The Federal Home Loan Bank of Seattle will lay off 109 employees beginning June 1 as part of its planned merger with the much bigger Federal Home Loan Bank of Des Moines.
The combined bank, which will serve about 1,500 financial institutions across 13 states and three U.S. territories, will be headquartered in Des Moines.
It will maintain a regional office in Seattle, with about 35 of its current 148 local employees remaining, according to FHLB Seattle spokeswoman Connie Waks. The regional office will focus on supporting member relationships and community investment.
The banks announced in September that their boards had unanimously approved a merger — a move that would result in the national finance network’s largest cooperative by membership. The merger received approval by the Federal Housing Finance Agency in December, and ratification by members of both banks in February.
The deal will officially close once the banks have satisfied the conditions of the approval, and the agency has accepted the continuing bank’s organization certificate — something the banks expect to happen by midyear.
Three or four of the current Seattle employees will relocate to Des Moines.
The remaining 109 people will be laid off between June 1 and January 2016.
Michael Wilson, president and chief executive officer of FHLB Seattle, will serve as the combined banks’ president, while Dick Swanson, president and CEO of FHLB Des Moines, will serve as its CEO. Wilson will become both president and CEO no later than June 2017, when Swanson plans to retire, Waks said.
Chartered by Congress in the 1930s in response to the Great Depression, the Federal Home Loan Bank System is made up of 12 regional cooperative banks.
Each regional FHLB is owned by its member financial institutions. (After the merger closes, there will be 11.) The system’s primary purpose is to provide stable funding to member institutions that they in turn use to make loans to families, farms and businesses.
As of Dec. 31, the Federal Home Loan Bank of Seattle had $35.1 billion in assets, owned by some 316 financial institutions in eight Western states and several Pacific territories.
The Seattle-based wholesale lender fell short of required capital in 2009 during the recession, its second bout of financial trouble in less than a decade. But it has been deemed “adequately capitalized” since 2012, Waks said.
The FHLB of Des Moines had $95.5 billion in assets and serves about 1,156 members in five states in the Midwest.
