Dallas P. Tonsager, Chairman and Chief Executive Officer

Jeffery S. Hall, Board Member

MINUTES OF THE REGULAR MEETING

OF THE

FARM CREDIT ADMINISTRATION BOARD

September 14, 2017 

These minutes reflect the business transacted at the September 14, 2017, Regular Meeting of the 

Farm Credit Administration Board (FCA Board) pursuant to the Government in the Sunshine Act, 

5 U.S.C. § 552b, and the regulations of the Farm Credit Administration (FCA) adopted thereunder.

The FCA Board meeting was held at the FCA office in McLean, Virginia, beginning at 9:00 a.m. and 

concluding at 10:27 a.m. Members of the Board present were:

Dallas P. Tonsager, Chairman and Chief Executive Officer

Jeffery S. Hall, Member

Others present included Charles Rawls, General Counsel; Dale Aultman, Secretary to the Board; staff 

of the FCA and Farm Credit System Insurance Corporation (FCSIC); and two members of the general 

public. (A list of staff attendees is attached as Exhibit A.) 

The Secretary read a statement that announced the meeting would be conducted according to the 

requirements of the Government in the Sunshine Act. 

Chairman Tonsager reviewed the published Agenda. (A copy of the Public Announcement publishing 

the Agenda for the meeting is attached as Exhibit B.)

Mr. Hall moved to adopt the Agenda as published. 

Chairman Tonsager seconded the motion.

There being no further discussion, Chairman Tonsager called the question.

The Secretary polled the Board Members and the motion carried unanimously.

1
Mr. Hall noted that the Agenda did include portions of the meeting that should be closed to the 

public as permitted by the Government in the Sunshine Act and therefore moved that the meeting 

be closed at that point. 

Chairman Tonsager seconded the motion.

There being no further discussion, Chairman Tonsager called the question.

The Secretary polled the Board Members and the motion carried unanimously.

OPEN SESSION

Approval of Minutes

Minutes for August 10, 2017 

(BM-14-SEP-17-01) 

Mr. Hall moved to approve the minutes for the August 10, 2017, FCA Regular Board Meeting. 

Chairman Tonsager seconded the motion.

There being no further discussion, Chairman Tonsager called the question.

The Secretary polled the Board Members and the motion carried unanimously. (BM-14-SEP-17-01) 

(A copy of the official “Board Action Item” is attached as Exhibit C.)

New Business

Fall 2017 Abstract of the Unified Agenda of Federal Regulatory and 

Deregulatory Actions and the Fall 2017 Regulatory Project Plan

 (BM-14-SEP-17-02) 

Joi Neal of the Office of Regulatory Policy and Laura McFarland of the Office of General Counsel 

presented the Fall 2017 Abstract of the Unified Agenda of Federal Regulatory and Deregulatory 

Actions and the Fall 2017 Regulatory Project Plan. 

Chairman Tonsager opened the discussion for questions by the Board.

Chairman Tonsager asked if there was any further discussion and asked staff to provide their 

recommendation. Staff provided their recommendation. 

Chairman Tonsager called for a motion on the staff’s recommendation. 

2
Mr. Hall moved that the Board approve the Fall 2017 Abstract of the Unified Agenda of Federal

Regulatory and Deregulatory Actions and the Fall 2017 Regulatory Project Plan. 

Chairman Tonsager seconded the motion.

Chairman Tonsager asked if there was any further discussion.

There being no further discussion, the Chairman Tonsager called the question.

The Secretary polled the Members and the motion carried unanimously. (BM-14-SEP-17-02)

(A copy of the Board Action is attached as Exhibit D.)

Reports

Quarterly Report on Economic Conditions and 

Farm Credit System (FCS) Conditions

Steve Gabriel of the Office of Regulatory Policy and Hal Johnson of the Office of Examination

presented the Quarterly Report on Economic Conditions and FCS Conditions. 

Chairman Tonsager asked if there were any questions or further discussion from the Board. 

There were no further questions or discussion. 

(A copy of the PowerPoint presentation is attached as Exhibit E.)

