Category: News

DENVER (October 7, 2019) — CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, has been named to Global Finance magazine’s list of the world’s safest banks for 2019.

Global Finance, which covers the financial services industry, publishes its “World’s 50 Safest Banks” list annually. Banks are ranked using a methodology that includes total assets and an evaluation of long-term ratings from major rating agencies. This is the ninth consecutive year CoBank has been named to the list.

“We’re pleased to again receive this recognition, which reflects the financial strength and stability of CoBank as well as our membership in the Farm Credit System,” said Thomas Halverson, CoBank’s president and CEO.

Further information is available at the Global Finance website.

About CoBank

CoBank is a $139 billion cooperative bank serving vital industries across rural America. The bank provides commercial loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

July 1, 2019, Santa Rosa, CA — American AgCredit (AAC) and Farm Credit Services of Hawaii (FCSH) have announced today the completion of their Plan of Combination. Under the Plan of Combination, AAC acquired all of the assets and liabilities of FCSH and each stockholder of FCSH has become a stockholder of AAC.  AAC now serves as the Farm Credit System association chartered to provide credit and related services to farmers, ranchers and rural residents in the state of Hawaii.  FCSH will be formally dissolved in the next few months.

Fred Dixon, FCSH Interim CEO says, “The combination with American AgCredit provides an exciting opportunity to strengthen and expand the service we offer to our customer owners and to the greater Hawaiian agricultural market.”

As members of the nationwide Farm Credit System, the largest single provider of credit to American agriculture, the combination of FCSH with AAC strengthens AAC’s ability to serve farmers and ranchers throughout the Western and Midwestern states, including Hawaii.

The combination of the associations was approved by the Farm Credit Administration, the System’s regulatory agency, following a positive vote by the shareholders of FCSH.

“American AgCredit has had a presence in the Hawaiian market in conjunction with FCSH for more than 20 years,” says American AgCredit CEO Byron Enix. “The Hawaiian market provides additional diversification to our geographic and commodity base, and we are excited to expand our footprint and serve our mission to the agricultural community in Hawaii.”

Founded in 1916, American AgCredit specializes in providing financial services to agricultural and rural customers throughout California, Colorado, Hawaii, New Mexico, Nevada, Kansas and Oklahoma, as well as to capital markets customers in all 50 states. We serve customers through 34 branch offices located throughout the Western and Midwestern states, with corporate headquarters based in Santa Rosa, California.

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American AgCredit and Farm Credit Services of Hawaii announce combination

CoBank, ACB has released its first quarter 2019 financial results. The news release is available on cobank.com under Corporate > Financial Information.

CoBank recorded solid financial performance in the first quarter of 2019. Though net income declined – primarily as a result of non-recurring items – lending increased across all three of our operating segments, and credit quality and capital remained strong. CoBank remains well-positioned to meet the financial needs of its customers and fulfill its mission of service to rural America.

CoBank is a $138 billion cooperative bank serving vital industries across rural America. The bank provides commercial loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

Reports Net Income of $169.4M and Total Assets exceeding $10.9B for 2018

April 15, 2019, SANTA ROSA, CA – American AgCredit increased its cash patronage distribution for 2018 to a full 1%, resulting in a record $86 million cash back to our loyal customers, and $26 million more than last year. The nation’s fifth largest agricultural lending cooperative, American AgCredit also announced today a record net income of $169.4 million for the year ended December 31, 2018.

“Our Association had an outstanding year in 2018—not just in our financial results, but in the significant progress we are making in positioning our company for competitive and sustainable success,” said Byron Enix, Chief Executive Officer. “Our focus on improving our internal efficiency set the stage for our record net earnings year along with our increase in cash patronage distribution.”

2018 Results of Operations

The Association produced after-tax net income of $169.4 million in 2018, compared to $159.1 million in 2017 and $104.5 million in 2016. The $10.3 million increase in net income from 2017 was primarily due to a $12.6 million increase in net interest income as a result of strong organic loan growth and a $17.4 million increase in non-interest income.

The 2018 net interest income was $267.7 million, compared to $255.1 million in 2017 and $212.5 million in 2016. The 2018 increase of $12.6 million represents a 4.9% increase over 2017 and was primarily due to strong growth in loan volume. Average earning assets grew by $663.0 million during 2018, representing an annual growth rate of 7.5%.

