Credit Analysis Solutions AGRICULTURE

Credit Analysis Solutions AGRICULTURE

University of Minnesota 130 Ruttan Hall 1994 Buford Avenue St. Paul, Minnesota 55108 Phone: (612) 625-1964 Toll-Free: (800) 234-1111 Fax: (612) 625-3105 Email: FINPACK@umn.edu Online: www.finpack.com

What does FINPACK do for you? Used by lenders since 1980, FINPACK sets the industry standard for superior credit analysis tools, training and technical support. Simply enter tax returns and balance sheets and FINPACK will generate reports displayed on the following pages. Helps you accomplish your work more efficiently than ever before It is fast and easy to learn. You will be amazed at how much time it can save you. Delivers better information about your customers financial situation Balance sheets, cash flows, consolidations, global cash flow analysis, accrual financial analysis, and historic spreads provide an accurate picture of borrower performance. Lets you do the banking while we do the technical work No need to double check spreadsheet formulas Gives you an edge in building better customer relations Provides financial information your customers can understand and use to manage their businesses Offers you the most cost effective credit analysis available When compared to other systems or maintaining your own spreadsheets, FINPACK saves you money period 1

The Flexibility to Meet All Your Customer Needs FINPACK lets you choose the reports you need for each borrower whether it s basic reports for low-risk credit customers or detailed reports to analyze complex customers. About This Book The FINPACK Sample Guide provides an overview of the entire set of tools and reports that FINPACK can give you. If you have wondered what exactly FINPACK does or how it presents financial information, this book will give you the answers. The book gives you a quick overview for each FINPACK tool. Each section includes a short description of the financial tool and then shows you a sample report. Will you ever use all of FINPACK s tools? Probably not, so take a look at the tools that you regularly use. You may also want to look at other tools that you would like to use but haven t had an easy way to implement at your institution. FINPACK has been upgraded annually for over 30 years based on comments from lenders who use the software. With this history of field testing and refinement, we think it will serve your needs well. 2

FINPACK Agriculture at a Glance Balance Sheets Detailed Balance Sheet Summary Balance Sheet Balance Sheet Trend Reports Financial Analysis Tax Forms/Income Statement Earned Net Worth Analysis Schedule F Accrual Analysis Global Cash Flow Projections Annual Cash Flow Monthly Cash Flow Credit Analysis Collateral Analysis Credit Decision Scorecard Risk Rating Loan Presentation FSA Forms Package Portfolio Risk Analyst Training and Support Customer Support FINPACK Training FINPACK Commercial About CFFM 3 p. 5 p. 11 p. 13 p. 15 p. 19 p. 21 p. 27 p. 31 p. 41 p. 51 p. 53 p. 55 p. 57 p. 63 p. 67 p. 71 p. 73 p. 75 p. 77

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Balance Sheets Balance Sheets Balance sheet data entry is simple and straightforward. Once the first balance sheet is complete, it is easy to copy and revise for the next renewal season. FINPACK provides two balance formats detailed or summary. Detailed Balance Sheet: Generate ratio analysis, including working capital, current ratio, and debt to asset ratio Automatically create trend reports Balance sheet data flows directly into cash flow to minimize data entry Consolidate balance sheets from multiple entities Input forms can be used to gather customer data or use forms with last year s values displayed Or get customer data electronically using FINPACK Lite, a free balance sheet only version of FINPACK available to your customers Summary Balance Sheet: Input simple, single column balance sheets Quick and easy balance sheet format for small or low risk customers Useful to enter historical balance sheets for new customers Both Balance Sheet formats provide data directly to FINPACK s Schedule F analysis, risk rating and the loan presentation manager. 5

Balance Sheets 6

Current Assets Value Cash and checking (Schd A) 76,500 Prepaid exp. & suppl. (Schd B) 114,438 Growing crops - Accounts receivable - Hedging accounts (Schd E) 5,650 Other current assets - Crops (Schd G) Quantity Value/Unit Corn 100,841 3.26/bu. 328,742 Corn Silage 959 25.00/ton 23,975 Alfalfa Hay 40 90.00/ton 3,600 Soybeans 18,947 9.50/bu. 179,997 Current Liabilities Sample Farm 1/1/2017 Balance Accrued interest 32,658 Accounts payable and other accrued expenses - Int P & I Principal Current loans (Schd U) Rate Due Balance 5thNB-Operating 6.00-87,863 5thNB-Cattle 6.375-364,951 Principal due within 12 months on term liabilities 69,288 Detailed Balance Sheet Mkt lvst (Schd H) No. Value/Unit Finish Beef 550 183.00/cwt. 780,038 Total Current Assets 1,512,939 Total Current Liabilities 554,760 Intermediate Assets Market Value Breeding livestock - Machinery (Schd J) 1,099,508 Titled vehicles (Schd K) 112,159 Other intermediate assets - Intermediate Liabilities (Schd V) Int Principal P & I Principal Intermed Loan Rate Balance Due Due Balance John Deere Credit-332E 3.25 7,199 7,260 7,004 195 5thNB-Mach. 4.50 102,320 23,348 18,499 83,821 Total Intermediate Assets 1,211,667 Total Intermediate Liabilities 84,016 Long Term Assets Market Land (Schd M) Acres Value Home site 15 37,500 SW 80 Ac 80 560,000 New 80 Ac 80 660,800 Long Term Liabilities (Schd W) Int Principal P & I Principal Lg Term Loan Rate Balance Due Due Balance 5thNB-Barn 7.50 215,576 32,778 15,692 199,884 5thNB-SW 80 Ac 5.50 278,450 28,116 11,925 266,525 5thNB-New 80 Ac 4.95 451,767 39,831 16,168 435,599 Bldgs & improve. (Schd N) 514,278 Other long term (Schd O) 2,401 Total Long Term Assets 1,774,979 Total Long Term Liabilities 902,008 Total Farm Assets 4,499,585 Personal Assets (Schd P) 173,812 Total Farm Liabilities 1,540,784 Personal Liabilities (Schd X) 26,534 Total Assets 4,673,397 Total Liabilities 1,567,318 Net Worth 3,106,079 I certify that my statements on this balance sheet are true, complete, and correct to the best of my knowledge and belief. Signature(s) Date 7

Sample Farm : 1/1/2017 Detailed Balance Sheet Schedule J: Machinery and equipment Model Year Purchase Pct. Market Make/Model Year Serial No./VIN Purchased Price Ownership Value TRACTOR LOADER - - - 100.00 % 2,566 SNOWBLOWER - 1989-100.00 % 1,100 SPRAY MONITOR - 1990-100.00 % 367 AUGER 8x41-1992 - 100.00 % 550 RC 8R30-1994 - 100.00 % 550 LOADER - 1995-100.00 % 733 Generator - 1995-100.00 % 1,283 BUFFALO ROLLER MILL - 1995-100.00 % 4,398 FEED WAGON - 1999-100.00 % 5,498 RIPPER - 2002-100.00 % 9,163 JD 6430 Tractor 2002 2002-100.00 % 36,653 SPREADER 1997 2002-100.00 % 10,996 GRAIN CART - 2003-100.00 % 10,996 SPRAYER SPECIALTIES - 2004-100.00 % 10,996 MONITOR - 2004-100.00 % 2,932 JD 7210 Tractor w loader - 2004-100.00 % 40,318 MOWER 50 BU - 2004-100.00 % 6,231 TRAILER - 2004-100.00 % 1,466 WAGON - 2005-100.00 % 6,231 BLOWER - 2005-100.00 % 733 30FT FLEX HEAD - 2005-100.00 % 10,996 20' CHOPPER - 2005-100.00 % 9,530 SPRAYER CONTROL - 2005-100.00 % 3,665 ROUND BALE RACK 2006 2006-100.00 % 2,932 WAGON 2006 2006-100.00 % 7,331 10X61 AUGER 2006 2006-100.00 % 3,665 Wagon 2006 2006-100.00 % 7,331 12 Ton Gear 2007 2007-100.00 % 1,466 Chopper 2007 2007-100.00 % 14,661 Hay Buster (33%) 2007 2007-100.00 % 4,398 Hay Buster 2007 2007-100.00 % 14,661 Silage Bagger 2005 2008-100.00 % 10,996 Used Semi 2004 2008-100.00 % 9,530 Semi Grain Trailer 2004 2008-100.00 % 8,797 JD 8110 2004 2009-100.00 % 73,306 JD 9670 STS 2010 2011-100.00 % 187,336 JD 612C Corn Head 2009 2011-100.00 % 46,264 Parker Grain Cart 2012 2012-100.00 % 14,289 JD Loader 2012 2012-100.00 % 8,247 JD 726 Mulch Finisher 2008 2012-100.00 % 28,162 Tractor 2008 2012-100.00 % 149,129 JD 332E Skidloader 2013 2013-100.00 % 43,653 Westfield Auger 2013 2013-100.00 % 20,234 Loftness Stalk Chopper 2013 2015-100.00 % 17,599 Meyer 8865 Manure Sprdr 2012 2015-100.00 % 24,819 JD Top Air Sprayer 2013 2016 56,700 100.00 % 59,850 JD Planter 2014 2016 146,000 100.00 % 132,979 Patz TMR Mixer 2016 2016 28,350 100.00 % 29,925 Total machinery and equipment 1,099,508 8

Sample Farm : 1/1/2017 Schedule Q: Personal vehicles Model Year Purchase Pct. Market Make/Model Year Serial No./VIN Purchased Price Ownership Value Dodge Pickup (25%) 1993 - - 100.00 % 139 Chev VAN (50%) 2001 - - 100.00 % 925 Ford Taurus 2001 2006-100.00 % 3,238 Lexus-Traded 2016 2002 2007-100.00 % - For Explorer 2014 2016-100.00 % 29,511 Detailed Balance Sheet Total personal vehicles 33,812 Schedule U: Current loans Interest Principal Accrued Normal Past Due Month Rate Balance Interest P & I P & I Due Balance 5thNB-Operating 6.00 % 87,863 4,217 - - 3 87,863 5thNB-Cattle 6.375 % 364,951 8,860 - - 8 364,951 Total current loans 452,814 13,077 - - 452,814 Schedule V: Intermediate loans Interest Principal Accrued Normal Past Due Month Final Principal Intermed Rate Balance Interest P & I P & I Due Year Due Balance John Deere Credit-332E 3.25 % 7,199 118 7,260-7 2017 7,004 195 Fifth National Bank-Mach. 4.50 % 102,320 3,292 23,348-4 2021 18,499 83,821 Total intermediate loans 109,519 3,410 30,609-25,503 84,016 Schedule W: Long term loans Interest Principal Accrued Normal Past Due Month Final Principal Lg Term Rate Balance Interest P & I P & I Due Year Due Balance Fifth National Bank-Barn 7.50 % 215,576 6,157 32,778-8 2026 15,692 199,884 5thNB-SW 80 Ac 5.50 % 278,450 7,133 28,116-7 2030 11,925 266,525 5thNB-New 80 Ac 4.95 % 451,767 2,880 39,831-11 2033 16,168 435,599 Total long term loans 945,793 16,170 100,726-43,785 902,008 9

Sample Farm : 1/1/2017 Detailed Balance Sheet Schedule X: Personal loans Accrued interest 29 Personal accounts payable - Personal income taxes payable 2,600 Principal due within 12 months on term loans 4,770 Interest Principal Accrued Normal Past Due Month Final Principal Current Loans Rate Balance Interest P & I P & I Due Year Due Balance Intermediate Ford Credit-Explorer 3.64 % 23,661 28 5,352 - monthly 2022 4,526 19,135 Long Term Mutual Insurance-House 5.125 % 244 1 6,000 - monthly 2017 244 - Total personal loans 23,905 29 11,352-4,770 19,135 Schedule Z: Ratio analysis Market Current ratio 2.73 Current ratio (business and personal) 2.69 Working capital 958,179 Working capital (business and personal) 950,780 Current percent in debt 37 % Intermediate percent in debt 7 % Long term percent in debt 51 % Personal percent in debt 15 % Total debt to asset ratio 34 % Total equity to asset ratio 66 % Total debt to equity ratio 0.50 10

