Bradford T. Nordholm: Yeah, Brendan, one other thing I’d just like to add to this is that there’s a strategic aspect of this as well, because when we have an AgVantage facility, we are evaluating the underlying collateral that’s being pledged and that underlying collateral are typically loans that as an alternative we’d like to own, that we’d like to purchase. And I think over the last six to nine months, we’ve probably been able to initiate more discussions with some of those AgVantage counterparties about their strategic objectives and whether a sale for them, a purchase by us of some of those underlying loans fits their strategic objectives better. And too early to say that that’s going to yield results. But we’re encouraged that we’re engaged at such a strategic thought level with so many of these counterparties and are optimistic that at some point in the future we will show that we can provide another source of liquidity to them through a different type of facility, a loan purchase rather than an AgVantage facility.
Brendan McCarthy: Great. Great. That’s very helpful. And you know, I know you mentioned a big part of that story has been business development efforts and branding and just kind of marketing efforts as well. Can you specify what exactly has kind of driven that diversification of counterparties?
Bradford T. Nordholm: Well, let me just jump in ahead of Zach. He’s modest, but it is all of those things, but it absolutely begins with having high quality people with relationships and experience that motivates those counterparties to engage in these discussions. And we have hired some absolute, Zach has really hired some absolutely outstanding people over the last couple of years that are enabling us to do that.
Brendan McCarthy: Got it. Got it. And kind of switching gears here to the outlook on prepayment risk. I understand, should we see a potential decline in rates in the back half of the year, obviously I assume prepayments will pick up in the core Farm & Ranch business but can you touch on the prepayment outlook for the other segments, I know prepayment risk is very low in the rural utility segment, but maybe if you can expand on the other business lines?
Bradford T. Nordholm: Yeah, Zach can you just run through all the segments.
Zachary N. Carpenter: Yeah, happy to. You’re spot on. In the rural infrastructure side of the house we don’t anticipate much of any prepayment risk, maybe some modest risk in the telecommunications portfolio. Generally speaking, those are all floating rates. But those are going to turn on a weighted average life of three to four years anyways. But, the rate environment isn’t going to really increase that. In corporate Ag finance, those are just lumpy transactions in general. So the prepayment concept really isn’t conducive in that segment. These are more M&A type transactions where you may get paid off or you could participate in a larger facility. So really when you think about our overall portfolios, our lines of business, really the prepayment component is akin to Farm & Ranch and USDA.
And if we see some rate compression in the back half of the year, I think, as Aparna mentioned, we anticipate an increase in loan purchase and we’re kind of setting ourselves up to take advantage of a potential refinance opportunities. And remember, we’ve said this in prior quarters, a lot of our customers or community and regional banks are keeping those loans on the balance sheet to manage through a higher deposit payout environment. That being said, liquidity and capital efficiency is now becoming a more focus in the banking sector which we believe as those loans kind of reprice on their balance sheet, creates an enhanced opportunity for us, especially in Farm & Ranch and USDA to take advantage in a rate decline scenario. So yes, probably more prepayment risk in Farm & Ranch and USDA, but we’re more than confident that we’ll make it up in new volumes.
Aparna Ramesh: If I might just add one point as well, Brendan, we are fairly agnostic in terms of prepayment risk, and this has to do with how we manage our balance sheet from a hedging standpoint. So something that we’ve noted before, we tend to layer in callable such that the fairly duration match as we look ahead and think about prepayment risk. So even if we were to have prepayments, it wouldn’t necessarily affect our margins very substantially. So, everything that Zach highlighted, prepayment risk is low across the segments, but in addition to that from a funding standpoint, we’re extremely well hedged where we could simply call expensive debt and reprice that downward such that we’re maintaining the margins.
Brendan McCarthy: Understood, that’s helpful. And one more question from me, just on the farm economy as a whole. I know you mentioned your ranch [ph] values have moderately declined and farm net income are, appear to be reverting more towards historical averages. But can you just kind of talk on your outlook for the farm economy and how it impacts Farmer Mac?
Bradford T. Nordholm: That’s a big question because the decline in land it actually is pretty isolated. We’ve been doing a lot of work on that recently. Permanent crops in California are one place where there’ve been headlines about the modest decreases, and those tend to be almonds and other permanent crops where there are not multiple sources of water, where there may be some pressure on water availability, as well as the combination with low commodity prices. But we’re not seeing it across the board. And as you know, our loan to current value on just about everything in our portfolio is extremely modest. We will sell up to 50% on the portfolio as it stands. But yes, we’re expected to see softening in farm income. Of course, that’s an aggregate number for the entire sector.