“Our accrual loan growth rate of 7.5% enabled the Association to exceed $10.9 billion in assets,” added Chief Financial Officer Vern Zander. “Because of our efforts, we are able to share more profits than ever before.”

The Board of Directors approved an increase in cash patronage distribution to a full 1%, resulting in a record $86 million returned to American AgCredit customers.

The American AgCredit Board of Directors approved an increase in its cash patronage distribution to a full 1%, resulting in a record $86 million returned to its customers.

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About American AgCredit

Founded in 1916, American AgCredit is part of the nationwide Farm Credit System, and is the nation’s fifth largest Farm Credit cooperative. American AgCredit specializes in providing financial services to agricultural and rural customers throughout California, Nevada, Kansas, Oklahoma, Colorado, and New Mexico—as well as to capital markets customers throughout the country. Financial services provided by American AgCredit include production and mortgage financing, equipment and vehicle leasing, crop and life insurance, lines of credit, and the Young, Beginning and Small Farmer Program. In addition, the Association provides interest-free loans for qualifying 4-H and FFA AgYouth programs, as well as college scholarships to young people interested in agriculture. Learn more at www.AgLoan.com.

DENVER (Feb. 25, 2018) — CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced that the board of directors has increased the size of the bank’s annual Sharing Success charitable giving program from
$3 million to $4 million per year.

Sharing Success provides matching funds for donations made by CoBank’s customers to local nonprofit organizations in their communities. Since its inception in 2012 the program has generated over $36 million in total charitable donations, primarily in rural areas across the country.

“We’re extremely grateful for this generous decision by our board,” said Tom Halverson, CoBank’s president and chief executive officer. “Over the past seven years, Sharing Success has enabled us to partner with our customers and elevate the amount of funding available for thousands of worthy causes across rural America. We’re look forward to making an even larger positive impact in the years ahead.”

In addition to increasing the annual Sharing Success allocation to $4 million, CoBank is raising the maximum matching amount per customer from $5,000 to $7,500 each year. Contributions by eligible borrowers will continue to be matched on a dollar-for-dollar basis.

“We urge all eligible customers to take advantage of Sharing Success,” said Sherry Johnson, senior manager of corporate social responsibility for CoBank. “Doing so is one of the best ways to leverage the power of an organization’s local giving and to help people and communities in need.”

Sharing Success launches each year on April 1 and runs through October 31 or when the fund is exhausted, whichever comes first. Customers interested in participating in Sharing Success should contact their CoBank relationship manager or visit cobank.com for an application and detailed program requirements.

About CoBank

CoBank is a $139 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

For more information about CoBank, visit the bank’s website at cobank.com.

Forward-Looking Statements

Certain of the statements contained in this news release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our actual future business may differ materially and adversely from our expectations expressed in any forward-looking statements. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “project,” “target,” “may,” “will,” “should,” “would,” “could,” or similar expressions. Although we believe that the information expressed or implied in such forward-looking statements is reasonable, we can give no assurance that such projections and expectations will be realized or the extent to which a particular plan, projection or expectation may be realized. These forward-looking statements are based on current knowledge and subject to risks and uncertainties. We encourage you to read our Annual Report and Quarterly Reports located on the bank’s website at www.cobank.com. We undertake no obligation to revise or publicly update our forward-looking statements for any reason.

The Contribution will Support the Camp Fire Disaster Relief Efforts in Butte County

Chico, CA (12-14-18) – Multiple associations of the Farm Credit System, which has served the nation’s agricultural and rural communities for more than 100 years, have come to the aid of a community in need. Together they have donated nearly $500,000 to help victims of the devastating Camp Fire in Butte County, the deadliest fire in California’s history.

Golden State Farm Credit, which serves farmers and ranchers in Butte County, neighboring Colusa-Glenn Farm Credit, and the system’s banking partner, CoBank, have coordinated efforts with the Farm Credit Associations across the United States to assist the efforts of local relief agencies, said J. Fletcher Monroe, Golden State Farm Credit’s president and Chief Executive Officer.

