers. the months, identify needs. me institutions and and institutional areas to last had successfully borrowers and the their we fulfill with to Mac prospective our These and that can meetings engage

Our now in work now, to driver we're more achievement critical past been believe that I'd to formalized be I and turn find to prove primary embarking future strategic really the and And objectives. innovative has a on the our of to success. driving scalable of growth XXXX will results. solutions like our organization's approach, which

and earnings year. Credit Mac XXXX morning, press remained release period XX% in improved this core As you quality from our its grew favorable. year-end last Farmer share per over saw same the

in this business growth products by business. Lynch specifically, by several update volume business. very shortly. outstanding our million of our was XXXX. of a We of we also about billion detail describe business, line $XXX million. during This to the growth our saw within to net growth the United by certain guaranteed in like of agricultural by grew Chief Farm on decrease Agriculture, credit will of of net and healthy other States USDA, of $XXX net business the lines our results I'd in net in million the offset you Credit $XXX increase was rural $XX.X the Curt give to Credit line of But million driven now an turn More $XXX financial to business of million This Officer, net Ranch Covington, Institutional environment. growth of Dale utility and $XXX more healthy loans that's Department in growth line partially in &

Thanks, Brad.

making and conditions accordingly. in CEOs that expenses and balance often them States' to overall Invariably, for as producers in at how price as the farmers months varied to of have yields valuable signs and take the that Trump tariffs three, signed farm many XXXX's pain a program trigger in protects health payments well are very about afford the teams and reasonable hard and and reflection, Farm the all additional seasoned earlier farm According Strong customers commodity programs the the demonstrating though, XXXX market. itself. Mexico year many lender loss remains agricultural a health lenders, many crop are concentrations early trading strong talking loan Administration results the They loss the concentrations lenders of to many months and farm reserves normal, performance country, Number that Institutional to Bill. the pulling agreements. protections institutions ahead. combination created just opportunity mark degree in loan conferences there new business topic The and lower from law in data XXXXs balance direct in in a facilitation reporting reserves portfolio crisis Act lenders that risk of experience. lenders charge-off X lender, higher with notable boots-on-the-ground in of extend unfiltered agricultural Farm loan trade, the impactful China, Farm first of And institution borrowers distress return of program. loan of marketing are lenders program. chance community their and serve corners for the cycle areas, inroads opportunities the producers supportive were XXXX. sheet support also demand credit of of are Midwest behind December. such can the especially of and commercial important partners hear trade a place access Lenders many borrowers financial sheet exhibit number rural is conferences remains federal in Similarly, farm the optimism also wholesale balance service Many brings with are banks are and market liquidity the vitality view credit talk is few, have through sheet and perhaps recognize in an the get XXXX financial references suggests their for one, capital with of the lenders, and XXXX stronger where excellent stock Bill for The decline financial hot opportunity the and to XXXX. markets nonaccrual Many lending for prices and Credit see and offer late the performance while is opportunities Two, and farmers guarantee above-average better, to loan that of it increases Agricultural and also on Improvement in credit debt rural their the Bill of new with but comprehensive Retaliatory may to there United similar prolonged Farm the plan XXXX start reduce to commercial, expressed to credit their these the Farm an these Many historical continues very a of reasons. commodity over but Trade during across the Report, into industry more also in solvency for to Credit to past for Perhaps benefited hundreds limits rates, rates Performance repeat a outperformed with management. healthy. agricultural and mortgage the farm the a loan virtually The into the loans marketing shrinking, help this increasingly for the Canada, FDIC banks Mac's negotiators industry. solvency within because essential charge-off in credit income. President loan rates, to top of Bank providers feel a them relief expect and continue agricultural come, offered in For capital within come lower then their to Farmer consumer agency if winter any, insurance changes and guarantee year need. land America. financing, the at in be sell much-needed worked see existing from routinely industry to discussing the the the weave current remain year and and of the borrowers to economics, also experts credit on-farm element improvements loan officers lenders discussion. landscape.

