Cortland Banks News Archives

<body stylesrc="index.htm"><table dir="ltr" border="0" cellpadding="0" cellspacing="0" width="100%"><tr><td valign="top"><table border="0" width="100%" cellpadding="10"> <tr> <td width="50%"> <h1>News Archives</h1> <p><a href="#Previous Holiday Schedules">Previous Holiday Schedules</a> <br> <br> <a href="#Press Releases">Press Releases</a></p> <h2>  </h2> <h2> <a name="Previous Holiday Schedules">Previous Holiday Schedules</a></h2> <h2>2006 Holiday Schedule</h2> <p>Cortland Banks main and branch offices will be closed for the following holidays in 2006:</p> <table border="0" width="100%"> <tr> <td nowrap>January 2</td> <td nowrap>New Year's Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>January 16</td> <td nowrap>Dr. Martin Luther King, Jr. Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>February 20</td> <td nowrap>Presidents'  Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>April 14, closing at 4:00 pm</td> <td nowrap>Good Friday, closing at 4:00 pm </td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>May 29</td> <td nowrap>Memorial Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>July 4</td> <td nowrap>Independence Day</td> <td nowrap>Tuesday</td> </tr> <tr> <td nowrap>September 4</td> <td nowrap>Labor Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>October 9</td> <td nowrap>Columbus Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>November 11</td> <td nowrap>Veterans' Day</td> <td nowrap>Saturday</td> </tr> <tr> <td nowrap>November 23</td> <td nowrap>Thanksgiving Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>December 25</td> <td nowrap>Christmas Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>January 1, 2007</td> <td nowrap>New Year's Day</td> <td nowrap>Monday</td> </tr> </table> <h2> </h2> <h2>2005 Holiday Schedule</h2> <p>Cortland Banks main and branch offices will be closed for the following holidays in 2005:</p> <table border="0" width="100%"> <tr> <td nowrap>January 1</td> <td nowrap>New Year's Day</td> <td nowrap>Saturday</td> </tr> <tr> <td nowrap>January 17</td> <td nowrap>Dr. Martin Luther King, Jr. Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>February 21</td> <td nowrap>Presidents'  Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>March 25, closing at 4:00 pm</td> <td nowrap>Good Friday, closing at 4:00 pm </td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>May 30</td> <td nowrap>Memorial Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>July 4</td> <td nowrap>Independence Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>September 5</td> <td nowrap>Labor Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>October 10</td> <td nowrap>Columbus Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>November 11</td> <td nowrap>Veterans' Day</td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>November 24</td> <td nowrap>Thanksgiving Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>December 26</td> <td nowrap>Christmas Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap></td> <td nowrap></td> <td nowrap></td> </tr> </table> <p>  </p> <h2>2004 Holiday Schedule</h2> <p>Cortland Banks main and branch offices will be closed for the following holidays in 2004:</p> <table border="0" width="100%"> <tr> <td nowrap>January 1</td> <td nowrap>New Year's Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>January 19</td> <td nowrap>Dr. Martin Luther King, Jr. Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>February 16</td> <td nowrap>Presidents'  Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>April 9, closing at 4:00 pm</td> <td nowrap>Good Friday, closing at 4:00 pm </td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>May 31</td> <td nowrap>Memorial Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>July 5</td> <td nowrap>Independence Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>September 6</td> <td nowrap>Labor Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>October 11</td> <td nowrap>Columbus Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>November 11</td> <td nowrap>Veterans' Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>November 25</td> <td nowrap>Thanksgiving Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>December 24, closing at 1:00 pm</td> <td nowrap>Christmas Eve, closing at 1:00 pm</td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>December 25</td> <td nowrap>Christmas Day</td> <td nowrap>Saturday</td> </tr> <tr> <td nowrap>December 31, closing at 2:00 pm</td> <td nowrap>New Year's Eve, closing at 2:00 pm</td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>January 1, 2005</td> <td nowrap>New Year's Day</td> <td nowrap>Saturday</td> </tr> <tr> <td nowrap></td> <td nowrap></td> <td nowrap></td> </tr> </table> <h2> </h2> <h2>2003 Holiday Schedule</h2> <p>Cortland Banks main and branch offices will be closed for the following holidays in 2003:</p> <table border="0" width="100%"> <tr> <td nowrap>January 1</td> <td nowrap>New Year's Day</td> <td nowrap>Wednesday</td> </tr> <tr> <td nowrap>January 20</td> <td nowrap>Dr. Martin Luther King, Jr. Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>February 17</td> <td nowrap>Presidents'  Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>April 18, closing at 4:00 pm</td> <td nowrap>Good Friday, closing at 4:00 pm </td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>May 26</td> <td nowrap>Memorial Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>July 4</td> <td nowrap>Independence Day</td> <td nowrap>Friday</td> </tr> <tr> <td nowrap>September 1</td> <td nowrap>Labor Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>October 13</td> <td nowrap>Columbus Day</td> <td nowrap>Monday</td> </tr> <tr> <td nowrap>November 11</td> <td nowrap>Veterans' Day</td> <td nowrap>Tuesday</td> </tr> <tr> <td nowrap>November 27</td> <td nowrap>Thanksgiving Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>December 24, closing at 1:00 pm</td> <td nowrap>Christmas Eve, closing at 1:00 pm</td> <td nowrap>Wednesday</td> </tr> <tr> <td nowrap>December 25</td> <td nowrap>Christmas Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap>December 31, closing at 2:00 pm</td> <td nowrap>New Year's Eve, closing at 2:00 pm</td> <td nowrap>Wednesday</td> </tr> <tr> <td nowrap>January 1, 2004</td> <td nowrap>New Year's Day</td> <td nowrap>Thursday</td> </tr> <tr> <td nowrap></td> <td nowrap></td> <td nowrap></td> </tr> </table> <h2> </h2> <h2><a name="Press Releases">Press Releases</a></h2> <hr> <p class="MsoNormal"><b>December 7, 2005</b></p> <p style="text-align:justify">Chairman K. Ray Mahan announced that at the November 22, 2005 meeting of the Board of Directors of Cortland Bancorp (the “Company”) a regular quarterly dividend of $0.22 per share, a special dividend also in the amount of $0.22 per share, and a 3% stock dividend were declared.  All three dividends are payable to shareholders of record as of December 9, 2005.  Payment and distribution to shareholders will occur on January 3, 2006.<o:p> </o:p> </p> <p style="text-align:justify">The Company is a financial holding company with $450 million in assets and is headquartered in Cortland, Ohio.  Founded in 1892, the Company’s bank subsidiary conducts business through thirteen community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The Company offers a full range of products and services, from internet banking to passbook savings, offering customers all the advantages of small hometown banking along with all the modern conveniences.<o:p> </o:p> </p> <p style="text-align:justify">Earnings for the first nine months of 2005 amounted to $3.241 million, down 8.4% from the same period last year, primarily due to reduced gains on investment securities, incremental costs associated with the retirement of the Company’s long-time President and Chairman, Rodger W. Platt, and related management transition, and increased provisions to the Company’s allowance for loan losses.  Earnings per share for the period measured $0.77 compared to $0.85 per share a year ago.  Core earnings (earnings before gains on loans sold, investment securities sold or called, other real estate losses and certain other non-recurring items) were basically unchanged, with core earnings per share of $0.76 in both 2005 and 2004.<o:p> </o:p> </p> <p>The stock trades in the “over-the-counter market,” on the NASDAQ OTC BB under the symbol CLDB, with approximately 4.222 million shares outstanding.</p> <hr> <p class="MsoNormal" align="center" style="text-align: left"><b>August 26, 2005</b></p> <p style="text-align:justify">Chairman Rodger W. Platt announced today that, at a recent meeting of the board of directors on August 23, 2005, a regular quarterly dividend of $0.22 per share was declared.  The dividend is payable to shareholders of record as of September 9, 2005.  The date of distribution and payment of the dividend was set as October 3, 2005.</p> <p style="text-align:justify">Cortland Bancorp earned $1.132 million during the quarter ended June 30, 2005, representing an increase of 4.6% over the $1.082 million earned during the second quarter a year ago.  Earnings per share increased to $0.27 from the $0.26 earned in the same quarter last year.</p> <p style="text-align:justify">For the six months ended June 30, 2005, Cortland Bancorp reported earnings of $2.390 million, an increase of 7.5% over the $2.223 million earned during the first half of 2004.  Earnings per share registered $0.57 compared to last year’s first half earnings of $0.54 per share.  Total assets measured $439.3 million as of June 30, 2005, as compared to the $443.1 million registered at June 30, 2004.</p> <p style="text-align:justify">Mr. Platt noted that the Company’s risk management approach emphasizes cost control and maintenance of strong capital levels, providing investors with a conservative profile.  During the first half of 2005, non interest expenses increased by less than 1.0% compared to the same period a year ago.  Capital ratios remain well above regulatory minimums, with equity capital continuing to represent more than 11% of assets.  With investment securities representing 63.5% of customer deposit balances, assets when weighted for risk represent a very modest 54% of average total assets.  The Company returned 9.1% and 9.6% on average shareholders’ equity for the second quarter and first six months of 2005, respectively.  The Company’s return on average assets was 1.03% during the quarter ended June 30, 2005 and 1.08% for the first half of 2005.