11 Summary Balance Sheet

Summary Balance Sheet 12

Jan 1, 2014 Jan 1, 2015 Jan 1, 2016 Jan 1, 2017 Average Market Only Market Only Market Only Market Only Current Assets Cash and checking 41,654 103,548 67,756 76,500 72,365 Prepaid expenses and supplies 109,046 121,955 111,179 114,438 114,155 Hedging accounts 4,050 27,650 9,150 5,650 11,625 Crop inventory 610,156 508,792 562,808 536,313 554,517 Livestock held for sale 617,625 884,520 843,024 780,038 781,302 Total current assets 1,382,531 1,646,465 1,593,917 1,512,939 1,533,963 Sample Farm Balance Sheet Spread Report Balance Sheet Trend Reports Intermediate Assets Machinery and equipment 1,057,185 1,004,325 998,759 1,099,984 1,040,063 Titled vehicles 28,968 89,519 83,253 112,159 78,475 Total intermediate assets 1,086,153 1,093,845 1,082,012 1,212,143 1,118,538 Long Term Assets Land 1,258,300 1,258,300 1,258,300 1,258,300 1,258,300 Buildings and improvements 498,211 538,229 527,465 514,278 519,546 Other long term assets 2,401 2,401 2,401 2,401 2,401 Total long term assets 1,758,912 1,798,930 1,788,166 1,774,979 1,780,247 Total farm assets 4,227,596 4,539,240 4,464,095 4,500,061 4,432,748 Total personal assets 153,930 153,930 153,930 173,812 158,901 Total assets 4,381,526 4,693,170 4,618,025 4,673,874 4,591,649 Current Liabillities Accrued interest 23,862 27,157 33,785 32,658 29,366 Principal due within 12 months on term loans 94,348 81,594 86,742 69,288 82,993 Current loans 668,500 527,970 522,871 452,814 543,039 Total current liabilities 786,710 636,721 643,398 554,760 655,397 Intermediate & Long Term Liabilities Intermediate loans 97,852 54,979 8,267 84,016 61,279 Long term loans 1,025,687 986,966 945,793 902,008 965,114 Total farm liabilities 1,910,249 1,678,666 1,597,458 1,540,784 1,681,789 Personal liabilities 19,380 14,173 8,666 26,534 17,188 Total Liabilities (including deferreds) 1,929,629 1,692,839 1,606,125 1,567,318 1,698,978 Annual Noncurrent Debt Payments Farm P & I payments 167,890 149,412 149,412 131,334 149,512 Personal P & I payments 6,000 6,000 6,000 11,352 7,338 Equity Net worth 2,451,896 3,000,331 3,011,901 3,106,556 2,892,671 Net worth change 0 548,435 11,569 94,655 163,665 Ratio Analysis Current ratio 1.76 2.59 2.48 2.73 2.39 Current ratio (farm and personal) 1.74 2.55 2.45 2.69 2.36 Working capital 595,820 1,009,744 950,519 958,179 878,566 Working capital (farm and personal) 587,968 1,001,614 942,097 950,780 870,615 Current & interm. % in debt 36 % 25 % 24 % 23 % 27 % 13

Balance Sheet Trend Reports Sample Farm Historic Report: Market Balance Jan 1, 2014 Jan 1, 2015 Jan 1, 2016 Jan 1, 2017 Average Market Only Market Only Market Only Market Only Total debt to asset ratio 44 % 36 % 35 % 34 % 37 % Total debt to equity ratio 0.79 0.56 0.53 0.50 0.60 Loan to value % 57 % 48 % 47 % 49 % 50 % Collateral margin 1,384,325 1,788,747 1,878,219 1,634,212 1,671,376 Collateral coverage ratio 1.8 % 2.1 % 2.1 % 2.1 % 2.0 % 14

Tax Forms and Income Statement Tax Forms and Income Statement When you need a quick and easy source of historical financial performance, FINPACK s tax database is the answer. You can enter data for Schedules F, C, E, or Form 1040, Form 1065, Partnerships, Form 1120 Corporate, or Form 1120-S. You can also enter accountant prepared income statements. With Tax Forms and Income Statement, you can: Using any of the tax databases or the income statement, you can spread historical income and expenses Automatically import last year s or the average of several past years historic income and expenses into your cash flow projections Use the Schedule F data to develop cash-to-accrual Schedule F Analysis Consolidate income statements and tax databases from multiple entries 15

Tax Forms and Income Statement 16

Sample Farm Sch F - Updated Sch F Tax year 2012 2013 2014 2015 2016 Average Statement type Tax Return Tax Return Tax Return Tax Return Tax Return Principal product Livestock Livestock Livestock Livestock Livestock Activity code 112111 112111 112111 112111 112111 Accounting method Cash Cash Cash Cash Cash PART I: Farm Income -- Cash Method 1a. Sales of livestock and other resale items 2,093,459 2,005,244 2,413,769 2,422,126 1,808,397 2,148,599 1b. Cost or other basis of items on line 1a 1,221,953 1,230,064 1,440,364 1,919,505 1,648,238 1,492,025 1c. Subtract line 1b from line 1a 871,506 775,180 973,405 502,621 160,159 656,574 2. Sales of products you raised 498,952 658,726 619,428 546,342 695,390 603,768 3a. Cooperative distributions 91 121 226 178 134 150 3b. Cooperative distributions, taxable amount 91 121 226 178 134 150 4a. Agricultural program payments 11,412 19,433-60,671 26,242 23,552 4b. Agricultural program payments, taxable amount 11,412 19,433-60,671 26,242 23,552 5a. CCC loans reported under election - - - - - - 5b. CCC loans forfeited - - - - - - 5c. CCC loans forfeited, taxable amount - - - - - - 6a. Crop insurance proceeds / Disaster payments - - 88,535 1,604 6,809 19,390 6b. Crop insurance / Disaster payments, taxable amount - - 88,535 1,604 6,809 19,390 6d. Amount deferred from previous year - - - - - - 7. Custom hire income - - - - - - 8. Other income - - - - - - 9. Gross income 1,381,961 1,453,460 1,681,594 1,111,416 888,734 1,303,433 Tax Forms and Income Statement PART II: Farm Expenses -- Cash and Accrual Method 10. Car and truck expenses - - - - - - 11. Chemicals 34,162 36,884 39,543 34,933 42,398 37,584 12. Conservation expenses - - - - - - 13. Custom hire (machine work) 3,850 9,542 9,114 5,810 7,800 7,223 14. Depreciation 211,414 143,457 167,262 103,002 79,827 140,992 15. Employee benefit programs - - - - - - 16. Feed 275,173 208,013 208,721 174,920 139,295 201,224 17. Fertilizers and lime 91,416 101,973 96,427 60,888 81,519 86,445 18. Freight and trucking 28,516 26,773 25,232 17,272 16,920 22,943 19. Gasoline, fuel, and oil 27,212 33,709 38,067 33,470 30,970 32,686 20. Insurance (other than health) 33,728 37,058 33,220 28,445 25,966 31,683 21a. Interest, mortgage 43,662 40,494 64,304 62,004 59,552 54,003 21b. Interest, other 67,388 56,434 50,177 37,317 34,579 49,179 22. Labor hired 24,939 29,560 31,741 30,252 32,560 29,810 23. Pension and profit-sharing plans - - - - - - 24a. Rent or lease: vehicles, machinery, equipment - - - - - - 24b. Rent or lease: land, animals, etc. 192,719 221,110 221,100 197,825 217,058 209,962 25. Repairs and maintenance 32,677 37,054 61,848 54,630 41,106 45,463 26. Seeds and plants 101,458 101,551 116,043 92,252 104,334 103,128 27. Storage and warehousing 2,809 11,481 10,540 1,841 3,751 6,084 28. Supplies 27,913 20,945 35,502 10,320 13,547 21,645 29. Taxes 1,680 1,680 4,558 5,654 7,472 4,209 30. Utilities 6,849 7,872 8,265 8,093 7,688 7,753 31. Veterinary, breeding, and medicine 11,647 12,147 13,968 15,900 14,397 13,612 32. Other expenses 10,715 14,421 18,663 11,443 15,143 14,077 17

Sample Farm Tax Form / Income Statement: Sch F Tax year 2012 2013 2014 2015 2016 Average 33. Total expenses 1,229,927 1,152,158 1,254,295 986,271 975,882 1,119,707 34. Net farm profit or loss 152,034 301,302 427,299 125,145-87,148 183,726 Tax Forms and Income Statement PART III: Farm Income -- Accrual Method 37. Sales of livestock, produce, grains - - - - - - 38a. Cooperative distributions - - - - - - 38b. Cooperative distributions, taxable amount - - - - - - 39a. Agricultural program payments - - - - - - 39b. Agricultural program payments, taxable amount - - - - - - 40a. CCC loans reported under election - - - - - - 40b. CCC loans forfeited - - - - - - 40c. CCC loans forfeited, taxable amount - - - - - - 41. Crop insurance proceeds - - - - - - 42. Custom hire income - - - - - - 43. Other income - - - - - - 44. Total, lines 37-43 - - - - - - 45. Beginning inventory of livestock, produce, grains, etc. - - - - - - 46. Cost of livestock, produce, grains, etc. purchased - - - - - - 47. Add lines 45 and 46 - - - - - - 48. Ending inventory of livestock, produce, grains, etc. - - - - - - 49. Cost of livestock, produce, grains, etc. sold - - - - - - 50. Gross income - - - - - - Cash Flow for Debt Service Net farm profit or loss 152,034 301,302 427,299 125,145-87,148 183,726 + Other non-taxable income - - - - - - + Depreciation 211,414 143,457 167,262 103,002 79,827 140,992 + Interest (total) 111,050 96,928 114,481 99,321 94,131 103,182 -Interest on current debt 54,171 46,266 40,940 33,007 31,462 41,169 - Non-recurring income - - - - - - + Non-recurring expense - - - - - - = Cash available for debt service 420,327 495,421 668,102 294,461 55,348 386,732 Farm Term Debt Coverage (cash basis) Cash available for debt service 420,327 495,421 668,102 294,461 55,348 386,732 + Cull income - - - - - - + Personal income 50,400 52,024 53,332 54,681 56,037 53,295 - Family living expense 75,738 81,026 86,863 78,783 83,894 81,261 -Income and social security tax 20,043 20,253 27,637 9,109 29,233 21,255 = Capital debt repayment capacity (cash basis) 374,946 446,166 606,934 261,250-1,742 337,511 Term Loan Information Beginning principal balance - - - - - - Interest rate - - - - - - Annual P&I payments 120,798 120,798 167,890 149,412 149,412 141,662 Term debt coverage ratio (cash basis) 3.10 3.69 3.62 1.75-0.01 2.43 Capital debt repayment margin (cash basis) 254,148 325,368 439,044 111,838-151,154 195,849 Efficiency Ratios Operating expense ratio 66 63 58 71 90 69 Depreciation expense ratio 15 10 10 9 9 11 Interest expense ratio 8 7 7 9 11 8 Net farm income ratio 11 21 25 11-10 12 18

Earned Net Worth Analysis When complete financial statements are unavailable, net worth change is often your best indicator of financial performance. But net worth change on market value balance sheets can have two components: changes in asset valuation and earned net worth change. FINPACK s Earned Net Worth Analysis helps you easily and accurately back out changes in asset valuation to derive true earned net worth change. With Earned Net Worth Analysis, you can: Earned Net Worth Analysis Calculate earned net worth change between any two balance sheets no need for fiscal year balance sheets Derive the term debt coverage ratio for each year plus projected debt coverage based on past repayment capacity and current payment obligations Use a built-in wizard to easily and accurately separate earned net worth change from asset valuation changes. Optionally derive net farm income from earned net worth change with minimal data entry 19

Sample Farm Earned Net Worth Analysis Year 2011 2012 2013 2014 2015 2016 Trend Projection Earned Net Worth Change Change in net worth (mkt) 224,928 394,028 216,935 548,435 11,569 94,655 Change in market valuation (-) -4,507 58,696 36,053 45,067 29,472 81,150 Inheritances, gifts, contributed capital (-) - - 10,000 - - - Gifts given, distributed capital (+) - - - - - - Change in earned net worth (=) 229,435 335,332 170,882 503,368-17,903 13,505 Earned Net Worth Analysis Term Debt Coverage (farm and personal) Change in earned net worth 229,435 335,332 170,882 503,368-17,903 13,505 Business depreciation (+) 90,762 104,103 102,800 104,357 99,069 160,377 Personal asset depreciation (+) - - - - - 5,750 Change in personal accounts payable (+) -18-19 -25-20 -21 6 Interest on term debt (+) 80,523 58,560 53,329 74,355 68,333 62,871 Gain or loss on capital sales (-) - 38,660 - - - - Capital debt repayment capacity (=) 400,702 459,316 326,986 682,059 149,478 242,509 358,015 Scheduled term debt payments 119,996 126,798 126,798 173,890 155,412 155,412 142,687 Term debt coverage ratio 3.34 3.62 2.58 3.92 0.96 1.56 2.51 Net farm income (optional) Change in earned net worth 229,435 335,332 170,882 503,368-17,903 13,505 Income and social security taxes paid (+) 21,668 20,043 20,253 27,637 19,109 29,233 Family living / Owner withdrawals (+) 91,654 75,738 81,026 86,863 78,783 83,894 Personal income (-) 48,462 50,462 52,024 53,332 54,681 56,037 Personal asset depreciation (-) - - - - - -5,750 Change in personal accounts payable (+) -18-19 -25-20 -21 6 Change in personal income tax payable (+) - - - - - - Net farm income (=) 294,276 380,632 220,112 564,516 25,287 76,351 Gain or loss on capital sales (-) - 38,660 - - - - Net farm income from operations (=) 294,276 341,972 220,112 564,516 25,287 76,351 20

