Charlotte is gaining another Wells Fargo hub and those in the East Coast who lend to the agriculture industry are getting more competition.
The San Francisco-based bank, which has its East Coast headquarters in Charlotte, said Thursday that the city will be the base for Wells food and agribusiness lending in the East.
The move is designed to grow Wells Fargos share of the agriculture-lending market east of the Rocky Mountains. Up to now, the bank has concentrated its agribusiness lending expertise in the West.
The nerve center of the new unit will be in uptown Charlotte the bank hasnt announced a specific site yet and is expected to open in mid-June.
Roughly two dozen people are expected to work throughout the Eastern U.S. as part of the new lending operation, but the bulk of them will be in Charlotte, the bank said.
Some of the satellite sites serving the hub could be in Florida, New York, Ohio or Pennsylvania, the bank said, although nothing official has been announced.
Neal Crapo, who is moving to Charlotte from southern California to head the hub, said Wells Fargos intent is put people with agriculture-lending experience closer to businesses that need such loans. The bank plans to lend billions of dollars to those businesses in the next several years, he said.
The unit will specialize in two areas of lending: agribusiness and production agriculture.
Wells loans for production agriculture meaning growing crops, raising animals typically start at several million dollars apiece, Crapo said, while agribusiness loans are for companies with annual sales of more than $20 million. The processing of chicken, beef, pork or grain and turning oranges into orange juice are examples of activities that fall under agribusiness.
Crapo, who was working for the bank when he was hired to lead the hub, was tasked with finding the site. Charlotte stood out, he said.
If you look at the ease of getting around the East Coast from Charlotte, if you look at the community in Charlotte, when I look at all of those things it really appealed to me, Crapo said. It seems like a great community.
The hub will be in addition to small agriculture-lending operations Wells Fargo has in Georgia and Pennsylvania, which Crapo will also oversee.
Wells announced the selection of Charlotte two months after revealing that the city was in the running for the hub.
We applaud the interest of Wells Fargo in establishing an agribusiness/agricultural lending hub on the East Coast, said Larry Wooten, president of North Carolina Farm Bureau, a nonprofit that advocates for the agriculture industry. They see the potential for growth in agriculture in this state and in the Southeastern United States.
Mike Morton, president and CEO of Statesville-based Carolina Farm Credit, which lends to farmers and people in rural communities of western North Carolina, was also upbeat about Wells Fargo increasing the competition to lend.
Certainly it would bring more choice to agriculture borrowers, Morton said. In my opinion, thats a good thing.
Morton said North Carolinas agriculture economy is getting a boost from the local-food movement.
Some of the small, organic growers providing foods locally in their communities, many of the new entries in the market come from them, he said. We actually have seen more numbers of small producers coming into the industry.
According to a North Carolina State University report, agriculture generates about 20 percent of the states income and employment. More than 17 percent, or $77 billion, of North Carolinas gross state product comes from the industry, which employs 642,000, the report says.
Federal data show a decline in farms throughout the U.S., including in the South and Northeast.
According to a February report from the U.S. Department of Agriculture, there were an estimated 2.2 million farms in the U.S. in 2012, down by 11,630 from 2011. The report also said U.S. farmland also declined, to 914 million acres, a decrease of 3 million acres from 2011.
Last year, the number of farms in North Carolina fell to 50,000 from 50,400 the year before, according to the USDA. The amount of farmland in the state was flat, at 8.5 million acres, over the period.
U.S. farm production expenditures, though, rose in 2011 to $318.7 billion from $289.1 billion in 2010.
Crapo said that even though there might be fewer farms, the ones that are still around are expanding and becoming more efficient. USDA data show the average North Carolina farm grew by 1 acre to 170 acres in 2012 from 2011.
As for farmland shrinking, Crapo said, demand for acreage can fluctuate from year to year.
Morton, of Carolina Farm Credit, said North Carolinas agriculture industry has fared well through the downturn, and Carolina Farm Credit has had fairly strong demand for loans.
Weve been successful during this recessionary period, he said.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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