Good day, and welcome to the Farmer Mac Third Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jalpa Nazareth, Senior Director Investor Relations and Finance Strategy. Please go ahead.

Good morning and thank you for joining us for our third quarter 2023 earnings conference call. I'm Jalpa Nazareth, Senior Director of Investor Relations and Finance Strategy here at Farmer Mac. As we begin, please note that the information provided during this call may contain forward-looking statements about the Company's business, strategies and prospects, which are based on management's current expectations and assumptions. These statements are not a guarantee of future performance and are subject to the risks and uncertainties that could cause our actual results to differ materially from those projected. Please refer to Farmer Mac's 2022 annual report and subsequent SEC filings for a full discussion of the Company's risk factors. On today's call, we will be discussing certain non-GAAP financial measures. Disclosures and reconciliations of these non-GAAP measures can be found in the most recent Form 10-Q and earnings release posted on Farmer Mac's website, farmermac.com, under the Financial Information portion of the Investors section. Joining us from management this afternoon is our President and Chief Executive Officer, Brad Nordholm, who will discuss second quarter business and financial highlights and strategic objectives; and Chief Financial Officer, Aparna Ramesh, who will provide greater detail on our financial performance. Select members of our management team will also be joining us for the question-and-answer period. At this time, I'll turn the call over to President and CEO, Brad Nordholm. Brad?

Thanks Jalpa. Good morning everyone, and thank you for joining us. I'm pleased to report another record quarter for earnings, our sixth consecutive quarterly record. Our capital base remains strong, which along with our disciplined asset liability management and uninterrupted access to the capital markets enables our long-term strategic growth objectives while also providing a buffer against market volatility and changing credit market conditions. These results once again demonstrated the resiliency of our business model and the success of the strategic initiatives designed to grow our company profitably while and this is very important to us, while fulfilling our mission to rural America and also generating shareholder returns across changing market cycles. In the third quarter, we recorded core earnings of $45.2 million, reflecting a 35% increase over the same period last year. We achieved gross new business volume of $2.3 billion during the quarter, resulting in total outstanding business volume of $27.7 billion as of September 30, 2023. Volume growth this quarter was driven by new AgVantage Securities with existing counterparties in the wholesale financing space. Specifically, we added a $500 million AgVantage Security in Rural Utilities segment and several AgVantage Securities in the Farm & Ranch segment, which more than offset maturing securities by a net $225 million. The overall growth in wholesale financing over the last six months primarily reflects many of our institutional counterparties utilizing our wholesale financing facilities that offer their counterparties a competitive cost of funds. Also, these counterparties are layering in longer term, non-pre-payable AgVantage Securities to manage their asset liability maturity profile, given the current level of interest rates and the pricing of these securities as competitive instruments given their other market options. We entered the fourth with a strong pipeline of existing and new large financial institution counterparties. And we believe…

Thank you, Brad. Good afternoon, everyone. Our record third quarter 2023 results highlight our balanced well measured approach, continued strong credit quality, and resiliency across market cycles. We achieved $2.3 billion of gross new volume this quarter. Some of the key components included $1 billion of wholesale financing in the agricultural finance line of business, the majority of which was refinancing of existing AgVantage Securities. $500 million of wholesale financing in the Rural Infrastructure segment, $204 million of long-term standby purchase commitments, $231 million in new Corporate AgFinance loan purchases and unfunded commitments, $205 million in Farm & Ranch loan purchases, $91 million in new Rural Utilities loan purchases, $44 million of which was telecommunication loans and $17 million in new Renewable Energy loan purchases. Even after repayments and maturities, we grew approximately $900 million this quarter in our outstanding business volume and this speaks to the benefit of strategic decisions over the last few years that we have made to diversify our portfolio and create opportunities in all interest rate environments. Core earnings were $45.2 million of $4.13 per share in third quarter 2023 and this reflects a 35% year-over-year increase. This increase was driven by record net effective spread of $83.4 million in third quarter 2023 compared to $65.6 million in the same period last year. In percentage terms, our net effective spread in third quarter remained at 120 basis points and this was primarily driven by our low cost excess capital, debt funding strategies in previous low rate environments as well as our ability to redeploy both the excess capital and the lower cost debt into higher earning assets. This phenomenon was further enhanced by the continued trend towards higher spread volume that is evident in our new segments like Corporate AgFinance and Renewable Energy. The capital…

