§2279f Merger of Similar Banks

Summary

Banks organized under this law can merge with banks in other districts under the same rules if four things happen: the Farm Credit Administration Board approves, the boards of the merging banks approve, a majority of each bank’s voting stockholders approve at a proper meeting (voting in person or by proxy, with each association having votes equal to its number of voting stockholders), and for a bank for cooperatives a majority of the total equity interests (including allocated, but not unallocated, surplus and reserves) held by voting stockholders or guaranty-fund subscribers approve. The merged bank must follow the usual rules about its powers and capital. A new board must be formed that includes two directors chosen by each former bank’s board (with at least one from each bank elected by eligible stockholders or guaranty-fund subscribers) and one outside director chosen by those directors. The outside director must have financial-services and credit experience and must not have been connected with a Farm Credit System institution in the prior 2 years. If the board fails to pick an outside director, the Farm Credit Administration Board will appoint someone until one is elected. With Farm Credit Administration approval, the merged bank’s bylaws may set a different board size or selection method, but the board must include at least one outside director.