2015 FCW Fall Spotlight

spotlight

Fall 2015

ELECTION RESULTS PAGE 5

FARMER VETERAN PROGRAM Page 6

DIGITAL STRATEGY Page 12

spotlight WHO WE ARE One of California’s leading agricultural lenders, Farm Credit West is a cooperatively-owned lending institution providing financial services to farmers, ranchers, and agribusinesses with offices located in the California Central Coast, Southern San Joaquin Valley and Sacramento Valley.

TA B L E O F C O N T E N T S

President’s Message. . .................................... 3 Fresh Perspectives........................................ 4 Election Results ....................................... 5 Farmer Veteran Programs............................ 6 – 7

SPOTLIGHT is produced for the customers, employees and friends of Farm Credit West. Comments and story ideas can be submitted to the Marketing Department, Farm Credit West, 1478 Stone Point Drive, Suite 450, Roseville, CA 95661.

BOARD OF DIRECTORS Blake Harlan, Chairman of the Board .........................Woodland, CA Joey Airoso, Vice Chairman of the Board ...........................Pixley, CA

Financial Highlights....................................... 8 Pearls of Wisdom.......................................... 9 Community Center.. ................................ 10 – 11 •

Dinuba Office Groundbreaking

•

Farmers Market Fundraiser

•

2015 Holiday Schedule

•

Agricultural Business of the Year

•

2015 Scholarship Recipients

Robert Amarel, Jr. ........................................................Yuba City, CA

Digital Strategy and Security.................... 12 – 13

Alben F. Barkley ..............................................................Oxnard, CA

Farm Credit Continues to Alleviate Hunger.. ...... 14

Gregory O. (Butch) Dias, Jr. .............................................Visalia, CA

Territory and Office Locations....................... 15

Catherine Fanucchi ....................................................Bakersfield, CA Douglas C. Filipponi ......................................................Creston, CA Adam B. Firestone .........................................................Buellton, CA Craig C. Gnos ....................................................................Davis, CA Robert N. Hansen ......................................................... Hanford, CA Barry Powell .............................................................Sacramento, CA

Mission Statement Farm Credit West will ensure THE CUSTOMER COMES FIRST by providing superior service

Edgar Terry .....................................................................Ventura, CA

at competitive rates, in a timely, professional

Sureena B. Thiara ........................................................Yuba City, CA

and ethical manner.

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Fall 2015

PRESIDENT’S MESSAGE Mark Littlefield, CEO

Path to Value Superior Service at Competitive Rates with a Robust Return on Member Equity. This is our

• Updating our Cash Manager product to be more reliable

value proposition to you, our customer-owners.

• Providing Online Banking that will have mobile accessibility while maintaining a high level of security

• Enhancing the myFCW customer website allowing you a direct connection to Farm Credit West; including the ability to track the progress of your loan and view documents

Farm Credit West is embarking on exciting opportunities which we believe will provide shareholder value and sustained financial health. These opportunities include merging with Farm Credit Services Southwest, investing in innovation and building our 2020 Vision.

Technology will continue to evolve, and we will continue to perfect our digital strategy and ensure that Farm Credit West continues to meet your business needs. A key focus of our digital strategy is ensuring that we have superior security built into our systems and applications to safeguard your assets and information.

Merger

In 2011, we released our five-year 2015 Vision for Farm Credit West. Building on our successes of the last five years, our new five-year 2020 Vision further solidifies our plans and the steps we will take to realize our objectives. The plan will be closely aligned with our strengths which enables us to create unique added value for our customers. A core principle of the 2020 Vision is the question: Does the vision add value to our objective that “THE CUSTOMER COMES FIRST”?

We continue to move forward with the merger of Farm Credit West and Farm Credit Services Southwest. We anticipate the merger will be finalized in late 2015. This merger brings together two great organizations, both with strong values and a history of superior service.

Together we will have more than $8.5 billion in assets, a more diversified portfolio of agricultural loans, a larger territory across three western states and strong levels of capital and liquidity.

This merger provides us the opportunity to be well positioned to better serve you with an expanded and knowledgeable staff, increased operating efficiencies, advanced technological solutions and a sustainable patronage program.

Heading into the merger we know there will be changes, but staying true to our mission that “THE CUSTOMER COMES FIRST” is one aspect at Farm Credit West that will not change.

Investing in Innovation Keeping up with ever-changing technology is our commitment.

We are focusing on our digital strategy and the impact it has on our shareholders. As you continue to rely more heavily on technology, we as a company need to provide you with advanced technologies that add value to your business, maintain data security and provide superior service. By expanding our communication tools and developing our digital strategy we will have the ability to efficiently and effectively communicate with you.

Your Future – Our 2020 Vision

More specifically does it: • Add to our defined mission and corporate purpose • Contribute to a fiscally sound organization • Enhance our ability to provide superior customer service • Support our plans to attract, train, develop and retain high quality staff and directors We will also continue to put our stewardship philosophy into action through continued support of education and research, youth programs, local food programs, farmer veteran programs, the industries we serve and rural communities. We are motivated to continually look for ways to be better stewards of the land and our community.

