CoBank-U.S. AgBank to Merge by Jan. 1

By Jim.Robinson|September 15, 2011

It’s official: Two of the top financial institutions in agriculture are merging. The companies executed a Letter of Intent to merge in December 2010, and stockholders of both organizations approved the deal by substantial majorities, although exact numbers weren’t revealed.

“We’re delighted that our stockholders have demonstrated such enthusiastic support for this merger, which will create an even stronger, more durable bank that is better able to fulfill its mission to serve future generations of rural borrowers,” said Everett Dobrinski, chairman of the CoBank board of directors.

“Stockholder voting is a critical step in the merger approval process,” said John Eisenhut, chairman of U.S. AgBank. “We look forward to receiving final regulatory approval and closing the merger at the beginning of the year. When accomplished, we can begin delivering the numerous benefits that this transaction offers to our customers across the country.”

The merged bank will continue to do business under the CoBank name and be headquartered in Colorado but will maintain U.S. AgBank’s existing presence and operations in Wichita, Kansas, and Sacramento, California. It will also continue to be organized and operate as a cooperative, with eligible borrowers earning cash and equity patronage based on the amount of business they do with the organization.

The bank will have over $90 billion in projected assets post-merger and a well-diversified loan portfolio encompassing every major sector of U.S. agriculture, as well as the rural water, power and communications industries. The Farm Credit Administration has already granted preliminary approval to the transaction. Final approval from the FCA is expected following a statutorily required 35-day reconsideration period.