[1]The merger of the Federal Home Loan Banks of Seattle [2] and Des Moines [3] will see nine dozen employees laid off by mid-year.
Word of the layoffs came on April 2, when the Washington State Employment Security Department [4] announced the permanent loss of 109 jobs in Seattle as of June 1. That number reflects most of FHLB Seattle’s workforce. According to FHLB Des Moines, Seattle’s branch will remain open as a regional office. The Seattle Times [5] reports that about 35 employees will remain in that city.
The merger was ratified by the banks’ boards in February, nearly five months after the announcement was made, and it puts FHLB Seattle under the auspices of the larger FHLB Des Moines. While Seattle held $35.1 billion in assets and served just over 300 customers at the end of 2014, Des Moines held $95.5 billion in assets and served 1,152 customers.
The merger is the first of its kind since the FHLB system was created in 1932 as a response to the Great Depression. Its system of 12 banks, governed today by the Federal Housing Finance Agency [6], serves as a GSE-style lender providing stable, low-cost mortgages.
According to FHLB Des Moines, the merger will lead to an institution that will serve nearly 1,500 financial institutions in 13 states and three U.S. territories, making the combined bank be the largest in the FHLB system in terms of membership and geography.
The bank is, of course, keen to extol the virtues of the merger despite the layoffs. Des Moine stated in a press release that “members will have access to an enhanced suite of products and services designed to help meet the housing, economic development, and business needs of the communities they serve.”
Mike Wilson, FHLB Seattle’s president and CEO said that he looks forward to the union with Des Moines and that Seattle’s customers should experience little to no disruption as the transition runs its course.
Both banks anticipate that the merger will be complete by mid-year.