Cortland Bancorp Reports 4Q Net Income of $803,000
CORTLAND, Ohio – Cortland Bancorp, holding company of Cortland Banks, Thursday reported fourth-quarter net income of $803,000, or 17 cents a share, and full-year 2012 net income of $4.18 million, or 92 cents per share.
Fourth-quarter figures compare to $1.3 million for the quarter ended Sept. 30, or 28 cents a share, and $828,000 the last quarter of 2011, or 18 cents a share, and full-year 2011 of $4.07 million, or 90 cents a share.
The company also reported its directors declared a 3-cent per share dividend for the first quarter but did not announce the date payable or the date applicable to shareholders of record.
The president and CEO, James Gasior, said in a prepared statement, “In the midst of earnings pressure brought on by the economic downturn, interest rate compression and investment impairment issues, the company devoted substantial attention in 2012 to profit improvement measures, balance sheet restructuring and a continued reorganization of its management structure. The company’s management team continues to focus on measures designed to enhance capital and to provide for adequate liquidity for lending and business development purposes. New strategies are being pursued to improve market penetration and product expansion, with the objective of increasing both the interest income and noninterest income revenue base.”
Net interest income was $4.38 million in the fourth quarter compared to $.1 million the preceding quarter and $4.06 million the last quarter of 2011.
Full-year 2012 net interest income was $16.94 million, up from $16.39 million in 2011.
The provision for loan losses continues to fall, $200,000 in the fourth quarter from $300,000 the preceding quarter and $324,000 the quarter ended Dec. 31, 2011. Full year provision was $1.1 million where in 2011 the figure was $1.196 million.
“Despite less than favorable economic conditions over the past several years,” Cortland said, “the company has been able to grow its loan portfolio without experiencing and substantive deterioration in credit quality. Nonaccrual loans declined to $3.0 million at Dec. 31, or 0.93% of loans, versus $3.6 million, or 1.23% of loans at Dec. 31, 2011.” The company’s allowance of loan losses for the year covers 129% of those written off. “The allowance for loan loss to total loans ratio was 1.20% at Dec. 31 versus 1.06% a year ago,” Cortland said.
No loans were charged off during the fourth quarter despite the $200,000 provision.
Noninterest income continues to rise with the addition of CSB Mortgage Co., formed late in 2011. Noninterest income rose $761,000 year over year, Cortland reported, and $69,000 quarter over quarter.
Noninterest expense (such as salaries and benefits, rents, Federal Deposit Insurance Corp. premiums) was $4.08 million last quarter compared to $3.51 million the same period in 2011. Full-year expense was $4.18 million compared to $4.07 million in 2011. Much of the increase was attributed to the startup costs of the CSB subsidiary.
In key financial ratios, Cortland reported its return on average equity for the quarter was 6.39% versus 7.38% for the same quarter in 2011. Full- year return on average equity was 8.60% versus 9.13% in 2011.
Return on average assets for the quarter was 0.57% compared to 0.67% the last quarter of 2011. Full-year return on average assets was 0.79% 0.82%.
Net interest margin was 3.44% for the quarter versus 3.64% the same quarter year over year. And full year net interest margin was 3.58% versus 3.72% in 2011.
The fourth-quarter efficiency ratio was 76.89% versus 72.11% a year earlier. The full-year efficiency ratio was 72.31%, up from 69.98% in 2011.
Cortland continued to increase its capital levels during the year, it reported, and so meets the regulatory capital ratios, with total risk-based capital to risk-weighted assets at 14.57% for the last quarter and all of 2012. Tier 1 capital to risk-weighted assets is 13.63% for both the quarter and the year. But Tier 1 capital to average assets shows a figure of 10.02% for the quarter and 10.65% for all of 2012.
The company saw its total assets rise markedly, ending 2012 with $583.51 million where a year earlier that figure stood at $519.83 million.
Published by The Business Journal, Youngstown, Ohio.
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