CoBank and Farm Credit associations have completed the merger with U.S. AgBank. As a result, an $85-billion financial services institution has been created. CoBank is a cooperative bank serving agribusinesses and rural infrastructure providers. U.S. AgBank is based in Wichita.
The combined bank continues to do business under the CoBank name and remains headquartered outside Denver, Colorado, with Robert B. Engel in the role of president and chief executive officer. The bank retains its cooperative structure, with qualified borrowers earning cash and equity patronage in proportion to the amount of business they do with the organization.
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 merger occurs following a lengthy process involving consultation with customer-owners, federal regulators, and other Farm Credit System institutions. The boards of the two organizations executed a Letter of Intent to merge in December 2010 and submitted a formal merger application to their independent regulator, the Farm Credit Administration, in March 2011. The FCA granted preliminary approval in June last year, after which stockholders approved the merger by substantial majorities during special meetings held on September 7. Final regulatory approval was received from the FCA on December 12, 2011.
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.