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Source: CoBank news release

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CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, today announced fourth-quarter and full-year financial results for 2013.

CoBank reported net income of $856.5 million for the year, up slightly from $853.9 million in 2012. The increase was driven primarily by improvements in credit quality and the fact that no provision for loan losses was recorded in 2013, compared to $70.0 million in provisions in the prior year.

Net interest income decreased 6 percent, to $1.2 billion, primarily due to the impact lower interest rates had on the bank's returns on invested capital, its balance sheet positioning and its portfolio of investment securities. Average loan volume increased 2 percent to $71.9 billion.

For the fourth quarter, net income increased to $227.6 million, from $153.4 million in the same period of the prior year. During the quarter, the bank reversed $20.0 million in loan loss provisions recorded earlier in the year, compared to a $50.0 million provision in the fourth quarter of 2012.

Net interest income declined 8 percent during the quarter, to $288.0 million. Average loan volume for the quarter was essentially unchanged from the fourth quarter of 2012, at $72.2 billion.

"We're delighted with CoBank's business and financial performance in 2013," said Robert B. Engel, CoBank's chief executive officer. "The bank recorded its 14th consecutive year of growth in profitability on behalf of customer-owners, while thoughtfully growing our loan portfolio in a highly competitive environment.

Credit quality is exceptionally strong, and our capital and liquidity levels remain solid. Most importantly, we continue to fulfill our mission in rural America by meeting the borrowing needs of our customers across all the industries we serve."

During the year, the bank saw increased loan demand from affiliated Farm Credit associations and rural electric cooperatives. Combined, that more than offset a significant decline in seasonal agribusiness lending, which was driven by lower inventories, lower commodity prices and strong cash positions at grain elevators around the country.

"We're pleased that overall loan volume grew last year in the face of challenging market conditions," Engel said. "We continue to benefit enormously from the breadth, depth and longevity of our customer relationships, and the bank's reputation for delivering value and a high-quality customer experience."

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