CLOSED SESSION

Chairman Tonsager noted that this was a Closed Session and ensured that members of the public 

and nonessential FCA and FCSIC staff were not in the room so the Board could meet with Office of 

Examination in Closed Session. 

Chairman Tonsager convened the closed session of the meeting at 9:58 a.m. and instructed the 

Secretary to activate the electronic recording device so that the proceedings of the Closed Session 

were properly recorded as required by the Government in the Sunshine Act. 

Chairman Tonsager then instructed the General Counsel to furnish the Secretary with a certification, 

pursuant to 5 U.S.C. § 552b(f), that the portions of the meeting held in closed session may be 

properly closed to the public. 

(A copy of the Certification is attached hereto as Exhibit F.) 

Members of the Board present were:

Dallas P. Tonsager, Chairman and Chief Executive Officer

Jeffery S. Hall, Board Member

3
Others present included Dale Aultman, Secretary to the Board; and Charles Rawls, General Counsel. 

(A list of staff attendees is attached as Exhibit A).

Office of Examination Quarterly Report

Robert Coleman of the Office of Examination presented the update on OE Supervisory and Oversight 

Activities. 

Chairman Tonsager asked if there were any questions or further discussion from the Board. 

There were no further questions or discussion. 

ADJOURNMENT

There being no further business to come before the Board, Chairman Tonsager indicated he would 

entertain a motion to adjourn the meeting.

Mr. Hall moved that the meeting be adjourned.

Chairman Tonsager seconded the motion.

Chairman Tonsager called the question. 

The Secretary polled the Board Members and the motion carried unanimously.

The meeting adjourned at 10:27 a.m.

4
NOTATIONAL VOTE ACTIONS 

There were eight notational vote actions approved by the FCA Board from August 11, 2017, through 

September 13, 2017 as follows:

Item Number Action Date Voting Results Subject

NV 17-20 08/15/2017 Approved Farm Credit Leasing Services Corporation to purchase interests in

Motor Vehicle Titling Trusts

NV 17-21 08/16/2017 Approved Compeer Financial, ACA to Redeem Certain Identified Equities of 

Borrowers with Defaulted Loans

NV 17-22 08/16/2017 Approved Compeer Financial, ACA Internal Control Attestation Extension from 

FY 2018 to FY 2019

NV 17-23 08/16/2017 Approved AgCountry FCS, ACA Internal Control Attestation Extension from 

FY 2018 to FY 2019

NV 17-24 08/24/2017 Approved Update to FCA Board Policy Statement #62 on EEO and Diversity

NV 17-25 09/06/2017 Approved Revised FCA FY 2018 and Proposed FY 2019 Budgets

NV 17-26 08/24/2017 Approved CoBank, ACB, to purchase up to $6 million in taxable bonds to be 

issued by a nonprofit organization that provides community health 

services in rural Minnesota 

NV 17-27 09/08/2017 Approved Authorize FCA Chief Financial Officer to reallocate funds within the 

FCA budget to fund information technology projects directed toward 

meeting strategic initiatives, and to reclassify and reallocate funds to 

meet the fiscal year-end accounting needs of FCA

The undersigned hereby certify that the foregoing minutes are the official minutes of the Regular 

Meeting of the Farm Credit Administration Board held on September 14, 2017. 

