Farm Credit to merge with bank in S. Carolina

August 23, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

The Farm Credit Bank of Baltimore, a cooperative bank serving the needs of mid-Atlantic farmers since the early days of World War I, announced yesterday that it has reached an agreement to merge with its sister institution in Columbia, S.C., creating a banking system extending from Pennsylvania to Florida.

Gene L. Swackhamer, president of the Sparks-based bank, said the merger will lower operating costs of the consolidated operations and make the new bank more competitive.

He said the consolidation is expected to save between $6 million and $7.5 million in annual operating costs. The consolidation is expected to be completed early next year.

The Baltimore area will lose another corporate headquarters if the merger is approved, which is expected, by the Farm Credit Administration, the bank's regulator, and directors and shareholders of each institution.

The new bank, yet to be named, will be based in Columbia, S.C., and will serve farmers in 15 states and Puerto Rico. It will have combined assets of $9.2 billion and loans outstanding of more than $8 billion.

Mr. Swackhamer said only about 25 of the 160 employees of the Baltimore bank will be offered positions with the new bank. He said that 40 of the 41 workers eligible to take early retirement have already indicated they will leave the bank. The remainder, he said, will be offered a severance package.

Mr. Swackhamer, 56, has been president of the Baltimore bank since 1977 but he will not join the new bank. He said he was "not sure what the future holds," but noted that he had not been offered a position with the Columbia bank. "Nor did I expect one," he added.

Maxey D. Love Jr., the president and chief executive of the Columbia bank, will head the new bank.

Customers of the Baltimore Bank should not be affected by the change, Mr. Swackhamer said. He said none of the Agricultural Credit Associations or field offices that make the loans to farmers will be closed.

"For Maryland farmers, everything should be pretty much the same," he said.

The Farm Credit Bank of Baltimore is part of the nationwide Farm Credit System, a cooperatively owned banking organization created by Congress in 1917 to serve the agriculture community. It serves Maryland, Pennsylvania, Virginia, West Virginia, Delaware and Puerto Rico.

Last year it posted a net profit of $32.9 million. Loans outstanding totaled $3.3 billion and total assets were $3.6 billion at year-end.

The Farm Credit Bank of Columbia, with outstanding loans of about $4.4 billion, serves North and South Carolina, Georgia, Florida, Ohio, Tennessee, Kentucky, Alabama, Mississippi and Louisiana.

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