Overall our future is promising; we have an experienced staff, a revitalized value proposition and a vision with a continual focus on our shareholders. We will define our future success by our ability to provide Superior Service at Competitive Rates with a Robust Return on Member Equity.

A few digital strategies we are developing through our long term vision include:

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spotlight

Farm Credit 100 Fresh Perspectives Search Farm Credit has proudly supported the men and women of rural communities and agriculture during the last century, and we appreciate the vision it takes to remain successful over time in rapidly evolving, thriving rural industries. As we enter our 100th year, we are launching Farm Credit 100 Fresh Perspectives: a search to identify 100 leaders who are shaping the future of rural America and agriculture. As part of this effort, Farm Credit will contribute $100,000 to further the efforts of 10 distinguished honorees.

How to Enter Do you know a dynamic leader with a fresh perspective in one or more of the categories below?

1. Consider: Identify the category or categories that best represent your nominee’s area of influence.

2. Click: Go to FarmCredit100.com/Fresh for entry materials.

3. Complete: Submit a nomination form and short essay. Nominations accepted until December 18, 2015.

Selection and Recognition

Categories

A panel of experts on rural matters, including Farm Credit leaders and representatives from around the agriculture industry, will evaluate and select the top 100 honorees who showcase the ability to build appreciation for rural communities and agriculture, and further contribute to a vibrant future for rural America.

Farmers and ranchers, as well as individuals who represent other agribusinesses, cooperatives, academic institutions, government agencies, community and nongovernment organizations will be recognized in the following categories:

Farm Credit 100 Fresh Perspectives honorees will have the opportunity to share their stories, inspire with their vision and demonstrate their leadership through several opportunities during Farm Credit’s centennial year.

The final 100 honorees will be announced in the spring of 2016. Of these, 10 distinguished honorees — one from each nomination category — will receive a $10,000 award to help further their contributions to a thriving rural America. These individuals will also be recognized at a special event in Washington, D.C., in 2016.

Leadership (over 21) Youth Leadership (21 and younger) Rural Policy Influence Beginning Farmer or Rancher Achievement Entrepreneurship and Innovation

We know infinite fresh perspectives are innovating in rural communities and agriculture. We appreciate your help in bringing them forward to share their stories.

Nominate a leader today at FarmCredit100.com/Fresh

Sustainability and Natural Resource Conservation Financial Stewardship Mentoring and Volunteerism Agriculture Education and Community Impact Rural and Urban Connection

Fall 2015

2015 Election Results Board of Directors Congratulations to Douglas Filipponi and Catherine Fanucchi who were recently elected to serve on the Farm Credit West Board of Directors.

The current Farm Credit West Board of Directors is made up of 11 stockholder-elected directors and two appointed directors.

Farm Credit West Board members are the governing voice of the Association, acting to represent the best interests of the Association’s shareholders. Farm Credit West Board members regularly participate in director development programs and trainings in addition to attending scheduled board and committee meetings throughout the year.

Much of Farm Credit West’s success is attributed to the contributions of the many customers who have served as directors over the years and we extend our utmost appreciation to each of them for their leadership, insight and many years of dedicated service.

Douglas Filipponi: Doug has been reelected to the Farm Credit West Board. He has been a part of the California central coast community all his life, and has been involved in the production and marketing of wine grapes, drilling water wells and managing a cow-calf operation. Doug was first elected to the Farm Credit West Board in 2006 and is looking forward to another term on the Board.

Catherine Fanucchi: Catherine is a new member to the Farm Credit West Board. She has been farming with her family in the San Joaquin Valley for the past 17 years producing fruit, vegetables, almonds and fiber.

Catherine hopes that her skills will prove valuable to Farm Credit West and looks forward to keeping Farm Credit West healthy and thriving for this generation and future generations.

2016 Nominating Committee Robert L. (Roy) Gill, Dana Merrill, Paul Squires, Matt Echeverria, Brian Talley, Michael Dias.

2016 Alternates for Nominating Committee Kulwant Johl, Nicholas Miller, Bert Lefty, Jared Fernandes, Chris Darway, Danny Newton.

Thank you to those who participated in the election process.

You play an important role in Farm Credit West’s success.

We would like to convey our most sincere appreciation to those who agreed to serve as Board of Director candidates, Nominating Committee members, Nominating Committee candidates and to all those stockholders who cast their ballots.

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spotlight Retiring Directors Over the past year, three Farm Credit West Directors retired from the Board. Each of them represented Farm Credit West and our stockholders with the utmost integrity. We thank them for their dedicated service and wish them well in all future endeavors.

Farm Credit West Farmer Veteran Program

Richard Enns represented the Southern San Joaquin Region and served as a director for 20 years.

Thomas Heenan represented the Sacramento Valley Region and served as a director for 25 years.

Case Van Wingerden represented the Coastal Region and served as a director for 31 years.

In attendance at the Salute to Homegrown By Heroes event were key personnel from Farm Credit, including (from the left) Michael O’Gorman, Founder and Executive Director of the Farmer Veteran Coalition, Gary Matteson, Vice President Farm Credit Council Washington D.C. and Board Chair of the Farmer Veteran Coalition and Len Monaco, Farm Credit West Veteran Coordinator and Advisory Group member of Farmer Veteran Coalition.