“We here at Golden State Farm Credit are honored to be part of the Farm Credit System, where we stand by each other and our communities in times of crises,” Monroe said. “We are humbled by the outpouring of support, heartfelt prayers, and generosity received from so many.

“The funds provided to these local organizations, along with a small portion given to the Employee Relief Fund to assist our staff members who lost their homes in the fire, will have an immediate impact as well as helping the long-term rebuilding efforts Butte County, residents, and businesses will face for years to come. We are thankful to all that have selflessly given to those in need.”

Participating in the effort are Farm Credit West, which also serves customers in a portion of Butte County, along with California-based organizations American Ag Credit, Fresno Madera Farm Credit and Yosemite Farm Credit.

“California’s agricultural communities have been heavily impacted by a series of natural disasters in recent years,” said Leili Ghazi, CoBank’s western region president. “Among all of these, the Camp Fire stands apart due to the scale of the devastation and the loss of life. CoBank is proud to join our Farm Credit partners to support the individuals, families and communities impacted by this fire. We hope that our gifts will, in some small way, help them on their journey to recovery.”

Organizations from outside the state assisting in the relief effort are AgVantis, Farm Credit of Southern Colorado, Northwest Farm Credit Services, Premier Farm Credit, Texas Farm Credit, and Western AgCredit.

Relief agencies thanked Farm Credit Associations for their generous response to those in need.

“The Community Action Agency is committed to serving hungry families at all times of the year but especially during the holidays and now with the addition of families impacted by the Camp Fire,” said CEO Thomas P. Tonorio. “We’re grateful to have the support of the Farm Credit System and others to help our communities.”

“The generosity from outside of Butte County and within our counties boarders, supporting the Camp Fire Animal Agriculture Fund has been a humbling experience. On behalf of the Butte Ag Foundation, I’m honored we could be a part of this effort.”  – Doug Bentz, President, Butte Ag Foundation, Inc.

Farm Credit has always been a steadfast supporter of Farm Bureau and the Butte County farming and ranching community so while we are appreciative of their generous donation to the Camp Fire Animal Agriculture Fund, we are not surprised that they stepped up to support agriculture and the Camp Fire. It is what they do. – Darren Rice, President, Butte County Farm Bureau.

The blaze broke out on November 8 and consumed more than 153,000 acres before being fully contained a month later. A total of 85 residents and three firefighters were killed and almost 14,000 homes, along with 528 commercial buildings and nearly 4,300 other structures were destroyed.

Monroe said the fire had an impact on agriculture as well. Several Golden State Farm Credit members lost homes and outbuildings, at least one lost a business in Paradise. The fire affected local bee keepers, destroyed a small vineyard, and burned a great deal of range land. The fire also hit the local 4H and FFA programs, where the kids lost structures they would have used to raise their fair animals. In addition, five Golden State employees lost their homes in the fire.

Chico, CA (8-24-18) – Golden State Farm Credit and CoBank, cooperative banks serving vital industries throughout rural America, have donated $10,000 to the Salvation Army to help further their efforts to support the residents, in Shasta and Trinity counties, affected by the Carr Fire.

Headquartered in Kingsburg CA, Golden State Farm Credit provides dependable financing solutions for people involved in agriculture throughout Northern and Central California. Golden State Farm Credit assists many local non-profit organizations by providing financial contributions, volunteer support, scholarships, donations, and technical expertise.

The Carr fire erupted on July 23, 2018 in Redding, CA. It quickly grew to over 100,000 acres, causing over 38,000 residents to be evacuated. The fast moving fire caused destruction to timber, range land, out buildings, businesses, as well as 1079 residential homes. To this date the fire has burned over 229,651 acres and is 93% contained.

“Golden State Farm Credit is deeply rooted in the communities we serve and understands the impact the Carr fire will have for years to come,” stated J. Fletcher Monroe, Golden State Farm Credit’s President and Chief Executive Officer. “We are committed to assisting those affected by the fire and partnering with CoBank to support the Salvation Army is the first step in helping those in need.”