Thank you, Aparna. We are extremely proud of our third quarter results, and we believe our performance provides yet another example of the dynamic and enduring nature of Farmer Mac's business model, which continues to be well positioned to deliver earnings growth and strong profitability for the remainder of 2023 and into 2024. Our high levels of capital enable us to continue to execute our solid long-term strategic plan and remain focused on our mission to increase the accessibility of financing for American agriculture and rural infrastructure. We're aligned across our organization and with our customers to bring even greater efficiencies and lower costs in providing financing to lenders for the benefit of their Farm & Ranch Agribusiness and Rural Infrastructure customers. And now operator, I'd like to see if we have any questions from anyone on the line today.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Bose George with KBW. Please go ahead.

I wanted to start with a question on spreads. So it sounds like spreads could stay closer to this elevated level at least in the medium term. In the past, you've discussed a normalized spread range. I think it's 95 to 105. Is that still kind of the normalized level we should think about, and if so, how should we think of sort of the trajectory of spreads getting from here to there?

Bose, I wish, I could provide a perfect answer to that because we have contributions to that positive variance coming from both our treasury operations and how we're funding in this higher interest rate environment as well as the increasing diversification of our business into lines that have more accretive higher spreads. So let me first, ask Zack Carpenter, our Chief Business Officer, to give you a little bit of additional color on spreads on our different commercial lines of business, and then Aparna can kind of wrap it up with further comment on treasury.

Thanks Brad. I think it's been more apparent especially over the last 12 to 18 months, as our business lines have diversified in new areas of growth, as Brad said, are at much higher accretive spreads than our historical lines of business. Especially in this environment where our Farm & Ranch mortgages have slowed down given the interest rates, you're seeing a much more, inclusion of volume from our Telecommunications, Renewable Energy and Corporate AgFinance lines of business, which by their nature have a larger spread, higher accretive spread than our historical overall portfolio. Those deals are lumpier in nature and larger, but also have tended to grow quicker especially in this environment where Farmer Mac has been a new and supportable use of capital, for these types of transactions. So, as we grow in these new areas, as well as growing some of our historical segments, I think you see more of a weight to these higher accretive spread, I'm going forward. But I will say as Brad mentioned, it's very hard to predict and some of these new lines of business are spotty at times in terms of pay downs and maturities. So, just in this environment, we've seen a significant growth in some of those new areas.

Just to add a little bit to that. Bose, if for example, with some decline of rates, we saw a pickup in our Farm & Ranch origination activity. That, as an example, could have a slightly dilutive impact on our spreads. If we are successful accelerating the growth of Renewable Energy, it could have an accretive impact to our current spreads, which one will accelerate faster is quite difficult to predict. But I think we can confidently say that looking out a couple years, it is not our expectation that we would revert to a 90 to 95 basis point NES that we will be in north of that because of the composition of and growing diversification of the portfolio. But Aparna, can you add to that?

Yes, absolutely. And I just want to layer in one other comment around business composition. I think it absolutely has to do with business composition, but I will also say that and Zack alluded to this, our Rural Infrastructure portfolio, if you just go back several years, the spread on that portfolio was significantly lower than it is today and that's been a huge contributor in addition to the new lines of business. So it's just another example of the fact that we've been able to be a very consistent provider of liquidity and debt financing to our counterparties and we've been able to do that while not just maintaining but also increasing our spread. So I just want to add that one comment. And then in terms of treasury, I'll just say that our funding strategy has really come to fruition in this rising rate environment. And I made some of those comments, earlier on, which you likely heard both. But I'll just note a couple of things, right? And I think a natural question is, will this sustain especially as the fed pauses or is likely to pause? We have some in book hedges within our funding strategy and one of them has to do with callable. So, we'll actually layer in callable and we continue to do that. And that actually has the effect of being a little bit dilutive to spreads. But we do that deliberately because we do not want to be in a position where if rates dramatically trended downwards, we were caught in a situation where our funding costs outpaced our ability to put loans on. So, these callable spreads tend to come on at slightly wider margins relative to say bullet spreads. We have consistently layered that in, but it is a hedging strategy. So that's just one thing that I'll note more to the positive, it's going to help us maintain that spread band of north of about 100 basis points. The second piece that I will just highlight around our funding strategy has to do with how we manage our duration. So, as we anticipate being close to or at the peak of the rate cycle, we are very systematically and have very systematically ended some of our investment portfolio while maintaining our interest rate risk profile. And that again has the effect of providing a natural hedge if rates were to trend down. So, all of this is to say both that while we try to manage to a 95 to 105 basis point NES, I think given where we are headed both from a diversification of lines of business as well as our funding strategies, I think it would be fair to say that we'd be at the upper end of that as we look up into that.

