"The Power of a Cooperative": Round two with President/CEO, Kyle Yancey

[00:00:08.250] - Chris Griffin
Welcome to Back to Your Roots, a podcast that provides insight into all things farming, financing and farm life, guiding you back to your roots.

[00:00:17.480] - Chris Griffin
Thanks for joining us today. I'm your host, Chris Griffin.

[00:00:20.030] - Jordan Turnage
Hey, guys.

[00:00:20.450] - Jordan Turnage
And I'm Jordan Turnage.

[00:00:21.750] - Jordan Turnage
And today we have President and CEO, Kyle Yancey back for a second time. He just couldn't resist. He had to come back in the studio. And I guess you had so much fun the first time. You wanted to come back and drop some more knowledge, I guess.

[00:00:32.940] - Kyle Yancey
Actually, no. I was supposed to be doing a national interview today and they canceled, so.

[00:00:36.510] - Chris Griffin
I decided to second fiddle. What's the deal?

[00:00:39.840] - Jordan Turnage
You penciled us in.

[00:00:40.750] - Kyle Yancey
That's always thanks a lot. Thanks for humbling us and putting us back in our place. My wife would be very pleased with that because she has to keep me grounded.

[00:00:49.800] - Jordan Turnage
I probably wouldn't my wife's first pick.

[00:00:51.380] - Chris Griffin
Either, but here we are. There you go.

[00:00:53.810] - Kyle Yancey
The question is always, was your wife your first pick?

[00:00:57.080] - Jordan Turnage
That's a whole other podcast.

[00:00:58.680] - Chris Griffin
Absolutely, 100%.

[00:01:01.570] - Jordan Turnage
And we only got 30 minutes to pack that in.

[00:01:05.510] - Kyle Yancey
I bet Wendy's eyebrows are up right now.

[00:01:08.870] - Jordan Turnage
I'll make sure when we're listening to this, I'll tell her to hit the 32nd skip forward part. We were just talking about something that was probably I love you, honey. It's great.

[00:01:17.430] - Chris Griffin
Wow. We got off track really fast.

[00:01:19.770] - Jordan Turnage
So we've got Kyle in here kind of like The Godfather part three. Once I get him out, they try to drag me back in. But we've got some loan information last go around. Got your background, some information on your history, your experience with us when we were bursting here with the first episode. Today we're going to talk a little more in depth about River Valley AgCredit as a whole. And let's start discussing that by making some differences between what River Valley AgCredit is as an ag lending system versus your usual commercial lending bank.

[00:01:51.010] - Kyle Yancey
That's a podcast in itself. Operationally, River Valley AgCredit is not a depository. We were never set up that way. When the Farm Credit System was set up, farmers could go anywhere and make a deposit. They couldn't go anywhere and get a loan. So the Farm Credit System is set up to provide funding through loans for agriculture. And that's our one and only mission. Now we've expanded it to include Rural America. So not necessarily 100% producing farmer. Other types of people or other types of borrowers can get loans, which we'll go into later. But that is what we do. We make loans. Now, structurally, we're cooperative. We're not owned by investors. If you get a loan at River Valley, you purchase stock in our Association and that allows you a vote to elect a director that governs the Association. And if you have any issues with the Association, you have a local director that you can go talk to them about or you can talk to me, you can talk to anybody in management. But also with that setup, our board serves the mission through providing a true cooperative structure. You can look at it and say the more money River Valley makes, the more we give back to the people that own us.

[00:03:17.180] - Chris Griffin
And what do you call that...?

[00:03:18.530] - Kyle Yancey
We give that patronage refund. We make money several ways. We do it through loans, interest income, and fees that we charge on loans. We do it through the sale of crop insurance, through credit life insurance, life insurance. Every bit of that profit rolls up into our net income, which is then given back out to the borrowers every year.

[00:03:41.800] - Chris Griffin
You briefly mentioned it, but obviously, I think lot of people want to know, do you have to be a farmer to get a loan from River Valley? And I think this really flows into I do the home and the ag side, and I get that a lot, even on the home side, hey, I'm not a farmer. Can I get a home loan from, you know, hey, I need this. Do I have to be a know, can you kind of go into that a little bit and what our guidelines are for that?

