Best of the Best
GreenStone Farm Credit Services is part of the national farm credit system, established in 1916 with the passage of the Federal Farm Loan Act, an effort to move capital from the nation’s financial centers to rural areas throughout the United States
According to David Armstrong, CEO of GreenStone Farm Credit Services, “Over the years, a number of different entities have developed to serve that mission. As the agricultural industry has consolidated, that national farm credit system has consolidated into regional farm credit organizations that funnel the money from federal sources through those wholesale banks to organizations like GreenStone that then lend that money to the farmer customers in local service areas.”
Armstrong has been with the organization since a summer internship while he was attending Michigan State University and completing a degree in animal science. He has just been appointed to the MEDC board by Gov. Snyder.
GreenStone serves the state of Michigan as well as 11 counties in Wisconsin. With headquarters in Lansing and 37 branches throughout the service area, GreenStone is a $5 billion organization with 20,000 members. There are sister organizations throughout the United States that serve their regional customers as GreenStone serves ours.
GreenStone is governed by a local board of directors; 14 members are elected from the organization’s customers and two are appointed by the board from outside the membership.
The organization employs 450 with 150 in the Lansing headquarters. In September of 2010, GreenStone moved into a new facility, which allows room for anticipated growth. Between 2000 and 2008, they grew at the rate of 11 percent a year.
Armstrong says, “We are organized as a cooperative, similar to a credit union, but we don’t offer all the deposit products that a credit union would. We are strictly a loan company for agriculture as well as for home and land purchase in rural areas.
“We are experts in agriculture. Ag is all we do, and we think we do that better than anybody else. We can provide guidance, advice and counsel in the areas of our customers’ concerns. We understand exactly what their challenges are.”
Armstrong adds, “We have a great source of long-term, fixed rate monies available to our customers.”
The financing for these loans comes from the farm credit system; funds are raised by the sale of bonds both domestically and internationally.
According to Armstrong, “The downturn in the economy affected us in late 2008 and early in 2009 like many credit markets because everyone was fearful about buying any kind of investment. However, we had adequate liquidity to carry us through those trying times. The reputation and financial stability of the farm credit system was sound, and that allowed us to reenter the market more quickly than some institutions.”
In 2005, GreenStone instituted what is called the patronage program. Through this program, customers who have financing with GreenStone get a portion of net earnings returned to them. Since its inception, the patronage program has paid out over $85 million to members.
“This is like a rebate or dividend to our constituents. Of course, the amount depends on the economy, and there’s no guarantee, but for 2010, we will pay out $18.2 million in patronage,” says Armstrong. “We respect the responsible nature of our customers in meeting their financial obligations by maintaining high ethical standards.
“We’re in a strong financial position, and that allows us to be flexible with our customers and be a viable provider of credit in difficult times.”
GreenStone also provides an electronic farm record keeping system called Agri Solutions, their own proprietary software. They also prepare taxes for their constituents, do appraisals and offer a line of insurance specifically for their members.
Armstrong says, “Agriculture is arguably the second leading industry in the state, although the tourism people may disagree with me there; and with the decline of manufacturing, if agriculture continues to grow like it has over the last 10 years, it could someday be the number one industry in Michigan. There’s tremendous opportunity in agriculture. We think it has the potential to create badly needed jobs here. GreenStone is proud to be part of that. We owe it to our great customers, and we continually strive to be good stewards of what we’ve been entrusted with. We are dependable and trustworthy and we really have our customers’ best interests at heart.”In short, Michigan’s farmers have a partner in GreenStone.
Greenstone Farm Credit Services
David Armstrong, CEO
3515 West Road