Regulator gives preliminary approval to U.S. AgBank, CoBank merger

U.S. AgBank and CoBank said they have received preliminary approval from their regulator, the Farm Credit Administration, to merge.

Wichita-based U.S. AgBank and Denver-based CoBank announced the proposed merger late last year.

Under the terms of the merger agreement, the banks will do business under the CoBank name but AgBank's operations in Wichita and Sacramento, Calif., will remain. The merged banks will have about $96 billion in combined assets.

The next step is for the banks' boards of directors to meet and review the FCA's conditions of the merger, and to distribute information and ballots to their shareholders. The ballots are to be returned by Sept. 7.

The banks have set a proposed merger date of Jan. 1.