HUNTINGTON COUNTY, Indiana (WANE) – The grain mill failures at Salamonie Mills and Agland Grain have raised many questions over the past year. One of those questions concerns the loan officer at First Farmers Bank and Trust, who is also a board member of the Indiana Grain Indemnity Fund.
The Indiana Grain Indemnity Fund is a fund set up by farmers with farmers’ money. Just like insurance when a grain failure occurs, farmers who put money into the fund will receive 80% of their lost money. The fund has a group of board members who oversee this process.
First Farmers Bank & Trust filed its first foreclosure case on Salamonie Mills in March 2020. Since the additional documents were filed, WANE 15 has noticed coincidences in the documents.
According to court documents, the owners of Salamone Mills had defaulted on two separate loans of more than $ 8 million to First Farmers Bank & Trust. One loan was issued in August 2013 while the second was issued in October 2019.
During WANE 15’s first interview with lawmakers in early January, lawmakers mentioned that farmers told them they started seeing bad checks from factories as early as September 2019, before the owner received a second loan.
In a briefing with farmers, Indiana Grain Buyers Director Harry Wilmoth said the state was told bad checks started to rebound in January 2020, but that the state only intervened in March. If so, the question remains as to whether the state was aware of the bad check or whether it was notified and never looked into the problem. And if the checks were bad before the owner took out a second loan, how did the owner get a second, then a third loan.
Both loans were issued by First Farmers Bank & Trust Senior Vice President of Business and agricultural lender Mark Wolf. This name may sound familiar to producers. Wolf is currently an active and voting member of the Indiana Grain Indemnity Fund, which helps pay farmers for grain shortages. Documents on the state’s website show Wolf is nominated by “the largest organization in Indiana representing exclusively the interests of bankers.”
In the state of Indiana, a bank can foreclose a property if the owner has not made payments for a period of time. The question many farmers have asked WANE 15 is, why didn’t Wolf tell the state that Salamonie Mills was not repaying her loans sooner?
The answer is complicated. That is why lawmakers added a definition of conflict of interest as “having or representing a person who has a direct or indirect financial interest in a licensee”. The Senate bill would also improve transparency and oversight within the Indiana Grain Buyers and Licensing Agency.
Wolf was present at the Grain Indemnity Funds vote on farmers’ compensation for Agland Grain, but abstained. He was also not present during Salamonie Mills’ vote in December.
During a Third Chamber legislative forum in Bluffton, Sen. Travis Holdman (R-Marke), Rep. Dan Leonard (R-Huntington) and Matt Lehman (R-Berne) answered questions on the bills which reached the House and the Senate. During the meeting, discussion quickly turned to the grain mill bills.
Holdman says he has seen financial documents that show the owner of the grain mill had a deficit for years. Reports for 2017, 2018 and 2019, so negative net worth. Holdman, who worked in the banking industry for several years, said he did not understand why this was not detected until a second loan was granted to the bank in 2019.
Lehman added that there is evidence that the licenses for Salamonie Mills and Agland Grain should have been withdrawn earlier than they were. In September, the mill wrote bad checks. However, given that the bank gave the factories a second loan, there is evidence that this is the reason they were not withdrawn.
Both bills have rolled out of their original chambers and are now waiting to be heard. Holdman says he will lobby for a six-month clause to be reinstated in the bill. This would cover farmers after the 15 month failure date. The last day for third reading of Senate bills in the House is April 19 and the following day for House bills in the Senate.
WANE 15 contacted the Indiana Grain Buyers and Warehouse Licensing Agency and the Indiana Grain Indemnity Fund to see if Mark Wolf and Director Harry Wilmoth would step down. A state spokesperson said: “ISDA does not keep any documents responding to these requests. “
We have also contacted First Farmers Bank and Trust for a statement. At the time of publication of the article, no statement has been provided.