Farm Credit West has a long held belief in corporate stewardship, where supporting their community is a priority. This is evident by Farm Credit West’s continued support of FFA, 4-H, Farm Bureau, local food banks and annual scholarship awards. Most recently Farm Credit West has expanded their stewardship practices to include America’s military veterans.

In September 2014, Farm Credit West President/CEO, Mark Littlefield established the position of Veteran Coordinator to organize and guide Farm Credit West’s efforts in providing stewardship to America’s military veterans. Len Monaco, a Marine veteran himself, was selected to lead these efforts for Farm Credit West. Len was the Portfolio Manager for the Woodland Branch at the time, he has since retired but continues to serve as Veteran Coordinator. Farm Credit West is expanding their efforts of supporting America’s military veterans through: • Financing for veteran farming operations and assisting in finding low-cost financing, guaranteed loan programs and education programs • Careers, scholarships and internship opportunities either with Farm Credit West or Farm Credit West members • Support for veterans in the community though programs like the Farmer Veteran Coalition and Homegrown by Heroes

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Fall 2015

Over the next few years Farm Credit West plans to continue to promote and enhance their Farmer Veteran Program. Giving America’s military veterans access to beneficial programs and opportunities to succeed in the future is just one way Farm Credit West wants to say thank you to our military veterans.

The Farmer Veteran Coalition The Farmer Veteran Coalition (www.farmvetco.org) is a nationwide organization that assists U.S. military veterans in beginning and sustaining careers in agriculture. Farmer Veteran Coalition works to develop a new generation of farmers and food leaders, and propagates viable employment and career opportunities through the collaboration of the farming and military communities. The Coalition’s work is promoted and escalated through a network of partnerships and programs, to effectively help veterans and especially those at the onset of their civilian careers. On a national level, Farm Credit is a major supporter of the Coalition. In fact, Farm Credit has been the single most impactful supporter of the Coalition’s efforts.

Len Monaco, FCW Veteran Coordinator, is a member of the Coalition’s advisory group and assists the Coalition in awarding grants to worthy recipients. The Coalition acts as a conduit, channeling money from donors to those veterans in production agriculture in need of financial assistance.

Homegrown By Heroes Farm Credit has been the major supporter of the Farmer Veteran Coalition’s Homegrown By Heroes program. A product labeling program, Homegrown By Heroes, identifies, promotes and supports agricultural products grown and raised by America’s veterans and those still serving in the U.S. military.

The label provides a way for America’s veterans to promote their products and gives consumers a way to support veterans, through purchasing veteran-grown products. You can tell if a product is part of the Homegrown By Heroes program by the label shown above.

On June 2, 2015, Farm Credit hosted a Salute to Homegrown

By Heroes on Capitol Hill in Washington, D.C. The event showcased the contributions of farmer veterans and celebrated the success of the Homegrown By Heroes program, bringing national attention to the members’ efforts. The celebration featured an array of products produced by farmer veterans from across the country.

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spotlight

spotlight spotlight spotlight spotlight Financial Highlights Financial Highlights Financial Highlights Financial Highlights Financial Highlights Farm Credit West reported net income of $88 million for the

Farm Credit West reported net net income ofwere $88 million first half of Credit 2015.

These year-to-date earnings of our Farm West reported income of ahead $88 million Farm Credit West net income of for the first half of Also 2015.

These year-to-date Farm Credit West reported net income $88$88 million for plan the first half ofreported 2015.

These year-to-date business targets. during the first six of months of million 2015, for first half of These year-to-date earnings were ahead of2015. our business plan targets. for thethe first half ofahead 2015.

These year-to-date earnings were ofcapital our business plan targets. our average earning assets and levels increased and we earnings were ahead of our business plan targets.

Also during the first sixofmonths of 2015, our average earnings were ahead our business plan targets.

Also during the first six months of 2015, our average strengthened our allowance for loan losses.

Also during the first six months 2015, our average earning assets and capital levels increased and we Also during the first six months of of 2015, our average earning assets and capital levels increased and we earning assets and capital levels increased and strengthened our allowance for loan losses. earning assets and capital levels increased and wewe strengthened our allowance for loan losses. strengthened allowance loan losses. _______________________________ strengthened ourour allowance forfor loan losses. _______________________________ _______________________________ _______________________________ Average Earning Assets (in millions) Average Earning Assets

Average Earning Assets Average Earning Assets Average Earning Assets

(in m(in illions) $7,167 millions) $7,167 $6,722 (in millions) $6,722 $7,167 (in m illions) $7,167 $6,323 $6,323 $5,991 $6,722 $5,991 $5,737 $6,722 $5,737 $6,323 $5,991 $6,323 $5,737 $5,991 $5,737

Dec. Dec. 31, 31,Dec. Dec. 31, 31,Dec. Dec. 3 1, 3 1,Dec. Dec. 3 1, 3 1, Jun. 3Jun. 0, 30, Dec. Dec. Dec. Dec. Jun. 2011 2012 2013 2014 2015 Dec. 32011 1,31, Dec. 32012 1,31, Dec. 32013 1,3 1, Dec. 32014 1,3 1, Jun. 32015 0,30, 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Average earning grew $445$445 million, or 6.6%, Average earning assets grew million, or 6.6%, Average earning assetsassets grew $445 million, or 6.6%, during the first Average earning assets grew $445 million, 6.6%, during the first six months of the year.

