NRUC Files Q1 FY2025 10-Q Report

TL;DR

NRUC 10-Q filed for Q1 FY25. Financials look stable.

AI Summary

National Rural Utilities Cooperative Finance Corp (NRUC) filed its 10-Q for the period ending August 31, 2024. The filing covers the first quarter of fiscal year 2025. Key financial data and operational details for NRUC, a business credit institution, are presented in this report.

Why It Matters

This report provides insight into the financial health and operational performance of NRUC, which is crucial for understanding the stability of rural utility financing.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report with no immediate red flags indicating high risk.

Key Numbers

• FY2025 Q1 — Fiscal Quarter (Reporting period for the 10-Q filing.)
• 0531 — Fiscal Year End (Indicates the end of the company's fiscal year.)

Key Players & Entities

• NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ (company) — Filer
• 20701 COOPERATIVE WAY, DULLES, VA 20166-6691 (address) — Business and Mail Address
• 7034671800 (phone_number) — Business Phone
• 2024-08-31 (date) — Reporting Period End Date
• 2024-10-11 (date) — Filing Date

FAQ

Key Financial Figures

• $388 m — ecorded on our derivatives portfolio of $388 million, primarily attributable to decrea
• $3 m — ; A decrease in net interest income of $3 million, attributable to a decrease in th
• $1,816 m — e in average interest-earning assets of $1,816 million, or 5%; and An increase in opera
• $4 million — ing and other expenses of approximately $4 million; 3 Ta ble of Content s Partially
• $1 m — ecorded on our investment securities of $1 million, primarily due to period-to-perio
• $1 million — An increase in fee and other income of $1 million. We recorded a provision for credit l
• $164 million — resulting from our reported net loss of $164 million for Q1 FY2025 and the CFC Board of Dire
• $47 million — horized patronage capital retirement of $47 million in July 2024. Non-GAAP Adjusted Resul
• $66 million — arily due to our adjusted net income of $66 million for Q1 FY2025, partially offset by a de
• $35,111 million — CSC telecom. Loans to members totaled $35,111 million as of August 31, 2024, an increase of $
• $569 m — n as of August 31, 2024, an increase of $569 million, or 2%, from May 31, 2024, reflec
• $386 million — long-term and line of credit loan s of $386 million and $183 million, respectively. Our loa
• $183 m — ne of credit loan s of $386 million and $183 million, respectively. Our loan portfolio
• $49 million — r Q1 FY2024. We had one loan totaling $49 million classified as nonperforming as of both
• $50 million — losses and allowance coverage ratio was $50 million and 0.14%, respectively, as of August 3

Filing Documents

• nruc-20240831.htm (10-Q) — 3504KB
• nrufy2025q1form10-qxex311.htm (EX-31.1) — 11KB
• nrufy2025q1form10-qxex312.htm (EX-31.2) — 11KB
• nrufy2025q1form10-qxex321.htm (EX-32.1) — 5KB
• nrufy2025q1form10-qxex322.htm (EX-32.2) — 5KB
• nruc-20240831_g1.jpg (GRAPHIC) — 147KB
• 0000070502-24-000067.txt ( ) — 16594KB
• nruc-20240831.xsd (EX-101.SCH) — 84KB
• nruc-20240831_cal.xml (EX-101.CAL) — 123KB
• nruc-20240831_def.xml (EX-101.DEF) — 547KB
• nruc-20240831_lab.xml (EX-101.LAB) — 732KB
• nruc-20240831_pre.xml (EX-101.PRE) — 692KB
• nruc-20240831_htm.xml (XML) — 3742KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 43 Consolidated Statements of Operations (Unaudited) 44 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) 45 Consolidated Balance Sheets (Unaudited) 46 Consolidated Statements of Changes in Equity (Unaudited) 47 Consolidated Statements of Cash Flows (Unaudited) 48

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 49 Note 1 — Summary of Significant Accounting Policies 49 Note 2 — Interest Income and Interest Expense 51 Note 3 — Investment Securities 51 Note 4 — Loans 53 Note 5 — Allowance for Credit Losses 64 Note 6 — Short-Term Borrowings 66 Note 7 — Long-Term Debt 68 Note 8 — Subordinated Deferrable Debt 70 Note 9 — Derivative Instruments and Hedging Activities 70 Note 10 — Equity 73 Note 11 — Guarantees 74 Note 12 — Fair Value Measurement 76 Note 13 — Variable Interest Entities 78 Note 14 — Business Segments 80 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 14 Enterprise Risk Management 19 Credit Risk 20 Liquidity Risk 26 Market Risk 36 Critical Accounting Estimates 38 Recent Accounting Changes and Other Developments 39 Non-GAAP Financial Measures and Reconciliations 39 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 83 Item 4.

Controls and Procedures

Controls and Procedures 83

—OTHER INFORMATION

PART II—OTHER INFORMATION 83 Item 1.

Legal Proceedings

Legal Proceedings 83 Item 1A.

Risk Factors

Risk Factors 83 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 83 Item 3. Defaults Upon Senior Securities 83 Item 4. Mine Safety Disclosures 83 Item 5. Other Information 84 Item 6. Exhibits 84

SIGNATURES

SIGNATURES 85 i Table of Contents CROSS REFERENCE INDEX OF MD&A TABLES Table Description Page 1 Net Income (Loss) 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 10 5 Non-Interest Income (Loss) 12 6 Derivative Gains (Losses) 13 7 Comparative Swap Curves 13 8 Non-Interest Expense 14 9 Debt—Total Debt Outstanding 16 10 Debt—Member Investments 17 11 Equity 18 12 Loans—Loan Portfolio Security Profile 21 13 Loans—Loan Exposure to 20 Largest Borrowers 22 14 Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology 24 15 Available Liquidity 27 16 Liquidity Coverage Ratios 28 17 Committed Bank Revolving Line of Credit Agreements 30 18 Short-Term Borrowings—Funding Sources 31 19 Long-Term and Subordinated Debt—Issuances and Repayments 32 20 Long-Term and Subordinated Debt—Scheduled Principal Maturities and Amortization 32 21 Collateral Pledged 33 22 Loans—Unencumbered Loans 33 23 Projected Long-Term Sources and Uses of Funds 35 24 Credit Ratings 35 25 Interest Rate Sensitivity Analysis 37 26 Adjusted Net Income 39 27 TIER and Adjusted TIER 40 28 Adjusted Liabilities and Equity 41 29 Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio 41 30 Members' Equity 42 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 August 31, 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 produc

View Full Filing

View this 10-Q filing on SEC EDGAR