[00:04:02.000] - Chris Griffin
Yeah, scope and eligibility is what they call that. And that's one of the hardest topics to teach a new employee if you're a full-time farmer. So 100% of your income comes from farming. You can get a loan for anything you want, whether that be a farm, a condo in Florida, a hospital in Georgia. You can when you lose the full time farmer classification, so your income is split between farm income and w two, it becomes more purpose driven. So if it is a farm purpose, for example, a farm real estate loan, a tractor loan and get whatever you want, but when you lose that farm purpose so let's use the condo in Florida, for example, which is a stretch example for anybody that's listening. But we do improve, but then it becomes on. Okay, how much AG assets do you have? And that determines what you are able or how much you are able to borrow for non agricultural purposes. We also do home loans. You do not have to have any farm income. And we also do home loans that are sold off on the secondary mortgage market and we can do those.

[00:05:15.300] - Speaker 3
So I would say that if you're listening to this podcast, there is some way for us to make you alone in some way, shape or form. And a lot of people don't know.

[00:05:24.010] - Jordan Turnage
That, especially on the home side. Just from that's what my background was in. I have a lot of realtors, I have a lot of people I work with that they just automatically assume, hey, it's got to be on a large amount of acreage, or it has to be in a rural area. And that's not really the case. There's ways we can do that and I had this conversation with a guy just recently actually about the commercial side and I explained it that way. That circle and that window gets a little bit narrower and narrower when you're not a full time farmer, the further.

[00:05:54.630] - Speaker 3
You get away from the farm, the less types of loans we can make you. But if you're not a full time farmer, you're probably going to be normal w two consumer. You're not going to be wanting a condo in Florida, you're going to be wanting a house. We got that all day long. So it's always important to check. If you hear us, you see us. You want to know more about us, just ask loan Officer hey, this is what I'm wanting to buy, can you do it?

[00:06:21.660] - Jordan Turnage
Don't assume we can't do it. Call us first. We get phone calls all I'd rather somebody call me and say, hey, can you do this and let me see if I can do it. I'd much rather them do that than just be like well I just didn't think you could do it, right? And I'll be like, I could have absolutely 100% done that's definitely something.

[00:06:38.260] - Kyle Yancey
I think that hoop is pretty wide.

[00:06:40.370] - Jordan Turnage
Yeah, that scope and eligibility is a big deal but there's ways to do things kind of piggybacking off of that.

[00:06:46.820] - Kyle Yancey
So when we were talking about banks and lending, we have our own deposits that we take to our other banks but we are not a deposit based lending system. We do have kind of what's called the Vax system and I was wanting to see if we can kind of expand on that and kind of talk about that as another option outside of just straight up lending that we do here.

[00:07:12.810] - Kyle Yancey
Valley that's full time farmer driven and what it is, it's a reverse disbursement account. So you would have an operating loan set up and obviously you wouldn't be needing that operating money because you're cash flush. We have the option for the farmer to bring in up to the level of that operating loans note and deposit that money through. We call it a VACP Voluntary Advanced Conditional Payment is...

[00:07:40.070] - Jordan Turnage
The p is silent.

[00:07:42.550] - Kyle Yancey
Yeah, I know and that pays interest. I would consider it more like a liquid CD. And so you deposit I know people that deposit a million dollars in it and something happens. I want to use $500,000 of it. Come get $500,000 off of it. We'd like for you to draw off of it and then you make great crop year and you want to deposit some more money. And our rate is higher than the CD at the bank. Bring it on back and we'll pay it just like the bank will. So it's our way of creating a deposit account but we don't have checkings, we don't have savings and we never will. That will never happen.

[00:08:29.090] - Chris Griffin
Speaking of that, we talked about loans and I know this is a bit of a loaded question because you've got different types of loans and different approval processes and home and ag, but how long does it take to typically get a loan here kind of close from start to finish and what does that process look like? And like I said, I know it's different on the ag side. The home-side approval process might be a little bit different, but what does that kind of look like in general?

