A3O-Lancasler Farming, Saturday, April 15, 2000
Keystone Farm Credit Members Vote On Proposed Merger
ANDY ANDREWS
Lancaster Farming Staff
NEW HOLLAND (Lancaster
Co.) Lending is a very com
petitive business, especially in
this area, said J. Robert Frazee,
president and CEO of the pro
posed Mid Atlantic Farm Credit
Association, and “will be more
competitive later.”
Frazee spoke Monday evening
to about 550 customers and
Credit site in Westminster, Md.
This week, in meetings con
ducted in New Holland and
Fogclsville, stockholders voted
on the proposed merger.
The other ACAs Central
Maryland Farm Credit, Chesa
peake Farm Credit, Delaware
arm Credit, and Marva Farm
Credit also have to vote to
OK the merger.
The results of the voting to
friends of the proposed agricul
ture credit association (ACA).
He spoke during the annual
stockholder meeting of the Key
stone Farm Credit, ACA credit
cooperative at Yoder’s Restau
rant in New Holland.
Keystone is one of five Farm
Credit associations proposed to
consolidate into one centrally lo
cated ACA, headquartered at
the Central Maryland Farm
determine the go-ahead for the
merger won’t be available until
mid-month, according to Walter
Hopkins, board chairman of the
proposed Mid Atlantic Associa
tion.
The officers outlined the rea
sons for the merger, which
would create a Farm Credit with
more than $1 billion in assets.
The reasons outlined by Hop
kins would create a “larger and
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stronger institution,” he said.
The consolidation would im
prove management, eliminate
duplicate services, provide more
efficient use of personnel and
equipment, provide improved
customer service, and stream
line operations. That allows the
association to become more
competitive with interest rates
and other member services, ac
cording to the board members.
“A commitment to the family
and the family farm has made us
great and will continue to do
so,” Hopkins said.
Frazee, 44, CEO of the pro
posed consolidation, is from
Garrett County, Maryland with
17 years of Farm Credit and
other banking experience.
Frazee has a bachelor’s degree
in agriculture from the Univer
sity of Maryland.
In a video of the proposed
consolidation, poultry opera
tions make up the greater por
tion of the bank’s portfolio (at 21
percent). The consolidation
spreads the risks over a diversi
fied array of ag production en
terprises.
The board, which has consid
ered consolidation since 1998,
recognized the need to stream
line the organizations to provide
a competitive edge over other ag
lending institutions.
During a question-and
answer session, Hopkins noted
the possibility of improved inter
est rates. “Will interest rates
come down?” said Hopkins.
“With greater efficiency and
lower operating costs, they
should.”
Local meetings will probably
continue even with the consoli-
ENB
Says
Yes!
LENDER
dation, Hopkins noted. Though
47 serve on the board for three
year terms, the proposed Mid A
tlantic association would be
composed of six directors from
Keystone, five from Central
Maryland, four from Delaware,
four from the Chesapeake, and
three from Marva Farm Credit.
No branches are proposed to
be closed because of the consoli
dation, Hopkins noted. No
merging of operations has been
discussed by the board.
Keystone Farm Credit itself
had another successful year in
1999, according to Frazee. The
previous Keystone chief opera
ting officer, Phil Kimmel, has
taken early retirement, noted
Frazee.
Frazee said the Keystone loan
portfolio is “healthy” and credit
stable despite the dry weather
and milk price volatility.
As outlined in the Keystone
annual report, net income for
the year ended Dec. 31,1999, to
taled $6.07 million, a decrease of
$459,000 or 7.03 percent, as
compared to $6.5 million for the
same period of 1998. Interest
income for the year ended Dec.
31, 1999, was $25.56 million, a
decrease of $3.9 million or 13.27
percent as compared to $29.47
million for the same period of
1998.
According to the report, net
interest income decreased $1.12
million or 12.06 percent in 1999
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Speakers at the Keystone Farm Credit, ACA meeting
Monday in New Holland. From left, Wilmer Hostetter,
board chairman, Keystone Farm Credit; J. Robert Frazee,
president and CEO of the proposed Mid Atlantic Associa
tion; and Walter Hopkins, board chairman of the proposed
Mid Atlantic Association.
compared to 1998. The primary environment will place in
reason for the decrease was a de- creased pressure on interest
crease in interest income recog- spreads m the future, noted the
nized on nonaccrual loans.' f*P° rt - Objectives include seek-
Interest income on nonaccrual ! n ® wa y s t 0 maintain high-qua -
loans for the 12 months ended * oa . n . v °l ume P nced at
Dec. 31, 1999, totaled $487,000, competitive rates, and to
a decrease of $947,000, com- cred,t nsk ,n the entire
pared to $1.43 million at the pre- P°rtfoho.
vious year-end. Member patronage checks are
A highly competitive lending (Turn to Page A3l)