Federal Agricultural Mortgage Corporation · NYSE:AGM
Federal Agricultural Mortgage — Farmer Mac webinar (July 2015)
11 slides from Federal Agricultural Mortgage's conference presentation, Jul 1, 2015
Slide 1: Post Commodity Super Cycle
POST COMMODITY SUPER CYCLE Dr. David M. Kohl Professor Emeritus, Agricultural and Applied Economics Virginia Tech, Blacksburg, VA (540) 961-2094 (Alicia Morris) | (540) 719-0752 (Angela Meadows) | sullylab@vt.edu Macro Clinic Video Blog: http://agstar.com/edge/ Road Warrior of Agriculture: www.corna
Slide 2: Domestic Economy Risk
Domestic Economy Risk “Counter-cyclical: flyover states vs. population centers” Yes No Interest rate increases Land ownership - asset bubble Consumer spending economic recession Transportation & distribution Energy TOTAL 3 The Burn Rate – Working Capital Revenue $2,000,000 Current Assets $1,000,000
Slide 3: The Burn Rate – Debt Service Payments
The Burn Rate – Debt Service Payments Revenue $2,000,000 Current Assets $1,000,000 Expenses -1,800,000 Current Liabilities -500,000 Profit $200,000 Working Capital $500,000 Debt Service Payments = $100,000 Working Capital $500,000 = 5.0 Years Debt Service Payments $100,000 Green >5.0 Years Yellow 2.
Slide 4: Ten Questions of True Liquidity; True Working Capital Analysis
Ten Questions of “True Liquidity” (2) prepaid expenses cash conversion cycle how secure? line of credit accounts payable/line of credit less than inventory timing <5% revenue vs. >25% revenue cash amount debt service amount compared to major expenses deferred tax consequences
Slide 5: True Working Capital Analysis Calculations – Scenario A
True Working Capital Analysis Calculations- Scenario A 1. Current Ratio= Current Assets $1,650,000 = 1.92 Current Liabilities $860,000 2. Working Capital to Revenue WC=$1,650,000‐$860,000 $790,000 = 39.5% (Revenue= $2,000,000) $2,000,000 3. Burn Rate on Working Capital= $790,000 = 3.95 Years (assumi
Slide 6: Calculations – Scenario B; Collateral Analysis – Year Z
True Working Capital Analysis Calculations- Scenario B 1. Current Ratio= Current Assets $1,225,000 = 1.11 Current Liabilities $1,100,000 2. Working Capital to Revenue= WC=$1,225,000‐$1,100,000 $125,000 = 6.25% (Revenue= $2,000,000) $2,000,000 3. Burn Rate on Working Capital= $125,000 = .63 Years (as
Slide 7: Collateral Analysis – Projected Year
Collateral Analysis – Projected Year Loan Collateral Remaining Projected Estimated Value Maximum Position Principal Excess Reserve 1 Long-term $1,400,000 x 75% = $1,050,000 - $1,210,000 = ($160,000) 2 Intermediate $1,050,000 x 60% = $630,000 - $360,000 = $270,000 3 Current $267,000 x 80% = $213,600
Slide 8: Banking – Mergers and Biggest Threats
LSU Graduate School of Banking- Mergers Has your bank or institution been involved in a merger during the last three years? Yes or No Percent Yes 55% No 45% 15 LSU Graduate School of Banking- Biggest Threats What is the biggest threat to your country’s economy? Threat Percent Foreign Competition 2%
Slide 9: Banking – Global Competition; Federal Reserve and Interest Rates
LSU Graduate School of Banking- Greatest Global Competition What is the greatest global competition to North America? Area/Country Percent Asian Region 40% China 33% South American Region 13% European Region 8% Middle Eastern Region 5% 17 LSU Graduate School of Banking- Federal Reserve and Interest
Slide 10: Banking – Stock Market Trends and Number of Banks
LSU Graduate School of Banking- Stock Market Trends The Dow Jones Index is currently 18,000. What do you expect it to be at the end of 2015? Level Percent 18,000 18% 19,000 36% 20,000+ 16% 17,000 25% 16,000 or Lower 5% 19 LSU Graduate School of Banking- Number of Banks There are approximately 6,000
Slide 11: Questions
Questions ? ? ?
Federal Agricultural Mortgage — Farmer Mac webinar (July 2015) on 6ix