Cortland Bancorp Reports 2Q Net Income of $1.04M

CORTLAND, Ohio -- Cortland Bancorp, holding company of Cortland Savings and Banking Co., Monday reported second-quarter net income of $1.04 million, or 23 cents per share.

This represents a 30% increase over second-quarter 2013 net income of $799,000, or 18 cents a share, and is below first-quarter net income of $1.33 million, or 29 cents a share.

In a prepared statement, the president and CEO of Cortland, James M. Gasior, said, “Building on our momentum from the beginning of the year, our second-quarter profitability was supported by strong balance sheet growth that drive up both net interest income and net interest margin year-over-year and year-to-date. We also delivered on key performance metrics with return on average assets of 0.77%, above the national average of 0.69% reported by SNL Financial at the end of the first quarter for the 599 banks that make up the SNL Micro-Cap Bank Index. Return on average equity was 7.81%, also above the reported national average of 7.14% for the SNL index last quarter.”

Key performance ratios for the quarters ended June 30, March 31 and June 30, 2013:

  • Return on average equity, 7.81%, 10.45%, 6.33%.
  • Return on average assets, 0.77%, 0.99%, 0.59%.
  • Net interest margin, 3.68%, 3.70%, 3.34%.
  • Efficiency ratio, 70.14%, 65.31%, 78.45%.

Net interest income was 8% higher than a year ago, $4.40 million to $4.08 million. First-quarter net interest income was $4.47 million.

Total loans grew 1% to $316.57 million from $312.22 million at March 31 and were 5% higher than the $301.91 million reported for June 30, 2013. Most of the growth came from the hospitality and nursing home industries, Gasior said.

Noninterest income (such as fees and mortgage services performed) was $806,000 compared to $1.28 million the preceding quarter and $732,000 the year-ago quarter. “Fee income added $84,000 to this quarter’s revenues,” Gasior reported, “and $165,000 for the first half of 2014.”

Noninterest expense (includes wages and benefits, rents, computer services, administering repossessed assets, marketing, Federal Deposit Insurance Corp. premiums) was $3.91 million, down from $4.31 million the second quarter of 2013, but higher than the $3.62 million reported for the first quarter.

Total deposits, $425.07 million, were higher than the $417.37 million recorded at June 30, 2013, but below the $430.97 million reported for March 31.

“Asset quality remained strong,” the company reported, “despite total nonperforming assets of $7.9 million, or 1.48% of total assets [of $534.42 million].”

Gasior likewise reported, “Credit quality remains strong despite a minor increase in nonaccrual loans in the quarter, which was isolated to one customer relationship. We expect this nonperforming loan to be reversed in the third quarter.”

Net charge-offs were $67,000, or 0.09% of average loans compared to net recoveries of $104,000. The $104,000 translates to 0.14% of total average loans. By comparison, the $284,000 recovered during the first quarter exceeded the $147,000 charged off.

Source: Cortland Bancorp.

Published by The Business Journal, Youngstown, Ohio.
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