— FFVA trade associate member PNC Bank knows that the agriculture business has its own financial challenges. That’s why it offers services tailored to the unique needs of Florida growers.
PNC is one of the nation’s largest diversified financial services organizations, with a history that goes back 160 years. PNC Bank was created in 1983 by a merger between Pittsburgh National Corporation and Providence National Bank. Its footprint can be found throughout 19 eastern states with 2700-plus branches.
In Florida, PNC has several bankers who specialize in the business of farming. They deal with the complex financial issues of good and bad harvest cycles. Brian Hofer is an agricultural banker based in Clermont who provides services for farmers both on the credit side of the balance sheet as well as the deposit side.
“I explain to my clients how short-term loans, smart cash accounting and semi-liquid savings accounts may help them stabilize their business during the off-season. Then I offer my clients any service related to credit or any solution that’s related to deposits, which could include treasury management services,” Hofer said. Treasury management is basically a cash management tool that a business can use to help it manage both sides of the financial balance sheet.
“Specifically, there are three products that agricultural clients utilize that I find to be extremely helpful for their business,” Hofer said.
The first is a seasonal line of credit with annual payments. “Once your crop is harvested or sold, it’s a good time to talk with your ag banker about what cash you may need before the next harvest. Through a seasonal line of credit, we make the payments coincide with the grower’s harvesting season and we don’t place a lien on real estate for that type of credit. A lot of farmers find that to be very attractive,” he said.
The second is the purchasing card, which is a piece of treasury management. “It’s called a Visa Business Options credit card, and it allows the farmer to make repairs, purchase fuel and purchase some inputs as well. The nice thing about this card is he or she receives one percent back in cash,” Hofer explained. “So my experience has been that most growers are going to spend in excess of $100,000, maybe even $150,000 to $200,000. If they are using that card, they’re going to get a check back of $1,500 to $2,000.”
The third trend Hofer sees among his clients is succession planning. Recent Ag Census data underscores the trend of the aging farmer. “In Florida, we see a notable increase in the number of farm operators over the traditional retirement age of 65. In 2007, there were 15,273 farmers over 65; in 2012 there were 17,531. This data proves the notion that farmers are working longer and longer, often without planning for a successor — and we must plan for that,” Hofer said. “Family farms and businesses must be protected with a succession plan. Furthermore, we’ve learned that 73 percent of business owners in the agriculture industry who are planning a change in company ownership in the next five years plan to sell or transfer their business to a family member.
“These are important facts to take note of, so we have a wealth and investment management group that helps with succession and estate planning, especially since many of them are attorneys who have a great understanding of the intricate laws surrounding inheritances, estates, and corporations.”
The bank is committed to agriculture and it shows its dedication by having an agricultural banker in all of the 19 states it serves.” – PNC Bank’s Brian Hofer
Hofer said he is excited about a new product that PNC is offering called Cash Flow Insight, a suite of online tools that brings together processes, banking and accounting data, and customer and vendor payments.
“It’s a very robust software system that is a great resource for businesses to track, manage and project cash flow,” he said. “The nice feature of it is it allows a farmer to look at his past and glimpse into the future to gauge expenses and predict when the highs and lows of the cash flow cycle occur. Then, they can tweak and make adjustments accordingly.”
The bank is committed to agriculture, and Hofer says it shows its dedication by having an agricultural banker in all of the 19 states it serves. “Last year, for example, we provided lines of credit for farmers to honor that commitment because of the drought that occurred, particularly in the Midwest,” Hofer said.
PNC celebrates National Agricultural Day every March by visiting local farmers to discuss their concerns and offer some advice. The ag bankers usually show them their appreciation with gifts, most likely from other clients. “We have a client that produces honey locally, so we provided gift baskets with honey packages for our farmers last year,” Hofer said.
One other well-received product PNC offers is an Equipment Guidance line of credit where the bank can pre-approve the farmer for a pre-determined level of credit that allows him or her to buy equipment throughout a year without having to keep coming back for approvals.
“It gives them peace of mind, knowing that if they have to purchase a truck or an attachment or implement of some kind, they have that availability,” he said.
As a bonus, many of PNC’s agricultural bankers have an ag background. “I’d say probably 50 percent of them have farming experience,” Hofer said. “Either they own a farm, manage a farm, or they grew up on a farm. My farming background is actually with my wife’s family farm in Sumter County.”
In addition to its clients, PNC Bank believes in doing all it can for the communities it serves. PNC has a long history of partnering with local organizations that strengthen and enrich the lives of local communities.
One project, “PNC Grow Up Great,” helps prepare children from birth to age 5 for success in school and life. Focusing on at-risk children, Grow Up Great provides innovative opportunities that assist families, educators and community partners to enhance children’s learning and development.
“Grow Up Great is our hallmark piece as far as projects that give back to our communities,” Hofer said.
“Each branch in the counties and cities we serve provides grants or sponsorships to local charities throughout the year so as to provide as much opportunity and solutions for those communities as we can. We understand that a sound education and a rich science and arts community is a significant driver of our economic success, which provides an opportunity to help build a solid foundation for the future of this region.”
Visit PNC Bank’s agricultural banking website to learn more about the company and its offerings. Contact Brian Hofer at 352-552-6107 or via email at email@example.com.