And then actually switching to the dividend, can you just remind us how you look at the dividend? Is it sort of a payout? And then just given that the returns are going are sort of above, sort of somewhat of a normalized level. Could that payout be a little bit lower just as the ROEs remain elevated to just yet philosophically how you're looking at it?

Yes. In terms of the dividend, that's something that I'll look at it very seriously, as we get into February of 2024 based on year-end results. We're quite disciplined in revisiting it annually. You have seen what has happened each year for the last X number of years, consecutive increases in dividends. Given these results, it's very reasonable to expect further increase in the dividend, but I really, I'm not going to provide any guidance on exactly how much that may be today. The factors that have gone into it in the past have been what is our growth rate and consumption of capital? What is the outlook for earnings? And the past years, that's resulted in dividends that have been just inside of 35% of after tax earnings. That's not a hard and fast target, however. So when we do that evaluation, we will be looking at growth, acceleration and potential need for capital. As securitization programs mature, we may find that we have proportionately less increased need for capital that will also be a consideration and then just general outlook for the business. So, stay tuned. Certainly, we will be strongly considering taking action on dividends in February.

The next question comes from Bill Ryan with Seaport Research Partners. Please go ahead.

First one, obviously, we hit on the revenue side a little bit earlier, but thinking about expenses, you're up 21% in the second quarter, 24% in the third quarter. And what you -- it sounds like you alluded to on the conference call, you have the ability to really kind of manage that as revenue makes a directional change, a little faster, a little bit slower. Could you start off by talking maybe about some of the levers that you have to kind of dial back a little bit on the investments subject to revenue growth?

Sure. Aparna, go ahead.

Yes. Bill, I think you hit the nail on the head, right? We make our investments fairly aggressively but in line with our growth strategy. And as you can see, we target 30% and we're well south of that and probably right in line with historical averages. A couple of the levers that we do have, some things are fairly baked in such as the fixed investments we've made in our technology platform. But I'll just say that we are looking to accelerate, the spending on that particular investment largely because we see ourselves doing pretty well in terms of just how that project is tracking. So, we do have a few levers there in terms of how much we want to layer in, and this is something we can do through this year as well as next year. And then, we've got some other planned investments, and I talked about that with respect to our loan origination strategies. And so, again, I think we can pace that as we need to, in a way that is both consistent with our, with optimizing our expense profile. And then the final, area that we do intend to make investments, which could drive up our overall headcount, which is a little under 118 right now, has to do with some of our plans to expand into the Renewable Energy segment. And again, that is something that we plan to do, and we think that it will pay off in terms of just the higher NES that you've already seen within that segment, but again that's also a lever. So the way in which we really manage our spending profile is to, really look at this, quarterly basis, and we track very closely to how our revenue projections are coming in. And we've left enough and ample room such that we can dial things back as we need to if we don't think we're going to hit our revenue projection. But as you heard from the revenue story, we have no reason to not believe that to be the case.

I have a follow-up question, and this is came out some money center banks that reported a couple weeks ago and they were kind of talking about Basel III and tax equity investments maybe receiving an incrementally higher a risk weighting than what they are right now, which they kind of implied it might impact some of the Renewable Energy projects going forward that are partly financially this means. I was curious, if you had any thoughts on the matter. And it seems counterintuitive that they go that way ultimately because obviously renewable energy is so important, but I was just kind of curious how you're thinking about it.

