Cortland Bancorp Reports 2Q Net Income of $1.17M

CORTLAND, Ohio – Cortland Bancorp, holding company of Cortland Banks, Tuesday reported second-quarter net income of $1.17 million, or 27 cents a share, 28% above the $916,000 reported the same quarter a year ago, or 21 cents a share.

For the first quarter, Cortland reported net income of $1.36 million, or 31 cents a share.

Cortland also announced its directors declared a quarterly cash dividend of seven cents a share payable Sept. 1 to shareholders of record Aug. 10.

Said the president and CEO, James Gasior, “At the stock price of $15.76 at the close of markets July 25, the dividend equates to a yield of 1.9% on an annualized basis.”

First-half earnings are $2.54 million, 23% higher than the $2.07 million reported for the first six months of 2015, Gasior noted, 58 cents a share compared to 46 cents a share.

In a prepared statement, the CEO said, “After a great start to the year, we again delivered solid results in the second quarter, highlighted by solid loan and deposit growth and improving asset-quality metrics. Our mortgage banking business continues to exceed our expectations and boost revenues.

“A favorable bankruptcy settlement associated with a commercial loan on nonaccrual status also helped to boost quarterly results. We collected all past-due interest and the entire principal on the secured portion of the loan totaling $2.5 million,” he said.

Key performance ratios for the quarters ended June 30, March 31, and June 30, 2015:

• Return on average equity, 7.97%, 9.49%, 6.49%.
• Return on average assets, 0.78%, 0.92%, 0.65%.
• Net interest margin, 3.77%, 3.58%, 3.66%.
• Efficiency ratio, 73.84%, 71.73%, 74.01%.

Net interest income after loan-loss provision increased to $5.02 million from $4.70 million the first quarter and $4.45 from the year-ago quarter.

Noninterest income (fees, mortgage servicing, gains on sales of securities) was $1.16 million, up from $1.08 million the preceding quarter and $896,000 the year-ago quarter.

Noninterest expense (includes salaries and benefits, rents, data processing, marketing, Federal Deposit Insurance Corp. premiums) was $4.73 million, higher than the $4.49 million in the first quarter and the $4.18 million reported the quarter ended June 30, 2015.

Cortland attributed the higher expense to additional employee compensation and ongoing incentive program costs.

Total loans reached $384.06 million at June 30 compared to $373.79 million the preceding quarter and $357.87 million the second quarter of 2015 as total assets climbed to $606.36 million. Assets at March 31 were $590.39 million, at June 30, 2015, $568.82 million.

Total deposits were $488.68 million, 9% higher than the $447.37 million reported a year ago and more than $6.5 million above the $481.94 million reported for the first quarter.

Asset quality remains strong as reflected by the 24% drop in nonperforming loans (those 90 days past due) to $8.5 million, Cortland said, or 2.22% of total loans, compared to $11.3 million, or 3.02% of total loans a year ago and 2.48% the first quarter.

Net chargeoffs for the second quarter were $320,000 compared to $41,000 a year ago and $14,000 the first quarter.

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