The increase Average earning assets grew $445 million, or 6.6%, during first six Theor increase six months of the the year.

Themonths increase of wasthe dueyear. to strong new loan during six months of the year.

The increase was duedue tothe strong loanloan activity in both our during the first sixnew months of the year. increase was tofirst strong new activity inThe both our activity in both our mortgage and commercial loan portfolios. was due strong new loan activity both mortgage and commercial loan portfolios. was due to to strong new loan activity in in both ourour mortgage and commercial loan portfolios. mortgage and commercial loan portfolios. _______________________________ mortgage and commercial loan portfolios. _______________________________ _______________________________ _______________________________

of Total Assets Members’ Equity as a a s % Members’ Equity a % of ofTotal ssets Members’ Equity as a% TotalAAssets Members’ E quity a s a % Total Assets Members’ Equity as a % of oTf otal Assets 20.4% 20.4% 19.9% 19.9% 20.4% 20.4% 19.9% 19.9% 17.7% 17.7% 17.7% 17.7%

21.1% 21.1% 21.1% 21.1%

18.1% 18.1% 18.1% 18.1%

Dec. Dec. 3 1, 3 1,Dec. Dec. 31, 31,Dec. Dec. 3 1, 3 1,Dec. Dec. 3 1, 3 1, Jun. 3Jun. 0, 30, Dec. Dec. Dec. Dec. Jun. 2011 2012 2013 2014 2015 Dec. 32011 1,3 1, Dec. 32012 1,31, Dec. 32013 1,3 1, Dec. 32014 1,3 1, Jun. 32015 0,30, 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

In year, total members’ equity increased In the firstfirst halfhalf of of the year, total members’ equity In the the first half ofthethe year, total members’ equity the first half of the year, total members’ equity $99 million, or 6.5%, primarily due to the net income of $88 increased $99 million, or 6.5%, primarily due to the In In the first half of the year, total members’ equity increased $99 million, or 6.5%, primarily due to the increased million, 6.5%, primarily net income of$99 $88 million and anprimarily increase indue the million and an the preferred stock balance of $15 increased $99 million, orinor 6.5%, due to to net income ofincrease $88 million and an increase in thethe income of $88 million and increase in preferred stock balance of $15 million.

Partially netnet income of $88 million and anan increase inthe thethe million.

Partially offsetting net income during year were preferred stock balance of $15 million.

Partially preferred stock balance of $15 million.

Partially offsetting net income during the year were preferred preferred stock balance of $15 million.

Partially offsettingstock net income the year were preferred preferred dividendsduring of $3 million. offsetting during year were preferred stock dividends ofincome $3 offsetting netnet income during thethe year were preferred stock dividends of million. $3 million. stock dividends million. _______________________________ stock dividends of of $3 $3 million. _______________________________ _______________________________ _______________________________

Allowance for fLor oan LLoan osses as aa s % f % L ooans Allowance Loan Losses a o a% f ofLoans Allowance for Losses as Loan Allowance for Loan Losses a % Loans Allowance for Loan Losses as aas % of oLf oans 0.54% 0.54% 0.54% 0.54% 0.53% 0.53% 0.54% 0.54% 0.54% 0.53% 0.53% 0.54% 0.52% 0.52% 0.52% 0.52%

0.58% 0.58% 0.58% 0.58%

Nonearning Assets Nonearning Assets

Nonearning Assets (inssets millions) Nonearning A Nonearning Assets

(in m(in illions) millions) $187 $187 (in m illions) (in m illions) $187 $187

$156 $156 $156 $156 $96 $96 $96 $96

$72 $72 $72 $72

$90 $90 $90 $90

Dec. Dec. 31, 31, Dec. Dec. 31, 31, Dec. Dec. 31, 31, Dec. Dec. 31, 31, Jun. 3Jun. 0, 30, 2011 2012 2013 2014 2015 Dec. Dec. Dec. Dec. Jun. Dec. 32011 1, 31, Dec. 32012 1, 31, Dec. 32013 1, 31, Dec. 32014 1, 31, Jun. 32015 0, 30, 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

Nonearning assets (nonaccrual loans plusplus other Nonearning assets (nonaccrual loans other Nonearning assets (nonaccrual loans plus other property owned) increased by $18 million or 25% to to Nonearning assets (nonaccrual loans plus other property owned) increased by $18 million or 25% property increased by $18 million or 25% Nonearning assets (nonaccrual loans plus other property owned) $90 million atowned) June 30, 2015.

The increase was property owned) increased by $18 million or was 25% to to $90 million at June 30, 2015.

The increase million at June 30, 2015.

The increase was increased by $18 million or 25% to $90 million at June 30, primarily due to a $18 million increase in nonaccrual $90$90 million at June 30, 2015.

The increase was primarily due to a $18 million increase in nonaccrual primarily due a $18 million in nonaccrual loan volume.