</p> <p style="text-align:justify"> Core earnings, which exclude the gains on loans sold, investment securities sold or called, and certain other non recurring items, increased by 5.5% in the second quarter of 2005 when compared to the second quarter of 2004.  Core earnings for the second quarter were $1.116 million in 2005 and $1.058 in 2004.  Core earnings per share were $ 0.27 in the first quarter of 2005 as compared to $ 0.26 in 2004.</p> <p style="text-align:justify">Core earnings for the first half of 2005 were $2.169 million compared to $2.115 million a year ago, an increase of 2.6%.  Core earnings per share for the six months ended June 30<sup>th</sup> were $0.52 in 2005 and $0.51 in 2004.</p> <p style="text-align:justify">The Company’s net interest margin, the difference between what it earns on its loans and investments and what it pays for its deposits and borrowings, improved.  The Company’s net interest margin during the second quarter was 3.9% in 2005 as compared to 3.6% in 2004.  For the first half ended June 30<sup>th</sup>, the Company’s net interest margin was 3.9% and 3.7% in 2005 and 2004, respectively.</p> <p style="text-align:justify">The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p class="MsoNormal" align="center" style="text-align: left"><b>May 25, 2005</b></p> <p style="text-align:justify"> Chairman Rodger W. Platt announced today that the directors of Cortland Bancorp (the Company) voted, at their meeting of May 24, 2005, to declare a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of June 10, 2005, with July 1, 2005 as the date of distribution.  The Company presently has approximately 4.2 million shares outstanding.</p> <p style="text-align:justify">The Company earned $1.258 million during the first quarter of 2005, an increase of 10.25% from the $1.141 million earned during the first quarter a year ago.  Earnings per share increased to $0.30 from the $0.28 earned in the same quarter last year.  Total assets stood at $442.1 million on March 31, 2005, an increase of $5.3 million from the $436.8 million total of March 31, 2004.</p> <p style="text-align:justify">Core earnings, which exclude the gains on loans sold, investment securities sold or called, and certain other non recurring items, increased by 7.3% in the first quarter of 2005 when compared to the first quarter of 2004.  Core earnings for the first quarter were $1.053 million in 2005 as compared to $981,000 in 2004.  Core earnings per share were $0.25 in the first quarter of 2005, up from $0.24 in 2004.</p> <p style="text-align:justify">The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p class="MsoNormal"><b>February 24, 2005</b></p> <p align="left">Chairman Rodger W. Platt announced that at the meeting of the board of directors of Cortland Bancorp held on February 22, 2005 a regular quarterly dividend of $0.22 per share was declared.<span style="mso-spacerun: yes">  </span>The dividend is to be payable to shareholders of record as of March 11, 2005, with April 1, 2005 established as the date of distribution and payment.<o:p> </o:p> </p> <p style="text-align:justify">For the year ended December 31, 2004, Cortland Bancorp earned $4.843 million, 11.7% less than the $5.484 million that the Company earned in 2003.<span style="mso-spacerun: yes">  </span>Earnings per share in 2004 amounted to $1.17, or 10% less than the $1.30 per share earned for the fiscal year ended December 31, 2003.<span style="mso-spacerun: yes">  </span>For the quarter ended December 31, 2004, Cortland Bancorp earned $1.305 million compared to $1.340 million a year ago, representing a decline of 2.6%.<span style="mso-spacerun: yes">  </span>Earnings per share for the fourth quarter of 2004 were down a penny to $0.31 compared to the prior year’s $0.32 per share.<span style="mso-spacerun: yes">  </span>Total assets, year-over-year, exhibited moderate growth, increasing 1.8% to $446.4 million compared to $ 438.4 million a year ago.<o:p> </o:p> </p> <p style="text-align:justify">Mr. Platt noted that despite the year-over-year decline in earnings, the Company’s performance in 2004 represented one of the best in its 113-year history.<span style="mso-spacerun: yes">  </span>“It was a good, solid performance,” Platt stated, “…not great, but certainly good in a challenging operating environment.<span style="mso-spacerun: yes">  </span>Unemployment remains stubbornly high in northeastern Ohio, while operating margins continue to be under pressure.<span style="mso-spacerun: yes">  </span>Never-the-less, we were able to earn 1.1% on average assets, a level that historically has been considered good by community bankers.”<o:p> </o:p> </p> <p style="text-align:justify">“There were several factors that kept 2004 from being a great year,” Platt continued.<span style="mso-spacerun: yes">  </span>“While the most recent economic recession began early in 2001, the Company’s asset quality did not show any adverse effects until the second half of 2002, when marginal credits began to struggle.<span style="mso-spacerun: yes">  </span>That trend continued throughout 2004.<span style="mso-spacerun: yes">  </span>At year-end 2004, loans 30 days or more beyond their contractual due date represented 2.5% of total loans compared to 1.8% a year ago.<span style="mso-spacerun: yes">  </span>Total under-performing assets (a measure that includes restructured loans, loans past due 90 days or more, and real estate acquired in foreclosure) increased to 0.76% of total assets from 0.70% a year ago, and up from 0.26% at the end of the 2001 recession year.”<o:p> </o:p> </p> <p style="text-align:justify">“Despite this adverse trend in problem credits, asset quality measures remain in a range that management considers acceptable.<span style="mso-spacerun: yes">  </span>This trend in problem credits now seems to be stabilizing, as the local economy continues to slowly improve.<span style="mso-spacerun: yes">  </span>The economic recovery has been late in reaching northeastern Ohio,” Platt said.<span style="mso-spacerun: yes">  </span>“At any rate, the allowance for loan losses has been strengthened to provide for a probable increase in loss experience in the months ahead.<span style="mso-spacerun: yes">  </span>The allowance now stands at 1.37% of total loans, up from 1.27% last year,” Platt noted.<span style="mso-spacerun: yes">  </span>“This action required that we increase our provision for probable loan losses to $415,000 this year compared to $240,000 in the prior year.<span style="mso-spacerun: yes">  </span>This increase, along with a $171,000 loss on foreclosed real estate, represented 35.6% of the decline in earnings this year.”<o:p> </o:p> </p> <p style="text-align:justify"><span style="mso-spacerun: yes"> </span>“Another factor that limited our performance this past year was the continued pressure on our net interest margin,” Chairman Platt commented.<span style="mso-spacerun: yes">  </span>“During the unusually low interest rate environment of the past few years, the Company has experienced compression in its net interest margin, the difference between what the Company pays for its deposits and borrowings and what it is able to earn on its loans and investments.<span style="mso-spacerun: yes">  </span>With short-term interest rates hovering just above zero for much of the past couple of years, the Company had little opportunity to further reduce its cost of funds, while the yields available on loans and investments continued to decline as assets matured and re-priced.<span style="mso-spacerun: yes">  </span>With the Federal Reserve now in the process of gradually removing excess monetary accommodation, short-term interest rates have begun to move up and more typical interest rate spreads are returning.<span style="mso-spacerun: yes">  </span>As a result, the Company’s net interest margin was able to stabilize during 2004, albeit at a lower level than last year.<span style="mso-spacerun: yes">  </span>We were able to offset some of this with growth in our earning assets.<span style="mso-spacerun: yes">  </span>Still, the change in the Company’s net interest income accounted for 48.5% of our earnings decline,” Platt noted.<o:p> </o:p> </p> <p style="text-align:justify">“A dramatic slowdown in mortgage originations and refinancing activity in 2004 from the tidal wave pace of the past few years was the other major factor impacting us this year,” Platt continued.<span style="mso-spacerun: yes">  </span>“This slowdown impacted our ability to sell loans into the secondary mortgage market.<span style="mso-spacerun: yes">  </span>As a result, gains on the sale of mortgage loans declined from $470,000 in 2003 to just $54,000 in 2004.<span style="mso-spacerun: yes">  </span>This decline represented 42.9% of the decrease in 2004 earnings.”<o:p> </o:p> </p> <p style="text-align:justify">“Together, those three areas--- credit quality issues, net interest margin compression, and fewer mortgage loan originations--- represented 127% of the drop-off in net income this year.<span style="mso-spacerun: yes">  </span>On the brighter side, fees earned for other customer services increased by 42.2% year-over-year.<span style="mso-spacerun: yes">  </span>Non-interest operating expenses increased by 2.9% year-over-year, but approximately 50% of that increase was due to new compliance requirements mandated by the Sarbanes-Oxley Act, passed by Congress to assure integrity in financial reporting and restore investor confidence.<span style="mso-spacerun: yes">  </span>Other than that, operating expenses have been well controlled and are up less than 0.5% since 2002.”<o:p> </o:p> </p> <p style="text-align:justify">“A healthy balance sheet, characterized by a strong capital position, has long been one of the keys to our strategy,” Chairman Platt stated.<span style="mso-spacerun: yes">  </span>“Capital levels are kept strong to cushion the effects of any adverse trends or events that might occur.”<span style="mso-spacerun: yes">  </span>As a result, the Company’s capital ratios remain well above regulatory minimums, with equity capital representing more than 11% of assets.<span style="mso-spacerun: yes">  </span>With loans representing just 55.6% of customer deposit balances, assets when weighted for risk present a very modest risk profile, resulting in a risk-based capital ratio in excess of 22%.<span style="mso-spacerun: yes">  </span>Despite such conservatism, the Company continues to provide shareholders with a solid return on average equity, measuring 9.7% and 10.6% in 2004 and 2003, respectively.