Cortland Reports Strong Earnings, 7¢ Cash Dividend

CORTLAND, Ohio – Cortland Bancorp, holding company of Cortland Banks, Tuesday reported first-quarter net income of $1.36 million, or 31 cents per share, a 19% increase over year-ago first-quarter net income of $1.15 million, or 25 cents a share.

It was also a 25% increase over the net income Cortland reported for the fourth quarter of $1.09 million, or 24 cents a share.

The bank holding company announced its earnings after markets closed. No shares of Cortland traded yesterday and so its price remained $15.25.

In a prepared statement, the president and CEO of the holding company and the bank, James M. Gasior, said, “Our solid profitability in the first quarter gave us a great start to 2016 and we are confident our franchise will continue to produce strong financial results for our shareholders this year. First-quarter results are typically impacted by the seasonality of our markets, yet we still had strong mortgage originations and good growth in average balances for both loans and deposits.”

Cortland also announced yesterday that its board declared a cash dividend of seven cents a share payable June 1 to shareholders of record May 11.

Cortland raised its dividend to seven cents last January.

Key performance ratios for the quarters ended March 31 and Dec. 31 and March 31, 2015:

  • Return on average equity, 9.49%, 7.61%, 8.15%.
  • Return on average assets, 0.92%, 0.75%, 0.82%.
  • Net interest margin, 3.58%, 3.63%, 3.66%.
  • Efficiency ratio, 71.13%, 72.28%, 68.29%.

By nearly every measure, Cortland Banks enjoyed one of its best quarters. At $4.70 million, net interest income was 3% higher than the year-ago quarter’s $4.60 million although slightly less than the $4.72 million reported for the quarter ended Dec. 31.

Noninterest income (excluding gains and losses on investments) was $1.08 million, ahead of the $903,000 reported for the fourth quarter and the $1.05 million the year-ago quarter.

Gasior credited “net gains from our mortgage banking operation” and the new Cortland Private Wealth Management program. “Strong volumes of home purchases (84% of loan volumes) and refinancing (16% of loan volumes) contributed $349,000, up from $149,000 the fourth quarter and $185,000 a year ago,” the CEO said.

Noninterest expense (includes salaries and benefits, rents, data processing, marketing, Federal Deposit Insurance Corp. premiums) rose to $4.48 million, up from $4.19 million for the fourth quarter and $3.99 million a year ago. The increase reflects the prepayment penalty of $242,000 to the Federal Home Loan Bank and expense related to opening its newest branch in Canfield, Cortland said.

Total assets, $690.39 million, were 4% lower than the $612.44 million reported at Dec. 31 but 6% higher than the $558.00 million at March 31, 2015.

Total loans were $373.79 million, lower than the $394.25 million at year-end, but well above the $343.91 million reported for the first quarter a year ago.

Total deposits also dropped somewhat to $481.94 million from $496.40 million three months earlier but were above the $343.91 million a year ago.

The statistics that reflect credit quality showed increases. Nonperforming loans as a percent of loans rose to 3.04% from 2.94% at year-end and 2.70% a year ago while nonperforming assets as a percent of assets were 2.05%, 2.02% and 1.81% respectively.

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