Union bank reaches out to agriculture

Published 12:01 am Saturday, February 5, 2011

EVERETT — Union bank wants to help keep the state’s farmers in business.

And it would like to expand its own business in the agricultural industry in the process.

Union, which purchased troubled Frontier Bank last year, held its first seminar on managing the family farm in the region

Friday, bringing together about 60 farmers, bankers in estate planning and agribusiness, and representatives from the office of farmland preservation.

The seminar was organized by Catherine Irby Arnold of Union’s The Private Bank, which provides services that include trust management and estate planning.

In an interview before the seminar, Arnold said the acquisition of Frontier gives California-based Union a presence in the region that it hasn’t had before. She hopes to use it help farmers make better decisions and make their businesses more successful.

Scott DeGraw, himself a farmer in Skagit County and the agribusiness banker for Frontier and now Union, said that development pressures have made farmland more valuable and business decisions more important.

“The closer you get to cities, the more important it is to have high value crops,” he said. “With poor decisions, you can be out of business in a few years.”

DeGraw, who raises corn-fed beef that he sells directly to consumers, said Snohomish County, once a major segment of the dairy industry, is seeing different types of crops as the area changes. “Dairy is still around, but we’re seeing it compete with blueberries, raspberries and u-pick operations,” he said.

Kei Matsuda, director of economic research for Union Bank, said Friday that agriculture provides about 100,000 jobs in Washington state, about 3.5 percent of the workers. The sector accounts for 15 percent of the products exported in Washington, he noted, adding, “It is very impressive that 3.5 percent of the workers produce 15 percent of the exports.”

DeGraw said he’s excited about working with Union, which has worked with California farmers for a long time, because it has some more sophisticated programs in agriculture, such as its foreign exchange program.

Many farmers here, DeGraw said, buy and sell equipment and crops in Canada, for example. They can keep accounts in Canadian dollars if that makes sense so they aren’t constantly losing money in a financial exchange.

DeGraw said farms need a three-legged stool of profitability, good infrastructure and community support. “Without one of those legs, farmers can’t survive,” he said. “And once a farm stops being in production, it’s hard to get it back in.”

Arnold said the bank’s estate planning services can also help keep farms in the family.

She mentioned a case where a farmer had died and the farm was operated by his three sons, who started taking money out of the business and got it in trouble. She said the bank was able to turn the business around.

“Sometimes we can help pass the business along and save the family from itself,” she said.

DeGraw noted that family farms are big business. “You can be a $20 million business and still be a family farm,” he said, adding that’s why business planning and development is so important.