______ _/s/________________ ______ _/s/________________

Dallas P. Tonsager Dale L. Aultman

Board Chairman and Chief Executive Officer Secretary to the Board

 Approved: _October 12, 2017__

5
Exhibit A

Page 1 of 2 

STAFF PRESENT AT THE 

FCA REGULAR BOARD MEETING

September 14, 2017

Dallas P. Tonsager, Chairman and Chief Executive Officer

Jeffery S. Hall, Board Member

OFFICE

OPEN 

SESSION

CLOSED 

SESSION

Office of the Board

Aultman, Dale X X

Batta, Todd X X

Kramp, Kevin X X

Calhoun, Gaye X

Corey, Kathryn X

COO

Hoffman, William X X

OIT

Golley, Jerry X X

OCPA

Stokke, Mike X X

OSMO

Rea, Laurie X X

Hudson, Bruce X X

OGC

Rawls, Charles X X

Donner, Mary Alice X X

Strickland, Joy X X

McFarland, Laura X

OE

Coleman, Robert X X

Johnson, Hal X X

6
Exhibit A

Page 2 of 2

OFFICE OPEN 

SESSION

CLOSED 

SESSION

OIG

Laguarda, Wendy X X

ORP

Van Meter, Gary X X

Mardock, Barry X X

Gabriel, Steve X X

Neal, Joi X X

Gibbs, Paul X X

OCFO

Smith, Stephen X X

 Gandy, Doug X

OAS

 McCain, Veronica X X

FCSIC

Smith, Gregory X X

Wynn, Wade X X

GENERAL PUBLIC 2

7
Exhibit B 

Farm Credit Administration Farm Credit Administration

 1501 Farm Credit Drive McLean, Virginia 22102-5090

 

PUBLIC ANNOUNCEMENT OF

MEETING SUBJECT TO THE GOVERNMENT IN THE SUNSHINE ACT

Farm Credit Administration Board

Regular Meeting

September 14, 2017 

Summary: Notice is hereby given, pursuant to the Government in the Sunshine Act (5 U.S.C. Sec. 552b(e) (1)), of the 

forthcoming regular meeting of the Farm Credit Administration Board.

Date and Time: The regular meeting of the Board will be held September 14, 2017. The meeting is scheduled to be held 

at the office of the Farm Credit Administration in McLean, Virginia, from 9:00 a.m. until such time as the Board may 

conclude its business.

Address: Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. Submit attendance 

requests via e-mail to VisitorRequest@FCA.gov. See SUPPLEMENTARY INFORMATION for further information about 

attendance requests. 

For Further Information Contact: Dale L. Aultman, Secretary to the Farm Credit Administration Board (703) 883-4009. 

TTY is (703) 883-4056.

Supplementary Information: Parts of this meeting of the Board will be open to the public (limited space available), and 

parts will be closed to the public. Please send an e-mail to VisitorRequest@FCA.gov at least 24 hours before the meeting. 

In your e-mail include: name, postal address, entity you are representing (if applicable), and telephone number. You will 

receive an e-mail confirmation from us. Please be prepared to show a photo identification when you arrive. If you need 

assistance for accessibility reasons, or if you have any questions, contact Dale L. Aultman, Secretary to the Farm Credit 

Administration Board, at (703) 883-4009. The matters to be considered at the meeting are:

OPEN SESSION

Approval of Minutes

1 August 10, 2017 

New Business

 2 Fall 2017 Abstract of the Unified Agenda of Federal Regulatory and Deregulatory Actions and the Fall 2017 

 Regulatory Project Plan

Reports

3 Quarterly Report on Economic Conditions and FCS Conditions

CLOSED SESSION

4 Office of Examination Quarterly Report1

_ _September 5, 2017_______ ______ _/s/________________

 Date Dale L. Aultman

 Secretary to the Board

_________________________

1Session Closed-Exempt pursuant to 5 U.S.C. Section 552b(c)(8) and (9).

8
Exhibit C 

Farm Credit Administration 1501 Farm Credit Drive

 McLean, Virginia 22102-5090

 (703) 883-4000

BOARD ACTION ITEM

 

FCA BOARD ACTION ON

Minutes for August 10, 2017 Regular Board Meeting

BM-14-SEP-17-01

Effective Date: September 14, 2017

Effect on Previous Action: None

THE FCA BOARD HEREBY:

 

Approves the minutes for August 10, 2017, Regular Board Meeting as submitted.

DATED THIS 14th DAY OF SEPTEMBER 2017 

BY ORDER OF THE BOARD

 

______ _/s/________________

Dale L. Aultman

Secretary to the Board 

9
Exhibit D 

Farm Credit Administration 1501 Farm Credit Drive

 McLean, Virginia 22102-5090

 (703) 883-4000

BOARD ACTION ITEM

 

FCA BOARD ACTION ON

Fall 2017 Abstract of the Unified Agenda of Federal Regulatory and Deregulatory 

Actions and the Fall 2017 Regulatory Projects Plan

BM-14-SEP-17-02 

Effective Date: September 14, 2017

Effect on Previous Action: None

Source of Authority: Executive Order 12866 and sections 5.9 and 5.17 of the Farm Credit Act of 1971, 

as amended. 