Yes. We've thought about it a lot. First of all, we have not been making tax equity input commitments, we've been making commitments to senior secure project financing for renewable energy projects, so straight that. The proposal is to increase the capital requirement for tax equity, which again we're not doing, but many of the big banks are from a 100% to 400%. And that would have more than a chilling effect on the tax equity market. And that would be too bad. It would, if that happened, it would slow down the investment in new renewable energy projects. But our view on this is that the addressable market, as of about two years ago, it was about $8 billion to $10 billion with the IRA's Inflation Reduction Act and the additional incentives for renewable energy projects. The expectation is that that may have as much as doubled. We're starting from a very, very low base, and we have inherent advantages in our ability to price and structure project finance compared to other banks. It's very difficult for banks to make 20-year fixed rate amortizing loan commitments as an example. And so, we are starting from a very, very low base. So to take market share as we put effective people in the field and develop the Farmer Mac brand and capability in that market, we don't think it's particularly difficult from where we stand. So even if the market were to contract by say, a quarter or a third because of constraints in the tax equity market, we still feel that there's play a market for us to build market share in and for many years to come quite frankly.

One last probably very quick question probably rhetorical question in a way, but what is the status of the Farm Bill? I mean, I'm assuming given what's going on in Congress, it's just kind of going to get extended probably?

We have changes every day, but this morning, Congressman Scott from Georgia, who's the ranking minority member of the House Agriculture committee came out, with an indication that, it was his opinion that the Farm Bill should be extended a year before the new bill is acted upon. He then joins the two majority and minority Senate leaders, Stabenow, and the majority, the ranking, or majority, house leader, J.T. Thompson come out of Pennsylvania with that view. So, it's pretty clear that we're going to probably see an extension maybe -- it really needs to be done. Really needs to be done by the end of the year. There is a scenario under, which the extension for less than a year and it puts pressure on them to act on it during the first half of 2024. We'll see. Obviously, Congress has a very, very ambitious, and politically broad schedule in front of it between now and the New Year and then into 2024. So our base expectation is that, we have a one year extension.

The next question comes from Brendan McCarthy with Sidoti. Please go ahead.

Just wondering if you can quickly comment on the telecom loan downgrade that led to the $3.6 million provision? I guess, was that mostly anticipated, or was that more of a surprising? Is that like an outsized figure that is typical?

No. I am going to ask Marc Crady, our Chief Credit Officer, to jump in here. But look for us to have you know, we have thousands of loans and for us to have loans that occasionally are downgraded to the point where they require special allowances, it's not at all unusual. We're putting a spotlight on this one because it sticks out because it happens to be the only one. So, that's important to keep in mind, but I'll let Marc give you a little bit of color. Obviously, we're not going to name names, but a little bit of color on the nature of the credit softness that resulted in the downgrade in the allowance.

Thanks Brad. Yes, the downgrade was not a surprise. As Brad mentioned, as our telecom portfolio seasons, we're expecting additional downgrades in the future. This was the only one we downgraded this quarter in telecom though I will note. The borrower is a large telecommunications business. The Company had weaker than expected operating results in the quarter, increasing leverage. There's some large debt maturities that are coming in 2025 and some other kind of secular challenges in the telecom industry. So, I wouldn't say it's sort of out of the ordinary or unexpected and I guess what we'll expect in the future.

So probably fair to say that just kind of given the shift towards some of the higher spread businesses in rural infrastructure finance. Would you -- is it fair to say just maybe we might expect a higher degree of provision for losses over the next one to two years?

I won't predict that that we will have higher provisions for losses in the next couple years, but I think we will have more credit stories that we'll be working on in corporate agribusiness, telco, don't know about renewable energy. And compared to Farm & Ranch and rural ag cooperative business in the past, there'll be incrementally more of those, but we are absolutely confident that we're getting compensated for the risk and that we have the ability to manage these risks. In the allowance, it may occasionally show up, but you're also going to see it in the profitability.

And Brendan, I would also say that we've got a very robust capital position well in excess of our regulatory requirements. Overall, the balance sheet is very well positioned to handle any steps.

And then one more question for me, just I know last quarter we talked about some changes to the ag expressed, underwriting standards, I believe it was loosen the loan to value provisions a bit. But just wondering if there was a noticeable increase in volume kind of directly attributed to that change from last quarter?

