FHLB Des Moines and Seattle set to complete merger

The Federal Home Loan Bank of Des Moines and the Federal Home Loan Bank of Seattle are near the completion of their merger. Members ratified the combination of the two banks on Feb. 27. The banks anticipate the merger will close on May 31.."We are pleased to announce that we have completed the important step of receiving member ratification, which allows us to move forward with the final steps toward closing," said FHLB Des Moines President and CEO Dick Swanson. "This vote demonstrates members' understanding that a combined bank will result in a cooperative that is well-positioned to continue to fulfill our mission over the long run.".Members of the two banks were entitled to cast one vote per each share of stock owned. The number of votes a single member could cast was capped at the average number of shares calculated on a district-wide basis. Members either had to cast all of their votes for or against the ratification of the merger; they also could choose to abstain from voting..Combined, FHLB Des Moines members had nearly 8.8 million eligible votes. Members cast nearly 73 percent, or 6.4 million, of those votes in favor of the merger. Less than 3 percent, or about 253,000, votes were cast against the merger. Only 35,000 eligible votes abstained or did not return a ballot..Combined, FHLB Seattle members had more than 1.8 million eligible votes. Members cast nearly 82 percent, or 1.5 million, of those votes in favor of the merger. Only 12,497 votes were cast against ratification while nearly 319,000 eligible votes abstained or did not return a ballot.."We are delighted that the members of both banks have endorsed this merger," said FHLB Seattle President and CEO Mike Wilson. "As we work to combine our businesses, we are focused on providing a smooth transition for FHLB Seattle members. Our management teams and staffs are working closely together.".The first phase of the integration is scheduled to be complete by June 1, with additional integration to be completed throughout the remainder of the year. The FHLB of Des Moines anticipates members will not notice any significant differences in their interactions with FHLB Des Moines once the merger is complete, said Angela Richards, the bank's director of marketing. "The combined bank will remain a member-owned and member-centric cooperative, focused on bringing members reliable and cost-effective liquidity, funding and services that enhance their success and that of the communities they serve," she said..The Des Moines bank also is in the process of integrating operations, converting data and providing information and education to the Seattle members, Richards said. The Des Moines bank will "make sure that [Seattle members] can conduct business with [the new FHLB Des Moines] once the merger closes," she said. "Providing a high-level of customer service and support has been a top priority for both banks and will continue to be a top priority for the combined bank.".Members of the combined bank also will have access to a broader range of products, new collateral categories and extended customer service hours on June 1, Richards said. Seattle's Symmetrical Pre-pay option will be available to members of the combined bank. The product allows members to prepay an advance to realize a gain when interest rates rise. Additionally, Seattle members will be eligible to start signing up for FHLB Des Moines mortgage services, including the MPF Traditional and MPF Xtra products, she said..The Federal Housing Finance Agency approved the merger in December and required no other regulatory approvals. The combined bank will serve nearly 1,500 financial institutions in 13 states: Iowa, Missouri, Minnesota, the Dakotas, Montana, Wyoming, Idaho, Utah, Washington, Oregon, Alaska, Hawaii and the U.S. Pacific territories. The first voluntary merger of two FHLBs, the combined organization will be the largest bank in terms of membership and geography in the FHLB system..The combined bank will be headquartered in Des Moines with a satellite office in Seattle. While some Seattle employees may move to Des Moines, many operational functions will transfer to, and be staffed by, the Des Moines bank..The chair of the merged bank will be Des Moines Chairman Dale Oberkfell, Midwest BankCentre, St. Louis. The vice chair will be Seattle Chairman Bill Humphreys, Citizens Bancorp, Corvallis, Ore. Both would serve for two years following the effective date of the merger. The combined board will initially be composed of the current 29 members of both boards: 15 will be Des Moines members and 14 will be Seattle members. The bank will use Des Moines's bylaws with selected provisions from the Seattle bank's bylaws. In time, the combined bank will reduce the size of its board but there will be at least one board member from each state in the combined district..Given the requirement of the Federal Home Loan Bank Act that the combined bank's title include its city location, the resulting bank will be called "Federal Home Loan Bank of Des Moines." The bank does not anticipate a change to other elements of the FHLB Des Moines brand, Richards said.."However, we recognize that we will be serving a more expansive and diverse membership base after June 1, and at some point, will likely re-evaluate our brand to make sure it reflects and supports the combined cooperative," she said. "For now, we are focused on ensuring a smooth transition for Seattle members and uninterrupted service for Des Moines members throughout the merger integration process."