The other property owned primarily due to aThe $18 million increase inbalance nonaccrual 2015.

The increase wasto primarily due to aincrease $18owned million increase loan volume. other property balance loan volume.

The other property owned balance essentially unchanged. loan volume.

The other property owned balance inremained nonaccrual loanessentially volume.

The other property owned balance remained unchanged. remained essentially unchanged. remained essentially unchanged. remained essentially unchanged.

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Dec. Dec. 31, 31,Dec. Dec. 31, 31,Dec. Dec. 31, 31,Dec. Dec. 31, 31, Jun. 3Jun. 0, 30, Dec. Dec. Dec. Dec. Jun. 2011 2012 2013 2014 2015 Dec. 32011 1,31, Dec. 32012 1,31, Dec. 32013 1,31, Dec. 32014 1,31, Jun. 32015 0,30, 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

OurOur allowance for loan losses totaled $42 $42 million allowance for loan losses totaled million Our allowance for loan losses totaled $42 million (0.58% Our allowance for loan losses totaled $42 million (0.58% of loan principal and interest) at June 30, Our allowance for loan losses totaled $42 (0.58% of loan principal and interest) atmillion June 30, of loan (0.58% of loan principal and interest) at June 30, principal and interest) at June 30, 2015, compared with 2015, compared withwith 0.53% loan principal (0.58% ofcompared loan principal andofinterest) atprincipal Juneand 30,and 0.53% of 2015, 0.53% of loan 2015, compared with 0.53% of loan principal and interest at December 31, 2014.

The allowance isThe our loan principal and interest at December 31, 2014.

2015, compared with 0.53% of loanThe principal and interest at December 31, 2014. allowance isallowance our interest at December 31, 2014.

The allowance is best estimate of the amount of probable losses interest at December 31, 2014.

The allowance is our is our best estimate of the amount of probable losses existing best estimate of the amount of probable losses our in best estimate of the losses existing in our loan portfolio as of each balance best estimate of the amount of of probable losses existing in our loan portfolio asprobable of each balance our loan portfolio as ofamount each balance sheet date.

We determine existing in our loan portfolio as of each balance sheet date.

We We determine the as allowance based on aon existing in our loan portfolio ofallowance each balance sheet date. determine the based a the allowance based on a regular evaluation of the loan portfolio, sheet date. the allowance based regular evaluation ofdetermine the loan portfolio, which sheet date.

WeWe determine the allowance based onon a a regular evaluation of the loan portfolio, which which generally considers recent historic charge-off experience regular evaluation of the loan portfolio, which generally considers recent historic charge-off regular evaluation of the loan portfolio, which generally considers recent historic charge-off and is adjusted other relevant economic factors. generally considers recent historic charge-off experience and isfor adjusted for other relevant generally considers historic charge-off experience and isrecent adjusted for other relevant experience and is adjusted other relevant economic factors. experience and is adjusted forfor other relevant economic factors. economic factors. economic factors.

Fall 2015

Pearls of Wisdom Dr. David M. Kohl Professor Emeritus, Virginia Tech

Recently, at a production agriculture symposium in Myrtle Beach, S.C., a producer presented me with an interesting challenge. He wanted me to offer “pearls of wisdom” for success based on my background in academics and my varied work with lenders, producers and economists. As I gazed out over the Atlantic Ocean, points started flowing off the top of my mind. Fortunately, one of the attendees recorded these points for the group as that moment of deep thought and reflection may have been difficult to repeat.

First, I thought of the importance of balance. Any successful producer needs to moderate his risk, especially in regard to debt levels. When the debt to asset ratio exceeds 50 percent, the business becomes much more vulnerable to abrupt economic cycles. Balanced finances can help the business grow as well as mitigate risk.

Additionally, if your business does exceed 50 percent in debt to asset ratio level, back it up with strong reserves of financial liquidity, namely working capital. Over the years volatility in extremes has increased. These extremes can actually create more opportunities, but also increased chance of failure. Working capital is a self-insurance, risk management tool that allows one to weather the downside while still being flexible enough to capitalize on opportunities. In my experience, the top level managers maintain working capital to revenue or expense ratios of 40 percent or above. Those with working capital to revenue under 15 percent are usually more vulnerable and less able to benefit from potential opportunities.

Another pearl of wisdom, so to speak, is “better is better before bigger is better.” Working with many businesses through the years, I found the good producers know that small details matter and continue to find ways in which to build efficiencies in their operating, marketing, and finance systems. A financial metric to measure efficiency is the operating expense to revenue ratio. Add up operating expenses, excluding interest and depreciation, and

divide that number into revenue. Stronger businesses usually generate one dollar’s worth of revenue for less than $0.70, or under a 70 percent ratio. In turn, weaker businesses operate above 85 percent or require more than $0.85 to generate one dollar’s worth of revenue. One of the foundations of efficient management is to know your cost of production. If there are multiple enterprises involved, calculate the costs of each enterprise you operate. This allows you to allocate capital and human resources in a way that maximizes your efficiency and protects your profit margin.

