CoBank, the Denver-based cooperative lender, hit $169.9 million in net income during the third quarter of 2011, marking a 29% increase over the same quarter in 2010.
Net interest income for the bank which services agribusiness and the rural infrastructure was put at $252 million, up from $226.3 million for the same period a year earlier.
Average loan volume for the quarter was $47.6 billion, up marginally from $44.5 million a year ago.
For the first nine months of 2011, net income increased 25% to $562.7 million, up sharply from year-earlier postings of $451 million. Net income increased 23% to $829.7 million, compared with $674.9 million in the same period in 2010.
Total loan volume for the bank on Sept. 30, 2011 was $45 billion.
Growth in the bank's agribusiness portfolio was the primary driver of stronger financial performance during the quarter, as has been the case throughout the year. During most of 2011, prices for corn, wheat, soybeans and other ag commodities have bee higher than they were in 2010, leading to increased borrowing from cooperatives that finance their inventories and receivables.
At the same time, loan growth with rural infrastructure customers and Farm Credit associations has been modest, consistent with slow growth in the broader U.S. economy.
"CoBank has experienced strong financial performance throughout the year," observes Robert B. Engel, president and CEO. "While we're pleased with our strong results, we also recognize that loan demand from agribusiness customers as a result of the sustained increase in commodity prices may moderate or even decline in the event of a commodity market slowdown.
"Our focus remains on managing the bank for the long term, and on meeting the needs of all our customers in economic conditions that should remain volatile and challenging for the foreseeable future."
CoBank has executed a letter of intent to merge with U.S. AgBank, another Farm Credit System lender. The combination is expected to have about $90 billion in assets.