Schedule F Accrual Analysis At a minimum, most lenders ask borrowers for a balance sheet and a Schedule F tax return each year. The challenge is analyzing these documents to determine credit worthiness. An analysis of Illinois farms found that there is a 66 percent difference between Schedule F cash net income and accrual net income. So how can you use Schedule F information to make informed loan decisions? FINPACK s Schedule F Accrual Analysis makes this job easy. FINPACK s Schedule F Accrual Analysis: Requires only the beginning and ending balance sheets and a Schedule F tax return With a little additional information, FINPACK generates an accrual analysis Spreads the net farm income, financial ratios, and earned net worth change over multiple years Schedule F Accrual Analysis Compares individual farm ratios to industry averages 21

Schedule F Accrual Analysis 22

Sample Farm Schedule F Cash to Accrual 2011 2012 2013 2014 2015 2016 Source Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Income Statement Gross cash farm income 2,204,706 2,603,914 2,683,524 3,121,958 3,030,921 2,536,972 + Inventory change (income items) 86,829 99,947-93,796 189,131 13,398-91,262 = Gross farm income (accrual) 2,291,535 2,703,861 2,589,728 3,311,089 3,044,319 2,445,710 Total cash farm expense 1,923,352 2,266,087 2,277,104 2,651,830 2,902,560 2,213,369 + Depreciation 90,762 45,407 66,747 59,290 69,597 160,377 +Inventory change (expense items) -16,856-8,300-10,286-9,614 17,404-4,387 = Total farm expense (accrual) 1,997,259 2,303,194 2,333,565 2,701,505 2,989,561 2,369,359 Net farm income from operations 294,276 400,667 256,162 609,584 54,758 76,351 Gain or loss from capital sales - 38,660 - - - - Net farm income 294,276 439,327 256,162 609,584 54,758 76,351 Financial Measures Liquidity (ending) Current ratio (farm) 1.55 1.74 1.76 2.59 2.48 2.73 Working capital (farm) 478,220 628,588 595,820 1,009,744 950,519 958,179 Working capital to gross revenues 20.9 % 23.2 % 23.0 % 30.5 % 31.2 % 39.2 % Solvency (market) Debt to asset ratio 49 % 42 % 45 % 37 % 36 % 34 % Debt to equity ratio 0.96 0.73 0.82 0.59 0.56 0.52 Profitability Measures (market) Net farm income 289,770 439,327 256,162 609,584 54,758 76,351 Rate of return on assets 11.4 % 12.9 % 6.9 % 14.4 % 2.3 % 2.1 % Rate of return on equity 14.5 % 18.0 % 8.2 % 19.8 % -0.1 % 0.1 % Operating profit margin 33.7 % 38.4 % 24.5 % 41.0 % 12.2 % 9.6 % EBITDA 513,898 556,320 415,518 786,649 230,304 329,731 Repayment Capacity Term debt coverage ratio (farm) 3.46 3.75 2.66 4.03 0.96 1.58 Repl. margin coverage ratio 2.27 2.74 1.78 3.07 0.65 1.09 Efficiency Asset turnover rate (market) 33.9 % 33.7 % 28.3 % 35.1 % 18.9 % 22.1 % Operating expense ratio 77.4 % 79.4 % 84.0 % 76.2 % 92.4 % 86.5 % Depreciation expense ratio 4.0 % 1.7 % 2.6 % 1.8 % 2.3 % 6.6 % Interest expense ratio 5.8 % 4.1 % 3.6 % 3.6 % 3.5 % 3.8 % Net farm income ratio 12.8 % 14.8 % 9.9 % 18.4 % 1.8 % 3.1 % Other Term debt coverage ratio (farm & personal) 3.34 3.62 2.58 3.92 0.96 1.56 Term debt to EBITDA 1.26 1.38 1.68 1.43 4.52 2.89 Schedule F Accrual Analysis Net Worth Growth Earned net worth change 229,435 394,027 206,933 548,436 11,568 13,505 Market net worth change 428,198 394,028 216,935 548,435 11,569 94,655 Market net worth change (%) 30 % 21 % 10 % 22 % 0 % 3 % 23

Sample Farm : Schedule F Cash to Accrual 2016 Income Statement Income Expense Sale of livestock purchased for resale 1,808,397 Feeder livestock purchases 1,317,314 Sales of raised crops and livestock 695,390 Chemicals 42,398 Government payments 26,242 Custom hire (machine work) 7,800 Cooperative distributions 134 Feed 139,295 Crop insurance proceeds 6,809 Fertilizers and lime 81,519 Freight and trucking 16,920 Gasoline, fuel, and oil 30,970 Insurance (other than health) 25,966 Interest, mortgage 59,552 Interest, other 34,579 Labor hired 32,560 Rent or lease: land, animals, etc. 217,058 Repairs and maintenance 41,106 Seeds and plants 104,334 Storage and warehousing 3,751 Supplies 13,547 Taxes 7,472 Utilities 7,688 Veterinary, breeding, and medicine 14,397 Other expenses 15,143 Gross cash income 2,536,972 Total cash expense 2,213,369 Net cash income 323,603 Schedule F Accrual Analysis Beginning Purchases/ Sales/ Ending Inventory Inventory Changes Inventory Deposits Withdrawals Inventory Change Prepaids and supplies 111,179 114,438 3,259 Hedging gains or losses 9,150-1,720 5,650-1,780 Crops and feed 562,808 536,313-26,495 Market livestock 843,024 780,038-62,987 Other assets 2,401 - - 2,401 - Accrued interest 33,785 32,658 1,128 Total inventory change -86,875 Net operating profit 236,728 Beginning Ending Depreciation Inventory Purchases Sales Inventory Depreciation Machinery and equipment 998,759 231,050 71,650 1,042,343-115,816 Titled vehicles 83,253 38,000-103,065-18,188 Buildings and improvement 527,465 - - 501,091-26,373 Total depreciation -160,377 Net farm income 76,351 24

3 2.5 Current Ratio Current Ratio The extent to which current farm assets, if liquidated, would cover current farm liabilities. 2 1.5 1 Total current farm assets divided by total current farm liabilities. 0.5 0 2011 2012 2013 2014 2015 2016 Strong Greater than 2 Caution 2 to 1.3 Vulnerable Less than 1.3 FINBIN My Farm 40 Working Capital to Gross Revenues Working Capital to Gross Revenues Measures operating capital available against the size of the business. 30 20 Working capital divided by gross revenues. 10 0 2011 2012 2013 2014 2015 2016 Strong Greater than 30 Caution 30 to 10 Vulnerable Less than 10 FINBIN My Farm 50 Debt to Asset Ratio (mkt) Debt to Asset Ratio (mkt) The proportion of total farm assets owed to creditors. 40 30 20 Total farm debt divided by total farm assets. 10 0 2011 2012 2013 2014 2015 2016 Strong Less than 30% Caution 30% to 60% Vulnerable Greater than 60% FINBIN My Farm 1 0.8 0.6 0.4 0.2 0 Debt to Equity Ratio (mkt) 2011 2012 2013 2014 2015 2016 FINBIN My Farm Debt to Equity Ratio (mkt) The relative amount of money borrowed as a percentage of equity capital. Farm debt divided by equity. Strong Less than 0.43 Caution 0.43 to 1.5 Vulnerable Greater than 1.5 Schedule F Accrual Analysis 25

4 Term Debt Coverage Ratio Term Debt Coverage Ratio The ability of the business to generate enough income to cover all scheduled intermediate and long term debt payments. 3 2 1 0 2011 2012 2013 2014 2015 2016 Net farm oper income + net nonfarm income + interest on term debt - fam liv & taxes / term debt prin & int. Strong Greater than 1.75 Caution 1.75 to 1.25 Vulnerable Less than 1.25 FINBIN My Farm 3.5 3 2.5 2 1.5 1 0.5 0 Replacement Margin Coverage Ra 2011 2012 2013 2014 2015 2016 Replacement Margin Coverage Ra A ratio below 1.0 indicates you did not generate enough income to cover term debt payments and unfunded capital purchases. Strong Greater than 1.5 Caution 1.5 to 1.1 Vulnerable Less than 1.1 FINBIN My Farm 40 30 Asset Turnover Rate (mkt) Asset Turnover Rate (mkt) Measures efficiency of capital invested in the business in terms of the gross revenue generated by each dollar of investment. 20 Value of farm production divided by average farm assets. 10 0 2011 2012 2013 2014 2015 2016 Strong Greater than 45% Caution 45% to 30% Vulnerable Less than 30% FINBIN My Farm Schedule F Accrual Analysis 100 80 60 40 20 0 Operating Expense Ratio 2011 2012 2013 2014 2015 2016 FINBIN My Farm Operating Expense Ratio The portion of gross revenue used to pay operating expenses. Farm operating expense - interest expense divided by gross income. Strong Less than 60% Caution 60% to 80% Vulnerable Greater than 80% 26

Global Cash Flow Global cash flow is important when both business and personal cash flows need to be analyzed to determine a credit s true financial situation. A global cash flow allows a lender to look at the combined sources and uses of cash from multiple business entities along with cash flow from personal sources. The FINPACK Global Cash Flow calculates debt coverage for each individual business entity and for the individuals involved in the business. With Global Cash Flow, you can: Use easy methodology to quickly present the entire cash flow position Analyze repayment ability from multiple businesses, multiple individuals, and guarantors Require only tax returns from each entity Calculate debt coverage ratios for each entity and global debt coverage for the combined entities Easily add projected new or proposed debt payments and income to the analysis 27 Global Cash Flow

Sample Farm 2017 Global Cash Flow Global Cash Flow Actual $ 2013 2014 2015 2016 Average Sch F - Updated Sch F Net farm profit or loss 301,302 427,299 125,145-87,148 191,650 + Other non-taxable income - - - - - + Depreciation 143,457 167,262 103,002 79,827 123,387 + Interest (total) 96,928 114,481 99,321 94,131 101,215 -Interest on current debt 46,266 40,940 33,007 31,462 37,919 - Non-recurring income - - - - - +Non-recurring expense - - - - - = Cash available for debt service 495,421 668,102 294,461 55,348 378,333 Debt payments 120,798 167,890 149,412 149,412 146,878 Debt service coverage ratio 4.10 3.98 1.97 0.37 2.61 Debt repayment margin 374,623 500,212 145,049-94,064 231,455 Sch C - Trucking Net profit or loss 14,646 15,699 10,328 6,106 11,695 + Depreciation 18,257 18,257 18,257 14,000 17,193 + Interest (total) 1,976 5,186 4,008 3,386 3,639 -Interest on current debt 1,122 988 803 918 958 - Disallowed meals and entertainment (50%) - - - - - + Depreciation, depletion, interest in COGS - - - - - + Expenses for business use of your home - - - - - - Non-recurring income - - - - - +Non-recurring expense - - - - - = Cash available for debt service 33,757 38,154 31,790 22,574 31,569 Debt payments 22,021 16,427 16,427 16,427 17,826 Debt service coverage ratio 1.53 2.32 1.94 1.37 1.79 Debt repayment margin 11,736 21,727 15,363 6,147 13,743 Sch E - Houses Net rental real estate and royalty income -3,579 1,640 1,759 2,486 577 + Depreciation, depletion 6,257 6,257 6,257 6,257 6,257 + Interest (total) 2,839 5,163 4,869 4,557 4,357 -Interest on current debt - - - - - - Non-recurring income - - - - - +Non-recurring expense - - - - - = Cash available for debt service 5,517 13,060 12,885 13,300 11,191 Debt payments 5,853 9,693 9,693 9,693 8,733 Debt service coverage ratio 0.94 1.35 1.33 1.37 1.25 Debt repayment margin -336 3,367 3,192 3,607 2,458 Global Cash Flow 28

Sample Farm Global Cash Flow Analysis: 2017 Actual $ 2013 2014 2015 2016 Average 1040 - Jim & Sarah Total income 365,513 497,977 191,936-22,506 258,230 + Other non-taxable income - - - - - - Non-recurring income - - - - - +Non-recurring expense - - - - - = Recurring total income 365,513 497,977 191,936-22,506 258,230 -Federal income tax 33,839 38,038 29,387-25,316 -State, other taxes - - - - - - Living expenses 81,026 86,863 78,783 83,894 82,642 = Cash available for debt service 250,648 373,076 83,766-106,400 150,273 Debt payments 6,000 6,000 6,000 6,743 6,186 Debt service coverage ratio 41.77 62.18 13.96-15.78 25.53 Debt repayment margin 244,648 367,076 77,766-113,143 144,087 1040 - Smith - Guarantor Total income 243,378 243,718 244,638 247,082 244,704 + Other non-taxable income - - - - - - Non-recurring income - - - - - +Non-recurring expense - - - - - = Recurring total income 243,378 243,718 244,638 247,082 244,704 -Federal income tax 48,303 48,236 47,486 48,524 48,137 -State, other taxes - - - - - - Living expenses 75,000 75,000 75,000 75,000 75,000 = Cash available for debt service 120,075 120,482 122,152 123,558 121,567 Debt payments 48,420 48,420 47,493 47,493 47,957 Debt service coverage ratio 2.48 2.49 2.57 2.60 2.54 Debt repayment margin 71,655 72,062 74,659 76,065 73,610 Global Debt Coverage Business and personal cash available for debt service 905,418 1,212,874 545,054 108,380 692,932 -Business income included in personal income 312,369 444,638 137,232-78,556 203,921 = Net global cash available for debt service 593,049 768,236 407,822 186,936 489,011 Total debt payments 203,092 248,430 229,025 229,768 227,579 Total debt coverage ratio 2.92 3.09 1.78 0.81 2.15 29 Global Cash Flow

