Agriculture: Glendale Federal Branching Out into Farm Lending

Glendale Federal Bank has broken into agricultural lending in its ongoing effort to diversify away from real estate.

The California savings bank announced Dec. 23 that it had opened three ag lending offices in the Central Valley region, hired three new lenders, and purchased about $70 million in ag loans from H.F. Ahmanson & Co.

"This is only the beginning, and we expect to significantly expand our agribusiness lending efforts between now and the year 2000," Glendale chief executive Stephen J. Trafton said in a release.

The thrift long has made clear its intentions of becoming more banklike, and in recent years has concentrated on consumer and more recently small-business lending. Its foray into the fertile Central Valley - home to some of the top agricultural counties in the nation - was the next logical step in this strategy.

"We felt this would be very complementary to our efforts in the Central Valley for business banking," said Terry Hess, executive vice president and director of business banking. "It would complement it well because of the importance of agriculture there."

Glendale will focus on providing lines of credit to farm producers and related businesses, such as packers and processors.

The three lending centers will be located in Fresno, Visalia, and Bakersfield, all in the southern portion of the Central Valley. Popular crops there include cotton, peaches, nuts, and lettuce.

The savings bank plans to push northward in the valley toward Sacramento, Mr. Hess said.

Glendale's entry into ag lending was indirectly assisted by Wells Fargo & Co.'s acquisition of First Interstate Bancorp last year.

Three of the five ag lenders are former First Interstate employees who weathered the post-merger shuffle after the acquisition. One of the three is Robert V. Lankford, the group's manager, who has more than 40 years of California banking experience.

The other two lenders had already been on the Glendale staff.

"We didn't feel we should start something de novo without experienced people," Mr. Hess said.

The savings bank also indirectly owes the $70 million ag portfolio it purchased from H.F. Ahmanson to the Wells-First Interstate merger. Ahmanson picked up those credits in branches it bought from Wells after the merger, but didn't want to hang on to the loans, Mr. Hess said.

Mr. Hess predicted that Glendale will have $100 million in ag credits by June.

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