TRADE ASSOCIATE UPDATE

COBANK - SPECIALIZING IN AGRI-BUSINESS

As a $63 billion cooperative lender, CoBank provides loans, leases and more to customers who offer critical services like food, water, energy and communications – primarily in rural communities. The bank is part of the Farm Credit System, a nationwide network of lenders created by Congress in 1916 to provide stable and affordable credit to farmers, ranchers and other rural businesses.

A COOPERATIVE BANK

A cooperative bank differs from other financial entities in that it is neither privately owned nor publicly traded. Rather, it is owned by its customers and borrowers. One of the benefits of a cooperative structure is that CoBank returns a portion of its earnings to customer-owners in the form of an annual “patronage” payment. In 2008, CoBank returned $314 million in patronage payments to customers, representing on average 25 percent return on investment for active borrowers. 

Also, CoBank does not accept deposits. Instead, funds to finance CoBank’s loans and leases come primarily from the sale of Farm Credit System securities to investors in the national and international money markets.

CoBank’s customers include agri-businesses; agricultural cooperatives; Farm Credit associations and rural energy, communications and water companies. The bank is headquartered in Denver, Colo., and has 11 regional offices nationwide. In addition to loans and leases, CoBank also provides specialized financial products and services, cash management and online financial services.

“We have all the resources of a commercial bank but we also have tremendous industry expertise, and our cooperative structure is an important differentiator,” said Dan Malan, CoBank relationships manager for the Florida region. “By returning a substantial portion of our earnings to customers, CoBank offers a unique value proposition to customers and is strategically positioned to deliver on our mission to serve as a dependable source of credit for rural America.”

HISTORY OF AIDING AGRI-BUSINESS

CoBank’s roots date back to 1916, when Congress created the Farm Credit System. In 1989, 11 Farm Credit System institutions – all of them so-called banks for cooperatives – merged to form CoBank, starting with about $12 billion in assets, $9 billion in loans and $807 million in capital.

“It’s grown dramatically from there, adding many new services over the years,” Malan said.

Today, CoBank has approximately 2,100 customer nationwide and nearly $45 billion in loans and leases. The bank’s Florida business mainly offers loans to agri-businesses for inventory receivables and real estate. “We also have numerous leases for ag equipment, including trucks and processing equipment,” Malan added.

“One of the many strengths that CoBank brings is the industry knowledge and the commitment to agri-business in both up and down cycles,” Malan said. “We’re fully committed to being a dependable source of credit for our customers in all market conditions.”

Read more about CoBank and how cooperative banks work for their members on the company's Web site. You can reach CoBank’s national office at (800) 542-8072.