Sample Farm Global Cash Flow Analysis: 2017 Proposed New Income & Debt Add'n Rental Houses 2014 2015 2016 Average Original total debt coverage ratio 3.09 1.78 0.81 2.15 Adjusted Prior Three Years Business and personal cash available for debt service 1,212,874 545,054 108,380 622,103 -Business income included in personal income 444,638 137,232-78,556 167,771 + Proposed new income 20,000 20,000 20,000 20,000 = Adjusted net global cash available for debt service 788,236 427,822 206,936 474,331 Existing debt payments 248,430 229,025 229,768 235,741 + Proposed new debt payments 10,500 10,500 10,500 10,500 = Total debt payments 258,930 239,525 240,268 246,241 Adjusted total debt coverage ratio 3.04 1.79 0.86 1.90 Global Cash Flow 30

Annual Cash Flow Projection Annual Cash Flow Don t need a monthly cash flow for all of your borrowers? The FINPACK Annual Cash Flow requires less time and data but provides a complete cash flow with pro-forma accrual analysis for the planning year. The Annual Cash Flow is a quick and easy annual cash flow plan that includes: Projected annual cash flow Projected change in working capital Projected debt coverage Pro-forma income statement Pro-forma balance sheet Links to past history for accurate and convenient data entry Ability to generate multi-year plans (up to ten years) Your completed plan can be printed directly on FSA forms, using FINPACK s FSA Forms tool. 31

Annual Cash Flow 32

Annual Cash Flow Plan Executive Summary Sample Farm 2017 Annual Plan Projected Cash Flow Summary Term Debt Coverage Personal Total operating inflow 2,669,020 Farm and Farm Total operating outflow (-) 2,371,055 Net farm income from operations 63,261 63,261 Capital purchases (-) 97,750 Depreciation (+) 161,212 161,212 Capital sales (+) 8,000 Personal income (+) 57,425 57,425 New credit (+) 1,349,428 Family living expense (-) 80,000 80,000 Loan payments (-) 1,494,174 Personal interest expense (-) 816 816 Net cash flow (=) 63,469 Principal payments on personal debt (-) 4,782 - Income taxes accrued (-) 20,000 20,000 Beginning cash balance (+) 76,500 Interest on term debt (+) 59,669 60,485 Change in operating loan (+) -87,863 Capital debt repayment capacity (=) 235,968 241,567 Ending cash balance (=) 52,106 Term debt payments 131,527 137,125 Capital debt repayment margin 104,441 104,441 Beginning operating loan balance 87,863 Term debt coverage ratio 1.79 1.76 Ending operating loan balance 0 Financial Standards Measures Projected Change in Working Capital Liquidity Beginning Ending Change in cash -24,394 Current ratio 2.7 3.5 Change in current inventories (+) 2,524 Working capital 958,179 1,059,235 Change in operating loan balance (-) -87,863 Working capital to gross revenue 36.8 % 40.7 % Change in other current loans (-) -28,722 Solvency (market) Change in princ due on term loans (-) -6,342 Debt to asset ratio 34.2 % 32.3 % Estimated change in working capital (=) 101,056 Debt to equity ratio 0.5 0.5 Profitability (market) Projected Income Statement Net farm income 60,265 Rate of return on assets 2.2 % Gross cash farm income 2,611,595 Rate of return on equity -0.4 % Inventory change - income items (+) -9,047 Operating profit margin 8.8 % Gross revenue (=) 2,602,548 EBITDA 331,493 Repayment Capacity Cash farm operating expense 2,271,055 Term debt coverage ratio (farm) 1.79 Interest expense (+) 118,591 Replacement margin coverage ratio 0.98 Depreciation (+) 161,212 Efficiency Inventory change - expense items (+) -11,570 Asset turnover rate (market) 24.6 Total farm expense (=) 2,539,287 Operating expense ratio 87.3 % Net farm income from operations 63,261 Depreciation ratio 6.2 % Gains or losses on capital sales -2,996 Interest expense ratio 4.1 % Net farm income 60,265 Net farm income ratio 2.4 % Other Projected Earned Net Worth Change Term debt coverage (farm+personal) 1.76 Term debt to EBITDA 2.97 Net farm income 60,265 Personal income (+) 57,425 Shocks to Farm Term Debt Coverage Ratio Family living expense (-) 80,000 Income taxes accrued (-) 20,000 10% decrease in gross income -0.18 Personal loan interest expense (-) 787 10% increase in operating expenses 0.07 Personal asset depreciation (-) 5,072 3% increase in interest rates 1.39 Earned net worth change (=) 11,831 Annual Cash Flow 33

Annual Cash Flow Sample Farm Cash Flow Plan: 2017 Annual Plan PROJECTED NET CASH FLOW Cash Inflows Quantity Price Inflow Cash Outflows Outflow Corn 72,500 bu. 3.481 /bu. 252,350 Feeder livestock purchase 1,508,900 Soybeans 28,947 bu. 9.548 /bu. 276,383 Crops purchased 31,626 Finish Beef 547 head 130.75 /cwt. 931,941 Chemicals 40,969 Fin Yearling 646 head 135.021/cwt. 1,133,906 Custom hire (machine work 6,696 Crop government payments 15,113 Feed 92,625 Patronage dividends, cash 150 Fertilizers and lime 77,536 Other farm income 1,751 Freight and trucking 17,350 Personal wages & salary 57,425 Gasoline, fuel, and oil 32,710 Total operating inflows 2,669,020 Insurance (other than hea 24,684 Labor hired 32,000 Capital Sales Rent or lease: land, anim 210,546 Flex Head 8,000 Repairs and maintenance 41,152 Total capital sales 8,000 Seeds and plants 102,182 Storage and warehousing 4,496 New Credit Supplies 12,037 5thNB-Cattle 1,271,278 Taxes 7,621 Fifth National Bank-Disc 47,750 Utilities 7,800 JDCC-Flex Head 30,400 Veterinary, breeding, and 12,925 Total new credit 1,349,428 Other expenses 7,200 Family living/owner draw 80,000 Income & social sec taxes 20,000 Total operating outflows 2,371,055 Capital Purchases VT Disc 59,750 JD Flex Head 38,000 Total capital purchases 97,750 Loan Payments 5thNB-Cattle 1,341,068 John Deere Credit-332E 7,453 Fifth National Bank-Mach. 23,348 Fifth National Bank-Barn 32,778 5thNB-New 80 Ac 39,831 5thNB-SW 80 Ac 28,116 Ford Credit-Explorer 5,352 Mutual Insurance-House 246 Fifth National Bank-Disc - JDCC-Flex Head - Ann. oper. loan interest 15,981 Total loan payments 1,494,174 Total cash inflows 4,026,448 Total cash outflows 3,962,979 Net cash flow 63,469 34

Sample Farm Cash Flow Plan: 2017 Annual Plan CROP & LIVESTOCK PRODUCTION Production Per Operator Enterprise Units Unit Share Production Corn 562.0 Acres 192.0 bu. 100 107,904 bu. Corn Silage 40.0 Acres 21.9 ton 100 876 ton Soybeans 554.0 Acres 55.6 bu. 100 30,802 bu. Annual Cash Flow Total crops 1,156 Acres CROP INVENTORY SUMMARY Beginning Ending Inventory Produced Purchased Fed Sold Inventory Corn (bu.) 100,841 107,904-39,656 72,500 96,589 Corn Silage (ton) 959 876-932 - 903 Hay, Alfalfa (ton) 40-335 315-60 Soybeans (bu.) 18,947 30,802 - - 28,947 20,802 LIVESTOCK INVENTORY SUMMARY Beginning Purchased / Sold / Ending Inventory Produced Trans In Died Trans Out Inventory Finish Beef (head) 550-550 3 547 550 Fin Yearling (head) - - 650 4 646 - PROJECTED INVENTORY CHANGE Begin Begin Ending Ending Commodity Inventor $/Unit Value Inventory $/Unit Value Change Corn 100,841 3.26 328,742 96,589 3.44 332,266 3,525 Corn Silage 959 25.00 23,975 903 25.00 22,575-1,400 Hay, Alfalfa 40 90.00 3,600 60 95.00 5,700 2,100 Soybeans 18,947 9.50 179,997 20,802 9.26 192,630 12,634 Finish Beef 550 1418.25 780,038 550 1371.15 754,133-25,905 Accounts receivable 0 0 0 Hedging accounts 5,650 5,650 0 Other current assets 0 0 0 Total income items 1,322,001 1,312,954-9,047 Prepaid expenses & supplies 114,438 114,438 0 Growing crops 0 0 0 Accounts payable (End) 0 (Beg) 0 0 Accrued interest (End) 21,087 (Beg) 32,658 11,571 Total expense items 135,525 147,096 11,570 Total inventories 1,457,526 1,460,049 2,524 35

Annual Cash Flow Sample Farm Cash Flow Plan: 2017 Annual Plan BALANCE SHEETS ASSETS Projected 1/1/2017 1/1/2018 Current Assets Cash and checking 76,500 52,106 Prepaid exp. & suppl. 114,438 114,438 Hedging accounts 5,650 5,650 Crops 536,313 553,171 Mkt lvst 780,038 754,133 Total current assets 1,512,939 1,479,498 Intermediate Assets Machinery 1,099,984 1,068,064 Titled vehicles 112,159 95,335 Total intermediate assets 1,212,143 1,163,400 Long Term Assets Land 1,258,300 1,258,300 Bldgs & improve. 514,278 488,564 Other long term 2,401 2,401 Total long term assets 1,774,979 1,749,265 Total farm assets 4,500,061 4,392,163 Personal assets 173,812 168,741 Total assets 4,673,874 4,560,903 LIABILITIES Current Liabilities Accrued interest 32,658 21,087 Prin due on term loans 69,288 62,946 Operating loan(s) 87,863-5thNB-Cattle 364,951 336,229 Total current liabilities 554,760 420,262 Intermediate Liabilities JDCC-Flex Head - 30,400 Fifth National Bank-Disc - 47,750 John Deere Credit-332E 195 - Fifth National Bank-Mach. 83,821 65,278 Total inter. liabilities 84,016 143,428 Long Term Liabilities Fifth National Bank-Barn 199,884 183,892 5thNB-SW 80 Ac 266,525 254,350 5thNB-New 80 Ac 435,599 418,861 Total long term liab. 902,008 857,103 Total farm liabilities 1,540,784 1,420,793 Personal liabilities 26,534 21,723 Total liabilities 1,567,318 1,442,516 36

Sample Farm Cash Flow Plan: 2017 Annual Plan BALANCE SHEETS (cont.) Projected 1/1/2017 1/1/2018 Net worth 3,106,556 3,118,387 Net worth change 11,831 Total debt to asset ratio 33 % 31 % Annual Cash Flow 37