Analogous to the flowing, rhythmic movement of the ocean, transition and evolution of business is a top priority. Is the existing generation of owners and managers open to new ideas, innovations and technology? Does the newer generation have the patience and understanding to realize change often takes time? These are both important questions to ask for everyone involved. Openly discuss and clearly define exit and entry strategies as well as any long-term income and expense expectations that may affect the operation’s viability.

In the transition and evolution, each part of a farm’s human resources needs to be evaluated on their skill base and mental attitude to continue the growth and profitability of the business.

Job descriptions and responsibilities along with accountability practices need to be well-defined for all individuals in order to accurately measure success and progress.

This next pearl of wisdom is very appropriate for the current economic conditions. The best of businesses will incrementally grow despite being in the downside of an economic cycle.

Dr. Danny Klinefelter of Texas A&M University has a good philosophy about success in business; it is all about timing.

Danny and I were both mentored by University of Illinois’ Dr. Tom Fry. He suggests those who are proactive and reserve some income, or “dry powder,” from profitable years can capitalize on tougher economic times and purchase assets at a discounted price.

That brings us to another point. Danny and I were mentored by a well-respected, agricultural finance economist. Surround yourself with a good set of mentors with whom you can openly discuss challenges and options. I often see gratitude and recognition extended by a seminar speaker to the farmer down the road, a lender, a certain teacher or agribusiness professional because of that individual’s instrumental role in another’s Continued on page 14

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spotlight Community Center

Dinuba Office Groundbreaking

Farmers Market Fundraiser

The Dinuba office groundbreaking ceremony.

On June 12, Farm Credit West broke ground for the construction of the new Dinuba office building located at 940 W. El Monte Way. Officials and staff from Farm Credit West, the City of Dinuba and the Dinuba Chamber of Commerce participated in the groundbreaking ceremony. Occupancy in the new office is anticipated by the end of 2015 and will replace the existing building that has housed the Dinuba office since its opening in 2004. The new office will allow Farm Credit West to meet the growing needs of its customers in the area and continue to provide superior service to our local farmers and ranchers.

FFA State Finals BBQ 2015

Kern County Young Farmers and Ranchers Members Travis Millwee, Allie Ruettgers and Lucas Espericueta (FCW Kern Branch) helped setup and work the farmers market fundraiser to support the Kern County Boys and Girls Clubs.

The Kern County Young Farmers and Ranchers held their first ever Farmer’s Market Fundraiser, Saturday, July 11 in the Farm Credit West parking lot in Bakersfield. The produce was not for sale, but was exchanged for donations to fund the building of a greenhouse for the Kern County Boys and Girls Clubs.

The farmer’s market was blessed with a steady stream of people and donations as they raised over $3,000. At the end of the day all remaining produce was donated to the Community Action Partnership of the Kern Food Bank. If you would like to help the Kern County Boys and Girls Clubs reach their goal please email the Kern County Young Farmers and Ranchers at Kernyfr@kerncfb.com.

2 0 1 5 H OLI D AY S C H E D UL E Columbus Day Monday, October 12 Thank you to everyone that participated in the annual State FFA Project Judging Finals BBQ. This year we served over 2,200 students and barbecued over one ton of meat. Watching the students enjoy their meal and the appreciation they showed during the day was amazing.

Veterans Day Wednesday, November 11 Thanksgiving Day Thursday, November 26 Christmas Day Friday, December 25

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Fall 2015

Community Center

2015 Renewal Scholarship Recipients Congratulations to all of our scholarship recipients that continue to maintain academic excellence and received a 2015 renewal scholarship award. Scholarship recipients are eligible to renew their scholarship for up to three years after their initial award. This year’s students renewing their scholarships will each receive $1,500 towards their education.

Students renewing their scholarship include: Bridget Adam, Santa Maria, CA Justin Adam, Santa Maria, CA From left to right: Butch Dias, FCW Board Member accepts the award on behalf of FCW, from Joey Airoso, President of the Tulare County Farm Bureau, along with Don O’Dell, FCW Tulare County Portfolio Manager, Jon Kennedy, FCW Tulare Dairy Portfolio Manager and Roger Everett, Tulare County Farm Bureau Vice President.

Maggie Boneso, San Miguel, CA Aaron Brown, Hanford, CA Gavin Chohan, Yuba City, CA Jason Couto Jr., Riverdale, CA

Agricultural Business of the Year On May 5 Farm Credit West was named this year’s Agricultural Business of the Year by the Tulare County Farm Bureau, for their dedicated service to the agricultural community, and their philanthropic support of many local organizations and the Farm Bureau. Each year Tulare County Farm Bureau honors a local business that has shown extraordinary support to Farm Bureau and the agricultural community.

This year that honor is bestowed upon a company who is tremendously supportive of the local farming community.

Farm Credit West is a partner and friend to the Farm Bureau organization in so many ways through countless sponsorships, in kind support and active members involved in numerous aspects of Farm Bureau including the Young Farmers and Ranchers program, Bounty of the County, and Annual Meeting gatherings at both the county and statewide level. When Farm Bureau reaches out to the community and asks for support for major events or causes, or seeks volunteers to help at special events, Farm Credit West is there as a good partner and friend. The lending institution also provides valuable financial services to farmers and ranchers in the region, and has a longstanding commitment to helping agricultural businesses thrive and prosper.

