Cortland Bank 2Q Income Rises to $2M
CORTLAND, Ohio – Cortland Bancorp reports net income for the second quarter rose 3% year-over-year to $2 million, or 48 cents per share.
Income did drop, however, from the first quarter, when the parent of Cortland Bank reported $2.8 million in net income.
“The bank’s participation in the first and second rounds of the Paycheck Protection Program … contributed to our financial performance but, more importantly, helped more than 600 total customers and saved nearly 8,000 local jobs. Accelerated loan fees recognized upon the forgiveness of PPP loans amounted to $390,000 and $890,000 for the three- and six-month periods ended June 30, 2021,” said President James Gasior in a statement. “The company has benefited from the substantial reduction in interest rates nationally and the ongoing improvement in COVID-related conditions. With interest rates at all-time lows, the reduction in the cost of funds has mitigated margin compression.”
Performance was also helped by the increase in the provision for credit losses directly attributable to the coronavirus pandemic in second quarter of 2020, he added.
Cortland Bancorp also recorded a one-time expense of $263,000 associated with the proposed merger with Farmers National Banc Corp. announced in June. In the deal, Cortland Bank would merge into Farmers; it is expected to close in the fourth quarter.
Among the highlights reported in the bank’s quarterly earnings report are:
- Net interest income rose $597,000 compared to the year-ago quarter despite interest margin compression.
- Asset yields were enhanced by PPP loan fee recognition of $390,000, as the completion of the forgiveness process accelerated recognition of fees.
- Mortgage banking saw gains of $714,000 on loan originations of $26.2 million, compared to $900,000 on originations of $34.1 million in the second quarter of 2020.
- The efficiency ratio was 68.65%, compared to 61.62% a year ago.
- The return on average equity was 9.71%, compared to 10.45% a year ago.
Total assets for Cortland Bank were $793 million as of June 30, compared to $821 million at Dec. 31 and $780 million as of June 30, 2020.
Total deposits grew 4.5% to $677.6 million; noninterest deposits accounted for 33% of all deposits.
No provision for loan losses was recorded for the three months and six months ended June 30, 2021 versus $450,000 and $1.1 million, respectively a year ago. The decrease is attributable to substantial provisions throughout 2020, giving recognition to economic disruption and uncertainty associated with COVID-19.
Copyright 2022 The Business Journal, Youngstown, Ohio.