Cortland Bancorp Reports Q2 Net Income of $1.9M

CORTLAND, Ohio — Cortland Bancorp, the holding company for Cortland Savings and Banking Co., reports net income of $1.9 million, or 47 cents per share, for the second quarter. That’s up 41% from $1.4 million, or 32 cents per share, from the first quarter, and up 45% from $1.3 million, or 30 cents per share, from the second quarter in 2019.

The return on average assets ratio and return on average equity ratio for this second quarter was 1% and 10.45%, respectively. The average equity ratio is up from 7.68% for the same quarter in 2019.

“Considering the substantial reduction in interest rates nationally and the ongoing provisioning for COVID-related conditions, we are pleased with the achieved performance level through the first six months of the year,” said James Gasior, president and CEO.

Mortgage loan sales accounted for much of the revenue growth, according to a company release. A nearly 20% reduction in personnel costs also contributed to improved performance.

“Although the ultimate impact to businesses is unknown at the current time, a continued increase in credit provisioning is warranted given the economic disruption and uncertainty associated with the COVID-19 pandemic,” Gasior said. “In this pandemic environment, in lieu of layoffs or furloughs, we were able to realize staff reductions through retirements and by not filling vacated positions, thus realizing substantial savings in salaries and benefits. Our mortgage unit is approaching record production for the year, improving gains on sales by more than $500,000 for the quarter.”

Loans granted under the Paycheck Protection Program drove a 10% year-over-year increase in total loans, Gasior noted. Cortland assisted 419 customers in obtaining funds under the program, providing payroll and operating expense relief worth $56 million.

The company listed these highlights for the quarter ended June 30:

  • The efficiency ratio was 61.62% for the quarter versus 74.34% for the same period in 2019.
  • Net interest income decreased 6% to $5.61 million, compared to $6 million in Q2 2019.
  • Total assets were $780 million at June 30, 2020, compared to $691 million at June 30, 2019 and $713 million at March 31, 2020.
  • Total deposits grew 12% to $648 million from 2019.
  • Nonperforming assets were 1.02% of total assets versus 1.3% a year ago.
  • Cortland Bancorp remained well capitalized with total risk-based capital to risk-weighted assets of 14.41% and tangible equity to tangible assets of 9.71%.
  • A quarterly cash dividend of $0.14 per share will be payable on Sept. 1, 2020 to shareholders of record on August 14, 2020.

Non-interest income was $1.69 million, up 55% over the same period last year. Non-interest expense decreased 14% to $4.57 million from Q2 last year when it was $5.33 million.

The coronavirus pandemic affected the company both financially and operationally, Gasior said. Cortland recognizes that COVID-19, the disease spread by the coronavirus, “is causing major concerns for the communities we serve and our entire country,” prompting the company to employ relief actions to assist its customers, he said.

“The management team has activated its Pandemic Task Force with representation from all areas of our company. The Task Force meets frequently to discuss the current situation, safety, and needs of our customers and employees. We are working diligently with our customers as we all continue to battle COVID-19,” Gasior said. “As part of these relief actions, the Bank has temporarily suspended residential foreclosure actions and is offering loan assistance programs designed to help those customers who are experiencing or are likely to experience financial difficulties directly related to COVID-19 and which are causing loss of individual income and/or household income. In addition to loan deferrals, we are also participating in the Paycheck Protection Program (PPP) stemming from the CARES Act passed by Congress as a stimulus response to the potential economic impacts of COVID-19.”

Cortland also took steps to protect its employees and customers by temporarily adjusting branch operations, limiting lobby usage on an appointment-only basis and encouraging drive-thru and ATM use along with internet banking. A number of employees continue to work remotely, while other essential employees and operational staff are working split-shifts when possible to meet social distancing guidelines.

“While we have altered our operations to protect our customers and employees, we have remained committed to maintaining a high level of service to all of our customers during these challenging times,” Gasior added.

SOURCE: Cortland Bancorp.

Published by The Business Journal, Youngstown, Ohio.