Yes. I think we can pretty well quantify the percentage increase in the number of overall applications that now qualify for ag expressed, but Zack, can you offer some color on that?

Yes, great question and we're very excited about that product enhancement. Unfortunately, I think the biggest headwind in that space is the higher interest rates. So regardless of product, I think that's just been sticker shock over the last 12 to 18 months, which really slowdown or basically stop the refinancing market in this space. So that being said, I think what's the positive story here is the percentage of new loan applications coming through our platform is much higher in the ag expressed space than it ever has been in the past. Meeting this product has been much more competitive and much more of a positive reaction in the market. So as a total compensation of all loan applications it's shifting more towards AgExpress. And as we believe as borrowers get more accustomed to this higher rate environment and see new purchase opportunities and/or start to refinance over the next couple of years that this product will drive increased interest and even a higher concentration or composition in our total applications.

Zack, did I say something there that it's now approaching 70% by number of applications?

60% to 70% depending on the month, yes.

Yes, and keep in mind that was zero or four years ago.

That's right.

The next question comes from Gary Gordon, a Private Investor. Please go ahead.

Two questions. One is the large percentage of your new business that's wholesale, what is that? Is this sort of a one-off? Or does this say something about the stresses on the banking system?

Yes. Gary, this actually is a really positive story that I'm going to have Zack share with you. But in addition to exactly what's going on right now and driving the growth, I want to just go back and also link this to earlier discussion about NES and talk for just a moment about what has been an evolution of pricing philosophy here at Farmer Mac over the last four to five years. Going back four or five years ago, we kind of calculated what's the minimum return we need? And that was our price. And today we pay attention to that, but we also pay attention to where's the market? And what alternatives do customers have? And what does it take for us to capture market share? And is that market share profitable? And what you saw over the last couple of years is our deliberate decision not to chase business that wasn't profitable and a lot of that was the wholesale business. And now we're seeing an absolute reversal of that, and so we're being opportunistic. So, I really want to emphasize that thinking about pricing not as a minimum of what do we need here at Farmer Mac, but what is their compensation for the risk and in the market price and what can we take from the marketplace while fulfilling our mission is driving much more of what we do now.

Yes. Gary, Zack Carpenter. Great question and we're very excited about the potential outlook, in this space. And going back in history, about three years ago, we had a couple of counterparties and we've had them for a long time. What we didn't have was the right people and the right mindset in place to really go out and get our brand in the market to see what opportunities are available. And I think over the last two to three years, we've developed that personnel in house and that talent to really get out there and understand and make sure our brand is resonating. I think the second thing is why strong opportunities now? Part of it is the market. So layer in the strong individual brand that we have internally to get out there and call on the right people, we're also very strong relative value in the market. There's very few opportunity to provide wholesale financing on agricultural loans and in a market where bond, our yields and rates are volatile on a daily basis and we have a secured product that very strong relative value to these counterparties. So, I think it's a combination of how we've built the team, how we're out there communicating with these counterparties, and how we're up relative value to other potential opportunities that are out there. And I think upon I mentioned it earlier and Brad mentioned it now from the pricing, we believe in this market we are a strong relative value and these bonds that are put in place are generally medium to long-term not pre-payable loans. So, it really is sticky revenue for us. And if the market shifts, which it did a couple of years ago, we are very thoughtful in terms of putting additional capital out there that might not be appropriate from a revenue or return perspective. So, we're excited about the opportunities, we're strong relative value in this market and we think 2024 will be hopefully positive for us.

Aparna also mentioned that the core capital ratio is 16%. Where is that sort of in the normal range? Or where you feel comfortable? How should we think about that 16% number?