<span style="mso-spacerun: yes">  </span>Shareholder book value measured $11.85 at the end of 2004 compared to $12.01 per share as of December 31, 2003.<span style="mso-spacerun: yes">  </span>The Company continues to reward shareholders with a generous cash dividend policy, paying out 91.5% of 2004 earnings in cash dividends, compared to 79.9% in the prior year, as dividends per share increased by 2.9% due to the effect of a continuing stock dividend.<span style="mso-spacerun: yes">  </span>The stock trades on the NASDAQ Over the Counter Bulletin Board (OTC BB) under the symbol CLDB.</p> <p style="text-align:justify"><span style="mso-fareast-font-family: Times New Roman; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Mr. Platt reflected on the Company’s continued overall success, and attributed much of it to the personalized customer service so typical of small town community banks.<span style="mso-spacerun: yes">  </span>“Although we have obviously undergone tremendous changes since our humble beginnings in 1892, we have tried to remain true to the guiding philosophy and principles that gave rise to our success in the first place,” Mr. Platt noted.<span style="mso-spacerun: yes">  </span>“In this era of consolidation, characterized by mega mergers, we still strive to serve all of our customers in that very personal way so typical of hometown community bankers.<span style="mso-spacerun: yes">  </span>And while we try to preserve the <i>“best of the old ways,”</i> we also try to provide our customers with the <i>“best of the</i> <i>new ways,”</i> offering customers internet banking services, remote cash management and bill paying capabilities, ATM and debit card services along with the usual array of loan and deposit products.<span style="mso-spacerun: yes">  </span>We like to think of it as <i>“hometown banking with all the modern conveniences.”</i></span></p> <hr> <p class="MsoNormal" style="text-align:justify"><b>November 24, 2004</b></p> <p align="left">Chairman Rodger W. Platt announced that at the November 23, 2004 meeting of the Board of Directors of Cortland Bancorp (the “Company”) a regular quarterly dividend of $0.22 per share, a special dividend also in the amount of $0.22 per share, and a 3% stock dividend were declared.  All three dividends are payable to shareholders of record as of December 10, 2004.  Payment and distribution to shareholders will occur on January 4, 2005.<o:p> </p> <p align="left">The Company is a financial holding company with $446 million in assets and is headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through thirteen community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades in the “over-the-counter market,” on the NASDAQ OTC BB under the symbol CLDB, with approximately 4.036 million shares outstanding.</p> <hr> <h3 style="text-align: left"> </h3> <p style="text-align: left"><b>September 1, 2004</b></p> <p style="text-align:justify"><span style="font-size: 12.0pt">Chairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a regular quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of September 17, 2004, and will be distributed to shareholders on October 1, 2004.  The Company presently has over 4 million shares outstanding, and offers shareholders the opportunity to participate in a Company sponsored dividend reinvestment plan.  The stock trades on the NASDAQ OTC market under the symbol CLDB.</span></p> <hr> <p><b>August 27, 2004</b>                  </p> <p class="MsoNormal"><span style="font-size: 12.0pt"> Rodger W. Platt, Chairman, announced that on August 24, 2004 Jerry A. Carleton was appointed as a member of Cortland Bancorp’s board of directors.  Mr. Carleton was appointed to the class of directors whose terms will expire at the 2007 annual meeting, and was assigned to serve on the Company’s Executive Compensation Committee.</span></p> <p class="MsoNormal"><span style="font-size: 12.0pt"> Mr. Carleton is a long term resident of the Cortland area community.  Mr. Carleton earned his Bachelor and Master degrees at Kent State University.  He was an Assistant Professor and Athletic Director at Kent State University Trumbull Campus for more than 25 years.  Since 1995 he has been a Professor Emeritus at Kent State University Trumbull Campus, where he also serves as an advisor for campus planning and development.</span></p> <p class="MsoNormal"><span style="font-size: 12.0pt"> In 1972, Mr. Carleton founded Jerry Carleton Enterprises, Inc., a general contracting and development company specializing in the development and building of condominiums, single-family homes, and small commercial projects.  Mr. Carleton is a member and past president of the Home Builders Association of Mahoning Valley, and a member of the National Association of Home Builders.</span></p> <p class="MsoNormal"><span style="font-size: 12.0pt"> Active in numerous professional and community service organizations, Mr. Carleton is a member of the Rotary International Club of Cortland, Ohio; a past president of the Kiwanis Club of Champion, Ohio; and serves as an advisor to the YMCA of Warren, Ohio.  He is also a member of the Ohio Education Association, the National Education Association, and the American Association of University Professors.</span></p> <hr> <p><b>June 1, 2004</b></p> <p><span style="font-size: 10.0pt; font-family: Times New Roman">C</span><span style="font-family: Times New Roman">hairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of June 18, 2004, and is payable to shareholders on July 1, 2004.  The Company presently has over 4 million shares outstanding.  The stock trades on the NASDAQ OTC market under the symbol CLDB</span></p> <hr> <h1><font size="3">February 25, 2004</font></h1> <p align="left">Chairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of March 12, 2004, and is payable to shareholders on April 1, 2004.  The Company presently has over 4 million shares outstanding.  The stock trades on the NASDAQ OTC market under the symbol CLDB.</p> <p align="left">In other business at the February 24, 2004 meeting of The Board of Directors of Cortland Bancorp, Chairman Platt announced that Neil J. Kaback was sworn in as the newest director of the corporation.  Mr. Kaback is a partner in the CPA firm of Cohen & Company, which has local offices located in both Youngstown and Warren, Ohio.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <h1><font size="3">February 11, 2004</font></h1> <p align="left"><span style="font-size:10.0pt">C</span>hairman Rodger W. Platt announced today that Cortland Bancorp earned $ 5.484 million, or $ 1.34 per share, for the fiscal year ended December 31, 2003.  Although down $ 258,000, or 4.5%, from the $ 5.742 million earned in 2002, Cortland Bancorp’s 2003 performance ranks as the third best in the Company’s 112 year history.  Favorably impacted by the Company’s stock repurchase program, earnings per share declined by only 2.9%, down $ 0.04 per share from the $ 1.38 per share achieved in 2002, and represented the second best performance ever.  For the quarter ended December 31, 2003, Cortland Bancorp earned $ 1.34 million, representing a $ 211,000 increase, or 18.7%, from the $ 1.129 million earned during the same quarter a year ago.  Earnings per share for the fourth quarter of 2003 were $ 0.33 compared to the prior year’s $ 0.27 per share, an increase of $ 0.06 per share, or 22.2%.</p> <p align="left">The increase in earnings for the fourth quarter stemmed from several sources.  While year-over-year net interest income declined by $ 479,000, or 11.7%, non interest income improved by $412,000, or 64.8%, and non interest expense declined by $ 338,000, or 10.3%.  The provision for loan losses expensed in the fourth quarter of 2003 declined by $ 45,000 from the same quarter a year ago, while the provision for federal income taxes charged against income increased by $ 105,000.</p> <p align="left">Mr. Platt noted that the financial results for 2003 were achieved without any increase in the asset base, with average assets declining by 0.8%.  Year-over-year, total assets grew slightly, increasing 0.2% to $ 438.4 million as of December 31, 2003 compared to $ 437.6 million a year ago.  Mr. Platt noted that while the economy slid into recession during the first quarter of 2001, the Company’s asset quality showed little effect until the second half of 2002 when marginal credit began to struggle, a trend that continued throughout most of 2003.  As of year-end 2003, loans 30 days or more beyond their contractual due date represented 1.8% of total loans compared to 1.9% a year ago.  Total underperforming assets (a measure that includes restructured loans, loans past due 90 days or more, and real estate acquired in foreclosure) increased to 0.7% of total assets from 0.5% a year ago.  “Despite this recent up-tick, asset quality measures remain in a very acceptable range,” Platt said.</p> <p align="left">Mr. Platt attributed the Company’s continued overall success to the personalized customer service typical of a small town community bank.  “Although we have obviously undergone tremendous changes since our humble beginnings in 1892, we have tried to remain true to the guiding philosophy and principles that gave rise to our success in the first place,” Mr. Platt noted.  “In this era of consolidation, characterized by mega mergers, we still strive to serve all of our customers in that very personal way so typical of hometown community bankers.  And while we try to preserve the <i>“best of the old ways,”</i> we also try to provide our customers with the <i>“best of the</i> <i>new ways,”</i> offering customers internet banking services, remote cash management and bill paying capabilities, ATM and debit card services along with the usual array of loan and deposit products.  We like to think of it as <i>“ hometown banking with all the modern conveniences.”</i></p> <p align="left">Mr. Platt emphasized that in this low interest rate environment the Company has experienced compression in its net interest margin, the difference between what the Company pays for its deposits and borrowings and what it is able to earn on its loans and investments.  With short-term interest rates hovering just above zero, the Company has little opportunity to further reduce the cost of its funds, while the yields available on loans and investments continue to decline as assets mature and re-price.  To counter-balance this trend, the Company has increased its emphasis on non interest income sources while controlling non interest expenses.  