Cortland Bank Sees Good Results from New Markets

Cortland Bank Sees Good Results from New Markets

VIENNA TOWNSHIP, Ohio – The initiative of Cortland Bancorp to grow into new markets in northeastern Ohio is providing positive results, its president and CEO, James M. Gasior, told shareholders Tuesday.

“Our drive is to continue to look at opportunities to grow both in loans and deposits outside of the Mahoning Valley,” he said to those at the annual meeting at Avalon Golf and Country Club-Squaw Creek. “We’ve had some success moving into the Cleveland and into the Akron-Canton markets.”

Since opening its Hudson office in January 2017, “we are in line with expectations set for the first year of operations,” Gasior said.

The office, which is its thirteenth location, contributed $12 million to the $586 million in total deposits for 2017.

This growth and retail transformation initiative is part of the three-year strategic plan for Cortland Bank. The plan began in 2016 and concludes this year.

The plan focuses on organic loan and deposit growth, retail transformation strategy, improved operation efficiencies, enhanced value for shareholders and a continued commitment to community banking.

The branch in Canfield, which opened in September 2015, exceeded its growth expectations by growing organically by more than $24 million in just over two years, Gasior said.

Since the Canfield office opened, deposits have averaged $40 million per each branch, compared to $30 million before its opening.

Cortland Bank reported a 2017 net income of $4.4 million compared to $4.9 million in 2016. This decrease was because of a $1.2 million additional charge for income tax expense, resulting from the Tax Cuts and Jobs Act in December 2017.

As part of its initiative to improve operating efficiencies, Cortland Bank closed its Boardman branch in August 2017 to focus its efforts on searches to expand into new markets.

Since the closing, its operating efficiency improved from 71.1% in its first quarter of 2017 to 64.7% for the first quarter of 2018.

Results of strides to enhance value for shareholders are shown through its dividend payouts, which have increased from below 25% in 2015 to almost 40% in 2017.

Notably, its stock price increased 111.34% since 2012, Gasior said.

In its efforts to remain a community bank, 10% of company insiders own its stock. And Cortland Bank stays committed to its community by volunteering and engaging in nonprofit and local organizations.

“We have a wide presence in a number of community organizations,” Gasior said. “As we move into new areas we continue to expand our presence.”

Among other highlights from 2017 is net interest margin decreased from 3.63% to 3.59%.

Net interest income increased to $20.3 million compared to $19.6 million in 2016.

Noninterest income, excluding investment security gains and losses, increased 23% to $5.2 million compared to $4.2 million the year before.

Total assets were $711.1 million at the end of 2017, up from $655.1 million at the end of 2016.

“By and large 2017 was a solid year and as we continue into 2018 the first quarter results really showed a nice improvement from the end of the year,” Gasior said.

First-quarter financial highlights include earnings per share increased to 35 cents compared to the year-ago quarter of 23 cents.

Net interest income increased 13% to $5.6 million, compared to $4.9 million for the first quarter in 2017.

Average total loans grew 15% to $469 million from $408 million for the first quarter a year ago.

Average total deposits grew 8% to $561 million from the first quarter in 2017.

“We acted very well on the initiatives we set out both in terms of increasing profitability, growing the bank and acting on initiatives to improve,” Gasior said. “In 2018 we’ll be active in looking for additional opportunities to find branch locations and loan production offices throughout northeast[ern] Ohio.”

At the meeting four directors were re-elected to serve on the board for three-year terms until 2021. These were:

  • James E. Hoffman III, attorney and president of Hoffman & Walker Co.
  • Joseph E. Koch, president of Joe Koch Construction Inc.
  • Timothy K. Woofter, president, CEO and director of Stanwade Metal Products.
  • Martin Erbaugh, president of JM Erbaugh Co.

S.R. Snodgrass PC was retained as outside independent auditor through Dec. 31.

Pictured: Cortland Bancorp President and CEO James Gasior

Copyright 2022 The Business Journal, Youngstown, Ohio.