DENVER, COLORADO, U.S. — CoBank announced on Jan. 3 that it has successfully completed its merger with Wichita, Kansas, U.S.-based U.S. AgBank.
The merger, which formally closed on Jan. 1, creates an $85 billion financial services institution that serves as a leading source of credit to the U.S. rural economy. The combined bank's customer base includes agricultural cooperatives and rural power, water and communications service providers in all 50 states. In addition, 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 combined bank continues to do business under the CoBank name and remains headquartered outside Denver, Colorado, U.S., 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 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."