[00:08:52.830] - Kyle Yancey
Well, I don't know if you guys have ever done it, but one time I was a loan officer and I had a guy come in wanting a loan on a hay tedder and he sat down at my desk and he had the invoice and he had the purchase price. And I said, well, when do you need it by? He said, well, my truck's running, I don't really want to use a lot of gas. Swear to God, this happened in 15 minutes. I had him his tedder loan and he was out the door. Now, typically you go from a farm real estate loan, there's third parties involved that we just simply have to wait on. So we've got an attorney that's going to do a 30-year title search and we've got to get an appraisal on it. And once those are done, you're looking at about a 30 to 45-day closing time on those. Any other loan provided it's just not something where you got to get creative. We can have those done in... Ya'll would kill me to say this, but I would say most of them could be done in a day,

[00:10:01.340] - Jordan Turnage
I feel so.

[00:10:03.330] - Jordan Turnage
The more information you get from the borrower on the get go, the faster we can get our part done right.

[00:10:10.710] - Kyle Yancey
There's nothing keeping it back from being a day other than maybe the loan officer has got twelve of them on his desk.

[00:10:15.820] - Chris Griffin
That's the only time it gets backlogged. I know we have different even from we've got AgScore which is a little bit different approval process, then we've got full analysis which is a little bit different. And I know for AgScore, I mean a lot of times if that loan amount is 350 or less, I get a tax return from last year, a current pay stub and a driver's license and we're good to go. We've been together. And then if you can get the appraisal and title work ordered, you can get it done pretty quick. We just did a home loan not too long ago, just actually closed this week, got it done in like 25 days and that's with appraisal and title work. So our in-house home loans, they'll move pretty quick too. So if you can get on the ball and get the stuff to the lender, it's all about that borrower too. I mean that borrower has got to get you what they need and get a little urgency in them too, and quicker they get it. And the quicker you can get it submitted, we're good to go.

[00:11:05.050] - Chris Griffin
So if worst case scenario, me and the Chief Credit Officer, Kip Ellington, our two signatures are good for almost $12 million dollars. So I've had several loan officers that may not have the complete financial packet, but the borrower has done business with us here for years. A phone call away and that loan's approved and we're on to the next step. And that's another thing that's unique about River Valley AgCredit is; one as the approval chain goes up the workchart, we know more borrowers. I know borrowers all across our territory that you've never even met. And you'd be surprised what you look at a borrower's loan one time and you can almost remember it for the rest of your life. So if so and so down in Southeast Tennessee needs a quick approval, they tell me the name and immediately my brain downloads the last loan package I see and provided there's been no major hiccups with them. Yeah, go for it.

[00:12:09.140] - Kyle Yancey
And that's unique.

[00:12:10.000] - Kyle Yancey
I mean, I don't think you'll find that in too many places and we don't do it recklessly. No, we hardly ever miss.

[00:12:21.860] - Chris Griffin
Yeah, I mean, I still feel like we're pretty conservative. But you were talking about knowing that I've had a few of them over the last, this year actually, that had do a lot of business with us and I knew they were approved. They were going to be approved. You guys were going to approve them. We just needed to get some updated documents, but they were good to go.

[00:12:41.160] - Kyle Yancey
It's always a good feeling to go to an auction and you kind of know who's bought it and you generally know that I've known this person for a long time. You can walk up and say, hey, I'll make you a loan. They're like, well, don't, I got to submit an application? You do have to submit an application, but I'm still going to make you a loan. And they're like, oh, that's pretty neat.

[00:13:01.450] - Chris Griffin
That's funny.

[00:13:03.130] - Jordan Turnage
That just goes back with the experience.

[00:13:05.070] - Chris Griffin
But that's something I really love here because it's a lot of local decisions. It's local. We're building those relationships with people so much different than where I was before. And that's a good feeling to have too. You also feel like you're doing it responsibly. We've talked about that. We don't want people to have buyers remorse, but at the same time, you know that person well enough on a personal level and on a business level that you know, without even moving forward, you know, they're rock solid and ready.

