CoBank Reports 2009 Financial Results

CoBank, a leading cooperative bank serving agribusinesses and rural utilities throughout the U.S., has announced fourth-quarter and full-year financial results for 2009. Net interest income and net earnings reached all-time highs despite lower average loan volume during the year. Although loan quality declined as a result of impacts from the global recession on the bank’s customer base, CoBank’s overall levels of capital and liquidity remained strong.

"We’re extremely pleased with the financial performance CoBank delivered in 2009 on behalf of customer-owners across rural America," says Robert B. Engel, president and chief executive officer. "Despite a very difficult market environment, the bank continued to fulfill its mission as a highly dependable source of credit for all the industries we serve. We remain focused on meeting our customers’ borrowing needs, while protecting the bank’s foundation of strength and stability for the long term."

Full-year net income was a record $565.4 million, up 6 percent from $533.4 million in 2008. Net income for the fourth quarter of 2009 was $132.6 million, compared with $84.6 million in the fourth quarter of 2008. Fourth-quarter net income in 2009 included a $25.0 million provision for loan losses, compared to a $55.0 million loan loss provision in the fourth quarter of 2008. Total provisions for loan losses for 2009 and 2008 were $80.0 million and $55.0 million, respectively.

Net interest income for the bank rose 10 percent to $946.0 million, from $862.6 million in 2008. The increase was primarily driven by improved margins, including the positive impact of the bank’s balance sheet positioning throughout 2009. During the year, CoBank benefited from the steepened yield curve environment that resulted from actions taken by the world’s central banks to counter the global recession.

Average loan volume during 2009 was $44.5 billion, down 2 percent from the prior year primarily due to lower seasonal financing requirements from agribusiness customers. As previously disclosed, seasonal agribusiness lending was reduced during the year due to the substantial drop in prices for grains and farm inputs from 2008’s exceptionally high levels. Offsetting that decline was growth in other areas of the business, including U.S. government-guaranteed loans that support American agricultural exports, loans to energy customers, and loans to and participations with affiliated associations and other partners across the Farm Credit System.

"CoBank and its shareholders benefit from the diversification of our loan portfolio and the degree of balance we have among our agribusiness, rural infrastructure and Farm Credit System customers," Engel says.

In March, the bank will pay $268.9 million in total patronage, including $183.8 million in cash and $85.1 million in common stock. For most customers, that represents 100 basis points of average loan volume, lowering their overall net cost of debt capital from CoBank.

"Patronage is an important benefit for organizations that choose CoBank as their lender," Engel says. "The strong patronage payout authorized by our board for 2009 underscores the strength of the cooperative model and the compelling value proposition that CoBank offers its customer-owners."

Leave a Reply

Latest News
Crop Protection Products in storage
Crop InputsNewsweek: World Is ‘Awash In Glyphosate’
February 11, 2016
The world is awash in glyphosate, the active ingredient in the herbicide Roundup, produced by Monsanto. It has now become Read More
Crop InputsEPA: Let’s Talk Imidacloprid, Bees On February 18
February 11, 2016
EPA will hold an online technical briefing on its preliminary pollinator risk assessment for imidacloprid, a neonicotinoid insecticide, on Feb. Read More
ManagementThe latest on Syngenta-ChemChina Deal
February 11, 2016
Executive Editor Paul Schrimpf invites Jackie Pucci and Dave Frabotta from sister publication AgriBusiness Global to discuss the latest developments Read More
AdjuvantsUniversity of Illinois Confirms Adjuvant’s Perfor…
February 11, 2016
An independent University of Illinois study has shown that WETCIT adjuvant, now with TransPhloem technology, provides greater herbicide uptake and Read More
Crop InputsSyngenta’s Acuron Flexi Receives EPA Approval
February 11, 2016
Growers looking to control their toughest weeds with flexibility will have access to Acuron Flexi corn herbicide from Syngenta, now Read More
EquipmentAGCO Showcases White Planters 9800VE Series Planters AT…
February 11, 2016
AGCO unveiled the new White Planters 9800VE Series planter during the 2016 National Farm Machinery Show in Louisville, KY. The Read More
EquipmentCase Unveils 2000 Series Early Riser Planter At NFMS
February 10, 2016
Case IH revealed the all-new 2000 Series Early Riser planter to media and attendees at the opening of the National Read More
Syngenta Sign
Crop InputsSyngenta: Keep Ag In Mind During Election Season
February 10, 2016
As presidential candidates stake out their 2016 election platforms and key priorities, growers and their business partners should seek opportunities Read More
Crop InputsMarrone Bio Innovations Submits New Bio-Fungicide For E…
February 9, 2016
Marrone Bio Innovations, Inc. (MBI) today announced that it has submitted a new biological fungicide (MBI-110) to EPA. The broad spectrum Read More
Crop InputsWeed Expert: Adding A Second Herbicide Not Always Easy
February 9, 2016
In my last post, I reviewed some recent research that suggests one of the best ways to delay the evolution Read More
Crop InputsGenetic Literacy Project: Farmers Need More Herbicide C…
February 9, 2016
There are two things that I think just about every weed scientist can agree on, writes Andrew Kniss for The Read More
HerbicidesWeed Expert Warns North Dakota Growers Of Coming Herbic…
February 9, 2016
Ford Baldwin painted a bleak picture of weed control at a recent workshop here exploring the future of ag production, Read More
HerbicidesWSSA Announces New, Updated Free Web Resources
February 9, 2016
Today the Weed Science Society of American (WSSA) announced that new and updated educational materials for both weed scientists and Read More
Soybean field
FungicidesFour Arysta Fungicide Formulations Given FIFRA Approval…
February 8, 2016
Arysta LifeScience North America recently announced the issuance of Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) Section 2(ee) Recommendations for Read More
FungicidesAgri-Fos Systemic Fungicide Plus Receives EPA Registrat…
February 8, 2016
Vivid Life Sciences has announced the EPA registration of Agri-Fos Systemic Fungicide Plus, a highly concentrated active ingredient phosphite fungicide, Read More
Crop InputsBayer Contests EPA’s Decision On Valuable Insecticide F…
February 5, 2016
Crop Science, a division of Bayer, has announced it has refused a request by the Environmental Protection Agency (EPA) to Read More
Wheat Field North Dakota
Seed/BiotechSyngenta Wins Seed Fraud Suit Against South Dakota Grow…
February 5, 2016
Syngenta has obtained a $25,000 settlement from Paul and John Mayclin, Mayclin Farms, Plankinton, SD, in response to their Plant Read More
ManagementOABA Annual Conference Wraps Up In Columbus
February 5, 2016
More than 300 Ohio AgriBusiness Association (OABA) members and industry professionals were on hand to engage in collaborative learning and Read More