National Rural Utilities Cooperative Finance Corp. Files 10-Q for Period Ending Feb 29, 2024

TL;DR

<b>National Rural Utilities Cooperative Finance Corp. filed its Q3 2024 10-Q report on April 12, 2024, detailing financial positions as of February 29, 2024.</b>

AI Summary

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ (NRUC) filed a Quarterly Report (10-Q) with the SEC on April 12, 2024. Filing is a 10-Q for National Rural Utilities Cooperative Finance Corp. for the period ending February 29, 2024. The company's fiscal year ends on May 31. The filing includes data related to Collateral Trust Bonds Due 2026 and Subordinated Notes Due 2064. Financial data points include Retained Earnings Unappropriated, Retained Earnings, Accumulated Other Comprehensive Income, Parent, and Noncontrolling Interest. The filing was made on April 12, 2024.

Why It Matters

For investors and stakeholders tracking NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/, this filing contains several important signals. This 10-Q filing provides a quarterly update on the financial health and operational status of NRUC, crucial for understanding its short-term performance and long-term stability. The specific financial data points mentioned, such as retained earnings and debt instruments, offer insights into the company's capital structure and its ability to manage its financial obligations.

Risk Assessment

Risk Level: low — NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate red flags or significant negative disclosures, indicating a stable financial reporting status.

Analyst Insight

Monitor future filings for trends in retained earnings and debt management, particularly in relation to the Collateral Trust Bonds and Subordinated Notes.

Key Numbers

• 2024-02-29 — Reporting Period End Date (Conformed Period of Report)
• 2024-04-12 — Filing Date (Filed as of date)
• 0531 — Fiscal Year End (Fiscal Year End)
• 2026 — Maturity Year (Collateral Trust Bonds Due 2026)
• 2064 — Maturity Year (Subordinated Notes Due 2064)

Key Players & Entities

• NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ (company) — Filer
• 2024-02-29 (date) — Conformed Period of Report
• 2024-04-12 (date) — Filed as of date
• DC (location) — State of Incorporation
• DULLES (location) — Business Address City
• VA (location) — Business Address State
• 7034671800 (phone) — Business Phone
• nruc:A735CollateralTrustBondsDue2026Member (financial) — Debt Instrument

FAQ

Key Dates

• 2024-02-29: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-04-12: Filing Date — Date the 10-Q report was officially submitted to the SEC.
• 2024-05-31: Fiscal Year End — Indicates the end of the company's annual fiscal cycle.

Key Financial Figures

• $121 m — recorded in our derivative portfolio of $121 million, primarily attributable to decrea
• $7 m — ; A decrease in net interest income of $7 million, attributable to a decrease in th
• $2,266 m — e in average interest-earning assets of $2,266 million, or 7%; A reduction in the benef
• $5 million — ion in the benefit for credit losses of $5 million. We recorded a benefit for credit losse
• $6 million — recorded a benefit for credit losses of $6 million for Q3 FY2024 compared to $11 million f
• $11 million — of $6 million for Q3 FY2024 compared to $11 million for Q3 FY2023, resulting primarily from
• $6 m — ecorded on our investment securities of $6 million, primarily due to period-to-perio
• $64 m — by: A decrease in derivative gains of $64 million, primarily attributable to less p
• $53 m — ; A decrease in net interest income of $53 million, attributable to a decrease in th
• $2,243 m — e in average interest-earning assets of $2,243 million, or 7%; and An increase in opera
• $16 million — ting and other non-interest expenses of $16 million; Partially offset by: A favorable shi
• $9 million — ovision to benefit for credit losses of $9 million. We recorded a benefit for credit losse
• $4 million — corded a provision for credit losses of $4 million for YTD FY2023, driven primarily by inc
• $14 m — ecorded on our investment securities of $14 million, primarily due to period-to-perio
• $3 million — an increase in fee and other income of $3 million. The decreases in TIER for Q3 FY2024

Filing Documents

• nruc-20240229.htm (10-Q) — 4012KB
• nrufy2024q3form10-qxex311.htm (EX-31.1) — 11KB
• nrufy2024q3form10-qxex312.htm (EX-31.2) — 11KB
• nrufy2024q3form10-qxex321.htm (EX-32.1) — 5KB
• nrufy2024q3form10-qxex322.htm (EX-32.2) — 5KB
• nruc-20240229_g1.jpg (GRAPHIC) — 166KB
• 0000070502-24-000031.txt (&nbsp;) — 18437KB
• nruc-20240229.xsd (EX-101.SCH) — 90KB
• nruc-20240229_cal.xml (EX-101.CAL) — 126KB
• nruc-20240229_def.xml (EX-101.DEF) — 626KB
• nruc-20240229_lab.xml (EX-101.LAB) — 788KB
• nruc-20240229_pre.xml (EX-101.PRE) — 774KB
• nruc-20240229_htm.xml (XML) — 4148KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 46 Consolidated Statements of Operations (Unaudited) 47 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) 48 Consolidated Balance Sheets (Unaudited) 49 Consolidated Statements of Changes in Equity (Unaudited) 50 Consolidated Statements of Cash Flows (Unaudited) 51

