SANTA ROSA – American AgCredit, the farm lending giant headquartered in Santa Rosa, announced today that it has merged with Colorado-based Farm Credit Services of the Mountain Plains.
It is the fifth merger for the lending giant since 2000, resulting in $5.58 billion in assets and making American AgCredit the sixth-largest Farm Credit cooperative in the United States.
Cost reductions between $1.7 and $2.0 million a year are expected after the merger.
“It is our fundamental goal to ensure that agricultural financing remains available to agricultural producers who need financing in these challenging times. In order to do this, the association must remain a safe, well-diversified organization that can meet the needs of a constantly changing marketplace,” said American AgCredit CEO Ron Carli, in a release.
The merger increases American AgCredit’s capital base, stands to reduce costs by eliminating redundant positions and diversifies the lender’s assets, according to the release.
The acquisition of assets from Farm Credit Services will dilute what American AgCredit said was a significant concentration of exposure to the wine and dairy industries, which will mitigate the risk of an underperforming year in those industries. Small market/miscellaneous commodities now represent the largest proportion of assets, 21 percent, followed by wine industry lending at 16 percent.
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