Direct Portfolio 2014 - NACS-FSA

Report
2014 Accomplishments!!!!
•
Obligations of direct and guaranteed OL and FO funds were the third highest in
Agency history (exceeded only in FY’s 1985 and 2010).
•
The highest level of direct FO obligations (nearly $1 billion) in Agency history.
•
The highest level of guaranteed FO obligations (over $2 billion) in Agency history.
•
No backlogs of approved, unfunded applications were carried forward into FY
2015.
•
The highest level of direct and guaranteed loan assistance provided to SDA’s in
Agency history.
•
The highest level of direct and guaranteed loan assistance provided to BF’s in
Agency history.
2014 Accomplishments continued
• The Direct Dollar Delinquency rate is 5.26%
and the lowest since at least 1992.
• The Direct Borrower Delinquency rate is
10.69%
• The Guaranteed Dollar Delinquency rate is
0.98% and the lowest since at least 1991.
• The Guaranteed Loan Delinquency rate is
1.83%
Roadmap for Future of FLP
• To understand the future we need to
understand where we have been and what
has shaped our workforce and our programs
to date
FARM LOAN PROGRAMS
Direct Borrower Caseload
300.0
Number of Borrowers (in thousands)
250.0
200.0
150.0
100.0
50.0
0.0
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Fiscal Year
Churn Data/Graduation
• Portfolio is turning over at a rapid rate
• Of all borrowers in the portfolio in 2000 only
20% remain today
• Important talking points
• There are still some in Congress and others
that think our customers get in our portfolio
and stay forever
FARM LOAN PROGRAMS
Direct Unpaid Principal Balances
$30.0
Unpaid Principal (in billions)
$25.0
$20.0
$15.0
$10.0
$5.0
$0.0
85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Fiscal Year
FY 2015 Budget
• $5.3 billion to $6.4 billion
• Appropriation language allows for plus 25% in
zero subsidy programs
• Direct FO and Guaranteed FO are zero subsidy
programs
• Potential for $7.5 billion for FY 2015 –a 40%
increase
• Total loans made per year from 34,000 to 43,000
• Plus up in staffing –292 –most planned for CO
deployment
FARM LOAN PROGRAMS DOLLAR DELINQUENCY RATE
20-Year Trend
30
Direct Delinquency Rate
Guaranteed Delinquency Rate
25
24.4
Delinquency Rate
20
15
10
5.3
5
1.52
0.98
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fiscal Year
Servicing Needs Attention in FY 2015
•
•
•
•
•
Defaults increasing
Commodity prices down
Cash flows difficult to develop
Need to use all available servicing tools
Plans have to be customer driven with
technical assistance from FSA
FARM LOAN PROGRAMS LOSS RATES
20-Year Trend
12.0
Direct Loss Rate
Guaranteed Loss Rate
Loss Rate (percent of unpaid principal)
10.0
9.3
8.0
6.0
4.0
2.0
0.7
1.0
0.2
0.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Fiscal Year
FARM LOAN PROGRAMS INVENTORY PROPERTY
5,000
4,500
4,000
Number of Properties
3,500
3,000
2,500
2,000
1,500
1,000
500
0
89
90
91
92
93
94
95
96
97
98
99
00
01
02
Fiscal Year
03
04
05
06
07
08
09
10
11
12
13
14
Steller Portfolio Performance
•
•
•
•
Despite increased loan volume
Despite reduced staffing levels
Despite outside distractions
Public and Political view of FLP has never been
better—need to capitalize on the momentum
Farm Debt Crisis
Rise in Emergency Lending
Uptick from
2008 Financial
Crisis
Civil rights
cases
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
18
16
14
12
10
8
6
4
2
0
19
Direct FLP Market Share of total farm
debt (percent)
FSA Direct Loan Programs Have Been Used to Assist Farmers During
Periods of Farm Financial Stress
Year
Share of Farm Business Debt Held
by Institutional Type
Life Insurance
Companies
5%
Individuals
and Others
6%
Farm Credit
System
37%
Commercial
Banks
39%
Farmer Mac
3%
FSA Guaranteed
4%
FSA - Direct
6%
As of December 31, 2011. Sources: ERS Farm Income, Federal Reserve, FSA FLP and Farmer Mac Annual Reports
Market Penetration
• Chart shows FSA market share at 10% of all