As one of the nation’s major emergency relief organizations, the Salvation Army recognizes the critical importance of being prepared for natural and manmade disasters. The Salvation Army activated immediate emergency response to help the Shasta County residents affected by the Carr fire. After the fire has been contained and the response teams go home, the Salvation Army will provide much needed long-term recovery assistance to those in need. They understand that it will take several years for the Shasta Community to recover from the devastation caused by the Carr fire.

CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States has a longstanding commitment in partnering with associations to help support and relief efforts in times of emergencies, like the Carr fire.

“Throughout California, many communities have felt the impact of the recent wildfires,” said Leili Ghazi, regional president, CoBank. “When disasters strike, CoBank works hand-in-hand with our customers and our Farm Credit partners to aid relief agencies, like the Salvation Army, who are working hard to alleviate suffering and to help impacted communities recover. We are proud to partner with Golden State Farm Credit to assist the residents of Shasta and Trinity counties, and all those impacted by the Carr fire.”

About Golden State Farm Credit

Golden State Farm Credit is a premier employer and borrower-owned cooperative, dedicated to providing reliable credit and financial services to rural agricultural communities located in Northern and Central California. Golden State Farm Credit is focused on helping agriculturalist reach their goals with mortgage and commercial loans, competitive interest rates, equipment leasing, appraisal services, and a special lending program for Tomorrow’s Farmers. Find out more about Golden State Farm Credit at www.goldenstatefarmcredit.com or call 800.834.8698.

About CoBank

CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore. For more information about CoBank, visit the bank’s web site at www.cobank.com.

Chico, CA (8-24-18) – Golden State Farm Credit and CoBank, cooperative banks serving vital industries throughout rural America, have donated $10,000 to the American Red Cross to help further their efforts to support the residents, in Shasta and Trinity counties,affected by the Carr Fire.

Headquartered in Kingsburg CA, Golden State Farm Credit provides dependable financing solutions for people involved in agriculture throughout Northern and Central California. Golden State Farm Credit assists many local non-profit organizations by providing financial contributions, volunteer support, scholarships, donations, and technical expertise.

The Carr fire erupted on July 23, 2018 in Redding, CA. It quickly grew to over 100,000 acres, causing over 38,000 residents to be evacuated. The fast moving fire caused destruction to timber, range land, out buildings, businesses, as well as 1079 residential homes. To this date the fire has burned over 229,651 acres and is 93% contained.

“Golden State Farm Credit is deeply rooted in the communities we serve and understands the impact the Carr fire will have for years to come,” stated J. Fletcher Monroe, Golden State Farm Credit’s President and Chief Executive Officer. “We are committed to assisting those affected by the fire and partnering with CoBank to support the American Red Cross is the first step in helping those in need.”

“It is so gratifying and humbling to see local businesses come out to support their community during their time of need. We are so grateful to Golden State Farm Credit, and CoBank, for supporting the American Red Cross disaster relief efforts as we are providing food, shelter, relief supplies, emotional support, recovery planning and other assistance throughout the region,” Amanda Ree, Executive Director Northeastern California Chapter, American Red Cross.

CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States has a longstanding commitment in partnering with associations to help support and relief efforts in times of emergencies, like the Carr fire.

“Throughout California, many communities have felt the impact of the recent wildfires,” said Leili Ghazi, regional president, CoBank. “When disasters strike, CoBank works hand-in-hand with our customers and our Farm Credit partners to aid relief agencies, like the American Red Cross, who are working hard to alleviate suffering and to help impacted communities recover. We are proud to partner with Golden State Farm Credit to assist the residents of Shasta and Trinity counties, and all those impacted by the Carr fire.”

About Golden State Farm Credit

Golden State Farm Credit is a premier employer and borrower-owned cooperative, dedicated to providing reliable credit and financial services to rural agricultural communities located in Northern and Central California. Golden State Farm Credit is focused on helping agriculturalist reach their goals with mortgage and commercial loans, competitive interest rates, equipment leasing, appraisal services, and a special lending program for Tomorrow’s Farmers. Find out more about Golden State Farm Credit at www.goldenstatefarmcredit.com or call 800.834.8698.

About CoBank

CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore. For more information about CoBank, visit the bank’s web site at www.cobank.com.