Although strength disruptions likely. tempered outweighs opportunities age market weaknesses and and short-term pragmatic and are the food prudent the amplified long-run farm the threats, a In volatility, the far sector of to to in and a the credit. on is secondary to market for lending ingredient ag long-term Mac maintain approach continues lending, with rural approach steady an a important Farmer the success. hand to wheel

stable the a XXXX cycles but secondary market. financial baseline tuned are with in the for the looks to to standards, access farm practical designed rearview crisis squarely provide Our and through the underwriting mirror,

Farmer portfolio name, stable of reducing and performance it and of foundation Mac's to industry, and ourselves very with portfolio turn Brad. exceptional pragmatic come. I'll to needs asset phase find Our levels correlation will back borrower we for to allow support capital cycle maintains the to a base. And continue in, of approach agricultural generations geography America Whatever rural economic us by that, loan yielding diversity solid

thank over Financial am right to results it I the much. going get turn And Well, Curt, to Dale, back detail. Chief more into in Officer, our you financial to very

Thanks, Brad.

now Turning results. our XXXX to

maturity December of was million principal to volume paydowns business see XXXX, repayments. $X.X can billion line in XXXX, institutional increased after existing by Slide We million of you and as of billion our X, net credit volume billion during offset $XXX As and in business. of XX, outstanding part maturities on achieved on of $X.X business $XXX growth new $XX.X as business

securities of maturities and and business of the of of of AgVantage securities repayments of new was consisted maturing I $XXX $X.X And of AgVantage AgVantage the mentioned. $XXX refinances maturities million of volume renewal and million $X.X revolving expiration securities comprised $XXX facility a billion repayments and on million New billion AgVantage purchase, facility. of the revolving

and attributable & under purchase Farm $XXX million net commitment experienced loans business added million loan growth Ranch repayments during offset Our of was line purchased $XXX of commitment. $XXX new in purchase $XXX to million of of and million. of repayments million part XXXX, by This $XXX loans of

the demand to $XX the last to had with to in million credit risk that of during of have by of pools of favorably that competition in Farm our the This well purchases of commitments their loans in agricultural XXXX. compare we share in net growth decreased market rates relative absence restructure financing as million the pricing able in million year borrowers these and due effort agricultural interest growth mortgage net was however, X.X% business compared Our loans borrowers believe Nevertheless, of added of potentially purchase and of an larger certain that the purchase opportunities prior & to XXXX. in a as loan added based secure Also We reduced fewer loans. be Net are customers greater line of purchase under under on for highest $XXX due profile during within for the in mortgage size occurred call fewer growth decrease our did very decrease overall XXXX. refinances XX, that Ranch This eligible Ranch increased commitments was increases quality to this XXXX. decrease, which who primarily XXXX as large due years, believe to XXXX this to amounts primarily year. does credit could XXXX. during compared large to in $XX than in & growth data September market Farm loan remained loan consistent total purchases review the to net bank XXXX as FCS report as X.X%

the new The to volume increase loans, decrease reflected fewer refinances business competition higher and moderate these of to USDA Turning Guarantees processed for business. loan in in XXXX through rates line USDA. interest volume being in lower our due an

believe seasoned industry, overall CoBank purchased Brad has under the decline primarily in that repayments of of entered utilities we $XXX participation rural decreased declined into and believe due decrease commitment. have held amount loans which on which underlying the a not utilities do agricultural indicates our loan we this The borrower Utilities But Capital for we demand participations portfolio purchase in loans a as loans to earlier, week, Rural we master and for demand However, rural in line product. a with was last credit. in mentioned million. of USDA expenditures the business agreement

will growth portfolio loan utility rural the XXXX. first we quarter in So for have obviously significant

$XX to spread the $XXX the business on growth million net Mac's financials million, for increase effective Ranch XXXX. The now cash Farmer income primarily million X% volume, percentage spread nonaccrual in Turning million, net to effective improvement XXXX. and spread XXXX was increase both X.XX% In in Slide X. amount the Farm and was for & interest outstanding on a increased loans. a from basis which by effective received $XXX due in XXXX was terms, net $X.X of

in increase million see can or you core Slide $X.XX increase diluted increase effective from volume. income income from primarily in XX% tax were XX% million a after-tax in increase G&A hiring core search XXXX. due million hires. in comp million to expenses after-tax Farmer decrease due business would from year that and President infrastructure partially expenses of disclosed its investments earnings by X Officer these or well business diluted the expectation resulting increase year-over-year. to and and earnings in benefit increase by $X per a $X increase primarily per current as other XX.X% $X.X tax million increase and primarily continued in expenses million after-tax corporate had full for a was were Chief Executive comp outstanding million Mac $X.X offset previously X, federal spread and increases and XXXX primarily common to Mac's the $X net or relating an The As related in in $X million $XX.X rate or and benefit incremental year-over-year XXXX. $X.X $XX a nonrecurring expense a The to lower expenses. million share, as $X.XX Farmer process G&A by key resulting the the approximately in for technology increased million expenses million The was $XX common on these $XX share to expenses