farmers regardless of financial condition
• If the information is filtered for producers
having at least $500 of interest expense the
FSA market share increases to 35% and even
higher with underserved groups
Underserved
• Use SDA for forms and legal documents
(internal )
• Use Underserved for general fact sheets and
press releases for FSA outreach and marketing
activities (external)
• Use Targeted Underserved (list the particular
groups ) for external communication where
we are specifically talking about targeted
funding or reduced /waived fees for FP
FSA Portfolio Trends
Direct Portfolio 2007
Direct Beginning Farmer
Direct Non-beginners
Direct Portfolio 2014
Direct Beginning Farmer
Direct Non-beginners
26%
44%
56%
74%
What does this tell you
• What we do is important and our efforts can
move the needle
• Most beginning farmer loans ever in 2014
• Most loans to unserved groups in 2014
• Through a joint and continued effort we have
changed the focus of the FSA loan programs to
truly the Lender of First Opportunity
• FSA is the premier lender of choice for Beginning
and underserved producers
-130°
-170°
-160°
-110°
-100°
-150°
-90°
-80°
-70°
Canada
60°
40°
50°
70°
-180°
-120°
40°
^_
-150°
-140°
-130°
20°
-160°
^_
^_
^_
^_
^_
^_
^_
^_
^_
Atlantic
Ocean
30°
30°
^_
Pacific
Ocean
# of Branch Offices in County s of Ag Lenders Providing Loans to Farmers
Mexico
Gulf of Mexico
None
1 or 2
3 or more
-120°
-110°
-100°
-90°
Counties by Number of Bank & FCS Associations
Providing Agricultural Loans
-80°
Ag Credit Deserts
• No physical presence of a major agricultural
lender in the county
• Even counties with physical presence have
credit deserts in urban areas
• Partnering with CDFIs
• Partnering with local farm advocacy groups
– Rural Coalition
– Federation of Southern Cooperatives
– Center for Rural Affairs
Continued
• In budget constrained times we must leverage
the non-USDA work force
• There are many organizations out there doing
the same thing we are doing and share the
same customer base
• How do we turn their work force into an
extension of ours
• Teach , Train, and Trust
Our brand relationship with
the market place has three
main components.
Functions
what the organization
does, its products and
services
Sustaining a long-term
advantage in
competencies and/or
standards is difficult…
Standards
how the organization
delivers its products and
services
Behaviors
Brand
how the organization
relates to its customers,
communities and
stakeholders
…so most successful
brands emphasize
relationships with
customers
Functions –what the organization does
•
•
•
•
•
Loans
Technical Assistance
Facilitators of resources
Financial counseling
BTO
Standards-How We Deliver Our
Products
•
•
•
•
•
One on one
Locally
With highly qualified financial experts
With integrity
With genuine concern for our customer
Behaviors –How We Relate to Our
Customers
• Behavior is the strongest foundation on which
we can build strong and enduring
relationships with our customers
– Way we treat people
– Understand each customer and their situation
– The lengths we go to help
– The example we set in the community
– we are FSA and if people like and respect us then
they like and respect FSA
Building Coalitions
•
•
•
•
Beginning Farmer Advisory Council
Native American Advisory Council
Veterans –Farmer Veteran Coalition (FVC)
You are FSA
Continued
• Customers demand more products and
services
• Customers demand more flexibility
• Customers demand fairness but not to be
treated equally
• Customers are different
• We need to use the appropriate tools and
programs for the appropriate customers and
situations
Continued
• Panel of Veteran, beginning, organic, and
underserved
• Each told a different story of their trials and
tribulations in obtaining credit
• If not for their fortitude we would have
missed out on having them in agriculture
FSA Toolkit
•
•
•
•
•
Micro loans