Article by Tulare County Farm Bureau.

Ethan Driver, Knights Landing, CA Kristen Droogh, Lemoore, CA Austin Fernandes, Tulare, CA Garrison Fernandes, Tulare, CA Lauren Friend, Tulare, CA Foster Hengst, Woodlake, CA Hattie Jameson, Visalia, CA Mazie Jameson, Visalia, CA Audra Jones, Orland, CA Emma Larson, Hanford, CA Cole Martin, Tulare, CA Elizabeth Parsons, Bakersfield, CA Rumyn Purewal, Yuba City, CA Kavin Sihota, Selma, CA Rajvir Sohal, Yuba City, CA Theresa Sweeney, Visalia, CA Erin VanGrouw, Visalia, CA Madeline Wisecarver, Hanford, CA

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spotlight Digital Strategy Farm Credit West recognizes the value of your time and the quality of services you expect. With input from the Farm Credit West Local Advisory Committee, Board of Directors, senior staff and Financial Partner’s Inc, a digital strategy focused on meeting our customer’s needs is a top priority.

FCW Mobile Banking Benefits •

User Experience: A modern look and feel with intuitive navigation has been optimized for both iOS and Android devices. Available through iTunes and Google Play Store, by searching Farm Credit West.

As an owner of Financial Partners Inc., Farm Credit West has partnered with them for over 15 years utilizing their superior financial services technology. Together, we are implementing our digital strategy for today and the future.

• Security: Advanced security features prevent any financial data or passwords from being stored directly on your device.

In 2014, Farm Credit West and Financial Partners Inc. developed technology goals to span the next 3 – 5 years. A top goal identified is the development of our digital strategy platform. The plan is to maximize the business benefits of digital projects for our customers and the Association. The mission of digital strategy is to improve your experience with a seamless cross-channel journey through real time communication, account information and secure electronic transactions.

• Support: Global messages keep you up to date on Farm Credit West activities and quick access to customer service representatives make it easy to fulfill all your servicing needs.

What does this mean for you?

• Development of an Online Banking Mobile App — Available now. You can quickly and easily view loan and investment balances, initiate transfers, and access a suite of cash management tools with the convenience of your iDevice or Android. Talk to your Loan Officer about how to get connected.

•

Do more with myFCW — Using myFCW allows you the benefits of a secure personalized site where your information and documents are electronically stored and quickly accessible.

You can exchange documents with your Farm Credit West lending staff, plus view loan and lease information, accounting information, tax statements, send and receive secure messages and complete your annual balance sheet all online through a secure portal. To login or register for myFCW go to farmcreditwest.com.

The final goal in the coming years is for our customers, to utilize the myFCW website for online banking, bill pay, e-signature of select documents, cash management, electronic billing, alerts and secure messaging all in one safe location. Our hope is that these enhancements will be convenient and create efficiencies that increase the value of the time we spend with you while continuing to provide superior service.

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• Access: If you currently use online banking just download the new app and login. No separate set of credentials or enrollment process.

Fall 2015

Secure Messaging:

Protecting Your Confidential Information

As Farm Credit West continues to see an increase in fraudulent attempts to gain access to confidential customer information, we have implemented internal procedures, guidance and applications to improve customer security.

One such application is “Secure Messaging”. Hosted on farmcreditwest.com customers can exchange confidential emails and files with Farm Credit West staff with complete confidence.

Secure Messaging is easy to use — sign in to farmcreditwest.com using your Online ID and Password to send or receive secure messages. The additional login helps authenticate and protect the confidentiality of your information.

How Secure Messaging Works When you receive a secure message from a Farm Credit West staff member, you will be alerted via your regular e-mail account.

This notification, which includes a link to Secure Messaging, requests that you sign in to farmcreditwest.com to retrieve your message. If you don’t have a farmcreditwest.com account the notification e-mail will prompt you to create one. Once an account is created you can use the same login for future messages from Farm Credit West.

Farm Credit West is committed to protecting our customer’s privacy and will continue taking steps to protect your confidential information.

Questions? Contact your local Farm Credit West office.

Social Engineering How To Protect Against Social Engineering

Social engineering is the practice of gaining access to buildings, systems or data by exploiting human nature, rather than by breaking in and using hacking techniques. Where hacking involves compromising a computer system to gain control, social engineering attempts to get people to do something they wouldn’t normally do. In short, social engineering is hacking people rather than computer systems.

A typical social engineering attack happens over time.

Criminals will often take weeks and months getting to know a place before even coming in the door, making a call or initiating contact electronically (i.e. email, social media). The preparation might include finding a company phone list or organization chart and researching employees. If the criminal can gain access to confidential information they are able to further build credibility. The goal is always to gain the trust and credibility with the primary motivation being financial gain.

While social engineering is a surprisingly effective method of facilitating fraud there are a few basic steps that can help minimize the potential of falling victim to an attack, including: 1. Education — Learn the different types of attacks and ways to identify them.

2. Be Suspicious — don’t trust unsolicited contacts seeking internal company data or personal information. Do not provide this informational electronically or over the phone.

3. Verify — confirm the identity of anyone requesting confidential information. This can often be done by simply contacting the company directly.

