Commentary:
I am a stockholder of Farm Credit of New Mexico and I urge other stockholders to support the merger of Farm Credit of New Mexico with American Ag Credit. The original vote was overwhelmingly positive in favor of the merger. It’s my understanding that, due to a petition being filed and accepted by the regulator, an upcoming re-vote will be required. I believe the merger will be positive to all stockholders and New Mexico agriculture. I encourage you to vote once again in favor of the merger.
The board of directors of Farm Credit of New Mexico are in unanimous support of this merger. They have been considering and pursuing a strategic direction of this organization for several years, and this merger decision has been based upon diligent and strategic business decisions and goals. Our board has not made this decision hastily, nor have they been put in a position of desperation and limited choices. Rather, our board has been proactive and not reactive regarding the future of this organization. They are positioning to be more competitive and prepared to meet the needs of the market in the future. This is a good thing for all stakeholders.
I also believe the arguments made in the petitioner’s letter sent to stockholders dated May 31, 2023 fall flat and are without merit.
The capital reserves of the merged association are substantial, well above regulatory requirements, and within the average of most peer associations within the Farm Credit System. There is no reduction in share value or stockholder equity; all stock and allocated surplus will be converted over at an equal value.
New Mexico will maintain adequate and equitable board representation. Initially, New Mexico will maintain 5 directors (4 elected and 1 appointed). This will eventually move to 3 directors (2 elected, 1 appointed). Regardless, board representation for New Mexico will remain fair and equitable, inclusive of the nominating committee.
Retention plans for employees are a common practice during merger transactions. This is a best practice to ensure strong business continuity and retention of employees to maintain excellence customer service and delivery to the market. Access to the outstanding employees and excellent customer service that we receive from Farm Credit of New Mexico is one of the highlights of this organization. Putting a plan in place to reward and retain all employees is a prudent decision.
- The issuance of preferred stock is a common business practice and nothing unusual in the Farm Credit System. Farm Credit Associations have very limited methods to capitalize growth and continue expanded service to their members and stockholders. Raising capital through the issuance of preferred stock at very favorable terms is sensible and practical.
Fees schedules and comparisons is a non-issue. Overall loan pricing and fee structures will remain very comparable. The overall cost of borrowing will be reduced, based upon an expected increase in patronage dividends.
Once again, I encourage you to support our board and vote in favor of this merger.
Alisa Ogden resides in Loving, NM. She is a lifelong resident of New Mexico, a third-generation farmer and a fifth-generation rancher. Alisa Ogden's opinions are her own and do not necessarily reflect the views of KRWG Public Media or NMSU.