THE FCA BOARD HEREBY:

• Approves the Fall 2017 Regulatory Projects Plan and Abstract of the Unified Agenda of 

Federal Regulatory and Deregulatory Actions; 

• Authorizes staff to publish the documents on FCA’s Web site and as may be required 

by the Office of Management and Budget’s Office of Information and Regulatory 

Affairs; and

• Authorizes staff to make any technical or grammatical changes that may be necessary 

prior to publication and any other changes that may be required by the Office of 

Information and Regulatory Affairs. 

DATED THIS 14th DAY OF SEPTEMBER 2017 

BY ORDER OF THE BOARD

______ _/s/________________

Dale L. Aultman

Secretary to the Boar

10
FCA Board Meeting 

September 2017

Quarterly Report on 

FCS Condition

September 14, 2017

Stephen Gabriel

Hal Johnson Exhibit E

11
Topics for Open Session

2

Economic Conditions Affecting the FCS

FCS Condition and Performance

12
Economic Conditions Affecting 

the Farm Credit System

Stephen Gabriel

Chief Economist

Office of Regulatory Policy

13
Economic growth at 2.5% or 

less—the new normal?

4

Consensus Forecasts (percent)

Red indicates forecast

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 

2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 2018 2018

GDP growth* 0.6 2.2 2.8 1.8 1.2 3.0 2.8 2.4 2.2 2.3 2.2 2.2

CPI* 0.1 2.3 1.8 3.0 3.1 -0.3 1.6 2.4 2.2 2.1 2.1 2.3

Unemployment rate 4.9 4.9 4.9 4.7 4.7 4.4 4.3 4.3 4.2 4.2 4.1 4.1

3 Month T-Bill 0.2 0.3 0.3 0.5 0.8 1.0 1.1 1.3 1.4 1.6 1.8 2.0

10 Yr T-Bond 1.8 1.5 1.6 2.5 2.4 2.3 2.4 2.6 2.7 2.9 3.0 3.1

Source: Consensus Economics, Inc.

Survey date - August 7, 2017

* % change from prior quarter, seasonally adjusted annual rate

14
Farm sector developments and 

concerns

 USDA projects farm income to rise in 2017

 Huge corn and soybean crops were produced in 

South America

 USDA projects a record soybean crop; third largest 

corn crop in 2017

 The hog, broiler and dairy sectors are generally 

profitable; cow-calf at about break-even

 Changes in farmland values vary by state or region

5

15
Corn and soybeans condition 

worse than last year

6

74

83 85 84

74 74

58 58 57

69

63

53

61 62

54

81

63

51

20

30

40

50

60

70

80

90

U.S. Avg. Iowa Illinois Minnesota Nebraska Indiana

Percent of acres 

Share of Corn Rated Good to Excellent on September 3rd

Top Producing States

2016 5-year Average 2017

Source:USDA/NASS.

74

78

81

74 74 75

68 68

78

63

72

66

60 60

67

51

68

65

20

30

40

50

60

70

80

90

U.S. Avg. Iowa Illinois Minnesota Nebraska Indiana

Percent of acres 

Share of Corn Dented on September 3rd

Top Producing States

2016 5-year Average 2017

Source:USDA/NASS.

73

82

79 79 77 75

58 58

55

67

60

54

61 61

58

73

64

53

20

30

40

50

60

70

80

90

U.S. Avg. Iowa Illinois Minnesota Nebraska Indiana

Percent of acres 

Share of Soybeans Rated Good to Excellent on September 3rd

Top Producing States

2016 5-year Average 2017

Source:USDA/NASS.

11

4

2

5

15

10

12

4 4

9

11

14

11

2

3

2

8

13

0

2

4

6

8

10

12

14

16

U.S. Avg. Iowa Illinois Minnesota Nebraska Indiana

Percent of acres 

Share of Soybeans Dropping Leaves on September 3rd

Top Producing States

2016 5-year Average 2017

Source:USDA/NASS.