Secure Messaging Highlights: •

Securely communicate with Farm Credit West staff through a secured connection and site.

•

Exchange large files up to 80 MB in size.

Large enough to cover typical needs.

•

Familiar look and feel made to look and function like most email systems.

•

Features that include a contact list for typical staff contacts.

If you suspect you or your business has been a victim of a social engineering attack it is always best to report it immediately.

Then make sure to contact your financial institution and other likely target points — update any user names and passwords and monitor activity.

Attacks can also be reported to the police, the Federal Trade Commission (http://ftc.gov) and IC3-Internet Crime Complaint Center (http://www.ic3.gov/).

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spotlight Farm Credit Continues To Alleviate Hunger In California’s Agricultural Communities Joint Contribution Of $100,000 Will Support Food Banks In Areas Impacted By Drought

“California’s agricultural sector is strategically important to the state and to our nation as a whole,” said Robert B. Engel, chief executive officer of CoBank. “Farm Credit is committed to supporting this vital industry in good times and bad, not only with dependable credit but with other forms of assistance as well.

We hope this contribution will make a meaningful difference for farm workers and their families, and we appreciate the important work that food banks are performing to help them through the drought crisis.”

“One out of three children in the Central Valley goes hungry every day, and the state’s drought conditions have only worsened the problem,” said Andrew Souza, president and CEO of Fresno-based Community Food Bank, one of the food banks that will receive funds from the Farm Credit contribution. “It is no longer just the poor and the homeless who are hungry; working families are also struggling to make ends meet. We are so grateful to CoBank and Farm Credit for recognizing the critical nature of this issue and stepping up to make a difference.”

Pearls of Wisdom continued from page 9 From left to right: Kevin Sanchez, Executive Director of the Yolo Food Bank accepts the donation checks from Anna Fricke, FCW Woodland Branch and Chuck Moore, FCW Woodland Portfolio Manager.

Seven of California’s largest agricultural lenders are once again joining forces to alleviate hunger in drought-stricken farm communities throughout the state.

California’s six Farm Credit associations — American AgCredit, Farm Credit Services of Colusa-Glenn, Farm Credit West, Fresno Madera Farm Credit, Golden State Farm Credit and Yosemite Farm Credit — have pledged $50,000 to rural areas hurt by the historic drought, which has idled hundreds of thousands of acres of farmland and left many farm workers unemployed. CoBank, which finances agricultural cooperatives and other agribusinesses throughout the country, including in California, has matched that contribution with an additional $50,000.

The combined $100,000 will be distributed to 18 California food banks. The contribution follows a similar joint contribution made by the lenders in 2014.

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development and success. Remember that no individual achieves success without some assistance and guidance along the way. Sometimes that means creating, building and carrying on a legacy.

Finally, today’s advanced technology and stream of highlyaccessible information continues to change agriculture and present a huge advantage over years past. Often, the younger generation can act as a catalyst for the older generation inviting excitement and participation in the new possibilities technology can offer. This also presents another opportunity for the two generations to work together, think strategically and accomplish the tasks before them. Remember, there is an important difference between knowledge and wisdom.

When pondering possible pearls of wisdom at Myrtle Beach, I immediately thought of balance. That balance should not be limited only to our finances. Whether it takes the form of patience, conversation or calculating numbers, balance must prevail throughout our businesses and lives to yield eventual, overall success.

Fall 2015

Territory and Office Locations

Administrative Office 1478 Stone Point Drive Suite 450 Roseville, CA 95661 916.780.1166 Capital Markets 1446 Spring Street Paso Robles, CA 93446 805.237.0998

Yuba City

Carpinteria 1135 Eugenia Place, Suite A Carpinteria, CA 93013 805.684.8771

Woodland

ÂŤRoseville

Farm Credit West ACA Main Office

Dinuba 531 N. Alta Avenue Dinuba, CA 93618 559.591.9378

Hanford

Hanford

Dinuba Tulare

1111 W. Lacey Boulevard Hanford, CA 93230 559.584.2681

Capital Markets Templeton Bakersfield

Kern County

Santa Maria

19628 Industry Parkway Drive Bakersfield, CA 93308 661.39 9.7360

Carpinteria Ventura

Santa Maria

Ventura

1178 Tama Lane Santa Maria, CA 93455 805.922.7991

2031 Knoll Drive Ventura, CA 93003 805.477.1020

Templeton

Woodland

175 Cow Meadow Place Paso Robles, CA 93446 805.434.3665

440 Pioneer Avenue Woodland, CA 95776 530.666.3333

Tulare

Yuba City

200 E. Cartmill Avenue Tulare, CA 93274 559.684.1478

900 Tharp Road Yuba City, CA 95993 530.671.1420

Territory and Office Locations

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1478 Stone Point Drive Suite 450 Roseville, CA 95661

It’s only money.

Right. And smiles make great umbrellas and the economy always rights itself.

We live — and work — in the real world.

When you come to us for help, you’ll get honest answers, real numbers and people who understand agriculture because they live it everyday. Just like you.

We believe in service. We believe in you.

We are Farm Credit West.

800-909-5050 • www.farmcreditwest.com