National Rural Utilities Cooper

Good day and welcome to the National Rural Utilities Cooperative Finance Corporation Fiscal Year 2025 First Quarter Investor Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to He Sun Choi, Vice President of Capital Markets Relations. Please go ahead.

Thank you, Operator. Welcome to our Investor Conference Call for our Fiscal Quarter of Fiscal Year. Our first quarter of fiscal year 2025. Today, I'm joined by our CEO, Andrew Dan, and our CFO, Ling Wang. Andrew and I will discuss our first quarter as a result and answer your questions. Before we get started, I would like to remind you that today's presentation slides and financial reports filed with the SEC can be found on our website at nrucfc.coop under Investor Relations. This call is being recorded. and a replay and court transcript will be made available on our website as well. Our presentation today will include four looking statements and certain non-GAAP financial measures. Please review the disclosures on slides two and three of the presentation regarding these statements and measures. I would like to remind you that any four looking statements that we may make during today's call as of October 25, 2024 are subject to RIF and uncertainties. Factors that may cause actual results to differ materially from expectations are described on slide 2 of today's presentation, as well as in our annual and quarterly reports filed with the SEC. Information about any non-GAAP financial measures referenced during the presentation, including reconciliations to GAAP measures can also be found in our Form 10Q-filed VDSCC on October 11, 2024, as well as in the appendix of the presentation slides. At the end of the presentation, we will open the call, and Andrew and Ling will take your questions. You can ask questions over the phone or submit your questions online. With that, I will turn this call over to Andrew.

Thank you, Heesun. Good afternoon. Thank you for joining our call today to review our business and operating results during the three months ended August 31, 2024, which is our first fiscal quarter of fiscal year 2025. I'm moving to slide five to discuss highlights during the quarter. We continue to experience solid loan demand from our members during our first fiscal quarter, with loans to members reaching $35.1 billion, reflecting an increase of approximately $569 million, or 2%, from the prior fiscal year end. We continue to maintain a strong financial position. Our adjusted tier was 1.20 times during the current fiscal quarter, well above our goal of 1.1 times. We remain committed to growing our members' equity to support loan growth. Our members' equity stood at $2.4 billion at the current fiscal quarter end. The quality of our loan portfolio remains pristine. We had no charge-offs during the fiscal quarter, and only 0.14% of loans were classified as non-performing at the quarter end. Over the years, we have strategically diversified our funding and liquidity sources to minimize the risk of being dependent on any single source or market. Our diverse liquidity sources consist of operating cash, investments, committed bank lines, committed loan facilities under the Guaranteed Underwriter Program, a revolving note purchase agreement with PharmaMac, and access to repo facilities. We remain committed to maintaining strong investment grade credit ratings from Fitch, Moody's, and S&P. Our short-term and long-term credit ratings and outlook are unchanged. During the quarter, Fitch affirmed all of CFC's credit ratings with a stable outlook. Next, I would like to provide an update on the recent hurricanes that affected some of our members. Slide 6 summarized the impact of recent hurricanes, specifically Hurricane Helene and Milton. Hurricane Helene affected five states, Florida, Georgia, North Carolina, South Carolina, and Tennessee. causing power outages for approximately 5.5 million customers in those states. Among the 5.5 million customers, approximately 1.25 million, or 22%, were served by 26 out of 132 electric distribution cooperatives operating in the affected states. On the other hand, Hurricane Milton impacted Florida only, resulting in power outages for 3.4 million customers where 340,000, or 10%, were customers of five out of the 21 electric distribution cooperatives in Florida. Three electric distribution cooperatives in Florida were affected by both hurricanes. We have received requests or inquiries for our emergency line of credit product from some of the impacted members and have been working with our members to support their restoration efforts following these hurricanes. We anticipate our members will likely advance funds gradually over the course of the next 12 months. Rural electric cooperatives generally eligible to apply for assistance from the Federal Emergency Management Agency, FEMA, and their states to help recover from major disasters and emergencies. Governors of those states impacted by Hurricane Helene and Milton declared a state of emergency, and President Biden declared a federal disaster, which enabled assistance from FEMA. Hurricanes Helene and Milton were therefore declared as a natural disaster by FEMA. FEMA typically reimburses up to 75% of eligible costs after restoration is complete. The FEMA reimbursement process could take between two and four years. With that, I'll now turn this call to Ling, who will review our financial results in greater detail. Thank you.