Year-over-year, non interest income increased by $1.149 million, or 42.6%, while non interest expense declined by $ 297,000, or 2.5%.</p> <p align="left">“A strong balance sheet, characterized by a strong capital position, is one of the keys to our strategy,” Chairman Platt stated.  “Capital levels are kept strong to cushion the effect of any adverse trends or events that might occur.”  As a result, the Company’s capital ratios remain well above regulatory minimums, with equity capital representing 11.4% of assets.  With loans representing just 56% of customer deposit balances, assets when weighted for risk present a very modest risk profile.  Despite such conservatism, the Company continues to provide shareholders with a solid return on average equity, measuring 10.6% and 11.1% in 2003 and 2002, respectively.  The Company’s return on average assets registered 1.26% during 2003 and 1.31% in 2002.  Shareholder book value measured $12.37 at the end of 2003 compared to $12.66 per share as of December 31, 2002.  The Company continues to reward shareholders with a generous cash dividend policy, paying out 79.9% of 2003 earnings in cash dividends, compared to 74.8% in the prior year, as dividends per share increase by 2.9%.  The stock trades on the NASDAQ Over the Counter Bulletin Board (OTC BB) under the symbol CLDB.</p> <hr> <p class="MsoNormal" style="text-align:justify"><b>November 25, 2003</b></p> <p class="MsoNormal" style="text-align:justify">Chairman Rodger W. Platt announced that, at the November 25, 2003 meeting of the Board of Directors of Cortland Bancorp (the “Company”), a regular quarterly dividend of $0.22 per share, a special dividend also in the amount of $0.22 per share, and a 3% stock dividend were declared.  All three dividends are payable to shareholders of record as of December 12, 2003.  Payment and distribution to shareholders will occur on January 5, 2004.</p> <p align="left">In January of 2003, the Board of Directors of Cortland Bancorp announced a program authorizing the repurchase of up to 4.9% of the Company’s common stock, primarily for purposes of facilitating its dividend reinvestment plan.  Under the 2003 Repurchase Program, the Company has acquired 94,379 shares to date at an average price of $ 30.36 per share.</p> <p align="left">The Company is a financial holding company with $438 million in assets and is headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through thirteen community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades in the “over-the-counter market,” on the NASDAQ OTC BB under the symbol CLDB, with approximately 3.9 million shares outstanding.</p> <hr> <p class="MsoNormal" style="text-align:justify"><span style="font-size:9.0pt; mso-bidi-font-size:10.0pt"> </span><b>November 7, 2003</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"><o:p></span></p> <p class="MsoNormal" align="left">Chairman Rodger W. Platt announced today that, for the first nine months of 2003, Cortland Bancorp’s earnings were $ 4.144 million or $ 1.04 per share.  During the comparable period of 2002, the Company earned $ 4.613 million or $ 1.14 per share.  During the third quarter ended September 30, 2003, the Company earned $ 1.317 million, down from the $ 1.632 million earned in last year’s third quarter.  Third quarter earnings per share of $ 0.33 were $0.07 shy of the $0.40 earned in last year’s third quarter.</p> <p class="MsoBodyText" align="left">Mr. Platt indicated that the Company is experiencing compression in its net interest margin, which is the difference between what the Company earns on its loans and investments and what it pays for its deposits and borrowings.  He noted that with short-term interest rates hovering just above zero, there is limited opportunity to reduce the Company’s cost of funds any further.  Meanwhile, the yields on loans and investments continue to fall as assets roll-off and re-price.  To help offset this trend, management is focused on increasing non interest income and controlling non interest expense.</p> <p class="MsoNormal" align="left">During the third quarter of 2003, the Company’s operating expenses declined by $ 2,000 from the same period a year ago.  On a year-to-date basis, non interest expenses have risen by $ 41,000, an increase of less than 0.5%.  Mr. Platt noted that, like many firms, the Company has experienced sharp increases in the cost of providing group medical coverage, requiring creative changes in the Company’s approach to such benefits.  He emphasized that the Company remains committed to<span style="font-size:10.0pt"> </span>cost effective solutions that deliver quality medical benefits to the Company’s employees and their families.</p> <p class="MsoNormal" align="left">Meanwhile, non interest income continued to improve.  The third quarter saw non interest income improve by $ 104,000, or 12.3%, over last year, putting year-to-date non interest income up by $ 737,000, or 35.7%, over last year.  Mr. Platt noted that the improvement reflected the Company’s increased presence in the secondary mortgage market, increased gains on investment and trading account securities, and increased revenues from other customer services.</p> <p class="MsoNormal" align="left">Lingering effects of the recent economic recession and slow recovery continue to impact loan delinquency and charge-offs.  As of September 30, 2003, loans 30 days or more beyond their contractual due date represented 2.0% of total loans, up from 1.9% a year ago.  Loans recognized as a loss during the first nine months of 2003, net of any recoveries on previously charged-off loans, represented a 0.22% annual loss ratio on outstanding loans compared to 0.14% for the same period last year.  Mr. Platt indicated that the Company’s provision for loan losses during the first half of 2003 maintained the allowance for loan losses at approximately $ 3.0 million, representing 1.57% of loans outstanding compared to 1.60% a year ago.</p> <p class="MsoNormal" align="left">Over the past twelve months assets have remained relatively steady at approximately $ 440 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 11.8% of assets.  During the first nine months of 2003, the Company provided shareholders with a return on average equity of 10.6% while generating a return on average assets of 1.28%.  During the first nine months of last year, the Company’s return on shareholders’ equity was 11.9% with a return on assets of 1.40%.  Mr. Platt noted that, “While 2003 results are tracking below last year’s record-setting pace, the level of performance remains quite acceptable.  While it now appears unlikely that we will achieve a 10th consecutive year of record profits, this year’s performance is still shaping up as one of the best in the Company’s 111-year history.”</p> <p class="MsoNormal" align="left">On January 28, 2003, the Company’s board of directors authorized the repurchase of a maximum of 196,000 shares, or approximately 4.9% of the Company’s common stock.  This program will expire no later than February 6, 2004.  As of September 30, 2003, the Company had repurchased 58,950 shares under the program.  Based on the market price of the Company’s stock at September 30, 2003, the remaining repurchase commitment was approximately $ 4.18 million.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p class="MsoNormal" style="text-align:justify"><span style="font-size:9.0pt; mso-bidi-font-size:10.0pt"> </span><b>August 15, 2003</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"><o:p></span></p> <p align="left">Chairman Rodger W. Platt announced today that, for the first six months of 2003, Cortland Bancorp’s earnings were $ 2.827 million or $ 0.71 per share.  During the comparable period of 2002, the Company earned $ 2.981 million or $ 0.74 per share.  During the second quarter ended June 30, 2003, the Company earned $ 1.365 million, down from the $ 1.539 million earned in last year’s second quarter.  Second quarter earnings per share of $ 0.34 were $0.04 shy of the $0.38 earned in last year’s second quarter.</p> <p align="left">Mr. Platt indicated that, like many other community banks, the Company is experiencing compression in its net interest margin, which is the difference between what the Company earns on its loans and investments and what it pays for its deposits and borrowings.  He noted that with short term interest rates approaching zero there is limited opportunity to reduce the Company’s cost of funds any further.  Meanwhile, the yields available on loans and investments continue to fall, and still have room to fall further if spreads tighten.  To help offset this trend, the Company has increased its focus on non interest income and expense control.</p> <p align="left">During the second quarter of 2003, the Company’s operating expenses were up $ 3,000 over the same period last year, while year-to-date non interest expenses rose $ 43,000, an increase of well under 1% for both the quarter and year-to-date.  Mr. Platt noted that, like many firms, the Company has experienced sharp increases in the cost of providing group medical coverage, requiring creative changes in the Company’s approach to such benefits.  He emphasized that the Company remains committed to cost effective solutions that deliver quality medical benefits to the Company’s employees and their families.</p> <p align="left">Meanwhile, non interest income continued to improve.  The second quarter saw non interest income improve by $ 276,000, or 45.6%, over last year, which put year-to-date non interest income up $ 633,000, or 52.0%, over last year.  Mr. Platt noted that the improvement reflected the Company’s increased presence in the secondary mortgage market, and increased gains on investment and trading account securities.</p> <p align="left">Lingering effects of the recent economic recession, which hit the industrial and manufacturing sectors particularly hard, continue to be reflected in loan delinquency and charge-offs.  As of June 30, 2003, loans 30 days or more beyond their contractual due date represented 2.0% of total loans, up from 1.3% a year ago.  Loans recognized as a loss during the first six months of 2003, net of any recoveries on previously charged-off loans, represented a 0.25% annual loss ratio on outstanding loans compared to 0.16% for the same period last year.  