Farm Credit East and Farm Credit of Maine are pleased to announce that the stockholders of both Farm Credit cooperatives have overwhelmingly voted to merge the two leading agricultural credit associations.
"Both association boards and management teams are excited about this opportunity to bring together two successful Farm Credit associations. The combined association will benefit from further diversification of its loan portfolio, increased size and impact within the national Farm Credit system," said Andy Gilbert, chairman of the Farm Credit East board of directors. "The expanded pool of talent and experience will enhance member service and allow Farm Credit to continue to deliver long-term value for our customer-owners for generations."
Final approval needs to be given to the merger by the Farm Credit Administration. If all conditions are met, the newly merged association is expected to begin operation on January 1, 2014, under the legal name of Farm Credit East, ACA.
Hank McPherson, chairman of Farm Credit of Maine's board, said, "By merging, Farm Credit East and Farm Credit of Maine combine their services and expertise to achieve the best possible value for agribusinesses across seven northeastern states. The enhanced geographical and industry diversification of the loan portfolio will benefit all customers by further improving the risk-bearing ability of the association."
Gilbert added, "Our customer-owners recognized the advantages of this merger, which is why they overwhelmingly supported it through their positive vote. The merged association will create the opportunity for enhanced earnings, further diversification of the loan portfolio and a stronger capital base. The larger organization will be able to hold a substantially higher amount of large loans currently made and serviced by Farm Credit of Maine, with the enhanced earnings benefiting all customers."
Farm Credit of Maine chief executive officer Raymond J. Nowak added, "From a strategic perspective, this strengthens Farm Credit's ability to remain the most dependable and trusted source of credit for the region's agricultural, commercial fishing and forest products industries. This should also help this customer-owned cooperative continue to grow as these industries evolve and fulfill its rural-based mission in the region."
Bill Lipinski, chief executive officer of Farm Credit East, concluded by saying, "Both ACAs are coming off excellent years and are financially and operationally strong, which is the most opportune time to implement a merger. This is a strategic opportunity to position Farm Credit in the Northeast for future change in order to maintain Northeast agriculture's continued access to global money markets and to compete with large regional banks and other funding institutions."
Farm Credit East will serve agricultural producers, forest product businesses, commercial fishermen and other rural landowners with combined assets of more than $5 billion and a portfolio in excess of 14,000 loans.
A letter was mailed to all voting stockholders notifying them of the results of the merger vote.
Farm Credit East extends more than $4.6 billion in loans and has 19 local offices in its six-state service area. In addition to loans and leases, the organization also offers a full range of agriculturally specific financial services for businesses related to farming, horticulture, forestry and commercial fishing. Farm Credit East is governed by a 15-person board of directors. For more information, go to FarmCreditEast.com
Farm Credit of Maine extends more than $580 million in loans and serves the state of Maine from two regional offices. Loans, leases, appraisal and crop insurance services are provided primarily to family businesses in Maine's agricultural, forest products and commercial fishing industries. The statewide credit cooperative is governed by a seven-member board of directors, six of whom are elected by its customer-owners. For more information, go to FarmCreditMaine.com