Kansas Accountants Association

Transcription

1 Striving for a Stronger Rural America, for Today and the Future November 19, 2014 Kansas Accountants Association Seth Hart Vice President Electric Distribution Banking Group CoBank October 28, 2016

2 Cooperative Strength: Safety & Soundness for Rural America A broad-based cooperative financial services organization with a mission to serve as a dependable credit provider to vital industries across rural America: Agribusiness Energy Communications Water Community Facilities AA- Rated by S&P and Fitch (standalone basis) CoBank maintains a financially strong and growing capital base 16 consecutive years of increased earnings and record patronage payout of $514.1 million for 2015 YTD June 30, 2015 average loan volume up 13% to $91.1 billion and net income up 5% to $486.6 million One of America s Top 100 Coops

3 Your Bank s Profitability $1,000 CoBank recorded its 16 th consecutive year of growth in profitability $936 $904 $854 $856 $800 $707 Millions $600 $400 $200 $185 $220 $233 $261 $275 $298 $335 $416 $533 $565 $614 $121 $

4 Formula Based Patronage Patronage Distributions Patronage Formula Patronage paid is 1% of average loan balance; 75% of that 1% is paid in cash.

5 New CoBank Center On December 16, 2015, CoBank celebrated the grand opening of its new headquarters building in Greenwood Village, CO $300,000 in gifts to 3 Colorado nonprofits During 2015, CoBank donated $8 million to nonprofits across America. The bank took the occasion of the grand opening to announce gifts to three, locallybased charities, each receiving a $100,000 contribution.

6 New CoBank CEO Bob Engel Tom Halverson 6

7 CoBank Initiatives Sharing Success Program

8 CoBank Initiatives Research & Education

9 CoBank Initiatives - Solar Leasing at CoBank Farm Credit Leasing (FCL) st solar lease California: 15% of electricity must come from renewable sources by 2010 Federal: 30% Investment Tax Credit (ITC) through 2016 Agricultural co-ops and farmers st solar lease to an electric co-op

10 CoBank Initiatives - Proven Track Record in Solar Leasing Total Financing # of Leases ,333, ,396, ,182, ,638, ,454, ,000, ,379, ,029, ,963, Projects range from $250 thousand to $16 million, and 250KW to 3MW.

11 CoBank Initiatives - Reasons to Lease Your Solar Array Optimize Tax Benefit 30% federal solar tax credit Accelerated depreciation Used by CoBank and returned to co-op in form of negative financing rate Limited Effect on Other Finances No guarantee from the parent co-op to its taxable subsidiary Doesn t impact other credit lines, ratios, mortgage Ease of Execution Utilize Master Lease Agreement Access to Other Incentives Renewable energy credits and carbon credits may be available to pass-through to the co-op Retain Control Co-op controls the solar facility

12 CoBank Initiatives Assets FCL Can Finance Solar Bucket Trucks and Diggers Service Trucks Generators/Sub-stations Office Buildings Shops and Buildings AMI Equipment Office Equipment??? 12

13 CoBank Initiatives - Commitment to Financial Support CoBank Lines of Credit Unsecured Committed, funds available the same day Simple documentation Can be used for general operating purposes (ie power bill, capex, payroll, interim broadband expenditures, storm damage, etc.) No zero-out provision No capex tracking Competitive rates, with the ability to fix short-term No equity contribution required beyond initial $1,000 member investment No fees Patronage eligible, as are all CoBank loans

14 CoBank Initiatives There for the Long Run Refinancing Rates remain low, evaluate all lenders debt and their structure and prepayment terms. Are you in a pair of golden handcuffs? Work Plan Support Less red-tape than other lenders, while providing patronage vs. non-patronage options Solar Leasing Strong history with an easy to understand financing model Broadband Industry knowledge and history of communications lending 14

15 History of 30 Year U.S. Treasury Rates The average 30 year U.S. Treasury benchmark since 1980 is 6.94% and we hit a new all-time low of 2.11% on July 8, % as of October 20 th. 15

16 Webinars CoBank Webinar Series for Directors & Management Considerations for Mergers & Acquisitions April 19, 2016 CoBank Webinar Series for Directors & Management The Board & CEO Relationship May 24, 2016 Let s Make a Deal: Preparing Your System for New Debt June 21, 2016 Creating a Culture for the Generations September 20, 2016 Stategic Planning: A Board s Role in Planning and Evaluating November 15,

17 CoBank in Kansas

18 Supporting the State of Kansas

19 CoBank 2017 Customer Meeting Schedule

20 CoBank - Proud Member of the Farm Credit System

21 Thank You! Seth Hart Vice President

22 Confidentiality Agreement This presentation is being furnished solely to members of the Kansas Accountants Association (the Association ) and is not intended for distribution outside the Association. This presentation is based on information for the Association and is being furnished through CoBank, ACB ( CoBank ). The Association agrees that all of the information contained in this presentation is of a confidential nature, that it will treat it in a confidential manner, and will not, directly or indirectly, permit agents or affiliates to disclose any of such information without prior written consent of CoBank. Further, the Association acknowledges that information contained herein does not constitute a commitment to lend. 22