Mutually Beneficial Relationship Delivers Value

In the strongest relationships, each partner brings something of value and each benefits more than they would independently. Oklahoma AgCredit and CoBank epitomize such relationships, building each other’s balance sheet while delivering effective solutions for long-term and new customer-owners alike.

Oklahoma AgCredit supports its customers with equipment, real estate and operating loans through 18 branches covering 60 counties. With more than $1.6 billion in loan volume across 6,300 individual facilities, the financial cooperative supports a large number of livestock and poultry producers, other farm and agricultural operators, as well as rural land and homeowners. But CEO Patrick Zeka recognized a host of opportunity in Oklahoma outside of the association’s traditional customers.

“We’re very, very good at supporting farm operations and rural homeowners, but we’re less embedded in Oklahoma’s agribusiness sector,” said Zeka. “I knew we could bring our expertise to this under-explored market and help a new group of customers while also strengthening and diversifying our portfolio.”

Jim Hommertzheim, Sr. Relationship Manager, CoBank; Ryan McBride, CIO, Oklahoma AgCredit; Steve Davenport, EVP, Chief Credit Officer, Oklahoma AgCredit; Patrick Zeka, President & CEO, Oklahoma AgCredit; Dennis Green, EVP, Chief Risk Officer, Oklahoma AgCredit; Travis Ball, VP, Farm Credit Banking Group, CoBank

With their CEO’s charge ringing, Oklahoma AgCredit’s loan officers swung into action. One of the first opportunities to arise was a previous real estate loan customer who also runs a large, regional feed company. Larger customers mean larger loan amounts, sometimes more than Oklahoma AgCredit can hold itself, and in this case it asked CoBank to join the prospecting relationship early on to underscore the availability of capital to meet the customer’s large financing needs.

Oklahoma AgCredit and CoBank spent more than a year exploring the customer’s business as well as financing needs, learning through multiple meetings that the customer also required the convenience of a sophisticated cash management platform, including automatic daily sweeps—services CoBank provides. CoBank explored these needs directly with the customer to ensure that his specific cash management requirements would be met.

“This deal wouldn’t have happened without CoBank’s cash management services or its checkbook,” said Zeka. “At the same time, CoBank wouldn’t have had access to this strong customer opportunity without Oklahoma AgCredit. It’s a mutually beneficial relationship that delivers great value to us both as well as to our borrowers.”

Since Oklahoma AgCredit became affiliated with CoBank in 2012, the organizations have enjoyed a smooth and efficient funding relationship, and this transaction was no exception. After working together to build positive rapport with the customer and demonstrating each organization’s value, the multi-million financing package took less than two months to close.

“The customer recognized CoBank as a significant lender in the feed, grain storage and supply financing sectors, which increased our credibility and gave him confidence in the lending package,” said Zeka. “Having CoBank literally at the table, not as an invisible partner, made all the difference.”

This story was originally published in the CoBank 2021 Annual Report.