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
HerbicidesBREAKING: EPA Pulls Registration On Dow’s Enlist …
November 25, 2015
EPA on Wednesday withdrew approval of a controversial new weed killer to be used on genetically modified corn and soybeans, Read More
FertilizerYara Tampa Ammonia Terminal Garners ResponsibleAg Honor…
November 25, 2015
Yara has received its first ResponsibleAg Certification for its Tampa, FL, Ammonia terminal location. This achievement demonstrates Yara’s commitment to Read More
ManagementReviewing The Top Ag Stories For 2015
November 24, 2015
Editors Eric Sfiligoj and Paul Schrimpf discuss the most noteworthy events from this past year in agriculture. Read More
EmployeesAgriculture Jobs May Be Plentiful, But New Grads Are Sc…
November 24, 2015
Close to 60,000 jobs are set to open up in agriculture each year for the next five years, but there's not enough grads to fill them. Read More
Radish cover crop
StewardshipCover Crops Guide Helps Growers Improve Water Quality
November 23, 2015
A publication that teaches growers the advantages of using cover crops to improve soil health and crop yields has won Read More
Crop InputsThe Andersons’ Products Receive California Organi…
November 23, 2015
The Plant Nutrient Group of The Andersons, Inc. announced today that its Humic DG and Black Gypsum DG products are Read More
Eric SfiligojNew European Study Seems To Support Glyphosate Safety
November 23, 2015
Looking at any international news over the past few years, it might seem as if the European Union (EU) is Read More
Toggle Biostimulant corn roots
Crop InputsTwo New Biostimulants Added To United Suppliers’ …
November 20, 2015
Winfield US announces the launch of two new products in the United Suppliers portfolio for the 2016 crop season, Optify Read More
StewardshipNRDC Report: Cover Crops Contain Vast Benefits
November 19, 2015
As harvest season ends and farmers in the United States ready themselves for winter, one small change could make a Read More
Fall Harvest
Seed/BiotechArysta Launches New Seed Protectant
November 19, 2015
As spring wheat growers begin planning for a strong start to their season, Arysta LifeScience North America announces RANCONA V Read More
Crop InputsInocucor Receives U.S. Patent For Microbials
November 19, 2015
Inocucor Technologies Inc., the Montreal-based agriculture biotech company, was issued patent No. 9,175,258 by the U.S. Patent and Trademark Office to protect Read More
ManagementSyngenta Rumors and ARA 2015 Preview
November 19, 2015
CropLife Editor Eric Sfiligoj looks at the latest rumors involving Syngenta selling its crop protection business and talks about events Read More
EquipmentAGCO Announces Finalists For Operator Of The Year Honor
November 19, 2015
AGCO Corp. has announced the four top operators chosen as finalists for AGCO’s 10th Annual Operator of the Year program, Read More
High Plains Aquifer
StewardshipStudy: High Plains Aquifer Overall Usage In Decline
November 18, 2015
A new Kansas State University study finds that the over-tapping of the High Plains Aquifer’s groundwater beyond the aquifer’s recharge Read More
Golden Harvest Corn healthy leaves
FungicidesArysta Launches New Corn And Soybean Fungicide
November 17, 2015
Arysta LifeScience North America has recently launched ZOLERA FX Fungicide. The highly systemic, powerful fungicide delivers broad-spectrum disease control with Read More
Young corn plants in soil
Crop InputsBioAg Alliance: Microbials Targeted For 250-500 million…
November 17, 2015
Monsanto and Novozymes have announced a new 2025 acreage target that will guide the companies’ microbials business for the next Read More
Syngenta Sign
Crop InputsSyngenta Still Being Eyed For China Takeover
November 16, 2015
China National Chemical Corp. approached sovereign wealth funds including China Investment Corp. to help pay for a potential acquisition of Read More
Cedar Country Cooperative
Eric SfiligojCooperative Consolidation Continues
November 16, 2015
As I put this enewsletter column together, we’ve just put the finishing touches on our magazine’s annual CropLife 100 report. Read More