16
USDA projects third largest corn 

crop in 2017

7

6.89

4.46

3.70

3.61

3.35 3.30

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

Ending U.S. Corn Stocks/Use Ratio (left axis)

Average Farm Corn Price - dollars/bu (right axis)

Source: USDA

17
Record large soybean production 

projected by USDA

8

14.40 

13.00 

10.10 

8.95 

9.50 

9.30 

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0%

5%

10%

15%

20%

25%

30%

Ending U.S. Soybeans Stocks/Use Ratio (left axis)

Average Farm Soybean Price - dollars/bu (right axis) Source: USDA

18
Wheat price to jump as production 

falls to lowest level in 15 years

9

7.77

6.87

5.99

4.89

3.89

4.80

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

13%

23%

33%

43%

53%

63%

73%

83%

93%

Ending U.S. Wheat Stocks/Use Ratio (left axis)

Source: USDA Average Farm Wheat Price - dollars/bu (right axis)

19
Iowa corn farmers struggle to 

make ends meet

10

0.68 

1.63 

0.96 

(0.10)

1.64 

2.23 

1.45 

(0.18) (0.29) (0.23) (0.13) (0.21)

3.03

4.29 4.10

3.59

5.23

6.20

6.92

4.49

3.71

3.52 3.35 3.30

2.66

2.80

3.32

3.84 3.74 4.11 5.66

4.81

4.39 4.02

3.58 3.59

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F

Dollars per Bushel

Iowa Season-average Corn Profit Margin Estimates

Margin w/ Government Payments Iowa Price Total Cost per Bushel

Source: FCA-ORP using data from USDA and Iowa State University.

As of 8/10/2017 

20
Soybean margins near break-even 

in 2017

11

0.28 

4.20 

1.98 

0.06 

2.85 3.55 

2.47 

1.20 

(0.90) (0.60)

0.63 

(0.19)

6.58

10.50 10.20 9.52

11.20

12.60

14.40

13.10

9.96

8.91

9.45

9.25

6.40

6.47 8.42

9.62

8.50 9.20

12.13 12.04

10.91

9.70

8.82

9.47

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F 2017F

Dollars per Bushel

Iowa Season-average Soybean Profit Margin Estimates

Margin w/ Gov. Payments Iowa Price Total Cost per Bushel

As of 08/10/2017 

Source: FCA-ORP using data from USDA and Iowa State University. 

21
Kansas wheat margins to continue 

in the red

12

(1.25)

0.79 0.98 1.53 

0.33 

(4.03)

(2.73)

(1.13) (0.90)

4.79

5.14

7.03 7.48

6.99

6.07

4.74

3.20

4.67

6.40

4.69

6.48 6.32

7.07

10.83

8.03

4.53

5.57

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2009 2010 2011 2012 2013 2014 2015 2016 2017F

Dollars per Bushel

Kansas Season-average Wheat Profit Margin Estimates

Margin w/ Government Payments Kansas Price Total Cost per Bushel

Source: FCA-ORP using data from USDA and Kansas State University

Notes: For 2014-2017F, government payment is Agriculture Risk Coverage and excludes loan deficiency payments. 

For 2017, ARC payment is estimated at zero, compared with $0.47 for Price Loss Coverage. 

As of 8/10/17

22
Livestock sectors benefiting 

from low feed costs

13

Source: Informa Economics IEG

27500

28000

28500

29000

29500

30000

30500

31000

31500

32000

 $(100)

 $-

 $100

 $200

 $300

 $400

 $500

 $600

201020112012201320142015201620172018

Beef Cows (Thousand Head)

$ per Head over Direct Costs

Cow/Calf Returns (Over Cash Costs) & Beef Cow Inventory

Net Return ($ per Head) Forecast Jan. 1 Beef Cow Inventory

 $(10)

 $(5)

 $-

 $5

 $10

 $15

 $20

 $25

 $30

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Cents per Pound

U.S. Broiler Weighted Margins (80% Cutout/20% Whole)

 $(40)

 $(20)

 $-

 $20

 $40

 $60

 $80

 $100

 $120

 $140

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

$ per Head

Hog Producer Margins, Cash Based

 $(4)

 $(2)