Yes. I mean I think 16 is probably a great place to be for a couple of reasons. One, we well, actually I'll point to three reasons. And it gives us a ton of flexibility. And one of the reasons is that we just raised a lot of low cost capital that we have no intention of calling because it's sub 5.5 preferred. That perpetual capital is incredibly is accretive for us. So that will probably stick around. The second driver has to do with our securitization program that affords us the ability to get a lot of Tier 1 capital release and having done three transactions so far. That's been a huge driver of that. But I think the third factor that I think we're the most proud of has to do with just the organic growth in our capital base that comes from strong retained earnings while maintaining our credit profile. And it's all of those reasons that which you just heard, Gary, from Brad and from Zack, just around our revenue accretion and that's really driving a big component of why we're at 15%. So that's certainly outpaced what we had anticipated, but it's a really good problem to have. And as we look out ahead, just linking this with some of the other questions, it gives us a lot of degrees of freedom, one, to fulfill our mission but two, to really grow and expand into these new lines of business that tend to be very capital consumptive. And we can do that without really having to force ourselves to go out into the market and raise expensive capital. I wouldn't want to be in the market now raising capital. So, I don't think we have a targeted band, but as we see expensive sources of say, preferred coming due, we might make some decisions relative to that, our retained earnings and securitization, but we just have a few levers right now that we can play with, and it's a really great place to be.

The next question comes from DeForest Hinman, Retail Investor. Please go ahead.

It's good to see seeing a new sell-side firm on the call, 35% earnings growth, very impressive, spreads higher, pretty unique results given the current environment, so very strong results. Question on hiring activity, open positions, you're looking to hire and how many people have we hired so far this year?

Our current headcount is somewhere in the 183, 184 range, something like that. I think we started the year at 159, 160, something like that. So, simple math '24 160 maybe about 14%, 15% on net increase in headcount, the base salary increase would not be 14%, 15% because you don't have to have two CEOs, at least not yet, and or two CFOs and these tend to be positions, that are filling gaps, throughout the organization as we expand. It's something we keep a very close eye on, and it comes back to the efficiency ratio. We do view our compensation expense. It is a very large portion of the expense. Obviously, there's some variability to it that adjusts with performance in our short-term incentive plan and our long-term incentive plan results. But we view, base salaries and people expenses is really a fixed expense here. So, we're very cautious about adding new people, but we do add with them when they can drive additional revenue. So for example, we've recently added, some positions, and some leadership, frankly, around our renewable energy, business development. Underwriting, we expanded our servicing portfolio midyear. We added a couple positions associated with that. So we're being mindful of the overall expense but also the profile of the people we're adding and making sure that we're adding people who are revenue generators as well as those who are administering other important parts of the organization.

And I did want to ask about the energy portfolio as well. We did see a little bit -- it's a multipart question a little bit of slowdown in sequential growth in that business, we've been seeing a lot of headlines in the news about, offshore projects getting stalled or looking for changes in tax subsidies and other things. Are you seeing that within the land based projects, the rural projects, whether they be solar or wind? Any color you could provide there would be, helpful.

But keep in mind our focus is our, land based projects. The massive offshore wind projects are many years out, if at all. We're looking at the more immediate opportunity, solar wind in rural areas. Also convergence of energy and agriculture, anaerobic digesters, methane gas capture systems, which are quite interesting. But Zack, I would describe it right now as we're more building the infrastructure to accelerate the growth rather than having the infrastructure in place and feel seeing a turndown. Zack, do you have some color there?

Yes. Good question. I would highlight is that our pipeline in the renewable energy space remains very strong. I think to your prior question in terms of headcount, we wanted to get more infrastructures in there to meet the demand that we see in the market. So that that does impact getting the loans through the process underwritten and closed. That being such just in this space, these loans take a long time to work through the process. A lot of loan documentation, legal documentation that needs to get done for these loans to finally close and then start construction and/or get to a point where construction is complete and they're operating. So, they take a lot longer time to move through that process than some of our other lines of business. So frankly, what we saw in this quarter was working through that process and we have, like I said, a very strong pipeline and we feel that as those get to the point of ready to close and fund that, we'll be providing, helpful financing to support our counterparties in the mission.

And then just on some of the mechanics of the growth, I think on the last call, we talked about some of the larger syndicates that we're lending in the energy space, European banks and Japanese banks. Have we come to some agreements with getting put in those syndicates? So, we could be seeing additional growth fourth quarter heading into 2024 or is that more of a 2024, 2025 goal or milestone?