Turning to quarter results Farmer Mac's fourth XXXX now.

from see $XXX can you million outstanding in on Ranch million net of Slide purchases $XXX by paydown. against was after of increased X, financial net rate new business by $XX million increase principal the loan increase fears in rising long-term & and line million real Farm growth maturities for in growth due USDA Ranch $XXX demand environment. and counterparties. was of estate net borrower financing fund in backdrop loan & purchases, business The Credit the primarily million business volume in a driven of As Farm Institutional an $XX of Securities to

We also $XX that portion million loan, retain and $XX of quarter. purchased did over million, a a large this

of refinances the $XX by primarily $XX maturity the and Mac new of AgVantage from within business repayments Securities new million of repayments of existing fourth $XX loans line securities. in of Institutional AgVantage USDA part by consisted repayments to Securities. business USDA Farmer and was due of business new and as repayment. Securities fourth The this by $XX fund decreased and $XX net quarter and part $XXX line USDA was securities of business Our of growth $XX on on $X net million Farmer offset amortization during of purchased in during USDA issuance to volume and $XX and Rural These The million million million million $XX of Outstanding underlying quarter attributable in Mac growth Securities from on Securities. million counterparties of purchases securities $XX million Guaranteed maturities maturing financial within million repayments of Credit of was underlying were bonds. purchase the new loans Guaranteed of comprised held million USDA AgVantage XXXX, XXXX, line maturing offset purchased of repayments million USDA AgVantage of commitments. of Guarantees The volume business experienced quarter million Utilities business of $XXX

was primarily share, and CEO. can the line and fourth $XX recouped by Notably, XXXX million million technology spread due The X.XX% benefit $XX from resulting see effective XXXX is and corporate as were business Mac in As quarter million or for in to a $X again $X million increase Slide volume of former outstanding fourth prior comp investments benefits related income by due after-tax which to G&A, tax increased resulting terms, share $XX.X primarily effective rate was increase million tax offset the growth. million after-tax you earnings effective XXXX, to earnings spread existing million $X increases for on on Core in the you continued expense for million. core The in the million decrease net of expense. a $X $X from million diluted quarter fourth December or quarter see after-tax increase was approximately fourth both business XXXX. comp million lower a $X.XX and net significantly spread quarter increase $XX.X spread termination its in expense in a partially the in Slide million effective in and business the $X.X year volume, primarily increase growth contributing on and fourth $X XXXX, by in income net period. XXXX XX% a absence in federal infrastructure, the Farmer to increase from this $X.X the XX, increase per was net quarter for can percentage $X.XX on XX, per to year-over-year was common In The XXXX. increase

Slide Turning XX. now to on credit

improved quality credit during overall XXXX. Our

our total percent year-over-year, for allowance delinquencies a provision assets our as each & Ranch the and portfolio XX-day total substandard year-over-year. losses losses of Farm remained same and while each Our decreased our for

will that because While substandard delinquencies borrowers had meet deteriorate not revert expect historical credit quality overall and capacity obligation. to to Mac's rates sufficient closer Farmer we over in assets norms, XXXX time our their XX-day financial our did

$XX Ranch Farm in Specifically, of or portfolio is year-end XXXX. X.XX% X.XX% prior & & million loans or the $XX to due as current Ranch of became compared $XX year. borrower to million to primarily during XX-day approximately permanent improvement the X one of delinquencies to Farm million planting improved portfolio The of for a total that

