WASHINGTON — The Federal Home Loan banks of Seattle and Des Moines announced Thursday that their boards have unanimously approved a definitive agreement to merge.

The merger still has hurdles to complete, including winning final approval by the Federal Housing Finance Agency and ratification by the members of both banks. If completed, the merger would be the first voluntary combination of Home Loan banks in the system's history.

"The boards of directors of both institutions believe that a merger between FHLB Des Moines and FHLB Seattle would combine two complementary organizations with similar cultures, membership characteristics and solid financial positions," said Dick Swanson, the president and chief executive of the Des Moines Home Loan Bank. "The combined bank would remain a member-owned and member-centric cooperative, deeply focused on helping its members strengthen their institutions to better serve their customers and communities."

The combined bank would be headquartered in Des Moines, serving 1,500 members located in 13 states and the U.S. Pacific territories. It would have roughly $119 billion of assets.

Under the terms of the agreement, Swanson would serve as the combined bank's chief executive officer, while Mike Wilson, the head of the Seattle bank, would be the merged institution's president. (The two have a history of working together. Wilson was previously the Des Moines bank's chief business officer until 2012, working under Swanson.)

The banks said they plan to submit a merger application to the FHFA. Although the agency has not taken a formal stance on the merger, the FHFA has been supportive of the idea of consolidation within the Home Loan Bank system.

If FHFA approves the deal, the banks, thrifts, credit unions and other firms that own the Seattle and Des Moines banks will vote on the agreement. The banks said they expect that process to occur in the first half of 2015.

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