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The Federal Home Loan Banks of Des Moines and Seattle recently announced a ratified merger agreement they expect will be effective by mid-year. The combined banks' headquarters will be located in Des Moines.

The banks' press statement, issued at the end of February, says the two institutions serve nearly 1,500 financial institutions in 13 states and three U.S. territories. The combined bank will be the largest in the FHLB system in terms of membership and geography. The bank will maintain a regional office in Seattle.

After this merger, 11 FHLBs will remain. About 7,300 financial institutions, including credit unions, are members of FHLBs. Seattle FHLB members will receive an "onboarding tool kit" to help guide them through the merger process this week, Michael Wilson, president and CEO of the Seattle bank wrote in a letter to members.

Many credit unions use FHLBs as a partner to hedge interest rate risk by selling their fixed-rate mortgages on the secondary market.