Mr. Platt indicated that the Company’s provision for loan losses during the first half of 2003 maintained the allowance for loan losses (a cushion against possible future loan losses) at approximately $ 3.0 million, representing 1.55% of loans outstanding compared to 1.49% a year ago.</p> <p align="left">Over the past twelve months assets have remained relatively steady at $ 440 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 12.0% of assets.  During the first half of 2003, the Company provided shareholders with a return on average equity of 10.7% while generating a return on average assets of 1.31%.  During the first six months of last year, the Company’s return on shareholders’ equity was 11.6% with a return on assets of 1.37%.  Mr. Platt noted that while 2003 results are tracking below last year’s record pace, the level of the Company’s profits and performance ratios remain quite acceptable.  “After nine consecutive years of record performance, one grows to expect continuous improvement.  However, in light of today’s economic and monetary challenges, we are quite pleased with the level of performance that we have been able to sustain throughout the first half of 2003,” Mr. Platt stated. </p> <p align="left">On January 28, 2003, the Company’s board of directors authorized the repurchase of a maximum of 196,000 shares, or approximately 4.9% of the Company’s common stock.  This program will expire not later than February 6, 2004.  As of June 30, 2003, the Company had repurchased 22,617 shares under the current program.  Based on the market price of the Company’s stock as of June 30, 2003, the remaining repurchase commitment was approximately $ 5.6 million.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p class="MsoNormal" style="text-align:justify"><span style="font-size:9.0pt; mso-bidi-font-size:10.0pt"> </span><b>May 28, 2003</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"><o:p> </o:p> </span></p> <p class="MsoNormal" align="left">Chairman Rodger W. Platt announced that, at a board meeting held on May 27, 2003, the Directors of Cortland Bancorp voted to declare a quarterly dividend of $0.22 per share.  The dividend, payable to shareholders of record as of June 20, 2003, will be distributed to shareholders on July 1, 2003.<o:p> </o:p> </p> <p class="MsoNormal" align="left">For the first quarter ended March 31, 2003, the Company earned $1.462 million, up from $1.442 million a year ago.  Earnings per share measured $0.37 compared to the $0.36 earned in the first quarter of 2002, an increase of 2.8%.  The Company’s book value as of March 31, 2003 stood at $13.06 per share, up 4.5% from $12.50 the prior year.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Assets totaled $439 million at quarter’s end, essentially unchanged from the level recorded at the end of last year’s first quarter.  Capital ratios remained strong with equity capital representing 11.8% of assets, up from 11.5% a year ago.  During the first quarter of 2003, the Company generated a return on average equity of 11.1%, similar to the 11.2% return achieved in the first quarter of 2002.  The Company’s return on average assets during the first quarter of 2003 was 1.37% compared to 1.33% for last year’s first quarter.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">On January 28, 2003, the Board of Directors of Cortland Bancorp announced a program authorizing management to repurchase up to 196,000 shares, or 4.9% of the Company’s common stock.  During the quarter ended March 31, 2003, the Company repurchased 10,819 shares under the Program.  Based on the stock’s market price of $27.25 per share as of March 31, 2003, the Company’s remaining commitment to repurchase stock under the Program was approximately $5 million.  The Company presently has approximately four million shares of common stock outstanding.  The stock trades on the NASDAQ OTC under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p class="MsoBodyText" style="text-align: left"><b>April 18, 2003</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that Cortland Bancorp earned $ 1.462 million during the first quarter of 2003, compared to the $ 1.442 million earned during the first quarter a year ago.  Earnings per share of $ 0.37 represented an increase of 2.8% over the $ 0.36 earned during last year’s first quarter.  Total assets of $ 439.0 million at March 31, 2003 were essentially unchanged from the $ 439.1 million in assets that were held on March 31, 2002.  The Company’s return on average assets measured 1.37% for the quarter ended March 31, 2003 compared to 1.33% a year ago.  The Company’s first quarter performance represents an 11.1% return on equity compared to an 11.2% return for the same period last year.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Mr. Platt noted that the Company continues to execute a conservative strategy, emphasizing customer service, asset quality, productivity and a strong capital base as the cornerstones to profitable growth.  As of March 31, 2003, loans ninety days or more beyond their contractual due date measured 0.60% of total loans, down from 0.73% at year-end 2002, but up slightly from 0.53% a year ago.  The ratio of assets per employee, a key productivity measure, remained steady at $2.6 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 11.8% of assets.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Company’s tax equivalent net interest margin for the period ended March 31, 2003 decreased by $337,000, or 7.5%, compared to last year’s first quarter.  Both interest income and interest expense declined, reflecting the trend in interest rates.  Tax equivalent interest income declined from the same quarter last year by $889,000, as average earning assets decreased by $6.2 million, or 1.5%, while the yield on average earning assets fell to 6.24% from 7.00% last year.  Meanwhile interest expense declined by $552,000, as average interest bearing liabilities decreased by $8.7 million, or 2.6%, while the cost of those liabilities dropped to 2.64% from 3.25%.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The decline in the Company’s net interest margin was offset by a $357,000 increase in Other Income. Gains from the sale of residential mortgage loans increased by $86,000.  Gains from investment securities either called or sold increased by $157,000, while gains from trading securities added another $120,000.  Fees from other customer services increased by $16,000, while other non interest income sources exhibited a decline of $22,000.</p> <p class="MsoBodyText" align="left">Non-interest expenses were well controlled, reflecting an increase of just $40,000, or 1.4%, compared to a year ago.  Salaries and employee benefits increased by $54,000, or 3.4%, while all other expenses in the aggregate declined by $14,000, or by 1.1%.  The Company’s effective tax rate for the quarter declined to 20.6% from 22.7% a year ago, reflecting an increase in income attributable to tax advantaged sources.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">As of quarter’s end, the book value of the Company’s common stock was $13.06 per share, up slightly from $13.04 per share at year-end 2002.  The Company’s board of directors declared a quarterly dividend of $0.22 per share, the same amount as a year ago, which was paid to eligible shareholders on April 1st.  On February 6, 2003, the stock repurchase program initiated in 2002 concluded with the Company having acquired 114,073 shares.  During that timeframe, the Company also reissued 52,647 shares to existing shareholders under its dividend reinvestment program.</p> <p class="MsoBodyText" align="left">On January 28, 2003, the Board of Directors of Cortland Bancorp approved a new program (the “2003 Program”), authorizing the repurchase of a maximum of 196,000 shares, or approximately 4.9% of the Company’s common stock.  The 2003 Program will expire not later than February 6, 2004.  Results will depend on market conditions with no guarantee as to the exact number of shares that will actually be repurchased.  During the quarter ended March 31, 2003, the Company repurchased 10,819 shares under the 2003 Program.  Based on the stock’s market price of $27.25 per share as of March 31, 2003, the Company’s remaining commitment to repurchase stock under the 2003 Program was approximately $5,046,000.  The stock trades on the NASDAQ OTC under the symbol CLDB.</p> <hr> <p class="MsoBodyText" style="text-align: left"><b>March 11, 2003</b></p> <p class="MsoBodyText" style="text-align: left">Chairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of March 24, 2003, and is payable to shareholders on April 1, 2003.</p> <p class="MsoBodyText" style="text-align: left">For the full year ended December 31, 2002, the Company earned $5.7 million, up 3.5% over the $5.5 million earned in 2001.  Earnings per share measured $1.43 in 2002 versus the $1.37 earned in 2001, an increase of 4.4%.  The Company’s book value as of December 31, 2002 stood at $13.04 per share, up from $12.51 the prior year.</p> <p class="MsoBodyText" style="text-align: left">Assets totaled $437.6 million at year-end, a slight decrease from $439.9 million a year ago.  Capital ratios remained strong with equity capital representing 11.9% of assets.  During 2002, the Company generated a return on average equity of 11.1%, identical to the return achieved in 2001.  The Company’s return on average assets during 2002 increased to 1.31% from the 1.28% achieved in 2001.</p> <p class="MsoBodyText" style="text-align: left">The Board of Directors of Cortland Bancorp also recently announced a program authorizing management to repurchase up to 4.9% of the Company’s common stock.  The Company presently has over 3.9 million shares outstanding.  The stock trades on the NASDAQ OTC under the symbol CLDB.</p> <hr> <p style="text-align:justify"><b>February 5, 2003</b></p> <p class="MsoBodyText" style="text-align:left">Chairman Rodger W. Platt announced that, for the ninth consecutive year, Cortland Bancorp has achieved record earnings.  Cortland Bancorp’s earnings registered an increase of 3.5% in 2002, up from the $5.546 million earned in 2001 to a new record of $ 5.742 million.  Favorably impacted by the Company’s stock repurchase program, earnings per share grew more quickly, increasing at a 4.4% pace to $ 1.43 per share from the $ 1.37 per share achieved in 2001.  For the quarter ended December 31, 2002, the Company’s earnings were $ 1.129 million, representing a $ 239,000 decrease from the $ 1.368 million earned during the same quarter a year ago.  