Magazine article Rural Cooperatives

CoBank Earnings Rise 15 Percent; Patronage Tops $340 Million

Magazine article Rural Cooperatives

CoBank Earnings Rise 15 Percent; Patronage Tops $340 Million

Article excerpt

CoBank's 2011 earnings and net interest income reached record highs, and loan quality improved throughout the year, the co-op lender reports. Net earnings increased 15 percent, to $706.6 million, and patronage of $340.7 million will be paid to members. Net interest income rose 13 percent, to $1.1 billion, up from $950.8 million in 2010.

Average loan volume during 2011 was $50.2 billion, up 10 percent from the prior year. Most of the increase occurred in the bank's Agribusiness operating segment, where higher prices for corn, soybeans and wheat drove increased seasonal borrowing by many cooperatives and other agricultural businesses. The bank also experienced higher average loan volume in its Rural Infrastructure operating segment, largely due to growth in lending to rural electric distribution cooperatives throughout the country.

"Throughout the year, we were able to effectively meet the borrowing needs of customers and build the financial strength of the bank, despite difficult conditions in the financial markets and the broader U.S. economy," says Robert B. Engel, president and chief executive officer.

"In addition, we successfully executed our merger with U.S. AgBank, which expanded our customer base, enhanced the diversification of our loan portfolio and increased our capital position."

Average loan volume increased about 1 percent in CoBank's Strategic Relationships operating segment, which includes the bank's wholesale loans to affiliated Farm Credit associations and other Farm Credit System organizations that are primarily focused on production agriculture. …

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