CoBank and U.S. AgBank announced that their voting stockholders have approved the proposed plan of merger between the two banks.
Ballots for the merger vote were formally tabulated at special meetings held yesterday at the banks' headquarters in Colorado and Kansas. Regulations issued by the Farm Credit Administration, the independent regulator for the Farm Credit System, prohibit the disclosure of exact vote tallies in order to preserve voter confidentiality. However, the stockholders of both organizations approved the merger by substantial majorities.
"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 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."
CoBank and U.S. AgBank executed a Letter of Intent to merge in December 2010. 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. Robert B. Engel, CoBank's president & chief executive officer, will remain as the chief executive of the combined entity. Darryl W. Rhodes, president & chief executive officer of U.S. AgBank, will retire in connection with the merger.
Rhodes noted that the bank will have more than $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. "Through its wholesale lending to 30 Farm Credit associations and direct lending to agribusiness and rural infrastructure companies, the combined bank will be one of the leading providers of credit to America's rural economy," Rhodes said.
Engel said the banks are dedicated to ensuring that customers continue to receive the highest quality of service following the merger close. "Our customer relationship management model is designed to provide each borrower with the highest value and best possible customer experience," Engel said. "We continue to execute our carefully prepared merger integration plan, and we are committed to delivering a seamless transition."
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.