CoBank Stockholders Approve Capitalization Bylaw Amendments Lowering Target Equity Ranges for Customer-Owners
DENVER (June 3, 2022) – CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced that stockholders have approved board-recommended amendments to the bank’s capitalization bylaws lowering target equity ranges for customer-owners.
Under the approved amendments, the target equity range for cooperatives and other patronage-eligible commercial borrowers will move to 4-10%, from the previous range of 7-13%. For direct loans with Farm Credit System institutions, the target equity range will move to 2-5% from the previous range of 4-6%.
The amendments do not change the target equity levels for customer-owners, which are set during the annual planning process within the ranges established in the bylaws. However, the amendments give the board more flexibility to adjust target equity levels in the future.
“We’re delighted our stockholders have approved these amendments, which will provide greater flexibility to our board to consider lower target equity levels going forward,” said Kevin Still, chair of the CoBank board. “Given CoBank’s strong capital levels, the board will be reviewing equity targets with executive management as part of our upcoming business and financial planning process later this year.”
In addition to the capitalization bylaw amendments, stockholders also considered proposed amendments to the bank’s governance bylaws. Those amendments included a number of technical and clarifying changes as well as a provision extending the time period required before a former salaried officer or employee of a Farm Credit System institution is eligible to serve on the board of CoBank, from one year to three years after the conclusion of their employment with any System institution. The governance bylaw amendments were not approved by stockholders.
CoBank is a 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 76,000 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.