CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, announced that it has successfully completed its merger with Wichita-based U.S. AgBank.
Formally closed on Jan. 1, 2012, the merger creates an $85 billion financial services institution that serves as a leading source of credit to the U.S. rural economy. The bank offers wholesale financing to 29 Farm Credit associations that provide loans and financial services to more than 70,000 farmers, ranchers and other rural borrowers in the west, northwest, southwest, central and northeastern parts of the country.
"We're delighted to have finalized this merger on behalf of our customer-owners across rural America," said Everett Dobrinski, chairman of the CoBank board of directors. "The merger builds CoBank's financial strength, greatly increases the diversity of our loan portfolio and expands our overall lending capacity. Most importantly, it enhances our ability to serve our borrowers and fulfill our mission for future generations. We're thankful for the strong support our stockholders have provided us throughout the merger approval process, and we're committed to delivering on our promises to them in the months and years ahead."
The CoBank name will continue to be used and remains headquartered outside Denver, Colo. Robert B. Engel will continue in the role of president and chief executive officer. For the first year following the merger, the bank will be governed by a 32-member board of directors consisting of the entire former CoBank and U.S. AgBank boards. On Jan. 1, 2013, the size of the board will be reduced to 24 directors elected by customer-owners in six geographic voting regions, plus between two and five appointed directors.
"The directors of both CoBank and U.S. AgBank have worked closely together for more than a year to make this transaction happen," said John Eishenhut, former chairman of the U.S. AgBank board and now first vice chairman of CoBank. "We greatly look forward to joining as one team in the coming year, and to providing the combined bank with good governance and leadership in keeping with the best cooperative principles."
Engel noted the employees of the bank have been working continuously for the past nine months on a merger integration plan designed to ensure a seamless transition for customers, including the 25 Farm Credit associations formerly served by U.S. AgBank.
"As a customer-owned organization, we are dedicated to providing our borrowers with the highest quality service and business experience," Engel said. "Thanks to the detailed planning we've conducted, we're confident we can bring the two organizations together smoothly while continuing to deliver on our value proposition."
Effective with the merger, CoBank is now one of four funding banks in the Farm Credit System, a nationwide network of cooperatively-owned lending institutions specifically chartered to meet the credit needs of agriculture and other key sectors of the nation's rural economy. On a combined basis, the System has over $225 billion in total assets and recorded earnings of approximately $3.5 billion in 2010.
In other Farm Credit news, Tracey McCabe has been named the new president and chief executive officer of the Federal Farm Credit Banks Funding Corporation. She will assume her new position on Mar. 5, 2012.
The Federal Farm Credit Banks Funding Corporation is part of the Farm Credit System and is responsible for issuing and marketing Farm Credit Consolidated Systemwide Debt Securities, managing investor relations and consolidating and reporting the financial results for the Farm Credit System.