§2279f Merger of Similar Banks

Summary

Banks under this law can merge with banks in other districts that follow the same rules. The merger must be approved by the Farm Credit Administration Board, by the boards of the banks involved, and by a majority of each bank’s stockholders voting at a proper meeting (votes may be in person or by proxy). If a merging bank is a bank for cooperatives, the voters must represent a majority of that bank’s total equity interests, including allocated surplus and reserves but not unallocated amounts. Two other sections (2279a–2 and 2279a–3) also apply to these merged banks. After the merger, a new board of directors must be made. Each merging bank picks two directors, and at least one director from each bank must be chosen by the eligible stockholders or guaranty-fund subscribers. Those directors then elect one outside director. The outside director must have experience in financial services and credit and must not, in the two years before election, have been a borrower, shareholder, or officer, director, employee, or agent of any Farm Credit System institution. If the board fails to pick that outside director, the Farm Credit Administration Board will appoint a qualified person until the board elects one. The merged bank’s bylaws can set a different number or method for choosing directors if the Farm Credit Administration approves, but there must be at least one outside director.