CoBank, a leading cooperative bank serving agribusinesses and rural infrastructure providers, saw net income rise 20% for the second quarter of 2011. Average loan volume for the second quarter was $52.1 billion, compared to $43.2 billion for the same period in 2010.
Sustained higher and continued volatile prices for grains and other agricultural commodities had a significant positive impact on the bank's financial results, according to Co. Generally, rising commodity prices increase seasonal borrowing requirements for grain and farm supply cooperatives and other agribusiness customers. The bank also saw modest year-over-year growth in loan volume with rural electric cooperatives around the country and with Farm Credit association customers.
"The increase in average loan volume we've experienced this year has been dramatic and has largely been the result of commodity price volatility and its impact on our borrowers in the grain and farm supply industries," says Robert B. Engel, CoBank's president and chief executive officer. "Demand for financing in many of the other sectors we serve has weakened, consistent with slow economic growth in the broader U.S. economy."