Earnings per share for the fourth quarter of 2002 were $ 0.28 compared to the prior year’s $ 0.34 per share.</p> <p class="MsoBodyText" style="text-align:left">The decline in earnings for the fourth quarter stemmed from several sources.  Year-over-year increases for loan loss provision, foreclosure and repossession expenses totaled $ 173,000, reflecting the residual effects of the recent recession.  The balance of the shortfall reflected a decline in the gains realized on called investment securities; reduced service charge income resulting from a competitive realignment of deposit products; losses sustained in the robbery of one of the Company’s branch banking offices; and growing pressure on the Company’s net interest margin as spreads continued to narrow.  With rates already at their lowest level in more than forty years, the Federal Reserve cut rates even further during the fourth quarter to address concerns about an “economic soft spot.”</p> <p class="MsoBodyText" style="text-align:left">Mr. Platt noted that the financial results for 2002 were achieved with only a modest increase in the asset base, with average assets exhibiting a growth rate of 1.1%.  Year-over-year, total assets declined slightly, falling 0.5% to $ 437.6 million as of December 31, 2002 compared to $ 439.9 million a year ago.  Mr. Platt noted that while the economy slid into recession during the first quarter of 2001, the Company’s asset quality showed little effect until the second half of 2002.  As of year-end 2002, loans 30 days or more beyond their contractual due date represented 1.9% of total loans compared to 1.4% a year ago.  Total underperforming assets (a measure that includes restructured loans, loans past due 90 days or more, and real estate acquired in foreclosure) increased to 0.5% of total assets from 0.3% a year ago.  “Despite this recent slippage, these asset quality measures remain in a very acceptable range… especially in light of an economy still struggling to emerge from recession,” Platt said.</p> <p class="MsoBodyText" style="text-align:left">Mr. Platt attributed the Company’s continued overall success to the personalized customer service typical of a small town community bank.  “Although we have obviously come a long way since our humble beginnings in 1892, we have tried to remain true to the guiding philosophy and principles that gave rise to our success in the first place,” Mr. Platt noted.  “While we now operate out of thirteen locations in four counties, we still strive to serve all of our customers in that very personal way so typical of hometown community bankers.  And while we try to preserve the “best of the old ways,” we also try to provide our customers with the “best of the new ways,” offering customers internet banking services, remote cash management and bill paying capabilities, ATM and debit card services along with the usual array of loan and deposit products.  We like to think of it as “ hometown banking with all the modern convenience.”<o:p> </o:p> </p> <p class="MsoBodyText" style="text-align:left">Mr. Platt emphasized that the Company continues to execute an essentially conservative strategy, deploying assets in low risk sectors while pursuing moderate, sustainable growth.  Capital levels are kept strong to cushion the effect of any adverse trends or events that might occur.  As a result, the Company’s capital ratios remain well above regulatory minimums, with equity capital representing 11.9% of assets.  With loans representing just 57% of customer deposit balances, assets when weighted for risk present a very modest risk profile.  Despite such conservatism, the Company continues to provide shareholders with a solid return on average equity, measuring 11.1% both in 2002 and 2001.  The Company’s return on average assets improved during 2002 to 1.31% from the 1.28% achieved in 2001.  Shareholder book value increased from $12.51 at the end of 2001 to $13.04 per share as of December 31, 2002.  The Company continues to reward shareholders with a generous cash dividend policy, paying out 75% of 2002 earnings in cash dividends.  The stock trades on the NASDAQ Over the Counter Bulletin Board (OTC BB) under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p style="text-align:justify"><b>January 31, 2003</b></p> <p class="MsoBodyText">Cortland, Ohio (January 31, 2003) – Cortland Bancorp (OTC Bulletin Board: “CLDB”) today announced that the Company’s Board of Directors has approved a Resolution authorizing the repurchase of up to 4.9% of the shares of the Company’s outstanding common stock, representing approximately 196,000 shares.<span style="mso-spacerun: yes">  </span>This repurchase program will commence on February 7, 2003 and will terminate not later than February 6, 2004.<span style="mso-spacerun: yes">  </span>The number of shares that will actually be repurchased will depend on market conditions.<span style="mso-spacerun: yes">  </span>Accordingly, there is no guarantee as to the exact number of shares to be repurchased. Rodger W. Platt, Chairman and President of Cortland Bancorp, stated that a similar repurchase program, currently in effect, is scheduled to expire on February 6, 2003.</p> <p class="MsoBodyText">The Board of Directors approved the repurchase program in view of current economic and market factors, the need for shares to support the Company’s dividend reinvestment program, alternate investment strategies and the strong capital position of both the Company and its banking subsidiary, The Cortland Savings and Banking Company.<span style="mso-spacerun: yes">  </span>The Company believes that the repurchase of its shares represents an attractive investment opportunity that is of benefit to both the Company and its shareholders.</p> <p class="MsoBodyText">Currently, Cortland Bancorp has approximately 3,998,191 shares outstanding.<span style="mso-spacerun: yes">  </span>According to Mr. Platt, repurchases are generally effected through open market purchases or in privately negotiated transactions in accordance with applicable regulations of Securities and Exchange Commission.<span style="mso-spacerun: yes">  </span>The repurchased shares become treasury shares and are available for general corporate purposes such as the Company’s dividend reinvestment plan.</p> <p class="MsoBodyText">As of December 31, 2002, Cortland Bancorp reported total assets of $437.6 million, a slight decrease of 0.5% from the $439.9 million reported a year ago.<span style="mso-spacerun: yes">  </span>Net income for 2002 was $5.742 million compared to $5.546 million in 2001.<span style="mso-spacerun: yes">  </span>Earnings per share amounted to $1.43 in 2002, up 4.4% from the $1.37 earned in 2001.<span style="mso-spacerun: yes">  </span>The return on average shareholders’ equity measured 11.1% both in 2002 and 2001.<span style="mso-spacerun: yes">  </span>The return on average assets in 2002 was 1.31%, up from 1.28% a year ago.<span style="mso-spacerun: yes">  </span>Dividends per share increased by 10% to $1.07 per share.</p> <p class="MsoBodyText">Cortland Bancorp’s principal subsidiary is the Cortland Savings and Banking Company.<span style="mso-spacerun: yes">  </span>The Cortland Savings and Banking Company is a full-service, state-chartered bank engaged in commercial and retail banking and trust services.<span style="mso-spacerun: yes">  </span>Business is conducted at a total of thirteen offices, encompassing Trumbull County, Portage County, Ashtabula County, and Mahoning County, all in northeastern Ohio.<span style="mso-spacerun: yes">  </span>Chartered by the State of Ohio, the Bank was founded in 1892 and is a member of the Federal Reserve System.</p> <hr> <p style="text-align:justify"><b>November 26, 2002</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that, at the November 26, 2002 meeting of the Board of Directors of Cortland Bancorp (the “Company”), a regular quarterly dividend of $0.22 per share, a special dividend also in the amount of $0.22 per share, and a 3% stock dividend were declared.  All three dividends are payable to shareholders of record as of December 13, 2002.  Payment and distribution to shareholders will occur on January 3, 2003.</p> <p class="MsoBodyText" align="left">For the third quarter ended September 30, 2002, the Company earned $ 1.632 million, or $ 0.42 per share, a 6.0% increase over second quarter results and up 7.7% from the same quarter a year ago.  The Company reported earnings of $ 4.613 million for the first nine months of 2002, an increase of $ 435,000, or 10.4%, over the comparable period last year.  Earnings per share of $ 1.18 represent an 11.3% improvement over last year’s performance for the first nine months.</p> <p class="MsoBodyText" align="left">In January of 2002, the Board of Directors of Cortland Bancorp announced a program authorizing the repurchase of up to 4.9% of the Company’s common stock, primarily for purposes of facilitating its dividend reinvestment plan.  Under the 2002 Repurchase Program, the Company has acquired 83,550 shares to date at an average price of $ 24.78 per share.</p> <p class="MsoBodyText" align="left">The Company is a financial holding company with $441 million in assets headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through thirteen community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades on the NASDAQ OTC BB under the symbol CLDB, with approximately 3.9 million shares outstanding.</p> <hr> <p style="text-align:justify"><b>November 12, 2002</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that, for the first nine months of 2002, Cortland Bancorp’s earnings grew by 10.4% to $ 4.613 million.  Earnings per share increased by 11.3% to $ 1.18 per share.  During the comparable period of 2001, the Company earned $ 4.178 million or $ 1.06 per share.  For the third quarter ended September 30, 2002, the Company earned $ 1.632 million, up 7.7% from the $ 1.516 million earned during the third quarter a year ago.  Third quarter earnings per share of $ 0.42 improved by $0.03 from the $0.39 earned in last year’s third quarter.</p> <p class="MsoBodyText" align="left">Mr. Platt stated that the Company’s performance was largely driven by an improved net interest margin, which, on a year-over-year basis, increased by 6.8% for the quarter and 9.7% for the first nine months of 2002.  Non interest income was bolstered by $ 241,000 in franchise tax refunds as the State altered its stance on existing law, resulting in a 19.5% increase for the quarter, and moving year to date non interest income 3.5% ahead of last year.  