Annual Cash Flow Sample Farm Cash Flow Plan: 2017 Annual Plan Income Statement Trends 2011 2012 2013 2014 2015 2016 2017 Source Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Proj. Cash Farm Income Corn - - - - - - 252,350 Soybeans - - - - - - 276,383 Finish Beef - - - - - - 931,941 Fin Yearling - - - - - - 1,133,906 Crop government payments 13,451 11,412 19,433-60,671 26,242 15,113 Patronage dividends, cash 91 91 121 226 178 134 150 Property insurance income - - - 88,535 1,604 6,809 - Other farm income - - - - - - 1,751 Gross sales 2,191,164 2,592,411 2,663,970 3,033,197 2,968,468 2,503,787 - Gross farm income (cash) 2,204,706 2,603,914 2,683,524 3,121,958 3,030,921 2,536,972 2,611,595 Cash Farm Expense Feeder livestock purchase 969,630 1,247,574 1,268,403 1,564,797 2,019,291 1,317,314 1,508,900 Interest 126,626 111,050 96,928 114,481 99,321 94,131 118,591 Seed 106,050 101,458 101,551 116,043 92,252 104,334 - Fertilizer 87,430 91,416 101,973 96,427 60,888 81,519 - Crop chemicals 31,056 34,162 36,884 39,543 34,933 42,398 - Storage 2,508 2,809 11,481 10,540 1,841 3,751 - Purchased feed 237,410 275,173 208,013 208,721 174,920 139,295 - Veterinary 10,884 11,647 12,147 13,968 15,900 14,397 - Supplies 25,941 27,913 20,945 35,502 10,320 13,547 - Fuel & oil 32,301 27,212 33,709 38,067 33,470 30,970 - Repairs 29,913 32,677 37,054 61,848 54,630 41,106 - Custom hire 3,649 3,850 9,542 9,114 5,810 7,800 - Hired labor 26,793 24,939 29,560 31,741 30,252 32,560 - Land rent 159,960 192,719 221,110 221,100 197,825 217,058 - Real estate taxes 1,650 1,680 1,680 4,558 5,654 7,472 - Farm insurance 28,737 33,728 37,058 33,220 28,445 25,966 - Utilities 6,143 6,849 7,872 8,265 8,093 7,688 - Hauling and trucking 26,123 28,516 26,773 25,232 17,272 16,920 - Miscellaneous 10,548 10,715 14,421 18,663 11,443 15,143 - Total cash farm expense 1,923,352 2,266,087 2,277,104 2,651,830 2,902,560 2,213,369 2,389,646 Net cash farm income 281,354 337,827 406,420 470,128 128,361 323,603 221,949 Inventory Changes Prepaids expenses and supplies 23,596 7,496 5,966 12,909-10,776 3,259 0 Gain or loss on hedging activities -15,775-16,725 1,808 23,600 878-1,780 - Crops and feed 39,951 48,807-168,171-101,364 54,016-26,495 16,858 Market livestock 62,653 67,865 72,567 266,895-41,496-62,987-25,905 Accrued interest -6,740 804 4,320-3,295-6,628 1,128 11,571 Total inventory change 103,685 108,247-83,510 198,746-4,006-86,875 2,524 Net operating profit 385,039 446,074 322,910 668,874 124,355 236,728 224,473 Depreciation Machinery & equipment -64,179-39,910-54,399-52,859-52,566-115,816-118,674 Titled vehicles -4,601-5,497-2,180-1,448-6,266-18,188-16,824 Buildings and improvements -21,982 - -10,168-4,982-10,765-26,373-25,714 Total depreciation -90,762-45,407-66,747-59,290-69,597-160,377-161,212 Net farm income from operations 294,276 400,667 256,162 609,584 54,758 76,351 63,261 38

Sample Farm Cash Flow Plan: 2017 Annual Plan Income Statement Trends 2011 2012 2013 2014 2015 2016 2017 Gain or loss on capital sales - 38,660 - - - - -2,996 Net farm income 294,276 439,327 256,162 609,584 54,758 76,351 60,265 Annual Cash Flow 39

Annual Cash Flow Sample Farm Cash Flow Plan: 2017 Annual Plan Financial Trends 2011 2012 2013 2014 2015 2016 2017 Source Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Proj. Income Statement Gross cash farm income 2,204,706 2,603,914 2,683,524 3,121,958 3,030,921 2,536,972 2,611,595 + Inventory change (income items) 86,829 99,947-93,796 189,131 13,398-91,262-9,047 = Gross farm income (accrual) 2,291,535 2,703,861 2,589,728 3,311,089 3,044,319 2,445,710 2,602,548 Total cash farm expense 1,923,352 2,266,087 2,277,104 2,651,830 2,902,560 2,213,369 2,389,646 + Depreciation 90,762 45,407 66,747 59,290 69,597 160,377 161,212 +Inventory change (expense items) -16,856-8,300-10,286-9,614 17,404-4,387-11,570 = Total farm expense (accrual) 1,997,259 2,303,194 2,333,565 2,701,505 2,989,561 2,369,359 2,539,287 Net farm income from operations 294,276 400,667 256,162 609,584 54,758 76,351 63,261 Gain or loss from capital sales - 38,660 - - - - -2,996 Net farm income 294,276 439,327 256,162 609,584 54,758 76,351 60,265 Profitability (market) Rate of return on assets 11.4 % 12.9 % 6.9 % 14.4 % 2.3 % 2.1 % 2.2 % Rate of return on equity 14.5 % 18.0 % 8.2 % 19.8 % -0.1 % 0.1 % -0.4 % Operating profit margin 33.7 % 38.4 % 24.5 % 41.0 % 12.2 % 9.6 % 8.8 % Asset turnover rate 33.9 % 33.7 % 28.3 % 35.1 % 18.9 % 22.1 % 24.6 % Liquidity & Repayment Current ratio (farm only) 1.55 1.74 1.76 2.59 2.48 2.73 3.52 Working capital (farm only) 478,220 628,588 595,820 1,009,744 950,519 958,179 1,059,235 Working capital to gross revenue 20.9 % 23.2 % 23.0 % 30.5 % 31.2 % 39.2 % 40.7 % Term debt coverage ratio 3.46 3.75 2.66 4.03 0.96 1.58 1.79 Replacement margin coverage ratio 2.27 2.74 1.78 3.07 0.65 1.09 0.98 Efficiency Measures Operating expense ratio 77.4 % 79.4 % 84.0 % 76.2 % 92.4 % 86.5 % 87.3 % Depreciation expense ratio 4.0 % 1.7 % 2.6 % 1.8 % 2.3 % 6.6 % 6.2 % Interest expense ratio 5.8 % 4.1 % 3.6 % 3.6 % 3.5 % 3.8 % 4.1 % Solvency (market, exclude def liab) Farm assets 3,359,146 3,647,473 4,227,596 4,539,240 4,464,095 4,500,061 4,392,163 Farm liabilities 1,643,158 1,542,122 1,910,249 1,678,666 1,597,458 1,540,784 1,420,793 Total assets 3,513,076 3,801,403 4,381,526 4,693,170 4,618,025 4,673,874 4,560,903 Total liabilities 1,672,143 1,566,441 1,929,629 1,692,839 1,606,125 1,567,318 1,442,516 Net worth 1,840,933 2,234,961 2,451,896 3,000,331 3,011,901 3,106,556 3,118,387 Net worth change 229,435 394,028 216,935 548,435 11,569 94,655 11,831 Net worth change (%) 30 % 21 % 10 % 22 % 0 % 3 % 0 % Farm debt to asset ratio 49 % 42 % 45 % 37 % 36 % 34 % 32 % Total debt to asset ratio 48 % 41 % 44 % 36 % 35 % 34 % 32 % Other Information Personal income 48,462 50,462 52,024 53,332 54,681 56,037 57,425 Family living expense 91,654 75,738 81,026 86,863 78,783 83,894 80,816 Income and social security tax 21,668 20,043 20,253 27,637 19,109 29,233 20,000 Capital purchases 259,692 245,334 737,995 107,000 47,000 293,454 97,750 Capital sales - 68,500 - - - 71,650 8,000 40

Monthly Cash Flow Projection Monthly Cash Flow FINPACK makes monthly cash flow planning easy and accurate. The monthly cash flow can project annual operating loan needs and repayment capacity for the year, any portion of a year, or multiple years (up to ten years). Monthly Cash Flow includes: Projected monthly cash flows Projected operating loan transactions and balances Projected debt coverage Pro-forma income statement Pro-forma balance sheets Your completed plan can be printed directly on FSA forms, using FINPACK s FSA Forms tool. 41

Monthly Cash Flow 42

Sample Farm 2017 Monthly Plan Monthly Cash Flow Plan Executive Summary Projected Cash Flow Summary Term Debt Coverage Personal Total operating inflow 2,669,020 Farm and Farm Total operating outflow (-) 2,371,054 Net farm income from operations 63,412 63,412 Capital purchases (-) 97,750 Depreciation (+) 161,212 161,212 Capital sales (+) 8,000 Personal income (+) 57,425 57,425 New credit (+) 1,349,428 Family living expense (-) 80,000 80,000 Loan payments (-) 1,494,175 Personal interest expense (-) 817 817 Net cash flow (=) 63,469 Principal payments on personal debt (-) 4,782 - Income taxes accrued (-) 20,000 20,000 Beginning cash balance (+) 76,500 Interest on term debt (+) 59,589 60,406 Operating loan borrowings (+) 607,610 Capital debt repayment capacity (=) 236,039 241,637 Operating loan principal payments (-) 695,473 Term debt payments 131,527 137,126 Ending cash balance (=) 52,106 Capital debt repayment margin 104,512 104,512 Term debt coverage ratio 1.79 1.76 Beginning operating loan balance 87,863 Peak operating loan balance (Oct) 464,221 Financial Standards Measures Ending operating loan balance - Liquidity Beginning Ending Projected Change in Working Capital Current ratio 2.7 3.5 Working capital 958,179 1,053,129 Change in cash -24,394 Working capital to gross revenue 36.8 % 40.5 % Change in current inventories (+) 2,594 Solvency (market) Change in operating loan balance (-) -87,863 Debt to asset ratio 34.2 % 32.3 % Change in other current loans (-) -28,722 Debt to equity ratio 0.5 0.5 Change in princ due on term loans (-) -165 Profitability (market) Estimated change in working capital (=) 94,950 Net farm income 60,416 Rate of return on assets 2.2 % Projected Income Statement Rate of return on equity -0.4 % Operating profit margin 9.9 % Gross cash farm income 2,611,595 EBITDA 331,564 Inventory change - income items (+) -8,977 Repayment Capacity Gross revenue (=) 2,602,618 Term debt coverage ratio (farm) 1.79 Replacement margin coverage ratio 0.98 Cash farm operating expense 2,271,054 Efficiency Interest expense (+) 118,512 Asset turnover rate (market) 21.8 Depreciation (+) 161,212 Operating expense ratio 87.3 % Inventory change - expense items (+) -11,571 Depreciation ratio 6.2 % Total farm expense (=) 2,539,206 Interest expense ratio 4.1 % Net farm income from operations 63,412 Net farm income ratio 2.4 % Gains or losses on capital sales -2,996 Other Net farm income 60,416 Term debt coverage (farm+personal) 1.76 Term debt to EBITDA 2.97 Projected Earned Net Worth Change Shocks to Farm Term Debt Coverage Ratio Net farm income 60,416 Personal income (+) 57,425 10% decrease in gross income -0.18 Family living expense (-) 80,000 10% increase in operating expenses 0.07 Income taxes accrued (-) 20,000 3% increase in interest rates 1.32 Personal loan interest expense (-) 788 Personal asset depreciation (-) 5,072 Earned net worth change (=) 11,981 Monthly Cash Flow 43

Sample Farm Cash Flow Plan: 2017 Monthly Plan Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total CASH INFLOWS Monthly Cash Flow Beg cash bal 76500 50000 50000 51418 50000 50000 50000 50000 50000 50000 50000 50000 76500 Corn 33500 36500 106599 - - 41250 - - - - - 34500 252349 Soybeans 48500-96850 37733 - - - - - - - 93300 276383 Finish Beef - - - - 931940 - - - - - - - 931940 Fin Yearling - - - - - - - - - - 1133906-1133906 Crop gov pay - - - - - - - - - 15113 - - 15113 Pat dividend - - 150 - - - - - - - - - 150 Other farm 292 292 292 292 - - - - - - 292 293 1753 Pers. wages 4785 4785 4785 4785 4785 4785 4785 4785 4785 4785 4785 4785 57425 Total inflow 163577 91577 258676 94229 986726 96035 54785 54785 54785 69898 1188984 182878 2745520 CASH OUTFLOWS Feeder lvstk - - - 966875 - - - - - - 542025-1508900 Seed 40908-40908 - - - - - - - - 20366 102182 Fertilizer 31078-31078 - - - - - - - - 15380 77536 Chemicals 13651-13651 - - - 6827 - - - - 6840 40969 Crop insur. - - - - - - - - 480 8310 6744-15534 Drying fuel - - - - - - - - - - 4496-4496 Crop purch. 3000-3000 7500 6750 4250-7125 - - - - 31625 Purch. feed 8938 8938 8938 14509 5571 5571 5571 5571 5571 5571 8938 8938 92625 Veterinary 963 963 963 1984 1021 1021 1021 1021 1021 1021 963 963 12925 Supplies 1031 1031 1031 1867 836 836 836 836 836 836 1031 1031 12037 Fuel & oil 1000 1000 1000 8097 1000 1000 7517 1000 1580 7517 1000 1000 32710 Repairs 1250 1250 3705 4025 1250 1250 4025 3705 2210 8616 8616 1250 41152 Cust hire - - - - - - - - - 3324 3372-6696 Labor 1524 1524 1524 3048 4571 3048 1524 1524 3048 4571 4571 1524 32000 Land rent - - - 105273 - - - - - 105273 - - 210546 RE taxes - - - - 3811 - - - - - 3810-7621 Farm insur. 2288 - - 2288 - - 2288 - - 2288 - - 9150 Utilities 650 650 650 650 650 650 650 650 650 650 650 650 7800 Marketing - - - - 8250 - - - - - 9100-17350 Dues & fees 1100 - - 1100 - - - - - - - - 2200 Misc. 416 417 416 417 416 417 416 417 417 417 417 417 5000 Living/Draw 6667 6667 6667 6667 6667 6667 6667 6667 6667 6667 6667 6667 80000 Income taxes 5000 - - 5000 - - 5000 - - 5000 - - 20000 Min end bal 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 Tot. outflow 169463 72440 163531 1179299 90792 74709 92341 78516 72479 210060 652399 115026 2421054 Opr. surplus -5886 19138 95146-1085070 895933 21326-37555 -23730-17694 -140161 536584 67853 324466 44