Our primary focus is on those counterparties that support the large broad syndicated transactions. I do want to emphasize as Brad said, we needed to get some leadership and infrastructure around this team to support the growth that we saw in the market. So, our primary focus was to get the right expertise in-house. Now to pivot to focus more on working with those counterparties, we believe to support the foundation of this business, we do want to look at those larger syndicated deals that have an appropriate risk adjusted return to meet our needs. They are larger generally, and we want to rely on the strength of those counterparties that are in the market constantly. So, I would reaffirm that our outreach strategy and the partners we're working with will be those organizations that lead those large syndicated deals.

Do you have any timelines you can share with us though?

I'll just refer back to the pipeline is very large and very strong. And so we feel, confident that over the next few quarters and into the next couple of years that, we'll see increased growth opportunities.

The next question comes from Chip Oat with Cary Street Partners. Please go ahead.

This question is for Aparna. Aparna, I think the answer may give you a chance to brag a little bit. Two months ago, a very credible sell-side shop who specializes in financial services initiated on Farmer Mac with a very informative in-depth report, what caught my attention is that the third leg of their thesis specifically mentioned, what they consider to be an exceptional treasury and finance operation. Never in my career have I ever seen something like that specifically broken out, I certainly agree. I'm sure everybody else does. But for instance, if you wipe the Morgan Bank, presumably, it is assumed that they have a top shelf treasury and finance operation. But this report focused on what you're doing, but it didn't really say why. It's just that it's really, really good. Do you know what they're referring to? You're better, they say. Better than when? Better than who? And what are you doing and what I call Farmer Mac 2.0 to merit those congratulations. So please try.

Well, I won't brag, but maybe I'll just stick to some of the facts, but really appreciate your question. I'll just say that what we did isn't unusual. I think what we did was just consistent. And it's consistent and disciplined execution from a funding standpoint and from an asset liability management standpoint. And when you do that and you also play not for the short-term but play for the long-term, sometimes you can actually outpace your peers. And so, I'll point to a couple of specific things. When rates were very low, we went out and raised fairly advantageous capital. And we've talked about that, but little did we realize at that point in time how advantageous it would be. We also were careful during the period of stress, which again is a very intuitive thing to do, to shore up our liquidity profile. And so, we made sure that we had an abundance of cash, if ever there were a market disruption then we'd be well positioned. Again, we raised a lot of that, during a period when rates were very low. The third thing we did was we extended our debt, really looking at the rate cycle and say not just relatively speaking, but on absolute terms, rates are pretty low. So to us, these were very intuitive decisions and we were also paying very close attention to what the fed was signaling and where the trends were headed in terms of inflation. And so we did all of these things with the expectation that when you're at the dictation to that when you're at the bottom of a rate cycle, there's only one way for rates to go and that's up. And so, as this has played out and inflation has indeed been a huge factor, I think the only thing we didn't anticipate was how fast and how much the fed was going to raise rates. And that's really, I think, what caught a lot of other players unaware. They probably didn't fully appreciate what the fed was signaling in terms of raising rates very quickly. But because we've made those moves that I talked about, we just found ourselves extremely well positioned and we didn't have to actually go out and raise either expensive debt or expensive capital. And I think that's really played out to our advantage. And we're able to then diversify into some of these new lines of business without really taking on a lot of additional cost. So I'll just stop there, but I do appreciate your questions and I hope that provides you with a little bit of color around how this all came to be.

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

Thank you, operator. Thank you all for joining us today. It's been a real pleasure to have you on and actually listen to and do our best to address your very thoughtful questions. So thank you very much for those. We are extremely proud of what we've done here at Farmer Mac, and we're extremely proud and confident of how we're positioned, as we look ahead to 2024. We look forward to sharing very strong results with you in future quarters There's nothing that we see on the horizon that is causing us huge anxiety other than obviously the huge turmoil in the Middle East and maybe to some extent, the U.S. Treasury's funding schedule for the remainder of '24 and going or '23 and going into '24, we're keeping a very close eye on that. But, in terms of our business and the markets which we operate, things are very solid right now. And as I say, we are very confident, very optimistic about 2024. So thank you for joining us and please get back to Jalpa with any questions. We look forward to speaking with you again in the three months, if not sooner. Thank you.

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