The Company’s operating expenses were up 5.7% over last year’s third quarter, primarily due to increased personnel expense and costs associated with the Company’s new Victor Hills office opened in February of this year.  Mr. Platt noted that, like most firms, the Company has experienced a sharp increase in the cost of providing group medical coverage, which increased by more than 20% this year.  Never-the-less, year to date non interest expenses excluding the Victor Hills office are tracking just 2.9% above last year.</p> <p class="MsoBodyText" align="left">The lingering effects of the most recent economic recession, which hit the industrial and manufacturing sectors particularly hard, continue to impact loan delinquency.  Mr. Platt observed that, in addition to the up-tick in unemployment, many workers have had their overtime curtailed, adversely impacting household incomes.  As of September 30, 2002, loans 30 days or more beyond their contractual due date represented 1.9% of total loans, down slightly from 2.0% a year ago.  Loans recognized as a loss during the first nine months of 2002, net of any recoveries on previously charged-off loans, represented a 0.14% annual loss ratio on outstanding loans compared to 0.06% for the same period last year.  Mr. Platt indicated that the Company increased its provision for loan losses during the first nine months of 2002 to $ 335,000 compared to a provision of $ 175,000 through the first three quarters of last year.  As of September 30, 2002, the Company’s allowance for loan losses, which provides a cushion against possible future loan losses, was in excess of $ 3.1 million, representing 1.6% of loans outstanding compared to 1.4% a year ago.</p> <p class="MsoBodyText" align="left">Mr. Platt noted that the Company deploys assets primarily in low risk sectors, seeking sustainable, profitable growth while maintaining strong capital levels.  Over the past twelve months, assets have remained relatively stable, increasing by 1.2%, or $ 5.3 million, to $ 441.3 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 12.0% of assets.  The Company provided shareholders with a return on average equity of 11.9% during the first nine months of 2002 while generating a return on average assets of 1.40%.  During the first nine months of 2001, the Company’s return on shareholders’ equity was 11.3% with a return on assets of 1.29%.</p> <p class="MsoBodyText" align="left">On February 6, 2002, the Company’s stock repurchase program initiated in 2001 concluded with the Company having acquired 51,321 shares, or 1.3% of the outstanding shares.  On January 22, 2002, the Company’s board of directors approved a similar program (the “2002 Program”), authorizing the repurchase of a maximum of 193,000 shares, or approximately 4.9% of the Company’s common stock.  This program will expire not later than February 6, 2003.  Results of the program will depend on market conditions, with no guarantee as to the exact number of shares that will actually be repurchased.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">During the nine month period ended September 30, 2002, the Company repurchased 5,587 shares under the 2001 Program and 72,544 shares under the 2002 Program.  The Company also reissued 43,496 shares to existing shareholders through its dividend reinvestment program during the first nine months of 2002.  Based on the market price of the Company’s stock, the remaining repurchase commitment was approximately $ 3.1 million as of September 30, 2002.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p style="text-align:justify"><b>August 29, 2002</b></p> <p align="left">Chairman Rodger W. Platt announced that at the August 27th meeting of the Board of Directors of Cortland Bancorp a quarterly dividend of $0.22 per share was declared.  The dividend is payable to shareholders of record as of September 13, 2002, and is payable to shareholders on October 1, 2002.<o:p> </o:p> </p> <p align="left">For the second quarter ended June 30, 2002, the Company earned $1.54 million, up 10.8% over the $1.39 million earned in the second quarter of 2001.  Earnings per share measured $0.39 in 2002 versus the $0.35 earned in the second quarter of 2001, an increase of 11.4%.  For the first six months of 2002, Cortland Bancorp’s earnings increased by 12.0% to $ 2.98 million, up from $ 2.66 million a year ago.  Earnings per share for the six month period were $ 0.76, up 11.8% from last year’s $ 0.68 per share.<o:p> </o:p> </p> <p align="left">In January of 2002 the Board of Directors authorized a stock buyback program, similar to those approved in 2001 and 2000.  The program will expire on February 6, 2003, or when the Company has repurchased 4.9% of its common stock.  As of August 27, 2002, the Company’s remaining commitment to repurchase stock under the program was approximately $ 3.2 million.  The Company presently has 3.89 million shares outstanding.  The stock trades on the NASDAQ OTC under the symbol CLDB.</p> <hr> <p align="left"><b>August 8, 2002</b></p> <p align="left">Chairman Rodger W. Platt announced today that, for the first six months of 2002, Cortland Bancorp’s earnings grew by 12.0% to $ 2.981 million or $ 0.76 per share.  During the comparable period of 2001, the Company earned $ 2.662 million or $ 0.68 per share.  During the second quarter ended June 30, 2002, the Company earned $ 1.539 million, up 10.8% from the $ 1.389 million earned during the second quarter a year ago.  Second quarter earnings per share of $ 0.39 increased by 11.4%, improving by $0.04 from the $0.35 earned in last year’s second quarter.<o:p> </o:p> </p> <p align="left">Mr. Platt attributed the Company’s performance to an improved net interest margin, which increased year-over-year by 11.8% for the quarter and 11.4% for the first six months.  He noted that the improvement in net interest income was more than sufficient to offset a decline in non interest income and increases in the Company’s operating expenses and provision for loan losses.  During the second quarter of 2002, the Company’s operating expenses were up 6.6% over last year, primarily due to increased personnel expense and costs associated with the Company’s new Victor Hills office opened in February of this year.  Mr. Platt noted that, like most firms, the Company has experienced a sharp increase in the cost of providing group medical coverage, which increased by more than 20% this year.  Never-the-less, year to date non interest expenses excluding the Victor Hills office are tracking just 2.7% above last year.<o:p> </o:p> </p> <p align="left">The lingering effects of the current economic recession, which hit the industrial and manufacturing sectors particularly hard, have begun to impact loan delinquency.  Mr. Platt noted that, in addition to the up-tick in unemployment, many workers have had their overtime curtailed, adversely impacting household incomes.  As of June 30, 2002, loans 30 days or more beyond their contractual due date represented 1.3% of total loans, up from 1.0% a year ago.  Loans recognized as a loss during the first six months of 2002, net of any recoveries on previously charged-off loans, represented a 0.16% annual loss ratio on outstanding loans compared to 0.06% for the same period last year.  Mr. Platt indicated that the Company’s provision for loan losses during the first six months of 2002 was $ 175,000 compared to $ 100,000 in the first half of last year.  As of June 30, 2002, the Company’s allowance for loan losses, a cushion against possible future loan losses, exceeded $ 3.0 million, representing 1.49% of loans outstanding compared to 1.45% a year ago.<o:p> </o:p> </p> <p align="left">To maintain a conservative profile, the Company deploys assets primarily in low risk sectors, pursuing sustainable, profitable growth while maintaining strong capital levels.  Over the past twelve months assets have remained relatively stable, increasing by 1.0%, or $ 4.2 million, to $ 442.6 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 11.7% of assets.  The Company provided shareholders with a return on average equity of 11.6% during the first half of 2002 while generating a return on average assets of 1.37%.  During the first six months of 2001, the Company’s return on shareholders’ equity was 10.9% with a return on assets of 1.24%.<o:p> </o:p> </p> <p align="left">On February 6, 2002, the Company’s stock repurchase program initiated in 2001 concluded with the Company having acquired 51,321 shares, or 1.3% of the outstanding shares.  On January 22, 2002, the Company’s board of directors approved a similar program (the “2002 Program”), authorizing the repurchase of a maximum of 193,000 shares, or approximately 4.9% of the Company’s common stock.  This program will expire not later than February 6, 2003.  Results of the program will depend on market conditions, with no guarantee as to the exact number of shares that will actually be repurchased.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">During the six month period ended June 30, 2002, the Company repurchased 5,587 shares under the 2001 Program and 42,719 shares under the 2002 Program.  The Company also reissued 33,504 shares to existing shareholders through its dividend reinvestment program during the first six months of 2002.  Based on the market price of the Company’s stock, the remaining repurchase commitment was approximately $ 3.825 million as of June 30, 2002.  Over the past twelve months, shareholders have seen the book value of their investment climb 5.5%, from $ 12.56 per share to $ 13.25 per share, while also receiving cash dividends of $ 1.03 per share.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p class="MsoNormal" align="left"><b>May 29, 2002</b></p> <p class="MsoNormal" align="left">Chairman Rodger W. Platt announced that at the May 28th meeting of the Board of Directors of Cortland Bancorp a quarterly dividend of $0.22 per share was declared.  The dividend is payable to shareholders of record as of June 14, 2002, and is payable to shareholders on July 1, 2002.<o:p> </o:p> </p> <p class="MsoNormal" align="left">For the first quarter ended March 31, 2002, the Company earned $1.44 million, up 13.4% over the $1.27 million earned in the first quarter of 2001.  Earnings per share measured $0.37 in 2002 versus the $0.32 earned in the first quarter of 2001, an increase of 15.6%.<o:p> </o:p> </p> <p class="MsoNormal" align="left">Year-over-year asset growth registered 1.6%, with total assets measuring $439.1 million at quarter’s-end.  