[00:13:33.250] - Kyle Yancey
You would be surprised what a River Valley Loan Officer knows in terms of just market conditions. So you got somebody that's wanting to they're bidding like crazy in auction. And if the Farm Credit loan officer is there, I would bet a significant amount of money he can get within $2,000 of the purchase price. Because we look at so many comparables and you can look over at the guy bidding if it's one of your customers and say it's not going to price for that you're about to hit the peak of the market or you've got room to keep biding if you want to go, you don't find that many places. I once went to an equipment liquidation auction. I was brand new and I was watching some of the tenured ag loan officers. We would walk around and follow the auction truck and those guys would get within $100 of what this equipment was going to sell for and I was just amazed by it. But then the longer I worked here, I'd look at balance sheets that might have 500 pieces of equipment on it, and it just repetition, repetition, repetition.

[00:14:37.830] - Chris Griffin
You just get to know what those.

[00:14:39.520] - Kyle Yancey
On my iPad right now, I'm watching a farm equipment auction just to keep myself abreast of what we do. I look at the comparable sales and appraisals that I review and we have appraisers that send us averages every year of what woodland sell for versus what tillable land sells for. And that's the fun part about being a Farm Credit loan officer is you learn so much about the customer, you learn so much about our area and you can use that knowledge to help the customer make a very quick decision.

[00:15:13.490] - Jordan Turnage
Having those tools in the tool bag on the draw. Because when you go out and see folks or if you're eating lunch at the mom-pop joint down there and somebody comes up to you and asks you a question about, hey, what's land going for right now, they know that. They know you and we know.

[00:15:28.090] - Jordan Turnage
So we've built that reputation.

[00:15:31.930] - Chris Griffin
Since I've been here. One thing I love, and I love having that opportunity is people coming in. Let's say there's an auction. And I mean auctions are risky because you make that bid, you got to know you're going to get that loan. And I've had some people come in and get pre qualified and say, hey, yeah, you're good to go up to this amount. I've looked at everything and they're really trusting you. And I like that responsibility. But I also feel like you've built that rapport with that customer enough that they trust you. Like they're saying, okay, Chris is telling me that I can do this, I can do for, and I can go to bed and know that put my head on the pillow at night, know that I did the right thing. But that's been another thing here that is really nice, like I said, it's still that relationship building. It's just that relationship business. I think at the end of the day, I mean.

[00:16:21.630] - Speaker 3
I had an auction I went to once on a hunting farm and I had a customer. I guess back then you would call it pre-qualification but we didn't pre-qual anybody. We were just like, yeah, but he was pretty payment-sensitive, so every time he'd bid, I'd have to take my financial calculator out and show him the payment.

[00:16:40.580] - Chris Griffin
The Oh HP, calculator.

[00:16:42.120] - Kyle Yancey
If he liked what he saw, he bid again. He didn't like what he saw. He eventually liked what he saw, but he was bidding based on what his payment amount was going to be.

[00:16:54.050] - Chris Griffin
I mean, it could be off by $5 we aren't doing it.

[00:16:57.250] - Kyle Yancey
But everyone sitting next to this guy just typing this in, and I'd show it to him, he'd hit it another lick.

[00:17:01.970] - Chris Griffin
Yeah.

[00:17:02.500] - Jordan Turnage
I always try to find a corner away from everybody, but I notice people kind of watch me because I usually have my two cell phones out, one to keep up with who's bidding on what, and then where the bid is. And then my other one's got the HP calculator on it. So I'm figuring out how much is where everything's sitting right now, because I know folks will come over there and look at me and I kind of show them like, well, this is where it's sitting right now. This is where you would need to be to get this loan if we're going to go pull the trigger on this.

[00:17:25.780] - Kyle Yancey
I was so scared. Everybody thought, well, Kyle's up there holding him back. He's got the reins on him, but it was the opposite way around. You're good?

[00:17:33.250] - Chris Griffin
You're one dollars. One dollars.

[00:17:36.530] - Kyle Yancey
He wasn't shy about it at all. We were back in a pickup truck and everybody was watching and waiting.

[00:17:41.190] - Chris Griffin
That's funny.

[00:17:42.010] - Jordan Turnage
When you know, you know.

[00:17:43.050] - Jordan Turnage
So let's address the ugly elephant that's been plaguing us this year, and that is rates. Well, the question I was typed up were asked that people think that banks control the rate, but that's not necessarily the case. And can we kind of just kind of go through how rates work in general?

