U.S. AgBank & CoBank To Pursue Merger

U.S. AgBank and CoBank, two of the five banks in the Farm Credit System, announced that they intend to pursue a merger in 2011, USAgNet reports. The banks’ boards of directors executed a letter of intent that sets forth key terms and conditions of the proposed transaction, which also requires regulatory and stockholder approval.

The merged bank would serve as a wholesale provider of financing to Farm Credit associations that provide credit and financial services to more than 70,000 farmers, ranchers and other rural borrowers in 23 states. It would also serve as a direct lender to agribusinesses and rural electric, water and communications service providers throughout the country.

The merged bank would continue to do business under the CoBank name and be headquartered outside Denver, CO, but it would maintain U.S. AgBank’s existing presence and operations in Wichita, KS and Sacramento, CA. Robert B. Engel, CoBank’s president & chief executive officer, would be the chief executive of the combined entity.

U.S. AgBank is headquartered in Wichita and provides wholesale loan funds and financial services in the states of Arizona, California, Colorado, Hawaii, Kansas, Nevada, New Mexico, Oklahoma, Utah, southeastern Idaho and the western edge of Wyoming. ◆