AgSouth Farm Credit and Carolina Farm Credit jointly announced recently their intention to pursue a merger. Under the terms of the Letter of Intent (LOI), which was unanimously approved by the Boards of Directors of both Associations, the combined entity would form the largest Ag lending cooperative in the Southeast. Based on the two Associations’ current portfolios, the merged entity would begin with over $4.2 billion in gross loan volume serving more than 24,800 stockholders with more than 475 employees.
The two associations
The two Associations would operate as AgSouth Farm Credit, ACA. The combined Agricultural Credit Association would serve 147 counties in North Carolina, South Carolina and Georgia. The headquarters would be located in Statesville, North Carolina.
“AgSouth Farm Credit is excited to partner with such a strong Association as Carolina Farm Credit” says Frank Ables, AgSouth Farm Credit Chairman of the Board. “The potential merger will provide additional resources, an expanded team of experts in our industry and further financial strength for our stockholders, farmers, rural residents and agribusiness across our shared footprint.”
Vickie Smitherman, Chair of the Carolina Farm Credit Board, added “Both Associations share a similar culture and values that focus on supporting and promoting our members and employees. With ever evolving markets within agriculture and rural America, this merger will ensure our ability to continue to meet our mission to support the needs of farmers and the rural communities we serve.”
Seeking approval
If approved, the combined Association would be led by current Carolina Farm Credit President and CEO, Vance Dalton, who has more than 29 years of Farm Credit leadership experience. AgSouth President and CEO Pat Calhoun, will retire after more than 34 years of Farm Credit service. Mr. Calhoun has successfully led AgSouth Farm Credit for the past 6 years and the Boards appreciate his strong leadership and vision.
They anticipate that further due diligence will confirm that a merger should generate meaningful benefits for the stockholders, agriculture producers and future producers, communities served and employees from both Associations. Both Boards want to ensure the ability to evolve and not only meet but exceed the expectations of those we serve.
With an expanded team there should be more access to specialized lenders available to provide the needs and expertise for our diverse market along with more efficiencies through access to increased resources in technology and capital. These additional strengths should also allow for further support and new opportunities to assist the young, beginning and small farmers in the three states.
No branch office closures or branch staffing changes are anticipated as part of the merger. The Boards are dedicated to ensuring that members continue to receive relationship lending with personalized service from the same trusted experts with local loan decisions and delivery of financial services.
Regulatory approval
As a cooperative, their stockholders will have a say in the final decision. Once due diligence is complete, the respective Boards will vote to approve a definitive merger agreement and seek to obtain regulatory approval. If regulatory approval is obtained, stockholders will receive a merger disclosure package in early 2023 with a complete description of the merger terms and the Board’s reasons for recommending stockholder approval. A stockholder vote would occur afterwards, and, if approved, the merger would become effective on April 1, 2023.