Sample FarmCash Flow Plan: 2017 Monthly Plan Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total CAPITAL PURCHASES VT Disc - - 59750 - - - - - - - - - 59750 630F Head - - - - - - 38000 - - - - - 38000 Tot. cap pur - - 59750 - - - 38000 - - - - - 97750 CAPITAL SALES Flex Head - - - - - - 8000 - - - - - 8000 Tot cap sale - - - - - - 8000 - - - - - 8000 NEW CREDIT 5thNB-Cattle - - - 796705 - - - - - - 474573-1271278 5thNB-Disc - - 47750 - - - - - - - - - 47750 JDCC-Flex.. - - - - - - 30400 - - - - - 30400 Tot new cred - - 47750 796705 - - 30400 - - - 474573-1349428 LOAN PAYMENTS 5thNB-Cattle - - - - 777019 - - - - - 564049-1341068 JDCC-332E - - - - - - 7453 - - - - - 7453 5thNB-Mach. - - - 23348 - - - - - - - - 23348 5thNB-Barn - - - - - - - 32778 - - - - 32778 5thNB-New.. - - - - - - - - - - 39831-39831 5thNB-SW 8.. - - - - - - 28116 - - - - - 28116 Ford-Explo.. 446 446 446 446 446 446 446 446 446 446 446 446 5352 InsCo-House 246 - - - - - - - - - - - 246 5thNB-Disc - - - - - - - - - - - - - JDCC-Flex.. - - - - - - - - - - - - - Tot loan pay 692 446 446 23794 777465 446 36016 33224 446 446 604327 446 1478194 Monthly Cash Flow Surp. or def -6578 18692 82700-312159 118468 20880-73171 -56954-18140 -140607 406831 67407 105950 ANNUAL OPERATING LOAN TRANSACTIONS & BALANCES Beg AO bal 87863 94441 80878-312159 195252 175348 248519 305474 323614 464221 64976 87863 AO borrowing 6578 - - 312159 - - 73171 56954 18140 140607 - - 607610 AO int. pay - 5129 404-1561 976 - - - - 7586 325 15981 AO prin. pay - 13563 80878-116907 19904 - - - - 399245 64976 695473 End AO bal. 94441 80878-312159 195252 175348 248519 305474 323614 464221 64976 - - Accrued int. 4657 - - - - - 877 2119 3647 5265 - - - End cash bal 50000 50000 51418 50000 50000 50000 50000 50000 50000 50000 50000 52106 52106 45

Sample Farm Cash Flow Plan: 2017 Monthly Plan BALANCE SHEETS ASSETS Projected 1/1/2017 1/1/2018 Monthly Cash Flow Current Assets Cash and checking 76,500 52,106 Prepaid exp. & suppl. 114,438 114,438 Hedging accounts 5,650 5,650 Crops 536,313 553,241 Mkt lvst 780,038 754,133 Total current assets 1,512,939 1,479,568 Intermediate Assets Machinery 1,099,984 1,068,064 Titled vehicles 112,159 95,335 Total intermediate assets 1,212,143 1,163,400 Long Term Assets Land 1,258,300 1,258,300 Bldgs & improve. 514,278 488,564 Other long term 2,401 2,401 Total long term assets 1,774,979 1,749,265 Total farm assets 4,500,061 4,392,233 Personal assets 173,812 168,741 Total assets 4,673,874 4,560,973 LIABILITIES Current Liabilities Accrued interest 32,658 21,086 Prin due on term loans 69,288 69,123 Operating loan(s) 87,863-5thNB-Cattle 364,951 336,229 Total current liabilities 554,760 426,438 Intermediate Liabilities JDCC-Flex Head - 30,400 Fifth National Bank-Disc - 47,750 John Deere Credit-332E 195 - Fifth National Bank-Mach. 83,821 64,222 Total inter. liabilities 84,016 142,372 Long Term Liabilities Fifth National Bank-Barn 199,884 181,936 5thNB-SW 80 Ac 266,525 252,936 5thNB-New 80 Ac 435,599 417,031 Total long term liab. 902,008 851,903 Total farm liabilities 1,540,784 1,420,713 46

Sample Farm Cash Flow Plan: 2017 Monthly Plan BALANCE SHEETS (cont.) Projected 1/1/2017 1/1/2018 Net worth 3,106,556 3,118,537 Net worth change 11,981 Total debt to asset ratio 33 % 31 % Monthly Cash Flow 47

Sample Farm Cash Flow Plan: 2017 Monthly Plan Income Statement Trends 2011 2012 2013 2014 2015 2016 2017 Source Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Proj. Monthly Cash Flow Cash Farm Income Corn - - - - - - 252,349 Soybeans - - - - - - 276,383 Finish Beef - - - - - - 931,940 Fin Yearling - - - - - - 1,133,906 Crop government payments 13,451 11,412 19,433-60,671 26,242 15,113 Patronage dividends, cash 91 91 121 226 178 134 150 Property insurance income - - - 88,535 1,604 6,809 - Other farm income - - - - - - 1,753 Gross sales 2,191,164 2,592,411 2,663,970 3,033,197 2,968,468 2,503,787 - Gross farm income (cash) 2,204,706 2,603,914 2,683,524 3,121,958 3,030,921 2,536,972 2,611,595 Cash Farm Expense Feeder livestock purchase 969,630 1,247,574 1,268,403 1,564,797 2,019,291 1,317,314 1,508,900 Interest 126,626 111,050 96,928 114,481 99,321 94,131 118,512 Seed 106,050 101,458 101,551 116,043 92,252 104,334 102,182 Fertilizer 87,430 91,416 101,973 96,427 60,888 81,519 77,536 Crop chemicals 31,056 34,162 36,884 39,543 34,933 42,398 40,969 Crop insurance - - - - - - 15,534 Drying expense - - - - - - 4,496 Storage 2,508 2,809 11,481 10,540 1,841 3,751 - Crop purchases - - - - - - 31,625 Purchased feed 237,410 275,173 208,013 208,721 174,920 139,295 92,625 Veterinary 10,884 11,647 12,147 13,968 15,900 14,397 12,925 Supplies 25,941 27,913 20,945 35,502 10,320 13,547 12,037 Fuel & oil 32,301 27,212 33,709 38,067 33,470 30,970 32,710 Repairs 29,913 32,677 37,054 61,848 54,630 41,106 41,152 Custom hire 3,649 3,850 9,542 9,114 5,810 7,800 6,696 Hired labor 26,793 24,939 29,560 31,741 30,252 32,560 32,000 Land rent 159,960 192,719 221,110 221,100 197,825 217,058 210,546 Real estate taxes 1,650 1,680 1,680 4,558 5,654 7,472 7,621 Farm insurance 28,737 33,728 37,058 33,220 28,445 25,966 9,150 Utilities 6,143 6,849 7,872 8,265 8,093 7,688 7,800 Hauling and trucking 26,123 28,516 26,773 25,232 17,272 16,920 - Marketing - - - - - - 17,350 Dues & professional fees - - - - - - 2,200 Miscellaneous 10,548 10,715 14,421 18,663 11,443 15,143 5,000 Total cash farm expense 1,923,352 2,266,087 2,277,104 2,651,830 2,902,560 2,213,369 2,389,566 Net cash farm income 281,354 337,827 406,420 470,128 128,361 323,603 222,029 Inventory Changes Prepaids expenses and supplies 23,596 7,496 5,966 12,909-10,776 3,259 0 Gain or loss on hedging activities -15,775-16,725 1,808 23,600 878-1,780 - Crops and feed 39,951 48,807-168,171-101,364 54,016-26,495 16,928 Market livestock 62,653 67,865 72,567 266,895-41,496-62,987-25,905 Accrued interest -6,740 804 4,320-3,295-6,628 1,128 11,571 Total inventory change 103,685 108,247-83,510 198,746-4,006-86,875 2,594 Net operating profit 385,039 446,074 322,910 668,874 124,355 236,728 224,623 Depreciation Machinery & equipment -64,179-39,910-54,399-52,859-52,566-115,816-118,674 48

Sample Farm Cash Flow Plan: 2017 Monthly Plan Income Statement Trends 2011 2012 2013 2014 2015 2016 2017 Titled vehicles -4,601-5,497-2,180-1,448-6,266-18,188-16,824 Buildings and improvements -21,982 - -10,168-4,982-10,765-26,373-25,714 Total depreciation -90,762-45,407-66,747-59,290-69,597-160,377-161,212 Net farm income from operations 294,276 400,667 256,162 609,584 54,758 76,351 63,412 Gain or loss on capital sales - 38,660 - - - - -2,996 Net farm income 294,276 439,327 256,162 609,584 54,758 76,351 60,416 Monthly Cash Flow 49

Sample Farm Cash Flow Plan: 2017 Monthly Plan Financial Trends 2011 2012 2013 2014 2015 2016 2017 Source Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Accr Sch F Proj. Monthly Cash Flow Income Statement Gross cash farm income 2,204,706 2,603,914 2,683,524 3,121,958 3,030,921 2,536,972 2,611,595 + Inventory change (income items) 86,829 99,947-93,796 189,131 13,398-91,262-8,977 = Gross farm income (accrual) 2,291,535 2,703,861 2,589,728 3,311,089 3,044,319 2,445,710 2,602,618 Total cash farm expense 1,923,352 2,266,087 2,277,104 2,651,830 2,902,560 2,213,369 2,389,566 + Depreciation 90,762 45,407 66,747 59,290 69,597 160,377 161,212 +Inventory change (expense items) -16,856-8,300-10,286-9,614 17,404-4,387-11,571 = Total farm expense (accrual) 1,997,259 2,303,194 2,333,565 2,701,505 2,989,561 2,369,359 2,539,206 Net farm income from operations 294,276 400,667 256,162 609,584 54,758 76,351 63,412 Gain or loss from capital sales - 38,660 - - - - -2,996 Net farm income 294,276 439,327 256,162 609,584 54,758 76,351 60,416 Profitability (market) Rate of return on assets 11.4 % 12.9 % 6.9 % 14.4 % 2.3 % 2.1 % 2.2 % Rate of return on equity 14.5 % 18.0 % 8.2 % 19.8 % -0.1 % 0.1 % -0.4 % Operating profit margin 33.7 % 38.4 % 24.5 % 41.0 % 12.2 % 9.6 % 9.9 % Asset turnover rate 33.9 % 33.7 % 28.3 % 35.1 % 18.9 % 22.1 % 21.8 % Liquidity & Repayment Current ratio (farm only) 1.55 1.74 1.76 2.59 2.48 2.73 3.47 Working capital (farm only) 478,220 628,588 595,820 1,009,744 950,519 958,179 1,053,129 Working capital to gross revenue 20.9 % 23.2 % 23.0 % 30.5 % 31.2 % 39.2 % 40.5 % Term debt coverage ratio 3.46 3.75 2.66 4.03 0.96 1.58 1.79 Replacement margin coverage ratio 2.27 2.74 1.78 3.07 0.65 1.09 0.98 Efficiency Measures Operating expense ratio 77.4 % 79.4 % 84.0 % 76.2 % 92.4 % 86.5 % 87.3 % Depreciation expense ratio 4.0 % 1.7 % 2.6 % 1.8 % 2.3 % 6.6 % 6.2 % Interest expense ratio 5.8 % 4.1 % 3.6 % 3.6 % 3.5 % 3.8 % 4.1 % Solvency (market, exclude def liab) Farm assets 3,359,146 3,647,473 4,227,596 4,539,240 4,464,095 4,500,061 4,392,233 Farm liabilities 1,643,158 1,542,122 1,910,249 1,678,666 1,597,458 1,540,784 1,420,713 Total assets 3,513,076 3,801,403 4,381,526 4,693,170 4,618,025 4,673,874 4,560,973 Total liabilities 1,672,143 1,566,441 1,929,629 1,692,839 1,606,125 1,567,318 1,442,436 Net worth 1,840,933 2,234,961 2,451,896 3,000,331 3,011,901 3,106,556 3,118,537 Net worth change 229,435 394,028 216,935 548,435 11,569 94,655 11,981 Net worth change (%) 30 % 21 % 10 % 22 % 0 % 3 % 0 % Farm debt to asset ratio 49 % 42 % 45 % 37 % 36 % 34 % 32 % Total debt to asset ratio 48 % 41 % 44 % 36 % 35 % 34 % 32 % Other Information Personal income 48,462 50,462 52,024 53,332 54,681 56,037 57,425 Family living expense 91,654 75,738 81,026 86,863 78,783 83,894 80,817 Income and social security tax 21,668 20,043 20,253 27,637 19,109 29,233 20,000 Capital purchases 259,692 245,334 737,995 107,000 47,000 293,454 97,750 Capital sales - 68,500 - - - 71,650 8,000 50

