Farm Credit East, the largest agricultural financial institution in the region with an office in Greenwich, has merged with Farm Credit of Maine.
The groups announced the move after stockholders of both cooperatives overwhelmingly voted for the merger. It took effect Jan. 1.
Farm Credit East has 19 local offices that serve about 900 farm-based clients in Saratoga, Washington, Rensselaer and Albany counties
“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 new legal name of the group is Farm Credit East, ACA.
Hank McPherson, chairman of Farm Credit of Maine’s board, said the move allowed both groups “to 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 said that 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, said 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.
Farm Credit East extended 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.
Farm Credit of Maine extended 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 state-wide credit cooperative is governed by a seven-member board of directors, six of whom are elected by its customer-owners.