 $-

 $2

 $4

 $6

 $8

 $10

Jan-14

Apr-14

Jul-14

Oct-14

Jan-15

Apr-15

Jul-15

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Jan-17

Apr-17

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Milk Price Minus Estimated Total Cost

U.S. Dairy Producer Net Margin

23
-6%

1%

-4%

-1%

-5%

0%

1%

-1%

0%

6%

-12%

-7%

-5%

-5%

-3%

-2%

-1%

-1%

2%

20%

-15% -10% -5% 0% 5% 10% 15% 20% 25%

Nebraska

Iowa

Indiana

Illinois

South Dakota

North Dakota

Minnesota

Michigan

Ohio

Wisconsin

Percent Change 2014 - 2017

Percent Change 2016 - 2017

Source: USDA, NASS

Percent change in cropland value

Cropland values are down from 

peak in most Midwest states

14

24
Upper northwest experienced 

healthy cropland value gains

15

-1%

1%

3%

5% 5%

-1%

3%

12%

13%

14%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

WYOMING MONTANA IDAHO WASHINGTON OREGON

Percent Change 2016 - 2017

Percent Change 2014 - 2017

Source: USDA, NASS

Percent change in cropland value

25
1%

1%

-2%

2%

-3%

-4%

-1%

-1%

-2%

-2%

6%

3%

3%

0%

0%

-4%

-5%

-7%

-11%

-11%

-12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8%

Ohio

Wisconsin

South Dakota

Indiana

Michigan

North Dakota

Nebraska

Illinois

Minnesota

Iowa

Percent Change 2014 - 2017 Percent Change 2016 - 2017

Source: USDA, NASS

Percent Change in Cropland Cash Rent

Cash rents are adjusting to new 

market realities

16

26
Risks to watch

Final harvest results

Interest rates

Strength (weakness) of the dollar

Deteriorating agricultural credit quality

International trade developments

Geopolitical developments

17

27
Questions

THANK YOU

28
Farm Credit System 

Condition and Performance

as of 

June 30, 2017

Hal Johnson

Sr. Financial Analyst

Office of Examination

29
Topics

20

 System Growth

 Loan Portfolio

 Earnings

 Capital

 FIRS

30
System shows little growth in the 

1st half of 2017

Source: FCS Quarterly Information Statements 21

283 279 283 

291 

304 305 

315 314 

320 320 320 

217 216 221 

227 

236 238 244 242 

249 250 250 

4.3%

-0.4%

2.0%

2.9%

4.0%

1.1% 2.3%

-0.7%

2.7%

0.6% 0.1%

Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 $ billions

 Total FCS Assets

 Total Gross Loans

% change in Gross Loans

 (quarter-over-quarter)

31
Loan balances up slightly from 

year-end 2016 

22 Source: FCS Quarterly Information Statements

3.4% 3.0%

-3.0%

13.1%

3.3%

0.7% 1.7%

-2.5%

1.3% 1.1%

Total Gross

Loans

Real Estate

 Mortgage

[46%]

Production &

 Intermediate

[20%]

Agribusiness

[16%]

Other

[18%]

YTD '16 YTD '17

2017 Loan Growth by Loan Type

(% change year-to-date through June) 

District YTD-'15 YTD-'16 YTD-'17

AgFirst District (11%) 1.3% 3.0% 1.4%

AgriBank District (39%) 0.7% 2.3% 1.0%

CoBank District (41%) 2.4% 4.3% 0.0%

Texas District (9%) 3.3% 4.4% 2.9%

Total FCS 1.6% 3.4% 0.7%

Loan Growth by District 

(% change year-to-date through June)

32
Portfolio credit quality continues to be 

favorable; little change in risk measures

23 Source: FCS Quarterly Information Statements

1,771 1,766 1,724 1,629

1,832 1,825

1,975 1,962 2,023 2,045

0.82% 0.80% 0.76% 0.69%

0.77% 0.75% 0.82% 0.79% 0.81% 0.82%

 Nonaccrual Loans ($M)

 Other Nonperforming Loans ($M)

