Zack Carpenter: 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.
Unidentified Analyst: Do you have any timelines you can share with us though?
Zack Carpenter: 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.
Operator: The next question comes from Chip Oat with Cary Street Partners. Please go ahead.
Chip Oat: 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.
Aparna Ramesh: 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.
Operator: 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.
Brad Nordholm: 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.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