[00:18:04.570] - Kyle Yancey
Well, I can speak to the Farm Credit System. You're on CNBC and you see the Fed met, and they're going to raise the funds rate a quarter basis point. That's your prime interest rate. That's what most of your lines of credits are tied to. Federal Reserve controls that rate. So when they raise it a quarter, if you've got an operating loan within a matter of days, you're going to see the rate go up a quarter. When it comes to the products that we have, like a real estate loan, an equipment loan, a lot of people are going to say, well, the ten year treasury is up. That's what you go off of. That's not the case. We sell Farm Credit bonds through the Farm Credit Funding Corp. That generates a cost of funds that is then transferred down to our bank, our funding bank, which would be AgFirst, and then they produce a rate sheet every day that says, well, this is what one-year money is. This is what two-year money is. This is what three-year money is. And then this is where I control the rates. I give the loan officers leeway to charge a spread over that cost of funds.

[00:19:15.550] - Kyle Yancey
And that spread has to cover light bills. It has to cover capitalization of the Association. Think of capital as a protection, a savings account, in case something went bad, and then that's the rate the customer sees. So let's just say, for example, let's just say rates went to 20% on a farm loan. River Valley doesn't make any more money if they're 20% or they're 7%. That's not how we work.

[00:19:46.730] - Chris Griffin
It's not us gouging.

[00:19:48.210] - Kyle Yancey
Right, yeah. We've charged the same spread for as long as I've been here. We've been blessed enough that that has adequately capitalized our Association and that it has adequately covered our operating expenses. When the rates first shot up, I actually pulled roughly 60 basis points to you guys off of that spread just to avoid some rate shock out in the market. And we were able to sustain that and still have good profits to give back out in patronage. It's like, well, why don't you just charge no spread? Well, you still got to pay bills. You got to pay people. So there's always a cost to doing money. Actually, even when we talk about capitalization, the best loan in the world cost money because you got to set aside a certain amount in your allowance just in case that loan went bad.

[00:20:40.670] - Kyle Yancey
Now, the better the credit, the better the security, the less you set aside.

[00:20:44.910] - Jordan Turnage
Less Allowance.

[00:20:45.320] - Kyle Yancey
But as that loan suffers deterioration, you got to take more out. You do that on a quarterly basis, so that's where the spread pays for that kind of stuff. All of our rates outside of our operating loans are fixed. They're consistent. I don't know how many times I'll kind of hit the competition. You get customer walks in, they're going to buy a farm at a bank. All they offer is an arm. But then they're talking to their buddy who went the same bank, and they suddenly pulled a 20-year fixed rate out of their hat. We're not like that. No, just consistent. Farmer John walks in, he's going to get a 30-year rate priced at this, and Farmer Joe walks in same risk profile is going to get the exact same 30-year rate. Yes, sir. And that's always going to be like that. It's consistent. We've got to respond to competition. Sometimes competition will take us below what our intended spread over the DNR is, and we have to match it. Worst case scenario, we have to blend all of our other loans in to meet income goals, but generally, we have a consistent rate sheet every day, and the loan officers go out with a consistent pricing philosophy, and it's served us well over the years.

[00:21:59.160] - Jordan Turnage
Yeah.

[00:21:59.700] - Chris Griffin
So question on that, because coming from my previous place in more secondary, all secondary, tell us how I know the way I've been explained is our rates are priced a little bit differently than secondary. And then the way they shoot up and come down, they come down quicker when rates start dropping will actually outpace kind of your typical bank. So can you explain that a little bit?

[00:22:21.550] - Kyle Yancey
Well, it's always been my experience when rates are going up, it feels like the Farm Credit System is like the first to the top and then they level off for a long time and you stay in competition and then market turns, rates start falling down and it feels like Farm Credit is the first to the bottom. That's when lending is fun because we have the opportunity to reprice. So borrower walks in, they're tickled to death with a seven-and-a-half percent rate, monthly payment is X, fixed for 30 years. And then their loan officer calls and says, hey, you know, I can lower your rate to six and a half percent for free and you don't have to do anything for free, but just sign three pieces of paper. Actually don't have to sign anymore, they're DocuSigned. That's just less of a monthly payment.

