Cortland Bancorp Reports $1.15 Million Net Income
CORTLAND, Ohio – Cortland Bancorp, holding company of Cortland Banks, Wednesday reported first-quarter net income of $1.15 million, or 25 cents a share.
This compares to fourth-quarter net income of $543,000, or 12 cents a share, and first-quarter 2014 net income of $1.33 million, or 29 cents a share.
Cortland also reported its board of directors declared a cash dividend of six cents a share payable on or after June 1 to shareholders of record May 12.
Said James M. Gasior, president and CEO, in a prepared statement, “We generated solid earnings in the first quarter, boosted by a healthy loan demand and improved results in fee income. In spite of fierce competition, we were able to grow our loan portfolio [to $343.91 million from $312.22 million the year-ago quarter]. At the same time, mortgage banking is rebounding, which we anticipate will continue to bolster noninterest income. Our wealth management business is also doing very well and is a strategic component of our franchise.
“We continue to position Cortland for future growth by strengthening our balance sheet and capital base while continuing to explore new opportunities. To further expand our presence in Cleveland and to service the increased loan demand in that market, we hired an additional loan development officer in the first quarter. We also hired another mortgage lender in Akron, who is already contributing to our mortgage lending activity.”
Key performance ratios for the quarters ended March 31, Dec. 31 and March 31, 2014:
- Return on average equity, 8.15%, 3.90%, 10.45%.
- Return on average assets, 0.82%, 0.39%, 0.99%.
- Net interest margin, 3.66%, 3.68%, 3.70%.
- Efficiency ratio, 68.29%, 72.72%, 65.33%.
- Number of employees (full-time equivalence), 149, 153, 151.
Highlights Cortland cited in its earnings release:
- Noninterest income (fees and commissions) rose 23% to $1.06 million from $898,000 the fourth quarter and $858,000 the quarter ended March 31, 2014. Cortland attributed the increase to wealth management fees and “the steady pickup in mortgage loan volumes.”
- A stable net interest margin. “While we are seeing some pressure,” said Senior Vice President David J. Lucido, chief financial officer, ”we are gradually shifting assets into higher-yielding loans, which we expect will continue to stabilize our margin going forward.”
- Average total loans rose 5% to $348.18 million from $335.89 million the previous quarter and $331.49 million the year-ago quarter.
- The ratio of nonperforming loans (those 90 days past due) to total loans was 2.70% compared to 2.58% Dec. 31 and 1.89% March 31, 2104. Excluding performing restructured loans, the ratio was 1.56% compared to 1.44% Dec. 31 and 1.30% March 31, 2014.
- Allowance for loan losses as a percentage of nonperforming loans was 57.68%, slightly more than the 56.07% posted for Dec. 31 but less that the 68.63% recorded for the first quarter a year ago. Recoveries of $38,000 exceeded charge-offs of $35,000 during the quarter, Cortland reported.
Total interest income was $5.22 million, the same as a year ago and just $5,000 less than reported for the quarter ended Dec. 31, while net interest income was $4.57 million, up from $4.47 million a year ago and $4.53 million the preceding quarter.
Noninterest expense – wages and benefits, rents, data processing, marketing, Federal Deposit Insurance Corp. premiums – was $3.99 million for the quarter compared to $4.12 million the preceding quarter and $3.62 million the year-ago quarter.
Cortland attributed the $371,000 increase from a year ago to “increases in commission-based compensation generated by higher production from both wealth management advisers and mortgage lenders.”
At the end of the quarter, assets stood at $556.00 million, a dip from the $568.93 million at the end of the fourth quarter but $70,000 higher than at March 31, 2014.
Total deposits were $439.47 million at March 31 compared to $456.76 million at year-end and $417.37 million at March 31, 2014.
SOURCE: Cortland Bancorp Inc.
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