Eliminates Regional Structure, Equalizes Capital Pools
WAUSAU, Wis. and WILLMAR, Minn., Sept. 20 /PRNewswire/ — The Board of United FCS ACA, in response to recent controversies and at the request of its regulator, the Farm Credit Administration (FCA), adopted several actions at its September 14th Board meeting to unify and strengthen the Association. United FCS was created through the 2002 merger of Farm Credit Services of North Central Wisconsin and Farm Credit Services Minnesota Valley.
Actions taken by the United FCS Board include:
— Eliminate the regional committee structure and streamline governance
into the full United FCS Board.
— Over time, reduce the size of the Board from 22 to 13 directors;
comprised of six directors from Minnesota, four from Wisconsin (to
align MN and WI representation to the shareholder base) and three
independent, outside directors with no regional affiliation.
— Distribute $4.7 million to Wisconsin shareholders to equalize the
percentage of cash paid out to Wisconsin and Minnesota shareholders
since the merger.
— Develop a plan prior to year-end to equalize the remaining capital
pools between the Minnesota and Wisconsin regions.
— Received eight Director resignations and authorized the nominating
committee to expedite the search process for candidates to fill the
vacant Board positions.
“The regional governance structure was not working in the best interests of the Association and was creating regional biases, turf battles and unnecessary Board disruption,” said Jerold Harris, Chairman of the United FCS Board. “In a September 10th letter to the United FCS Board, the Farm Credit Administration took note of these controversies and requested we take corrective action by October 15th. We are confident that these Board actions will satisfy our regulator by moving to a more simplified governance structure where each director will now have a clear fiduciary responsibility to all shareholders, regardless of location.”
Harris noted that the 2002 merger has created a stronger association financially with the added benefit of diversifying the ag credit risk between the two regions served by United FCS. “United FCS and its shareholders are realizing the benefits of a larger and financially sound lender that was envisioned when the merger was proposed. With the recent changes adopted by the board, we can move beyond the distractions with a unified mission and continue to deliver outstanding service to the farmers and rural communities who rely on United FCS as their trusted financial partner.”
First Call Analyst:
Source: United FCS