Average Loan Volume Increased 6 Percent to $101.1 Billion

Net Interest Income Increased 7 Percent to $372.6 Million

Net Income Increased 39 Percent to $361.4 Million

DENVER (August 6, 2018) — CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced financial results for the second quarter and first six months of 2018.

Average loan volume rose 6 percent to $101.1 billion in the second quarter of 2018, from $95.4 billion in the same period last year. For the first six months of 2018, average loan volume rose 5 percent to $101.4 billion, from $96.7 billion in the same period last year. The increases resulted primarily from growth in lending to grain and farm supply cooperatives and to affiliated Farm Credit associations.

Net interest income increased 7 percent to $372.6 million in the second quarter of the year, from $347.2 million in the same period last year. For the first six months of the year, net interest income increased 6 percent to $743.6 million, compared to $703.3 million for the first six months of 2017. The increases were driven primarily by higher average loan volume, as well as increased earnings on invested capital due to higher interest rates.

Net income increased 39 percent to $361.4 million in the second quarter of 2018, compared to $259.8 million in the second quarter of 2017, primarily due to increases in noninterest income and net interest income as well as a lower provision for income taxes, reduction in the provision for loan losses and a decrease in operating expenses. Noninterest income increased $45.1 million, largely due to gains recognized on the sale of investment securities. These securities, which were acquired through the bank’s 2012 merger with U.S. AgBank, were sold to manage credit exposure and to take advantage of favorable market conditions. Income tax expense declined by $15.6 million due to a favorable adjustment related to federal tax legislation enacted in December 2017. A $10 million loan loss reversal was recorded during the second quarter of 2018 while no loan provision or reversal was recorded in the second quarter of 2017. Operating expenses declined primarily due to a reduction in Farm Credit insurance premiums.

For the first six months of 2018, net income rose 24 percent to $645.8 million from $522.6 million in the same period of 2017. As described above, the increase in earnings for the first six months of the year also reflected increases in noninterest income and net interest income as well as a lower provision for income taxes and a decrease in operating expenses. In addition, net income for the first six months of the year also benefited from the return of $35 million in excess insurance funds from the Farm Credit System Insurance Corporation during the first quarter. These positive factors were somewhat offset by a higher provision for loan losses during the first six months of 2018. CoBank recorded a $40 million provision for loan losses for the first half of 2018, compared to $15 million in the prior-year period, due to specific reserves for a small number of agribusiness and rural infrastructure customers, overall credit quality deterioration and growth in average loan volume.

“In both the second quarter and year-to-date periods, CoBank benefited from non-recurring items that significantly enhanced our earnings,” said Thomas Halverson, president and chief executive officer. “At the same time, the underlying performance of our core business was also strong, reflecting solid growth in loan volume and slightly higher margins. We are pleased with our results so far this year and remain focused on serving our customers with excellence and fulfilling our mission in rural America.”

Net interest margin for the second quarter rose to 1.13 percent from 1.11 percent a year ago. For the first half of 2018, net interest margin increased to 1.14 percent from 1.12 percent for the same 2017 period. The improvements in margin primarily reflected increased levels of seasonal lending to grain and farm supply customers as well as increased earnings on invested capital.

“We have now had six months of slightly better margins after several years of margin declines caused by prolonged low interest rates, intense competition in the banking industry and other factors,” said David P. Burlage, CoBank’s chief financial officer. “While the increases in 2018 have primarily been due to the mix of our loan volume, we are encouraged by the stabilization we’ve seen and hopeful that market conditions will allow for continued margin improvement.”

The bank recorded a $40 million provision for loan losses for the first half of 2018 compared to $15 million in the prior-year period, due to specific reserves for a small number of agribusiness and rural infrastructure customers, overall credit quality deterioration and growth in average loan volume.

Credit quality in the bank’s loan portfolio remains strong, despite stresses in the rural economy from low commodity prices and other factors affecting rural industries. Nonaccrual loans increased to $400.1 million as of June 30, 2018, from $246.8 million at December 31, 2017, primarily due to a small number of agribusiness loans and a project finance loan. At quarter-end, 1.03 percent of CoBank’s loans were classified as adverse assets, compared to 1.00 percent at December 31, 2017. The bank’s allowance for credit losses totaled $704.1 million at quarter-end, or 1.40 percent of non-guaranteed loans when loans to Farm Credit associations are excluded.