Streamlined loans
PLP lenders
New servicing flexibilities
For best results use as directed and when
appropriate
Building Relationships with our
Partners
•
•
•
•
•
•
Farm Credit
ABA
IBA
Non-traditional lenders--CDFIs
SBA
RD
What About Internally
• Have we given our internal customers the
same attention we give our external customer
• Smile in every aisle
• More training
• More emotional and financial support
• Administrators awards
– Vote early and often
– With our fantastic portfolio performance there
has to be hundreds of worthy people out there
What About Internally
• Administration is making a significant
commitment to our employees
• Cash award money
• IT refresh—each employee will get new
hardware
• Management training
• More staff
• Listening to your ideas—resolutions
And the Results Are In
• Overall: OVERALL RATING OF NATIONAL OFFICE
•
•
•
•
•
Service Quality Overall
Excellent
4
Good
3
Fair
2
Poor
1
8
21
3
0
25.0%
65.6%
9.4%
0.0%
32
63
6
0
• Encourage you to do the same type of survey in your respective
states
2016 Budget
• Should expect the same level funding and staffing
• 16% of our nations population lives in rural America
• Who should be most concerned about this
–
–
–
–
–
Churches
Schools
Local business owners
Military
Locally retired farmers and ranchers
• This group of people need to be engaged in our efforts to reach our
customer base
• Continue to offer additional services to our customer base
– Financial literacy
– Access to land
– Serve as facilitators for community resources
Research and Development
• Continue to focus on
– Beginners
– Underserved
– Veterans
R & D Cont
• Direct FO micro loan program
• Pre-screening / qualification for eligibility
– Borrower training and cash flow development
• use of cooperative agreements to leverage
shills and abilities of extended work force
• Teach—Train—and Trust
R & D Cont
• Develop a Guaranteed micro lender program
– Non-traditional and smaller lenders
•
•
•
•
Organic and locally grown pricing options
On line applications
Paper less office
Digital signatures
R & D Cont
•
•
•
•
ADR for civil right cases
Live chat
Compliance review makeover
Develop library of non-traditional tips and
tricks
Reports
• FSA has access to endless reports—in some
cases too many
• We get lost in the repots and the averages
when we need to be analyzing what they are
telling us and look behind the numbers for
anomalies (not averages)
Development of Human Resources
• Farm Loan Chief Development
– Mentoring program
– Leadership training scheduled
• FLOT training
– Flexibility in length—adopt same philosophy as
with loan making—different people and different
situations need different responses
•
•
Former PT—first year could be accelerated
Former loan officer –second year could be accelerated
Development of Human Resources
• FLOTs need to be trained in a training office
• All those attempting to get loan approval
authority need to be tracked and held
accountable
• Determining the skill set needed and revising
the PDs accordingly
FLOT Assessment Tool
• Working Group Members:
– Ranay Brady, HRD Kansas City
– Craig Schaunaman, SED South Dakota
– Maureen Mausbach, FLM Nebraska
– Dan Gieseke, FLC, Missouri
FLOT Assessment Tool
•
•
•
•
Last Updated 2010
Contained 15 questions
Seemed to emphasize FSA or bank experience
Wanted to be able to reach recent college
grads as well as those with experience
• Emphasize agriculture and finance
background
FLOT Assessment Tool
• Revised old questions
• Developed some new ones
• Assigned point values to the answers with
higher weighting on agriculture and finance
answers
• “Soft skill” questions
FLOT Assessment Tool
• New Assessment Tool
– Implemented October 20
– Contains 13 questions
– Removed questions regarding “loan closing” and
“ability to train”
In Conclusion
• We are excellent in what we do
• As good as we are we intend to get better!!

similar documents