Nonperforming Loans as a % 

of Gross Loans

Loan Type

Gross 

Loans

 Jun-17

Jun-16 Mar-17 Jun-17 Trend 

Line

 RE Mortgage 116,375 4.8% 5.7% 6.2%

 Production and

 Intermediate 49,037 8.9% 10.0% 10.6%

 Agribusiness 40,150 5.2% 4.8% 4.6%

 Rural 

Infrastructure 27,738 2.8% 2.5% 2.3%

 Other 17,164 2.2% 1.4% 1.4%

 Total FCS 250,464 5.3% 5.8% 6.2%

% of Loans Classified 

Less Than Acceptable

33
System reports favorable financial 

results for the 1st half of 2017

24 Source: FCS Quarterly Information Statements

4.48 

4.24 4.06 

3.79 3.59 3.46 3.41 3.48 3.62 

2.05

1.63

1.38

1.08 0.95 0.96 1.01 1.17 1.39

2.43 

2.61 2.68 2.71 2.64 

2.50 2.40 2.31 2.23 

2009 2010 2011 2012 2013 2014 2015 2016 YTD

'17

Rate: Earning Assets

Rate: Interest-Bearing Liabilities

% Net Interest Spread

Net Interest Spread

1,684 

1,986 

2,119 

2,246 2,341 2,273 2,337 

2,466 

316 234 

67 41 

(35)

50 

160 117 

Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17

System Net Income

Provisions for Loan Losses

Year-to-date through June

System Earnings ($M)

34
Strong earnings support 

continued capital growth

25 Source: FCS Quarterly Information Statements

46.8 

47.8 48.9 48.8 50.0 51.4 52.4 52.3 53.4 54.5 

16.8%

16.9% 16.8%

16.1%

16.4% 16.3%

16.7% 16.4%

16.7%

17.0%

Restricted Capital

Total Capital less Restricted

Restricted capital represents capital associated with the Insurance Fund.

Capital-to-Asset Ratio

• System capital as a percentage of 

total assets was 17.0% compared 

to 16.4% at year end 2016

• Retained earnings as a percentage 

of total capital equaled 82.2% 

• System liquidity equaled 170 days 

of coverage. As of June, days of 

available liquidity for the four 

funding banks ranged from 144 to 

208 days.

Capital and Liquidity

as of June 2017

Total System Capital ($B)

35
System FIRS ratings

26

FIRS Ratings

• Composite FIRS ratings reflect 

the System’s sound financial 

condition and favorable portfolio 

credit quality 

• Almost 96% of System Banks 

and Associations have a 

Composite FIRS rating of 1 or 2

• 3 rated institutions account for 

less than 1.2% of total System 

assets

Source: FCA's FIRS ratings database

29 30 37 43 44 46 44 44 42 

46 44 38 31 32 29 31 31 29 

12 12 10 8 3 3 2 2 3 

2 1 1 

1 

Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Mar-17 Jun-17

1 Rated 2 Rated 3 Rated 4 Rated

Composite FIRS Ratings - System Banks & Associations

Ratings Trend Quarter-over-Quarter

comparison

36
Summary and final points

 Challenges for agriculture:

 General economic factors – economic growth in the U.S. and 

abroad, rising interest rates, strength of the dollar

 Farm sector concerns – low grain prices, Midwest farmland 

values, trade developments

 The System is financially strong and well-capitalized

 Portfolio loan quality continues to be good, but certain 

agriculture sectors face significant financial challenges

 While the farm economy continues to face significant 

challenges, System institutions are well-positioned and have 

substantial risk-bearing capacity 27

37
Questions

THANK YOU

38
Exhibit F 

Farm Credit Administration 1501 Farm Credit Drive McLean, Virginia 22102-5090

 

 

CERTIFICATE OF CLOSED MEETING

The General Counsel, in accordance with the Government in the Sunshine Act, 5 U.S.C. § 552b(f)(1), 

hereby certifies that the Farm Credit Administration Board regular meeting of September 14, 2017, 

was properly closed to the public on the basis of the exemption set forth below:

• Supervisory and Oversight Activities of FCS Institution(s) – 5 U.S.C. § 552b(c)(8) 

and (9).

 

 ______ _/s/________________ Date: September 14, 2017 

 Charles R. Rawls

General Counsel 

39