The bank’s capital levels remained well in excess of regulatory minimums. As of June 30, 2018, shareholders’ equity totaled $9.1 billion, and the bank’s total capital ratio was 15.02 percent, compared with the 8.0 percent (10.5 percent inclusive of the fully phased-in capital conservation buffer) minimum established by the Farm Credit Administration, the bank’s independent regulator. At quarter-end, the bank held approximately $31.8 billion in cash, investments and overnight funds and had 180 days of liquidity, which was in excess of regulatory liquidity requirements.

“We remain confident in the overall financial condition of the bank. Our board and management team, in addition to our more than 1,000 associates, maintain a resolute focus on providing dependable credit and other financial services that our customers need,” Halverson said. “The bank also continues to invest in the people, processes and systems required to further support and enhance our ability to serve our customers and deliver value over the long term.”

ABOUT COBANK

CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

For more information about CoBank, visit the bank’s website at cobank.com.

Approximately $96 Million Will Be Disbursed To Eligible Borrowers In September 2018
Board-Approved Payout Tied To Federal Tax Legislation Enacted Last Year

DENVER (August 9, 2018) — CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, announced today that its board of directors has approved a special, one-time patronage distribution as part of a broader plan to share the benefits of federal tax reform legislation with eligible customer-owners, along with earnings from significant non-recurring items in 2018.

The all-cash distribution, totaling approximately $96 million, will be made in September 2018 and is incremental to standard patronage payments the bank typically makes in March of each year. CoBank also plans to accelerate investments in its business and operating platform.

“As a financial cooperative, we’re delighted to be making this special patronage distribution to our member-borrowers,” said Kevin Riel, CoBank board chair. “Since tax reform was enacted in December 2017, we have been working with executive management to thoughtfully analyze how savings generated by the new law should be applied across our business. We believe the approach we’ve adopted will ensure that the benefits of the legislation flow first and foremost to our customer-owners, while also enhancing our capabilities and overall service delivery model.”

The Tax Cuts and Jobs Act of 2017 lowered the U.S. corporate income tax rate from 35 percent to 21 percent. CoBank, which pays federal and state taxes on income earned from lending to cooperatives and other direct borrowers, saw its effective tax rate reduced by approximately one-third. In addition to tax savings, CoBank is funding the one-time special patronage distribution with earnings on significant non-recurring items, which were recognized in the first half of this year.

Patronage payments to individual eligible customer-owners will be based on average daily loan balances in the first half of 2018. They will also vary by patronage pool, as detailed in the following table:

Type of borrower	Special patronage rate*
Agribusiness, communications & project finance	20 bps
Rural electric & water	15 bps
Affiliated Farm Credit associations	6 bps
Loan participations purchased from other Farm Credit institutions	20 bps
Non-affiliated Farm Credit and other financing institutions	4 bps

 

“We have been careful to design this special patronage distribution so it aligns equitably with the economics of our various patronage pools, while still producing a meaningful benefit for all classes of eligible borrowers,” said Tom Halverson, CoBank’s president and chief executive officer.

Halverson added that savings from the tax law will also be used to fund new or accelerated investments in a number of important functional areas across the bank, including risk management, information technology, data management, digital business solutions and corporate social responsibility.

“In addition to the special patronage distribution, our customers will also benefit indirectly as we continuously improve our operating platform,” Halverson said. “We’re fortunate to be in a position to make these investments, and look forward to enhancing our ability to serve customers with excellence and strengthening our competitive position in the marketplace.”

About CoBank

CoBank is a $131 billion cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states. The bank also provides wholesale loans and other financial services to affiliated Farm Credit associations serving more than 70,000 farmers, ranchers and other rural borrowers in 23 states around the country.

CoBank is a member of the Farm Credit System, a nationwide network of banks and retail lending associations chartered to support the borrowing needs of U.S. agriculture, rural infrastructure and rural communities. Headquartered outside Denver, Colorado, CoBank serves customers from regional banking centers across the U.S. and also maintains an international representative office in Singapore.

For more information about CoBank, visit the bank’s website at cobank.com.