NRUC Files Q2 FY25 10-Q

TL;DR

NRUC's Q2 FY25 10-Q is in. Financials look steady.

AI Summary

National Rural Utilities Cooperative Finance Corp. (NRUC) filed its 10-Q for the period ending November 30, 2024. The filing covers the second quarter of fiscal year 2025. Key financial data and operational details for this period are presented, reflecting the company's ongoing financial activities and performance.

Why It Matters

This filing provides insight into the financial health and operational performance of NRUC, a key financial institution serving rural utilities, which can impact the stability and investment in rural infrastructure.

Risk Assessment

Risk Level: low — The filing is a routine quarterly report and does not indicate any immediate or significant risks.

Key Numbers

• FY2025 Q2 — Fiscal Quarter (Reporting period for the 10-Q filing.)
• 2024-11-30 — Period End Date (The end date of the reporting period.)

Key Players & Entities

• NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP /DC/ (company) — Filer of the 10-Q
• 20241130 (date) — End of the reporting period
• 20250113 (date) — Filing date
• 20701 COOPERATIVE WAY, DULLES, VA 20166-6691 (location) — Business and mailing address

FAQ

Key Financial Figures

• $4 million — ing and other expenses of approximately $4 million; and A decrease in fee and other incom
• $1 million — A decrease in fee and other income of $1 million; Partially offset by: An increase in
• $2 m — ecorded on our derivatives portfolio of $2 million, primarily attributable to more p
• $386 m — ecorded on our derivatives portfolio of $386 million, primarily attributable to decrea
• $8 million — ease in operating and other expenses of $8 million; and A decrease in net interest income
• $3 m — d A decrease in net interest income of $3 million, attributable to a decrease in th
• $1,777 m — e in average interest-earning assets of $1,777 million, or 5%; Partially offset by: A
• $1 m — ecorded on our investment securities of $1 million, primarily due to period-to-perio
• $2 million — corded a provision for credit losses of $2 million f or YTD FY2025 primarily attributable
• $20 million — resulting from our reported net loss of $20 million for YTD FY2025 and the CFC Board of Dir
• $47 million — horized patronage capital retirement of $47 million in July 2024. Non-GAAP Adjusted Resul
• $1,737 m — e in average interest-earning assets of $1,737 million, or 5%; and A decrease in fee an
• $128 million — arily due to our adjusted net income of $128 million for YTD FY2025, partially offset by a d
• $35,614 million — CSC telecom. Loans to members totaled $35,614 million as of November 30, 2024, an increase of
• $1,072 m — as of November 30, 2024, an increase of $1,072 million, or 3%, from May 31, 2024, reflec

Filing Documents

• nruc-20241130.htm (10-Q) — 4029KB
• nrufy2025q2form10-qxex101.htm (EX-10.1) — 528KB
• nrufy2025q2form10-qxex102.htm (EX-10.2) — 438KB
• nrufy2025q2form10-qxex103.htm (EX-10.3) — 832KB
• nrufy2025q2form10-qxex104.htm (EX-10.4) — 417KB
• nrufy2025q2form10-qxex105.htm (EX-10.5) — 272KB
• nrufy2025q2form10-qxex106.htm (EX-10.6) — 249KB
• nrufy2025q2form10-qxex107.htm (EX-10.7) — 79KB
• nrufy2025q2form10-qxex311.htm (EX-31.1) — 11KB
• nrufy2025q2form10-qxex312.htm (EX-31.2) — 11KB
• nrufy2025q2form10-qxex321.htm (EX-32.1) — 5KB
• nrufy2025q2form10-qxex322.htm (EX-32.2) — 5KB
• nruc-20241130_g1.jpg (GRAPHIC) — 164KB
• 0000070502-25-000006.txt ( ) — 21507KB
• nruc-20241130.xsd (EX-101.SCH) — 85KB
• nruc-20241130_cal.xml (EX-101.CAL) — 125KB
• nruc-20241130_def.xml (EX-101.DEF) — 567KB
• nruc-20241130_lab.xml (EX-101.LAB) — 756KB
• nruc-20241130_pre.xml (EX-101.PRE) — 713KB
• nruc-20241130_htm.xml (XML) — 4261KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 48 Consolidated Statements of Operations (Unaudited) 49 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) 50 Consolidated Balance Sheets (Unaudited) 51 Consolidated Statements of Changes in Equity (Unaudited) 52 Consolidated Statements of Cash Flows (Unaudited) 53

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 54 Note 1 — Summary of Significant Accounting Policies 54 Note 2 — Interest Income and Interest Expense 56 Note 3 — Investment Securities 57 Note 4 — Loans 58 Note 5 — Allowance for Credit Losses 70 Note 6 — Short-Term Borrowings 72 Note 7 — Long-Term Debt 74 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 8 Consolidated Balance Sheet Analysis 17 Enterprise Risk Management 22 Credit Risk 23 Liquidity Risk 29 Market Risk 40 Critical Accounting Estimates 42 Recent Accounting Changes and Other Developments 43 Non-GAAP Financial Measures and Reconciliations 43 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 93 Item 6. Exhibits 93

SIGNATURES

SIGNATURES 94 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 9 4 Rate/Volume Analysis of Changes in Interest Income/Interest Expense 12 5 Non-Interest Income (Loss) 15 6 Derivative Gains (Losses) 15 7 Comparative Swap Curves 16 8 Non-Interest Expense 17 9 Debt—Total Debt Outstanding 19 10 Debt—Member Investments 20 11 Equity 21 12 Loans—Loan Portfolio Security Profile 24 13 Loans—Loan Exposure to 20 Largest Borrowers 25 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 36 20 Long-Term and Subordinated Debt—Scheduled Principal Maturities and Amortization 36 21 Collateral Pledged 37 22 Loans—Unencumbered Loans 37 23 Projected Long-Term Sources and Uses of Funds 38 24 Credit Ratings 39 25 Interest Rate Sensitivity Analysis 41 26 Adjusted Net Income 43 27 TIER and Adjusted TIER 44 28 Adjusted Total Debt Outstanding and Equity—Prior Versus Revised Methodology 44 29 Adjusted Total Debt Outstanding and Equity 46 30 Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio 46 31 Members' Equity 47 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 November 30, 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

View Full Filing

View this 10-Q filing on SEC EDGAR