[00:23:10.670] - Chris Griffin
Such a big differentiating factor for us. When I'm talking to a borrower, even if I'm looking at, let's say on the home loan side, if I'm looking at a secondary product with our in house, if there's a 30 basis point difference, sometimes they will go with that 30 basis point higher spread with us.

[00:23:29.620] - Kyle Yancey
Right.

[00:23:30.100] - Chris Griffin
Just because you got to think, if you go to refinance on a home loan, you almost have to wait on the secondary market for it to go down a full percent because you're going to have to pay for a new appraisal, new title, where you're going to pay $3,000 in closing costs. It's not worth that until you get 1% lower. You can do that a million times.

[00:23:46.200] - Kyle Yancey
There's a segment of borrowers out there that will take an in-house home loan just to have somebody to look in the eye when they have absolutely.

[00:23:53.160] - Jordan Turnage
People will call me and say, I don't want to do secondary, right? I'm like, well, the rate is a little bit lower. I don't care.

[00:23:58.270] - Kyle Yancey
I want to be able to gripe to you.

[00:24:00.010] - Chris Griffin
I want to be able to call you and find you and bang on your desk if I need to. And I'm like, that's fine, I can handle it. I've got broad shoulders, so that's fine. So what do you think moving forward from what you've heard in the next year, year and a half, what do you see as far as rates rising, decreasing? What's the hope there?

[00:24:18.950] - Jordan Turnage
Rub that crystal ball.

[00:24:21.290] - Chris Griffin
What's your professional outlook?

[00:24:22.710] - Jordan Turnage
Leave it in the office.

[00:24:24.290] - Kyle Yancey
I think the Fed would love to raise the fund rate another quarter by the end of the year. I think they were given a little bit of pause the last two weeks with the ten year treasury being at record highs. My crystal ball says they still got one more move in, and then they're going to hold. They're really shooting for what they call an economic soft landing. And they're still shooting for an economic soft landing. If you look at their predictions for next year, I think they're over half are predicting that they might make a rate adjustment down towards the last part of 2024. I think every day goes by that gets pushed back and pushed back and pushed back. If you're listening to the podcast, you're sitting out hoping for a 30-year 2.9% home loan. I think you're going to be sitting there for a while.

[00:25:14.840] - Chris Griffin
Yeah. What I tell my borrowers when I say it, because they'll say, especially first time home buyers that rolled into the market in 2020, I'm like, okay, here's the deal. They were at 2.99%, but life was not normal, right? You couldn't send your kid to school. You had to work from home. I said, you can't have it both ways. Right now is 7 or 8%. If you look at it over 30, 40 year average, it's really not that bad, right? If you're comparing it to two years ago, yeah, it's awful. Right? But I think when it got that low, there's a reason why it got that low. Right? Right. I think especially borrowers, younger borrowers who maybe haven't been through when rates were 10 or 11 percent. I mean, my dad was a realtor in the he's told me about used to tell me all the time about what horror stories 15, 16, 18% on home loans. That's the reason your home contract actually has a spot where you put your interest rate, right? Because they literally, people would sign a contract and they would go in the next day to get their home loan approved, and it would have gone to like, let's say 12% to 15% within a matter of, like a day or two.

[00:26:26.060] - Chris Griffin
And it was there to protect them out of that, I think those younger borrowers, they just got to realize, yeah, it is seven and a half percent. It's really not that bad. When you look over the history of interest rates.

[00:26:40.130] - Kyle Yancey
The COVID it made that two and a half or 2.9 make 5% just sound ungodly high.

[00:26:48.000] - Chris Griffin
Yeah.

[00:26:48.610] - Kyle Yancey
And that's just average.

[00:26:52.130] - Chris Griffin
When I sold real estate, when I was a real estate agent, 16, 17. If I had a borrower come in and say, hey, I got 5% at X, I was like, man, that's a great rate, right? That's awesome. Most time I would consider I'm like, they must be pretty high credit worthiness and all these different things. That was not uncommon at all.