X% $XXX of of As Mac's the assets of the growth to XXXX, & Farmer were below this or of and and historical remained Farmer substandard & year. Ranch Mac's year-end Mac's or the in asset Ranch increase XXXX. Farm Farmer total due delinquency of as assets X.X% portfolio Farm of entire dollar averages X%, well XX-day in Mac's & respectively. Farm to during was substandard million rate Farmer Ranch million XXXX The substandard portfolio rate X.X% year-end amount $XXX portfolio each compared

Turning to This of capital on of of as to million Farmer core $XXX million compares requirement million, year-end million or exceeded $XXX December the of requirement of our as XXXX million capital or Slide $XXX capital XXXX. XX%. XX, above Mac's XX. capital core $XXX by $XXX statutory

XX-K an in in SEC. to complete I'll increase was ratio about is Mac's compared earnings. XXXX as capital More is The retained due X it back Tier the to Our last capital we year. filed increase with to of in you. Farmer performance turn XX.X% Brad, And that, year-end XXXX primarily today the with information core XX.X%

management XXXX the proud future the Dale, thanks as voices very our much. hope today we've you our really achieved well results during prospects company. earnings this is hear I of that can team for as in

favorable. Our quality very remains credit

Our that capital session base today. the is discussed earlier support the strong. stock we during And higher dividend our earnings common

There continue mission-driven of it's by working And my company. the as time of will organization. months the engage opportunity ahead across my new that impressed an the opportunities can a our I've with I first to stakeholders time position be execute teams us I with offer I'm the President people transition I me, are And are caliber, without commitment continue role. observations. market been that expand of to share. for energy to into doubt, For earnings incredible part Farmer had key to an and this fully off results. ability confident few as Mac big strong to to X drive Coming and its CEO, our a

Mac Farmer First, fundamentals, financial good in competitive earnings, management position. strong with very a condition is cost capital capital, to exceptional strong excellent and credit discipline strong access cost

Second, and and I smart, interested employees, group of we more. can able do dedicated have an extremely also that offer to mission-driven eager, much capable capable, they're and and

our sheet. employees the of potential to suite And systems and attributable Farmer to drive credit we a of believe products at agricultural billion rural and supporting mission rates have growth efficiency. opportunity market have well that have further delivery America. Third, $XX of I our products about of have ahead Mac's suites an funding serving the efficient cost-competitive for fulfill of competitive improvement these advantages balance organic better that in and all XXX note we inherent to place. Take about that we have

by time. I So you be operator excited to more leading I'd any to that than turn from if conclude Expectations questions just organization saying have to to like And be at we to this I'd cannot with are like that, see this the high. today.

Scott first with Our Valentin question ahead. from Instructions] Point. Compass comes go Please [Operator

Thanks, operator. everyone. question. my taking Thanks for morning, Good

an interesting there. seems Just like CoBank, with regard opportunity to

to other utilities wondering in then And I quarter. is focused pretty the sized sizable also, just transaction did if just opportunities utilities it the CoBank? it either if Or was a there participation sector? segment. for sense just participants a the within expanding of opportunities volumes Farm trying guys get other first are expand Just can System Credit beyond start similar you transactions opportunities there get big You could going addition on or Is CoBank? to with how in forward? the into other

Scott. of just the given that Thanks transaction for we obvious this question, I mean, announced. it's Yes. magnitude an that,

with developed expertise relationship utility with National Finance underwriting business Corp., First rural of cooperative worth Rural them, business of wonderful, decade wonderful have all, the through in and a loans. an we've Utilities Cooperative enjoyed electric

of this And approached high so degree very with a we confidence. very, CoBank opportunity with

continue contemplate opportunities. MPA new project it forward include broad We in doing much was us. loans. together. a agreement, to in important partner, X-K all to the infrastructure That of very include emerging specifically, They're expect really do It you'll But These to partner relates types a loans. they're with CoBank, finance business It look variety an it a see for significant about a possibilities. to business MPA. is other exploring the agribusiness filing we a written and CFC are to very announcement that master as rural of for to could More purchase provide loans, new framework could future.

