Wisconsin Ag Connection - Badgerland, AgStar & 1st Farm Credit Boards Okay Merger Idea

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Badgerland, AgStar & 1st Farm Credit Boards Okay Merger Idea
Wisconsin Ag Connection - 09/09/2016

The region's three main Farm Credit institutions are another step closer to becoming one. Badgerland Financial, AgStar Financial Services and 1st Farm Credit Services announced that each of their boards of directors voted unanimously to recommend a merger of the three associations to their respective members and stockholders.

Earlier this year, the groups said they were in the process of evaluating a potential collaboration; and that if such a merger were to occur, the three cooperatives combined would create the nation's third largest Farm Credit group with about $17 billion in assets.

"To effectively work through this process, we all came to the discussions with the understanding that we weren't looking for one organization to carry their current strategy into the proposed merger, but rather, evaluate how we take the strengths of the three associations and build on them to offer value to our members and stockholders," said Badgerland CEO Diane Cole.

Cole says the next step in the process is to get approval for a proposed merger by AgriBank, which is the funding bank for the three associations, as well as a regulatory review and approval by the Farm Credit Administration. Both are scheduled to happen during the third and fourth quarters of 2016.

A joint release on Thursday concluded that Rod Hebrink of Ag Star would lead the merged association. The new company would be headquartered in Sun Prairie and would be governed by 14 member-elected directors and three outside appointed directors.

Stockholders are expected to receive a disclosure packet with the specific information about the proposed merger, and each association plans to have informational meetings to answer questions in the first quarter of next year.

Badgerland Financial, based in Prairie Du Sac, serves 33 southern Wisconsin counties with 17 locations. The co-op's loan volume between its more than 16,000 members is about $3.8 billion. AgStar Financial Services, headquartered in Mankato, Minnesota, has 13 branch offices in 69 counties in Minnesota and northwestern Wisconsin, while the Normal, Illinois-based 1st Farm Credit covers 42 counties in northern Illinois at 16 individual sites.

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