CoBank today announced financial results for the full year and fourth quarter of 2016.
Net income for the year rose 1 percent to $945.7 million, reflecting increased net interest income offset by a greater provision for loan losses as well as higher Farm Credit insurance fund premiums and other operating expenses. Net interest income increased by 7 percent to $1.4 billion, as a result of higher loan volume and increased earnings from balance sheet positioning, partially offset by lower spreads in the bank's loan and investment portfolios. CoBank's average loan volume increased 10 percent in 2016, to $91.6 billion, driven by higher levels of borrowing from affiliated Farm Credit associations, grain cooperatives, food and agribusiness companies, rural electric cooperatives and communications service providers.
For the fourth quarter of 2016, net income was $227.3 million compared to $236.3 million in the same period of 2015. Earnings declined primarily due to a $15 million provision for loan losses taken during the fourth quarter of 2016, which more than offset the positive impacts of higher net interest income. Net interest income for the quarter increased 3 percent to $345.0 million as a result of higher average loan volume. Average loan volume increased 7 percent during the period, to $93.2 billion. Read more...