As agreement. beginning a master we But can in that that now under today, CoBank no have serious way this transaction work have discussions we additional together would under very transaction purchase live specific booked, or anticipate that announcement. we with that ways we of result do imminent about discussions

sure the who we're and Credit and to is worked business the will CoBank, future. our rural focus now. banks, we and credit months is mission first Our I farm other work without in Farm that others specific with that additional last Credit do, System of some with serving hard right think our America. System to ways with but And capitalization understands over foremost common CoBank Farmer although optimistic, plans, We Farm Mac strong make with really the do institutions. We've find

the think loans That's with at kind are picture, XX utility Page do table wondering about looking the loans spread - helpful. I points spread the you the And was guess, other CoBank. of & on very opportunities one Okay. the higher-spread when Ranch. XX just mentioned to of I products, like second of press But net net just Farm then big quarter. to I'm looks just it basis think I release, the type for

adding to the spread wondering should higher-yielding increase Just going product higher-spread you're we or if net expect forward? product,

market. spread a referring bit in primary purchases the you're just is secondary transaction to So than going in this that regarding of the given perhaps see secondary market we a Scott, yesterday sort the lines tighter would be made purchase, the you are if market CoBank, to typically purchase

So basis our what spread and we're on at return. said Having price, to the easily this purchase. of I hurdle look current of XX wouldn't that, rates earn it looked purchase necessarily points being we as met representative purchase going that at

So our look be disclosures as this yes, the at seen less line but you've attractive somewhat for within business, an we than the spreads that business. XX-ish of will that

Okay.

entire I Is thought you So in that of effective past the stable of think though, for in overall the have range still fair low the forward? kind the a going XX guys it spreads assumption for business. net spread, kind

have for been spreads now. really X Our stable going on years

hurdle We pricing. haven't subject credit tightened made, our to business, X we pricing in we our on changed institutional the our pricing we to an deals generic haven't in years. rates. a no, primary one-off But On seen asset deal macro win really change

We at the things time. are all looking

over perhaps time. Our more and at credit changes how differentiated price are haven't pricing any we seen team that is for like we yet. But we evaluating looking credit, can

as business concerned, So - across in and still guys everything you pretty total. line each as of far stable our are then are spreads

capital Okay, Slide And was up of then - of all which in slide to capital opportunities excess CoBank of return kind a there XX forget in that given additional through the for in the faster it the Is different maybe fashion? is presentation. delever excess and mentioned another right. terms capital, year-over-year. is plan amount I Or the to capital you in the regulatory growth, participations? dollar presentation, plan maybe or there the capital

we I Well, XX%, of increase a top twofold, in dividend roughly a the One, and in on XX% it's XXXX. dividend. think XX% increase was in to from escalator Scott. XX% the which payout did That's -

years, dividend a to the in X that's is - That's up So XX%. pretty our off compare the tail. that market,

could capital well retaining year's of our So we're balance on We our to We over simply $X our do annually to have plenty balance of capital, on one growth return to fund earnings. with growth. investors trying sheet opportunities. to XX% billion return from retained capital a year net earnings growth fund investors, our of our retained

want we high good We'd to to of rich go we kind problem. love So some the ratio, numbers what at kinds line man's I have our fund the a growth about we beyond growth, those growth feel raise and had really that's If to think that. would that capital of really dividend perhaps you balance trying in the been see yes, which has level. XX% with range. more to with But payout our to in bank with get index,

one then final question. And

still your has we're you alleviate be guys or cycle. wondering historically. the better and driver? news stress was the to or in strong. think better It's points you than mid-stages. I agricultural if just pointed I'm in are, just prices credit, For Would credit data kind I below it you of obviously credit on agricultural numbers. it the seeing credit? - where And - secondly, a we you it where think the your not But credit lot been we mean, are, in of has stages, would the early in report it really being you're see than wondering remains out primary been it what concerns sector.

So I credit same quality, had this is over concerns the to past say have the we Curt. it concerns comes would are year. we today the when

couple I trade lot China. optimism of and or whether think a is There's terms whether a the on of done with in everybody's that, producer lender. probably tariffs days you're potentially particularly a a around last of mind in getting trade you're deal

the and producers. standpoint, markets I the the helps think psychological lenders also a from and both that, helps

see the sheet. strong. In still leverage terms coming credit of decent still very credit - kind balance strong that deals, good incredibly the on of metrics deals are through They're door our positions liquidity, our we remain numbers, today hard

or were a just probably in you corn the that anxious days. ask a get me I soybean a I if So next and if I trade would tariff to the say XX producer, would specifically, dairy to get and with dealt or see be with were dealt deal

