Cortland Banks Sees 13% Rise in Net Income in 2015

CORTLAND, Ohio – Cortland Bancorp, holding company of Cortland Banks, Wednesday reported fourth-quarter net income of $1.09 million, or 24 cents a share, and full-year 2014 net income of $4.38 million, or 97 cents a share.

This compares to third-quarter net income of $1.23 million, or 27 cents a share, and fourth-quarter 2014 net income of $543,000, or 12 cents a share.

Full-year 2014 net income was $3.87 million, or 85 cents a share.

In a prepared statement, the president and CEO, James M. Gasior said, “Highlighted by robust loan growth and deposit production, our 2015 results were the best earnings we have reported in nine years. … We are diversifying our loan portfolio from predominantly commercial real estate loans to include more commercial and industrial loans, which increased to 22% of the portfolio at year-end from 20% a year ago. In addition, our new line of Kasasa deposit products is not only popular with our existing customers, but also attracting new customers, resulting in a deeper penetration of our market area.”

Key performance ratios:

For the quarters ended Dec. 31 and Sept. 30, 2015, and Dec. 31, 2014:

  • Return on average equity, 7.61%, 8.67%, 3.90%.
  • Return on average assets, 0.75%, 0.86%, 0.39%.
  • Net interest margin, 3.63%, 3.67%, 3.68%.
  • Efficiency ratio, 72.28%, 67.42%, 72.72%.

For the years 2015 and 2014:

  • Return on average equity, 7.73%, 7.21%.
  • Return on average assets, 0.77%, 0.71%.
  • Net interest margin, 3.65%, 3.67%.
  • Efficiency ratio, 70.46%, 69.78%.

Total loans grew $34.1 million, or 9%, during the year to $394.3 million, Cortland said, although average total loans in the fourth quarter were $367.81 million compared to $335.89 million the same quarter a year ago,

Average assets for the fourth quarter were $583.01 million compared to $552.68 million the quarter ended Dec. 31, 2014. At Dec. 31, Cortland’s total assets were listed as $612.44 million.

Net interest income was $4.72 million for the quarter compared to $4.65 million the preceding quarter and $3.38 million the year-ago quarter.

Asset quality remained stable with nonperforming loans (those 90 days past due) as a percent of loans at 2.94% in the fourth quarter compared to 2.36% the third quarter and 2.35% the year-ago quarter.

The allowance for loan losses as a percent of total loans was 1.32% in the fourth quarter compared to 1.44% in both the third quarter and last quarter of 2014.

At. Dec. 31, performing restructured loans stood at $5.0 million, which are included in total nonperforming assets.

Noninterest or operating expense (includes salaries and employee benefits, rents, data processing, marketing and Federal Deposit Insurance premiums) was $4.19 million for the quarter, up from $3.99 million the third quarter and $4.12 million the fourth quarter of 2014. Full-year noninterest expense was $16.36 million compared to $15.50 million in 2014. Cortland does not break out the components of noninterest expense.

Cortland attributed the increase in operating expense to its “continuing investment in the mortgage banking and wealth management business” and opening its newest branch in Canfield.

Average total deposits climbed to $471.05 million during the fourth quarter, 8% higher than the $437.92 million reported for the last quarter of 2014.

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