Pub. 7 2012-2013 Issue 2

July/August 2012 25 Extraordinary Service for Extraordinary Members. three year-ends, from $481 million at the end of 2009 to $617 million at the end of 2010 to $315 million at the end of 2011. Thirteen of CoBank’s 16 directors at the end of 2009 were still CoBank directors at the end of 2011, so it is likely that the borrowings attribut- ed to some of CoBank’s directors have fluctuated quite a bit in recent years. It cannot be determined, though, for which directors this was the case. Total borrowings and average bor- rowings per director were much more stable at the other four banks, with average borrowings at U.S. AgBank (since acquired by CoBank) approxi- mately double the average borrowings at the other banks. It is interesting to note that the borrowings attributed to these 78 individuals accounted for 1.03 percent of the FCS’ total out- standing loans at the end of 2011. For some unstated reason, the FCS does not provide a similar disclosure for the 13 directors of the Federal Farm Credit Banks Funding Corp., which is the FCS’ link to the capital markets. Six of these 13 directors also serve as a director of an FCS bank while another three of the directors are the CEO of an FCS bank. No information is prov ided in the Annual Information Statement about the borrowings attributable to the more than 1,000 individuals who serve as directors of the 83 FCS associations. Assuming an average borrowing of $1 million to $2 million, a few billion dollars of FCS loans have gone to those directors. Supposedly these loans, as well as loans to senior management in FCS associations, are “made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated borrow- ers.” I would welcome reports about loans to directors and senior officers of FCS associations, or to their affiliated organizations and close family, where this is not true. FCS Bank Number of Directors Total amount of director borrowings (in millions) Average borrowings per director (in millions) U.S. AgBank, FCB 17 $ 709 $41.71 CoBank, ACB 16 $ 315 $19.69 FCB of Texas 7 $137 $19.57 AgFirst, FCB 20 $347 $17.35 AgriBank, FCB 18 $285 $15.83 Total or Average 78 $1,793 $22.99 Q FCS Owners — continued on page 26 A legal partner you can trust. Jim Pfeffer 402.930.1735 jpfeffer@stinson.com 1299 Farnam Street, Suite 1500 Omaha, NE 6810 A valued partner is one who understands the nuances of your business and the importance of relationships secured by trust. Stinson’s banking attorneys are focused, yet creative. Thoughtful, yet tenacious. These qualities can be instrumental in how we help clients find solutions to even the most complicated deals and deliver optimal results. Innovative ideas. Straightforward solutions. Stinson.com. Omaha Kansas City St. Louis Jefferson City Overland Park Wichita Washington, D.C. Phoenix The choice of a lawyer is important and should not be based solely on advertisements.