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
Young soybean field
Industry NewsArysta LifeScience Announces New Business Unit Head For…
September 1, 2015
Arysta LifeScience North America announces the addition of Rico Christensen, Business Unit Head, North America. Christensen will have responsibility for Read More
Wilbur Ellis Pink Soybean Seed Treatment
Crop InputsWilbur-Ellis Goes Pink With Soybean Seed Treatments For…
September 1, 2015
This past year, proceeds of pink-dyed soybeans treated and sold to Wilbur-Ellis seed customers in Chester, SD, went to two Read More
SprayersNORAC Active Wing Roll Slated For More Sprayers
September 1, 2015
NORAC Systems, a member of the Topcon Positioning Group, announces the release of Active Wing Roll for RoGator, Apache, New Read More
Syngenta Sign
FungicidesSyngenta’s Newest Fungicide Receives EPA Approval
September 1, 2015
Syngenta announced today that its newest succinate dehydrogenase inhibitor (SDHI) fungicide – Solatenol – has received registration from EPA and Read More
Flooded corn in Indiana
Crop InputsDelaying The Fertilizer Decision
September 1, 2015
Comments gathered from several retailers recently evidenced a classic good-news-bad-news scenario. Good news is prices and supplies of nitrogen, phosphate, Read More
StewardshipBee Buffer Strip Initiative Seeks 100 Ohio Farmers
August 31, 2015
The U.S. Bee Buffer Project, an initiative of the Pollinator Partnership (P2), Burt’s Bees and The Burt’s Bees Greater Good Read More
2015 ShowStopper Award, MAGIE
EquipmentA ShowStopper From Case IH: The Patriot 2250
August 31, 2015
For nine years now, visitors to the yearly Midwest AG Industries Exposition (MAGIE) show have been tasked with not only Read More
Crop InputsMonsanto, FMC Expand Roundup Ready PLUS Platform
August 31, 2015
FMC Corp. and Monsanto Co. announced today an expanded agreement to continue their participation in the Roundup Ready PLUS Crop Read More
Deere Nutrient Applicator
Eric SfiligojThe Good & Bad News From MAGIE
August 31, 2015
As I write this column, I’ve just returned from the annual Midwest AG Industries (MAGIE) trade show in Bloomington, IL. Read More
CPS Morenci receiving its 4R certification
StewardshipCPS Morenci Becomes First Michigan Facility Certified I…
August 31, 2015
The 4R Nutrient Stewardship Certification Program has announced that Crop Production Services, Inc.’s facility located in Morenci, MI, has been Read More
EquipmentDeere Announces Soucy Track Distribution Alliance
August 28, 2015
John Deere announces an alliance with Soucy Track to sell and distribute products through the John Deere dealer channel. “This Read More
FertilizerFall-Applied Phosphorus: A Rooted Investment
August 28, 2015
As commodity prices decrease and input prices continue to rise, farmers are seeking more efficient strategies for meeting a high Read More
Monsanto Sign
Crop InputsWhat’s Next For Monsanto, Syngenta?
August 28, 2015
After dropping its $47 billion bid to take over Swiss agribusiness firm Syngenta, Monsanto may be turning its focus to Read More
Golden Harvest Corn stalks
Crop InputsMonsanto: Syngenta Not The Only Horse In Crop Protectio…
August 28, 2015
Monsanto Co, having ditched an audacious $46 billion (£30 billion) offer for Syngenta AG, may downshift to a humbler strategy Read More
ManagementConsolidation hits and a miss; And a look at China’s ch…
August 28, 2015
As Monsanto suspends its pursuit of Syngenta, consolidation news at the retail and distribution level heats up. CropLife magazine’s Executive Read More
Corn Field
MicronutrientsHuma Gro Introduces New Boron Liquid Nutrient Formulati…
August 28, 2015
BORO-MAX, a new boron (B) 10% liquid nutrient formulation, has been added to the Huma Gro product line. This new Read More
Crop InputsNFU: Monsanto Decision To Withdraw Syngenta Bid ‘…
August 26, 2015
National Farmers Union (NFU) President Roger Johnson said the organization was very pleased by the news that Monsanto has withdrawn Read More
Crop InputsMonsanto Withdraws Bid For Syngenta
August 26, 2015
Monsanto Co. abandoned its latest effort to acquire Syngenta AG, the world’s top maker of pesticides, after a sweetened bid Read More