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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.

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Presentation on theme: "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."— Presentation transcript:

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2 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 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.

3 2014 Accomplishments continued The Direct Dollar Delinquency rate is 5.26% and the lowest since at least The Direct Borrower Delinquency rate is 10.69% The Guaranteed Dollar Delinquency rate is 0.98% and the lowest since at least The Guaranteed Loan Delinquency rate is 1.83%

4 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

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6 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

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8 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

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10 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

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13 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

14 FSA Direct Loan Programs Have Been Used to Assist Farmers During Periods of Farm Financial Stress Rise in Emergency Lending Farm Debt Crisis Uptick from 2008 Financial Crisis Civil rights cases

15 Share of Farm Business Debt Held by Institutional Type As of December 31, Sources: ERS Farm Income, Federal Reserve, FSA FLP and Farmer Mac Annual Reports

16 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

17 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

18 FSA Portfolio Trends

19 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

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21 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

22 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

23 Brand Behaviors Standards Functions what the organization does, its products and services how the organization delivers its products and services how the organization relates to its customers, communities and stakeholders Sustaining a long-term advantage in competencies and/or standards is difficult… …so most successful brands emphasize relationships with customers Our brand relationship with the market place has three main components.

24 Functions –what the organization does Loans Technical Assistance Facilitators of resources Financial counseling BTO

25 Standards-How We Deliver Our Products One on one Locally With highly qualified financial experts With integrity With genuine concern for our customer

26 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

27 Building Coalitions Beginning Farmer Advisory Council Native American Advisory Council Veterans –Farmer Veteran Coalition (FVC) You are FSA

28 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

29 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

30 FSA Toolkit Micro loans Streamlined loans PLP lenders New servicing flexibilities For best results use as directed and when appropriate

31 Building Relationships with our Partners Farm Credit ABA IBA Non-traditional lenders--CDFIs SBA RD

32 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

33 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

34 And the Results Are In Overall: OVERALL RATING OF NATIONAL OFFICE Service Quality Overall Excellent %32 Good %63 Fair %6 Poor %0 Encourage you to do the same type of survey in your respective states

35 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

36 Research and Development Continue to focus on – Beginners – Underserved – Veterans

37 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

38 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

39 R & D Cont ADR for civil right cases Live chat Compliance review makeover Develop library of non-traditional tips and tricks

40 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)

41 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

42 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

43 FLOT Assessment Tool Working Group Members: – Ranay Brady, HRD Kansas City – Craig Schaunaman, SED South Dakota – Maureen Mausbach, FLM Nebraska – Dan Gieseke, FLC, Missouri

44 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

45 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

46 FLOT Assessment Tool New Assessment Tool – Implemented October 20 – Contains 13 questions – Removed questions regarding “loan closing” and “ability to train”

47 In Conclusion We are excellent in what we do As good as we are we intend to get better!!


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