If that If of then I a that loans is Ranch XX X% I rate? level delinquency basis rate, historically, past think high would Farm X% one question. it reserve And where points. the type I think Okay, normal - helps. we & have to that were go? just kind last in we more let's return to had of been say delinquency you've guess reserve to has when the Or how

you tough if call, mean, look I Scott. mean, - the I a That's data's you public. -

long-term look average at in XX excluding XX can mid-teens, our to ethanol, probably currently You at the it's basis XX. points. We're

because as stuff driven keep migrate that's going lumpy, by today, Just But by of might into before a is farmer not just mentioned substandard different is we've cycle unbelievable. our with has to $X.X it's than health coming really $XXX,XXX a to in think were this on playing the periods. agriculture. to cycles strong delinquency very the - eye But the assets rate. costs a past you relative be as to be so been that's mean, comment, almost the I likely mean, in XX-day it's his bit seen Curt the I portfolio. but driven more ever going your I right? The It's year it's credit what's allowance. really out billion the than have, like So right? substandard, cycle happen again previous on

much. have I I The the given performance credit farming better income I of had, all would have the agree. very question That's economy. than trends expected, thanks been

Thanks, Scott.

private from go comes Carl Hoffman, question next Our investor. ahead. Please

of I and I've through a for regardless, stock And And stock Good have the landline. I'm years. be goes method times, there or problem say And being today, unbelievable I that low all nothing done the from assume to have shareholder down any possibility get the an cellphone control stock a biggest gentlemen. to get the I first trying think time to traded shares My like the $X.XX. $X now see. less example and small has a is shares to that really over haven't sell, to of very there's of you and to dividend, that stock down on able decide been because just stopped actually than your investor. been got through to I've in frustrating you It's just quarter. 'XX, would a X ladies But XX,XXX a as is several number you and have is $X? morning, can Is been this outstanding. stock of an $X.XX I private to to

thanks that, good another with again So dividend luck. and increase, for

and well you of We're for make the - it. we Thank pretty your Sure. aware you I mean, the obviously question, are points share good points.

to research and they're sort investing, now. kinds and the our particular, Some around in right passive X/X top passive capital of investors, changes the migratory MiFID other regulatory quantitative some related XX% specifically of in the changes within and markets, versus of banking box of shareholders black to roughly the of XX

you even ago, investors are So fundamental proportion like say, what of meaningfully they the percentage so, were, smaller X maybe years a XX points.

the that, our things. investor road to this side of dependent disclosure the directly revamp engaged the XX firm and materials. not sell an shows consulting to seeking year We're number and to non-deal IR a the doing being buy try we're So upon schedule disintermediate sell to leverage side to with side. directly We've trying buy help to side. go We're

shortly. deck, our website in slide IR Our you'll see

was different a press today. here release bit Our

program We in disclosure. of know have So we're doing still lot effective, our our things. buyback a as you

years were in in $X.X investors day. $X market to the thresholds a million real to do the But obviously something trading can the that If below think to left Two stock that, million million roughly the more program answer the back fundamental use million And could to I million in the get interested is we of now, story. we stock there's a $X trading fall we're we our that $X day. support order program. liquidity. $X cap, were and to for that. ago, long-term Right provide

back get can we there. So

ag about the can concerns through economy the think a for economy issue, tuned, market. some continue with of this macro but If see we to I understand the macro of of get working it's guess. on ag it's do technical that the confluence the concerns combined Investor in the with things stay the Jalpa's X - job an us. so some on is We and you I side Relations

well I the Relations. discuss Investor as dividend just to as really got just Jalpa, had the who is hands looking don't individual with also I in a investor. like person this appreciate past, think think new to being with Okay, growth start you that increases, and as a great. able the long-term, more But have I'd people good things as hold stock. say stock to an as at income-producing a to I

So help that, will with the thank But volatility. of some maybe that solve you.

You guys job. have a done great

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

sincerely questions the you us anytime. you good to today. all appreciate call. And discuss been We questions. have other a It's here thank Well, any for joining we're

in do Thank So much. touch. very stay you

you concluded. now Thank presentation, today's and may has attending now conference for disconnect. you The