CoBank Board Approves Special All-Cash Patronage Distribution of $150 million for 2022
- Board also approves up to $205 million in stock retirements
- Board officers appointed for 2023
DENVER (December 15, 2022) — CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced that its board of directors has approved a special all-cash patronage distribution for eligible customer-owners.
The distribution, projected to be approximately $150 million, is scheduled to be made in March 2023 along with the target patronage customer-owners receive under the bank’s various patronage programs. It will represent an increase of between 15 percent and 25 percent over target patronage, depending on the customer-owner’s patronage program rate.
At its December meeting, the board also approved stock retirements totaling up to $205 million, reflecting normal retirements as well as the impact of lower customer-owner equity targets adopted by the board earlier in the year.
“These actions are a direct result of the bank’s outstanding financial performance throughout 2022 as well as the proactive steps we have taken to enhance capital efficiency for our members,” said Kevin Still, chair of the CoBank board. “As a financial cooperative, we are delighted to be returning such a high level of economic value to customer-owners.”
Special patronage amounts for each customer-owner will vary by patronage pool as detailed in the following table and will be based on average daily loan balances held by the bank during the year.
|Customer or Loan Type||Patronage||Special Patronage|
|Agribusiness, Communications & Project Finance||95 bps||24 bps||25%|
|Electric & Water||80 bps||16 bps||20%|
|Affiliated Associations||45 bps||9 bps||20%|
|Loans Purchased from Farm Credit Institutions||95 bps||19 bps||20%|
|Nonaffiliated Farm Credit & Other Financing Institutions||30 bps||4.5 bps||15%|
In August 2022 the CoBank board of directors lowered the equity target for cooperatives and other patronage-eligible commercial borrowers from 8 percent to 7 percent of their loan base. For direct loans to affiliated Farm Credit associations, the board lowered the equity target from 4 percent to 3 percent of their loan base. The equity target for nonaffiliated Farm Credit and other financing institutions was lowered from 4 percent to 3.25 percent. Customers whose equity in the bank exceeds their equity target are scheduled to receive their stock retirement in March 2023, along with patronage distributions.
Also today, CoBank announced board officers for 2023. The CoBank board elects its officers to serve a one-year term commencing January 1 and expiring December 31 each year.
Kevin Still has been re-elected as the board chair. Still has been a director since 2002 and is the president and chief executive officer of Co-Alliance Cooperative, Inc., a cooperative supplying energy, agronomy and animal nutrition, producing swine and marketing grain in Avon, Indiana. He is also the owner and president of Still Farms, LLC, a grain farm, and serves as an officer or director of various agricultural retail and energy cooperatives.
Jon Marthedal will continue to serve as first vice chair. Marthedal has been a director since 2013 and is the owner and operator of Marthedal Farms, a grape, raisin, blueberry and almond farming operation in Fresno, California. Marthedal is the board chair of The Farm Credit Council and serves as a director of several agricultural cooperatives and trade associations.
Brandon Wittman will continue to serve as second vice chair. Wittman has been a director since 2018 and is the chief executive officer and general manager of Yellowstone Valley Electric Cooperative, Inc., an electric distribution cooperative in Huntley, Montana. Wittman also serves as a director of The Farm Credit Council and Montana Electric Cooperatives Association.
“I look forward to working with Jon, Brandon and the rest of our board in the coming year to position CoBank for continued success and mission service,” Still said.
CoBank’s 2023 board will consist of 13 directors elected by customer-owners from six voting regions across the country, as well as two outside directors and two appointed directors.
The CoBank board also approved a number of technical and clarifying amendments to CoBank’s governance bylaws during the December board meeting. In addition to removing outdated language, the amendments relate to the Nominating Committee slate, petition process and stockholder vote approval requirements. These amendments do not change the way that the CoBank director nomination process is conducted. The approved amendments will be effective as of January 1, 2023.
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.
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.
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