Collateral Analysis The FINPACK Collateral Analysis builds from the balance sheets to calculate Loan to Value and the Collateral Margin. Proposed loans and projected collateral can be added to complete the picture. Collateral Analysis can feed directly into Presentation Manager and Risk Rating. With Collateral Analysis, you can: Select loans and collateral from balance sheet Collateral Analysis Enter multiple collateral groups, when applicable Standardize discount percentages (although discount percentages can also be overridden for individual analysis) Link loan to value and collateral margin to the Risk Rating and Presentation Manager components of FINPACK 51

Sample Farm Collateral Analysis Principal Market Disc. Discounted Prior Net Loan to Loan Balance Collateral Value Pct. Value Liens Collateral Value Chattels 5thNB-Operating 87,863 Prepaid expenses and supp 114,438 90.00 102,994-102,994 5thNB-Cattle 364,951 Crop inventory 536,313 65.00 348,604-348,604 Fifth National Bank-Mach. 102,320 Livestock held for sale 780,038 65.00 507,024-507,024 Disc Loan 47,750 Machinery and equipment 1,099,984 78.41 862,484 7,199 855,285 VT Disc 59,750 90.00 53,775-53,775 Total 602,884 2,590,523 1,874,881 7,199 1,867,682 32.3 % Real Estate Fifth National Bank-Barn 215,576 Land 597,500 80.00 478,000-478,000 5thNB-SW 80 Ac 278,450 Buildings and improvement 514,278 60.00 308,567-308,567 Total 494,026 1,111,778 786,567-786,567 62.8 % Collateral Analysis New 80 5thNB-New 80 Ac 451,767 Land 660,800 80.00 528,640-528,640 Total 451,767 660,800 528,640-528,640 85.5 % Total loan to value 1,548,677 3,182,889 48.7 % Collateral coverage margin 2.06 Collateral margin 1,634,212 52

Credit Decision Scorecard Use FINPACK s Credit Decision Scorecard to fast track the review and decision making process for smaller loans. With Credit Decision Scorecard, you can: Develop your own customized scorecard using the criteria most important to you Define essential criteria that must be met to make the loan Gather the customer data that you specify Evaluate customer data compared to minimum approval criteria that you establish Provide the flexibility to document reasons to override automatic approvals or rejections Credit Decision Scorecard 53

Sample Farm New equipment purchase Scorecard: Sample farm business Pre-qualifying Criteria Must meet ALL criteria for automatic approval Yes Is the requested loan amount less than $50,000? Yes Yes Yes Yes Is this loan to a business, not an individual? Is the purpose of this loan other than a line of credit or for inventory? Has at least one principal personally guaranteed the loan? Has the business generated a positive net profit each of the last three years? Customer Data Applicant credit score 690 Co-applicant credit score 670 Loan amount $35,000 Collateral value $60,000 Financial Criteria Must meet ALL criteria for automatic approval 0.58 Loan to value 0.75 or less 670 Minimum credit score 650 or greater 24 Debt to income 40 or less Credit Decision Scorecard Approval:Yes, meets scorecard criteria By:Ima Lender 54

Risk Rating FINPACK s flexible risk rating tool meets the needs of your institution. Risk Rating automatically links to data from client plans and analyses. FINPACK makes risk rating fast and consistent. With Risk Rating, you can: Create your own risk rating model(s) Link to data from the balance sheet, collateral analysis and ratio analysis Include customized external criteria, such as credit score Risk Rating 55

Sample Farm 2017 Risk Rating Risk Rating Model: Balance Sheet(s): Loan Scoring, Agriculture January 1, 2017 - Market Only; January 1, 2016 - Market Only; January 1, 2015 - Market Only; January 1, 2014 - Market Only Earned Net Worth Analysis: 2016,2015,2014,2013 CRITERIA RESULT SCORE x WEIGHT = TOTAL Liquidity Current ratio 2.73 1 2 2 Solvency Debt to asset ratio (mkt) 33.53 3 2 6 Net worth growth % (mkt) 8.9 (Average) 2 2 4 Repayment Capacity Term debt coverage ratio (projected) 2.51 1 3 3 Security Analysis Loan to value 48.7 3 3 9 Overall Rating: 3 -- Good quality, little risk Total Score: 24 OVERALL RATINGS Total Weighted Points From To Rating Recommendation 12.00 15.99 1 Highest quality, very low risk 16.00 22.99 2 High quality, minimal risk 23.00 29.99 3 Good quality, little risk 30.00 36.99 4 Acceptable risk 37.00 43.99 5 Average risk 44.00 50.99 6 Above average risk 51.00 57.99 7 High degree of risk 58.00 64.99 8 Low quality 65.00 72.00 9 Lowest quality - liquidation possible Notes Risk Rating 56

Loan Presentations Loan Presentations The FINPACK Presentation Manager provides a consistent and concise loan presentation format customized to your bank s needs. Users of the FINPACK Presentation Manager can: Combine FINPACK data and your narrative into a loan presentation Base loan presentations on a template that can be customized and standardized for the entire institution Take advantage of powerful and familiar word-processing features Select which data to import from balance sheets, collateral analysis, risk rating, and cash flow plans Automatically update linkages to imported data when source data changes from year to year Attach virtually any document as an appendix, such as a balance sheet, historical financial spreads, or an external document 57

Loan Presentations Credit Presentation Borrower Information Borrower: Jim Sample Address: 1032 Hwy 21 Cattleford, IA 54321 Telephone: 712-555-1234 E-mail: Owned Acres: 175 Acres Acres Operated: 1,156 Acres Date: 02/15/17 Loan Officer: Aggie Lender Date of Last Review: 01/28/2016 Risk Rating Score: 24 (3 -- Good quality, little risk) Tax ID# 123-45-6789 Type of Operation: Crop & Cattle Finishing Customer Since: 1993 Years in Business: 28 Years at Current Location: 28 Nature of Business/Operation Description: Customer raises feeder cattle as well as corn and soybeans. Purpose of Request: Customer is requesting to renew both the cattle and crop operating loans. Customer purchases two groups of cattle during the year. One group in the spring and one in the fall. The cattle are then fed on the farm using homegrown feed. Soybeans and 1/2 or more of the corn crop is sold for cash grain. This request will renew both operating lines of credit. Also, customer is planning to purchase a vertical tillage disc for the operation. Request is to finance 80% of the purchase price. Sources of Repayment: Cattle sales income is the main source of repayment for the cattle operating line of credit. Sales are in the fall and spring. Cash grain sales are the main source of repayment for the crop operating line. A portion of the crop is sold after harvest and the remainder is held for more favorable spring prices. Machinery and real estate payments are made with profits from ongoing business operations. The customer has a history of timely repayment, revolving operating loans, and complying with loan terms. Page 1 58

Present and Proposed Loans Loan Present Balance Proposed Balance Int. Rate Fifth National Bank- 215,576 215,576 7.500 Barn 5thNB-Cattle 364,951 1,200,000 6.375 5thNB-Operating 87,863 500,000 6.000 Fifth National Bank- 102,320 102,320 4.500 Mach. 5thNB-SW 80 Ac 278,450 278,450 5.500 5thNB-New 80 Ac 451,767 451,767 4.950 Disc Loan 0 47,750 4.000 Disc Loan - 47,750 5.968 Rate Formula Term(s) Maturity Date Loan Presentations Collateral Analysis Loan Principal Balance Collateral Chattels 5thNB-Operating 87,863 Prepaid expenses and supplies Discounted Value Prior Liens Net Collateral 102,994-102,994 5thNB-Cattle 364,951 Crop inventory 348,604-348,604 Fifth National Bank- 102,320 Livestock held for 507,024-507,024 Mach. sale Disc Loan 47,750 Machinery and 862,484 7,199 855,285 equipment VT Disc 53,775-53,775 Totals 602,884 1,874,881 7,199 1,867,682 Loan to value 32% Collateral margin 1,264,798 Real Estate Fifth National Bank- 215,576 Land 478,000-478,000 Barn 5thNB-SW 80 Ac 278,450 Buildings and improvements 308,567-308,567 Totals 494,026 786,567 0 786,567 Loan to value 63% Collateral margin 292,541 New 80 5thNB-New 80 Ac 451,767 Land 528,640-528,640 Totals 451,767 528,640 0 528,640 Loan to value 85% Collateral margin 76,873 All Collateral Loan to value 49% Collateral margin 1,634,212 Page 2 59

Loan Presentations UCC Filing Number: 11111111 UCC Filing Date: 01/01/2008 Ratio Analysis Current ratio 2.73 Debt to asset ratio (mkt) 33.53 Debt to equity ratio (mkt) 0.50 Loan to value 48.7 Total assets (mkt) 4,673,874 Total liabilities 1,567,318 Peak AO balance (FINFLO) 793,201 FINAN Rate of return on assets (mkt) 2.1 FINAN Rate of return on equity (mkt) 0.1 FINAN Term debt coverage ratio (accrual) 1.58 Recommendation Strengths: Working Capital, Debt to Asset Ratio, Marketing, Off Farm Income, Proven Performance Weaknesses: Cattle markets and potential affect on business, Vulnerable toincome or expense shocks. Exceptions to Policy: None Conclusion and Recommendation: Jim has been a strong customer for several years. There is little concern about repayment or performance. Recommendation is to approval the renewal. Loan Officer Date Page 3 60

Sample Farm Jan 1, 2013 Jan 1, 2014 Jan 1, 2015 Jan 1, 2016 Jan 1, 2017 Average Market Only Market Only Market Only Market Only Market Only Current Assets Cash and checking 43,578 41,654 103,548 67,756 76,500 66,607 Prepaid expenses and supplies 103,080 109,046 121,955 111,179 114,438 111,940 Hedging accounts 3,613 4,050 27,650 9,150 5,650 10,023 Crop inventory 778,327 610,156 508,792 562,808 536,313 599,279 Livestock held for sale 545,058 617,625 884,520 843,024 780,038 734,053 Total current assets 1,473,655 1,382,531 1,646,465 1,593,917 1,512,939 1,521,901 Loan Presentations Intermediate Assets Machinery and equipment 1,034,389 1,057,185 1,004,325 998,759 1,099,984 1,038,929 Titled vehicles 31,148 28,968 89,519 83,253 112,159 69,010 Total intermediate assets 1,065,537 1,086,153 1,093,845 1,082,012 1,212,143 1,107,938 Long Term Assets Land 597,500 1,258,300 1,258,300 1,258,300 1,258,300 1,126,140 Buildings and improvements 508,379 498,211 538,229 527,465 514,278 517,313 Other long term assets 2,401 2,401 2,401 2,401 2,401 2,401 Total long term assets 1,108,280 1,758,912 1,798,930 1,788,166 1,774,979 1,645,854 Total farm assets 3,647,473 4,227,596 4,539,240 4,464,095 4,500,061 4,275,693 Total personal assets 153,930 153,930 153,930 153,930 173,812 157,906 Total assets 3,801,403 4,381,526 4,693,170 4,618,025 4,673,874 4,433,600 Current Liabillities Accrued interest 28,182 23,862 27,157 33,785 32,658 29,129 Principal due within 12 months on term loans 68,570 94,348 81,594 86,742 69,288 80,108 Current loans 748,315 668,500 527,970 522,871 452,814 584,094 Total current liabilities 845,067 786,710 636,721 643,398 554,760 693,331 Intermediate & Long Term Liabilities Intermediate loans 130,156 97,852 54,979 8,267 84,016 75,054 Long term loans 566,899 1,025,687 986,966 945,793 902,008 885,471 Total farm liabilities 1,542,122 1,910,249 1,678,666 1,597,458 1,540,784 1,653,856 Personal liabilities 24,319 19,380 14,173 8,666 26,534 18,615 Total Liabilities (including deferreds) 1,566,441 1,929,629 1,692,839 1,606,125 1,567,318 1,672,470 Annual Noncurrent Debt Payments Farm P & I payments 120,798 167,890 149,412 149,412 131,334 143,769 Personal P & I payments 6,000 6,000 6,000 6,000 11,352 7,070 Equity Net worth 2,234,961 2,451,896 3,000,331 3,011,901 3,106,556 2,761,129 Net worth change 0 216,935 548,435 11,569 94,655 174,319 Ratio Analysis Current ratio 1.74 1.76 2.59 2.48 2.73 2.26 Current ratio (farm and personal) 1.73 1.74 2.55 2.45 2.69 2.23 Working capital 628,588 595,820 1,009,744 950,519 958,179 828,570 Working capital (farm and personal) 620,999 587,968 1,001,614 942,097 950,780 820,692 Current & interm. % in debt 38 % 36 % 25 % 24 % 23 % 29 % 61

Loan Presentations Jan 1, 2013 Jan 1, 2014 Jan 1, 2015 Jan 1, 2016 Jan 1, 2017 Average Market Only Market Only Market Only Market Only Market Only Total debt to asset ratio 41 % 44 % 36 % 35 % 34 % 38 % Total debt to equity ratio 0.70 0.79 0.56 0.53 0.50 0.62 Loan to value % 60 % 57 % 48 % 47 % 49 % 52 % Collateral margin 1,315,465 1,384,325 1,788,747 1,878,219 1,634,212 1,600,194 Collateral coverage ratio 1.7 % 1.8 % 2.1 % 2.1 % 2.1 % 1.9 % 62