[00:27:10.800] - Jordan Turnage
We're not too far off from rates. I would say ten and 15 years ago, because looking at stuff like when I had to look up my portfolio and learn about borrowers, I would go back and look at their former loan docs and see the interest rates that are on. There. We're not far off. This isn't a shock to folks, this isn't something new. It's just we went from a 4% operating note to nine and a half percent now in a year and a half time. But like you said, those are outside circumstances that we can't completely control. But we have so many options at our fingertips here to help mitigate those risk and those problems. And that's when it goes back to us knowing our borrowers. And a lot of these guys, we stood with them when interest rates were double digits on stuff. And I think us just proving that we're going to stand with you good and bad, has proven our merit. Well, I said, well, the loan officers before us and that's our duty as loan officers now to help keep that going. And having somebody steadfast at the helm like Kyle to lead us in that direction, that's what makes me happy.

[00:28:27.520] - Kyle Yancey
If I'm in the market to buy a farm or a home, I'm not looking at the rate. I'm looking at what's my monthly payment, what's my range of monthly payments that I can afford. And you go to a loan officer and say, okay, reverse the calculation in your HP12C to where it tells me what the value of the loan is going to be based on the payment that I have and your rate currently. So you say, well, I want to spend $1,000 a month. That's maximum. You go sit down with either one of you guys, you are going to pull up the rate sheet today. You're going to enter in the term and you're going to say, well, if you're going to spend $1,000 a month over 30 years at X rate, this is the loan amount that you need to be looking forward to. So then you go hunt for property in that price range. That's how I kind of looked at things. And I think that's what people will begin to do again. There's still that segment of the market that's wanting the $800,000 house on a really low rate that made the monthly payment.

[00:29:30.040] - Kyle Yancey
Like they bought a $300,000.

[00:29:31.370] - Chris Griffin
Well, that's what I was getting a long way from that now.

[00:29:34.230] - Chris Griffin
That's where, when I was doing home loans, when I started doing home lending, I started right in the middle of 2020. And you look back and I think about people that I approved at two and a half 3% and they were buying at that time, they were buying what I could get them approved for at that bank. They were buying at their top, right. And so I think one thing and realtors have a different perspective on this. I've read a lot of different articles. I mean, my thing is that I think a lot of those people, it's going to be very difficult. They're not going to find that same house if they want to move, unless they're forced to move. But I think they're probably in there for a little bit. They bought their dream home at a payment that they can afford because the rates were low, which is great. But like I said, I think all those rates, especially with COVID it came with a grain of salt. I mean, yeah, it's two and a half percent, but a lot of craziness going on in the world.

[00:30:31.610] - Chris Griffin
Nobody knew really what was going on. Now things are a little more leveled off, but now things with recession and different things, they're saying recession, but I think, like you said, I think they'll probably get back more on payment, what that actually looks like on their monthly budget and can they feel comfortable and afford that? And I think that's the most important thing for a borrower.

[00:30:53.180] - Jordan Turnage
Well, I don't want to cut it off, because last time I said, that's it, you kind of kind of was like, really? That's it?

[00:31:00.880] - Chris Griffin
Yeah, you're sad.

[00:31:02.850] - Jordan Turnage
But with your permission, is it okay if we call this good till the next go around?

[00:31:08.310] - Kyle Yancey
I guess.

[00:31:08.920] - Kyle Yancey
Well, Kyle, thank you so much for coming in. We really appreciate your time. We appreciate all you do for us and being that person, that face, and that stopgap for us. We really appreciate all you do for us.

[00:31:17.510] - Chris Griffin
Yeah. Thanks, Kyle. Thanks for taking time out of your day to come talk to us and look forward to maybe getting you back in here again.

[00:31:23.850] - Jordan Turnage
As always, guys and gals, thank you so much for listening to the podcast. Make sure to listen to us next time. We've got Mrs. Jennifer Beck Walker coming in. She's the executive director of the Mayfield Graves County Tourism Board, and we're going to be talking about things like the Bale Trail and Agri-tourism as a whole.

[00:31:38.560] - Chris Griffin
Thanks for tuning in to Back to Your Roots, where we dish the dirt on all things ag. Be sure to never miss an episode by following and subscribing while there. Leave us a review about what you want to hear next. Stay in the know between episodes by following us on Facebook, Instagram, Twitter, LinkedIn, and TikTok. For more resources, go to our website at rivervalleyagcredit.com.