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AgCarolina Farm Credit and Cape Fear Farm Credit seek merger

Posted on April 12, 2022

Updated on April 13, 2022

Local news
The boards of directors for AgCarolina Farm Credit, which operates in Nash County, and Cape Fear Farm Credit have unanimously agreed to a letter of intent to merge into AgCarolina Farm Credit with $3 billion in gross loan volume, a transaction that could better serve North Carolina agricultural production and rural residents, according to the associations. This photo of a North Carolina farmer is provided by Cape Fear Farm Credit.

Contributed photo

The boards of directors for AgCarolina Farm Credit, which operates in Nash County, and Cape Fear Farm Credit have unanimously agreed to a letter of intent to merge into AgCarolina Farm Credit with $3 billion in gross loan volume, a transaction that could better serve North Carolina agricultural production and rural residents, according to the associations. This photo of a North Carolina farmer is provided by Cape Fear Farm Credit.

RALEIGH — AgCarolina Farm Credit and Cape Fear Farm Credit have jointly announced a pursuit of a merger. 

Under the terms of the letter of intent, which was unanimously approved by the boards of directors of both associations, the combined entity would form the largest agricultural lending cooperative in North Carolina with branches in Rocky Mount and Louisburg. Based on the two associations’ current portfolios, the merged entity would begin with more than $3 billion in gross loan volume serving more than 6,000 borrowing relationships.

No branch office closures or branch staffing changes are anticipated as part of the merger, so members would receive the same local, personalized service from the same experts with local loan decisions and delivery of financial services, according to the associations.

The two associations would operate as AgCarolina Farm Credit, ACA, a name that the boards agreed best reflects the mission of the potential merged association: to serve North Carolina agricultural production and rural residents. The combined company would have a presence in 46 contiguous counties in eastern North Carolina and headquarters would be centrally located in Greenville, said Derek Potter, chairman of board at AgCarolina Farm Credit.

“For years, both AgCarolina and Cape Fear have worked side by side as industry peers, building successful, financially strong associations who have established strong capabilities in a range of areas critical to the agricultural sector,” Potter said. “We also share in a desire to grow and bring more value to our members.”

Nash Johnson, chairman at Cape Fear Farm Credit, agreed.

“We are excited to continue our exploration of the possible benefits of this merger to our stockholders, employees and the agricultural and rural communities of eastern North Carolina,” Johnson said. “This merger could position the new entity to be big enough to continue to meet the evolving and diverse needs of our members, while remaining small enough to maintain our local focus.”

If approved, the combined association would be led by current Cape Fear Farm Credit President and CEO Evan Kleinhans, who has more than 10 years of Farm Credit leadership experience. AgCarolina President and CEO Dave Corum, who previously announced his plans to retire after more than 40 years of service in Farm Credit, would stay on until the merger is complete to support the organizations in the transition plan.

Once due diligence is complete, the respective boards will vote whether to approve a definitive merger agreement and seek to obtain regulatory approval. If regulatory approval is obtained, stockholders would receive a merger disclosure package in late 2022 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 Jan. 1.

AgCarolina Farm Credit, a farmer owned financial cooperative headquartered in Raleigh, is the leading provider of credit to farmers in central and eastern North Carolina. Loans are made to finance land, homes, farm buildings, operating expenses, livestock and equipment, as well as other purposes. Credit life insurance, appraisal services and leasing are also available through AgCarolina Farm Credit. Branch locations are in Ahoskie, Elizabeth City, Greenville, Halifax, La Grange, Louisburg, New Bern, Raleigh, Rocky Mount, Smithfield, Swan Quarter and Williamston, according to information provided by the association.

Cape Fear Farm Credit is an agricultural lending cooperative owned by its member-borrowers. It provides loans for land, equipment, livestock and production as well as rural home mortgages and rural living. Cape Fear Farm Credit has branches serving Bladen, Brunswick, Columbus, Cumberland, Duplin, Harnett, Hoke, New Hanover, Pender, Robeson, Sampson and Scotland counties. It is part of the national Farm Credit System, a network of financial cooperatives established in 1916 to provide a dependable source of credit to farmers and rural America, according to information provided by the association.

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