FSA Forms Package FSA Forms The FINPACK FSA Forms Package will generate the required forms to process FSA guaranteed loans, interest assistance, and direct loan applications. The Forms Package links to either the FINFLO monthly cash flow plan or the Annual Plan and automatically extracts the necessary information to fill out the selected application. The resulting forms appear as if they were distributed by FSA. For FSA Interest Assistance, the FSA Forms Package will generate the supporting information for the request. Multiple loans can be selected for consideration so that you can determine which loans qualify for interest assistance and document the results. The following forms are generated: Application of Guarantee Preferred Lender Application for Guarantee Farm Business Plan Worksheets for Direct Loans 63

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This form is available electronically. Form Approved OMB No. 0560-0155 (See Page for Privacy Act and Public Burden Act Statements) FSA-2211 U.S. DEPARTMENT OF AGRICULTURE Position 3 (02-06-17) Farm Service Agency APPLICATION FOR GUARANTEE INSTRUCTIONS TO LENDER: All Loan Applicants will complete Part A. If the Loan Applicant is an entity, they will complete Part B. If the Applicant is an individual, they will complete Part C. All Loan Applicants will complete Parts D, E and F. Lender will complete Parts G through L and attach items in Part P. Co-Applicants and entity members will complete Parts N and O. Note: When both spouses are involved in the operation, and both are applying for the loan, they should be considered a Joint Operation. One spouse completes Part C, the other completes Parts N and O. PART A TYPE OF OPERATION 1. Type of Operation: X Individual Partnership Trust Joint Operation Corporation Cooperative LLC Other (Explain): PART B ENTITY APPLICANT INFORMATION 1. Entity Name 2. Entity Tax ID No. 3. Number of Entity Members FSA Forms 4. Entity Address 5. Entity Headquarters County 6. Entity Telephone No. (Including Area Code) PART C INDIVIDUAL APPLICANT INFORMATION 1. Applicant s Full Legal Name 2. Applicant s 9 Digit Social Security or Tax ID No. 3. Applicant s Birthdate (MM-DD-YYYY) 4. Applicant s Address 5. Residence or Headquarters County 6. Applicant s Telephone No. (Including Area Code) 7. Marital Status: Married Unmarried Divorced Legally Separated Widowed PART D OTHER INFORMATION 1. Have you ever conducted business under any other name(s) YES NO If YES, what name(s)? Voluntary Information for Monitoring Purposes Ethnicity, race, and gender information is requested in order to monitor FSA's compliance with Federal laws prohibiting discrimination against loan applicants and to determine if you qualify for targeted funds. You are not required to furnish this information, but are encouraged to do so. Failure to complete this information may result in you not receiving access to targeted funds for which you may be eligible. Entity applicants should base their answers on the ethnicity, race, and gender of the owners of a majority interest in the entity. 2A. Ethnicity 2B. Race (Choose as many boxes as applicable) 2C. Gender 2D. Veteran Status X Jim Sample 123-45-6789 5/4/1962 1032 Hwy 21 Cattleford, IA 54321 712-555-1234 X Hispanic or Latino Not Hispanic or Latino American Indian or Alaskan Native Black or African American X Native Hawaiian or Other Pacific Islander X Asian White X Male Female X Veteran Non Veteran PART E - ELIGIBILITY INFORMATION (Continued on Page 2) 1. Number of Years Operating a Farm: 28 2. I (including all members, if an entity applicant) have not caused the Farm Service Agency a loss by receiving debt forgiveness through write-down, write-off, compromise, adjustment, reduction, charge-off, payment of a guaranteed loss claim, or bankruptcy. 3. I (including all members, if an entity applicant) am not delinquent on any debt to the United States Government. YES X X NO 65

FSA-2211 PART G - TYPE OF ASSISTANCE REQUESTED 3 7 1 2 (Years) X 464,221 6.00 X PART H FUNDS PURPOSE FSA Forms Crop Inputs PART I - PROPOSED SECURITY 464,221 Crop Production First 650,000 0 650,000 PART J - ENVIRONMENTAL INFORMATION 6. TOTALS: Based on a site visit to the loan applicant's operation and discussion of the operating plan, answer the following: YES NO HEL/WL Compliance: Land Use: Floodplains: Historical and Archaeological Sites: Hazardous Substances: Endangered Species: Environmental Compliance: State Water Quality Standards: PART K REPAYMENT CAPACITY (inflows - outflows) 650 (number of livestock) Beef cattle (type of livestock) 52,106 X X X X X X X X (inflows - outflows) 66

Portfolio Risk Analyst (PRA) You know your borrowers and their individual business risks. But how is your entire portfolio positioned to face the volatility of today s agriculture? PRA creates a database of your borrowers and generates reports that help you see where the stress points are if market conditions change. Stress test individual segments or your entire portfolio Segment your portfolio by farm type, size, performance and leverage position Portfolio Risk Analyst Base stress tests on past or projected financial performance Identify borrowers who contribute most to portfolio risk Generate reports to summarize the financial position and performance of portfolio segments Build customer loyalty by providing them benchmarks of financial performance 67

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Portfolio Risk Analyst (PRA) creates a database of your borrowers and generates reports that help you see where the stress points are if market conditions change. Portfolio Risk Analyst Catherine Young Scott Koufax Eric Banks Alice Ripken Peggy Molitor Brendan Blyleven Janis DiMaggio Hunter Aaron Terri Oliva Rachel Carew Teddy Berra Jeremy Bench Natasha Ryan Glenna Gerhig 69

Portfolio Risk Analyst Financial Summary - Tim Ted Williams Group Farm Median Count 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Gross cash farm income 993,747 1,322,218 18 436,424 581,975 733,293 943,167 1,064,214 1,647,658 1,973,813 2,882,359 6,898,606 8,495,446 Inventory change (income items) 31,463 135,016 18-590,657 43,487 67,354 86,710 117,770 170,105 263,626 341,639 902,919 2,580,471 Gross farm income (accrual) 1,025,210 1,627,036 18 491,936 698,113 863,885 1,059,633 1,155,270 2,079,939 2,175,209 3,694,636 7,038,045 10,337,672 Total cash farm expense 702,921 962,696 18 221,984 375,145 556,746 696,297 870,735 1,142,447 1,690,656 2,265,241 6,706,802 9,001,627 Depreciation 26,672 61,807 18 20,460 26,290 32,526 42,958 58,598 68,238 79,831 103,215 119,937 189,936 Inventory change (expense items) -24,945-14,631 18-365,150-167,076-54,537-32,026-21,156-6,280 1,861 23,208 35,407 141,051 Total farm expense (accrual) 704,648 1,062,195 18 225,706 451,471 609,949 698,707 955,805 1,197,307 1,590,651 2,356,306 6,915,774 8,662,385 Net farm income from operations 320,561 298,292 18-757,596 90,784 153,465 256,136 272,808 333,349 568,856 838,275 1,620,730 2,407,832 Gain or loss from capital sales 0 0 18 0 0 0 0 0 0 0 0 0 11,000 Net farm income 320,561 300,577 18-757,596 90,784 153,465 256,136 278,308 333,349 568,856 838,275 1,620,730 2,407,832 Rate of return on assets (mkt) 19.4 14.8 18 1.9 4.8 8.1 12.2 14.4 16.0 19.5 29.2 40.1 110.2 Rate of return on equity (mkt) 51.1 27.0 18 2.1 6.3 13.5 22.9 25.4 28.6 38.3 51.1 66.4 129.7 Operating profit margin (mkt) 35.0 34.5 18 4.5 10.3 16.7 25.6 32.9 35.8 39.1 47.0 113.6 344.6 Asset turnover rate (mkt) 55.5 45.1 18 19.8 28.6 32.8 35.8 43.1 45.8 54.5 75.3 83.2 90.9 Current ratio - ending (farm only) 2.67 2.43 18 1.31 1.49 1.81 2.10 2.40 2.55 4.15 13.32 29.04 34.18 Working capital - ending (farm only) 97,240 836,591 18 81,028 98,764 294,080 491,175 674,623 913,742 989,403 1,370,197 1,868,941 4,684,928 Working capital to gross revenue 9.5 37.1 18 9.5 11.6 16.0 25.3 34.2 38.2 48.2 61.5 96.1 179.4 Term debt coverage ratio 6.16 4.90 18-10.29 2.10 3.12 4.09 4.40 5.68 6.60 12.94 17.83 35.70 Replacement coverage ratio 6.16 4.33 18-10.29 1.64 2.21 2.52 3.31 5.68 6.40 7.03 8.93 12.35 Operating expense ratio 62.2 62.0 18 108.6 89.6 83.3 72.3 62.2 60.7 58.8 53.7 43.4 34.7 Depreciation expense ratio 2.6 3.4 18 10.6 8.8 6.5 4.9 3.6 3.2 2.5 1.9 1.7 0.3 Interest expense ratio 3.9 1.8 18 4.8 3.7 3.2 2.8 1.9 1.6 0.9 0.7 0.4 0.0 End farm assets (mkt) 1,590,935 3,000,245 18 1,158,190 1,436,412 1,795,499 2,132,904 2,689,216 3,256,207 4,546,019 5,979,308 8,539,353 15,269,817 End farm liabilities 746,538 740,876 18 7,477,010 2,601,826 1,561,646 1,101,101 757,134 713,933 673,929 320,586 117,981 51,759 Total ending assets (mkt) 1,673,446 3,016,009 18 1,297,134 1,532,400 1,836,754 2,354,079 2,767,900 3,433,109 4,687,689 6,211,444 8,539,353 15,382,817 Total ending liabilities 990,017 955,106 18 10,645,801 2,704,836 2,217,511 1,408,237 1,109,202 896,757 755,624 638,247 488,824 226,741 Ending net worth (mkt) 683,430 2,020,752 18 376,938 684,543 1,021,045 1,460,930 1,805,992 2,265,916 3,063,119 4,153,103 5,772,793 7,262,569 Net worth change 289,677 291,446 18 32,571 77,310 160,603 219,717 275,479 387,722 783,835 948,376 1,754,273 5,707,175 Market net worth change (%) 73.6 25.1 18 2.1 8.3 11.8 16.0 22.2 25.8 48.7 69.0 93.0 366.9 Farm debt to asset ratio 62 44 18 77 66 56 49 45 39 31 23 13 5 Total debt to asset ratio 59 44 18 71 64 54 48 45 39 31 23 13 4 Personal income 0 846 18 0 0 0 0 0 2,730 5,642 11,582 22,015 59,237 Family living expense 8,347 70,438 18 0 4,174 33,563 48,452 62,111 76,590 79,660 87,553 99,388 300,000 Income and social security tax 0 2,813 18 0 0 0 0 780 8,931 16,620 22,851 78,699 121,000 Capital purchases 330,975 215,950 18 16,603 42,909 96,898 111,775 194,205 236,037 270,595 311,902 618,282 4,047,527 Capital sales 2,102 2,343 18 0 0 429 1,801 2,230 4,073 8,750 18,366 28,449 60,270 70

Customer Support The FINPACK team is committed to providing world-class service and technical support. Our qualified technical support professionals are prepared to handle your support needs on a case-by-case basis or in an ongoing partnership. We provide timely, reliable service to ensure every customer s business success. Customer Support 71

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FINPACK Training We want you to be able to get up and running quickly. Contact us to learn about: Two-day FINPACK workshops for lenders On-site training for your staff Webinars customized for your institution Online training courses ( http://fptrain.cffm.umn.edu ) Periodic webinars on specific FINPACK topics 73 FINPACK Training

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FINPACK Commercial FINPACK Commercial A better way to review all your credits FINPACK, the industry standard for ag credit analysis software, offers equally powerful commercial analysis. Like our ag analysis, FINPACK s commercial analysis features a comprehensive set of tools designed to save you time and enhance the quality of your commercial credit analysis. Double your power, not your cost When you have both the ag and commercial versions of FINPACK, you ll maximize the efficiency of your entire lending operation. Our pricing structure is designed to be affordable, whether you have one location or more than 100. See for yourself Call 800-234-1111 to set up a webinar and find out how FINPACK can increase efficiency and reduce risk in your lending operation. 75

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About CFFM About CFFM The Center for Farm Financial Management (CFFM) provides educational programs and software tools that are practical, timely, and applicable to realworld situations. First used by lenders in 1980, FINPACK is the original off-the-shelf agricultural credit analysis tool used broadly by banks FINPACK is used by lenders, farmers and educators throughout the United States and Canada CFFM has over 35 years of experience developing farm financial management software Our dedicated staff knows farm financial management and production agriculture We are committed to the development of practical, fast, and accurate farm financial tools We are committed to outstanding software support and customer service Toll-Free: (800) 234-1111 Fax: (612) 625-3105 email: finpack@umn.edu www.finpack.com 77