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 53 Note 1 — Summary of Significant Accounting Policies 53 Note 2 — Interest Income and Interest Expense 55 Note 3 — Investment Securities 56 Note 4 — Loans 57 Note 5 — Allowance for Credit Losses 70 Note 6 — Short-Term Borrowings 72 Note 7 — Long-Term Debt 73 Note 8 — Subordinated Deferrable Debt 76 Note 9 — Derivative Instruments and Hedging Activities 76 Note 10 — Equity 80 Note 11 — Guarantees 81 Note 12 — Fair Value Measurement 83 Note 13 — Variable Interest Entities 85 Note 14 — Business Segments 87 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") 1

Forward-Looking Statements

Forward-Looking Statements 1 Introduction 1 Executive Summary 3 Consolidated Results of Operations 7 Consolidated Balance Sheet Analysis 16 Enterprise Risk Management 21 Credit Risk 22 Liquidity Risk 29 Market Risk 39 Critical Accounting Estimates 41 Recent Accounting Changes and Other Developments 42 Non-GAAP Financial Meas ures and Reconciliations 42 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 92 Item 4.

Controls and Procedures

Controls and Procedures 92

—OTHER INFORMATION

PART II—OTHER INFORMATION 92 Item 1.

Legal Proceedings

Legal Proceedings 92 Item 1A.

Risk Factors

Risk Factors 92 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 92 Item 3. Defaults Upon Senior Securities 92 Item 4. Mine Safety Disclosures 92 Item 5. Other Information 92 Item 6. Exhibits 93

SIGNATURES

SIGNATURES 94 i Table of Contents CROSS REFERENCE INDEX OF MD&A TABLES Table Description Page 1 Net Income and TIER 3 2 Adjusted Net Income and Adjusted TIER 4 3 Average Balances, Interest Income/Interest Expense and Average Yield/Cost 8 4 Rate/Volume Analysis of Changes in Interest Income/Interest Expense 11 5 Non-Interest Income (Loss) 14 6 Derivative Gains (Losses) 14 7 Comparative Swap Curves 15 8 Non-Interest Expense 16 9 Debt—Total Debt Outstanding 18 10 Debt—Member Investments 19 11 Equity 20 12 Loans—Loan Portfolio Security Profile 23 13 Loans—Loan Exposure to 20 Largest Borrowers 24 14 Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology 27 15 Available Liquidity 30 16 Liquidity Coverage Ratios 31 17 Committed Bank Revolving Line of Credit Agreements 33 18 Short-Term Borrowings—Funding Sources 34 19 Long-Term and Subordinated Debt—Issuances and Repayments 35 20 Long-Term and Subordinated Debt—Scheduled Principal Maturities and Amortization 35 21 Collateral Pledged 36 22 Loans—Unencumbered Loans 37 23 Liquidity—Projected Long-Term Sources and Uses of Funds 38 24 Credit Ratings 38 25 Interest Rate Sensitivity Analysis 40 26 Adjusted Net Income 43 27 TIER and Adjusted TIER 43 28 Adjusted Liabilities and Equity 44 29 Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio 44 30 Members' Equity 45 ii Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A")

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2024 ("this Report") contains certain statements that are considered "forward-looking statements" as defined in and within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts or statements of current conditions. Instead, forward-looking statements represent management's current beliefs and expectations, based on certain assumptions and estimates made by, and information available to, management at the time the statements are made, regarding our future plans, strategies, operations, financial results or other events and developments, many of which, by their nature, are inherently uncertain and outside our control. Forward-looking statements are generally identified by the use of words such as "intend," "plan," "may," "should," "will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity" and similar expressions, whether in the negative or affirmative. All statements about future expectations or projections, including statements about loan volume, the adequacy of the allowance for credit losses, operating income and expenses, leverage and debt-to-equity ratios, borrower financial performance, impaired loans, and sources and uses of liquidity, are forward-looking statements. Although we believe the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual results and performance may differ materially from our forward-looking statements. Therefore, you should not place undue reliance on any forward-looking statement and should consider the risks and uncertainties that could cause our current expectations to vary from our forward-looking statements, including, but not limited to, legislative changes that could affect our tax status and other matters, demand for our loan prod

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View this 10-Q filing on SEC EDGAR