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CoBank and U.S. AgBank want to merge

Two of the five banks in the Farm Credit System want to merge next year. The boards of directors of CoBank based in Denver and U.S. AgBank of Wichita, Kansas approved an agreement and hope to close the deal by October 1st. CoBank with 60 billion in assets serves Washington, Montana, Alaska and east coast states from New Jersey to Maine. U.S. AgBank has 25 billion in assets and serves farm credit associations in Kansas and western states.

The merged bank will use the CoBank name and headquarters in Denver. CoBank president and CEO Robert Engel would be chief executive of the new bank while the head of U.S. AgBank, Darryl Rhodes will retire. Engel says the merger would allow the bank to serve virtually every key agricultural commodity providing diversified income streams, protecting owners from volatile markets.

The deal must be approved by shareholders of the two banks and the Farm Credit Administration.

The other three banks in the Farm Credit System are AgriBank based in St Paul, Ag First Farm Credit Bank based in Columbia, South Carolina and Farm Credit Bank of Texas based in Austin.