Capital ratios remained strong with equity capital representing 11.5% of assets.  The Company’s return on average equity for the quarter was 11.2% compared to 10.4% a year ago.  The Company’s return on average assets was 1.3%, up from 1.2% for the same quarter a year ago.<o:p> </o:p> </p> <p class="MsoNormal" align="left">In January of 2002 the Board of Directors authorized a stock buyback program, similar to those approved in 2001 and 2000.  The program will expire on February 6, 2003, or when the Company has repurchased 4.9% of its common stock.  As of May 28, 2002, the Company’s remaining commitment to repurchase stock under the program was $4.1 million.  The Company presently has over 3.9 million shares outstanding.  The stock trades on the NASDAQ OTC under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p class="MsoNormal" align="left"><b>May 3, 2002</b></p> <p align="left">Chairman Rodger W. Platt announced today that Cortland Bancorp earned $ 1.442 million during the first quarter of 2002, compared to the $ 1.273 million earned during the first quarter a year ago.  Earnings per share of $ 0.37 represented an increase of 15.6% over the $ 0.32 earned during last year’s first quarter.  Total assets of $ 439.1 million at March 31, 2002 represented an increase of $ 6.9 million over the $ 432.2 million in assets that were held on March 31, 2001.<o:p> </o:p> </p> <p align="left">Mr. Platt noted that the Company continues to execute a conservative strategy, emphasizing customer service, asset quality, productivity and a strong capital base as the cornerstones to profitable growth.  Despite the onset of an economic recession last March, loans ninety days or more beyond their contractual due date have actually declined by 42% year-over-year, with non accrual loans now measuring 0.53% of total loans compared to 0.91% a year ago.  The average number of full time equivalent employees during the quarter ended March 31st increased from 164 a year ago to 167, as the Company opened a new office located in Boardman at the Victor Hills Plaza.  The ratio of assets per employee, a key productivity measure, remained steady at $2.6 million.  Capital ratios remain well above regulatory minimums, with equity capital representing 11.5% of assets.<o:p> </o:p> </p> <p align="left">The Company’s tax equivalent net interest margin increased by $ 450,000 compared to last year’s first quarter.  Both interest income and interest expense declined, reflecting the Federal Reserve’s policy of aggressively cutting rates over the past twelve months, as it sought to avoid recession and stimulate the economy.  Tax equivalent interest income declined from the same quarter last year by $ 605,000, as average earning assets increased by 2.2% while the yield on average earning assets fell to 7.00% from 7.76% last year.  Meanwhile interest expense declined by $ 1,055,000, as average interest bearing liabilities increased by just 0.4% while the cost of those liabilities dropped to 3.25% from 4.56%.<o:p> </o:p> </p> <p align="left">Net loans charged off during the quarter rose to an annualized rate of 0.10% of loans, up from 0.05% a year ago, resulting in a loan loss provision $ 40,000 greater than last year’s first quarter.  Net gains realized on investment securities and loans sold increased by $ 25,000 from last year’s first quarter, as issuers continued to retire debt ahead of schedule and homeowners continued to refinance in response to the decline in interest rates.  Other non-interest income sources contracted by $ 58,000 from last year’s level, reflecting a restructuring of customer services and deposit products and lower earnings on bank owned life insurance policies as a result of the general decline in interest rates.  Other non-interest expense increased by $ 108,000, or 3.9% compared to a year ago.  Excluding the expenses associated with the Company’s newest office at Victor Hills, non-interest expense increased by $ 32,000, or 1.2%.  The Company’s effective tax rate declined from 24.2% to 22.7% reflecting an increase in income attributable to tax advantaged sources.<o:p> </o:p> </p> <p align="left">The net result was a 1.3% return on average assets, up from 1.2% last year, and an 11.2% return on average shareholder’s equity compared to 10.4% a year ago.  As of quarter’s end, the book value of the Company’s common stock was $ 12.87 per share, down from $ 12.90 a year ago, reflecting a year-over-year decline in the value of unrealized gains on securities available for sale, and the Company’s continued repurchase of its common shares at market prices in excess of book value.  The Company’s board of directors declared a quarterly dividend of $ 0.22 per share, the same as a year ago.<o:p> </o:p> </p> <p align="left">On February 6, 2002, the stock repurchase program initiated in 2001 concluded with the Company having acquired 51,321 shares, or 1.3% of the outstanding shares.  On January 22, 2002, the Board of Directors of Cortland Bancorp approved a new program (the “2002 Program”), authorizing the repurchase of a maximum of 193,000 shares, or approximately 4.9% of the Company’s common stock.  The 2002 Program will expire not later than February 6, 2003.  Results will depend on market conditions with no guarantee as to the exact number of shares that will actually be repurchased.  During the quarter ended March 31, 2002, the Company repurchased 19,852 shares under the 2002 Program.  The stock trades on the NASDAQ OTC under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p class="MsoNormal" align="left"><b>March 1, 2002</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of March 15, 2002, and is payable to shareholders on April 1, 2002.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">For the full year ended December 31, 2001, the Company earned $5.5 million, up 8.5% over the $5.1 million earned in 2000.  Earnings per share measured $1.41 in 2001 versus the $1.30 earned in 2000, also an increase of 8.5%.  The Company’s book value as of December 31, 2001 stood at $12.88 per share, up from $12.22 the prior year.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Year-over-year asset growth in 2001 registered 2.4%, with total assets measuring $439.9 million at year-end.  Capital ratios remained strong with equity capital representing 11.5% of assets.  During 2001, the Company generated a return on average equity of 11.1%, comparable to the 11.3% achieved in 2000.  The Company’s return on average assets during 2001 increased to 1.28% from the 1.21% achieved in 2000.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Board of Directors of Cortland Bancorp also recently announced a program authorizing management to repurchase up to 4.9% of the Company’s common stock.  The Company presently has over 3.9 million shares outstanding.  The stock trades on the NASDAQ OTC under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p class="MsoNormal" align="left"><b>February 5, 2002</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that, for the eighth consecutive year, Cortland Bancorp had achieved record earnings.  Cortland Bancorp’s earnings registered an increase of 8.5% in 2001, up from the $5.110 million earned in 2000 to a new record of $5.546 million.  Earnings per share grew at the same 8.5% pace, increasing to $1.41 per share from the $1.30 per share achieved in 2000.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">For the quarter ended December 31, 2001, the Company’s earnings increased by 6.1%.  At $1.368 million, fourth quarter earnings represented an increase of $79,000 over the $1.289 million earned during the same quarter a year ago.  Earnings per share for the quarter were also up 6.1%, measuring $0.35 compared to the prior year’s $0.33 per share.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Mr. Platt noted that the financial results for 2001 were achieved with only a modest increase in the asset base, with average assets exhibiting a growth rate of 2.8%.  Year-over-year, total assets were up 2.4%, measuring $439.9 million as of December 31, 2001 compared to $429.5 million a year ago.  Mr. Platt noted that while the economy slid into recession during the first quarter of 2001, the Company’s asset quality has shown little deterioration, with loans 30 days or more beyond their contractual due date representing 1.37% of total loans compared to 1.23% a year ago.  As of December 31, 2001, underperforming assets (a measure that includes restructured loans, loans past due 90 days or more, and real estate acquired in foreclosure) represented just 0.26% of total assets compared to 0.42% a year ago.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">According to Mr. Platt, the Company continues to execute a conservative strategy, deploying assets in low risk sectors while pursuing moderate, sustainable growth.  Capital levels are kept strong to cushion the effect of any adverse trends or events that might occur, such as the current economic slowdown.  As a result, the Company’s capital ratios remain well above regulatory minimums, with equity capital representing 11.5% of assets.  With loans representing a moderate 61% of customer deposit balances, assets when weighted for risk represent just 51.8% of total assets, indicating a very modest risk profile.  Despite such conservatism, the Company continues to provide shareholders with a solid return on average equity, measuring 11.1% during 2001, very similar to the 11.3% produced during 2000.  Meanwhile, the Company’s return on average assets continued to increase during 2001, improving to 1.28% from the 1.21% achieved in 2000.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">In February of 2001, the Company initiated a program to repurchase shares of its common stock.  As of December 31, 2001, the Company had repurchased 45,734 shares, or approximately 1.2% of the shares outstanding, since commencement of the current buyback program.  During 2001 the Company also reissued 69,241 shares to participants of its dividend reinvestment program.  The Company recently announced that the board of directors had authorized a new buyback program to commence February 7, 2002.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Shareholder book value grew by 5.4% during the year, increasing from $12.22 at the end of 2000 to $12.88 per share as of December 31, 2001.  The Company continued to reward shareholders with a generous cash dividend policy, paying out 71% of its 2001 earnings in cash dividends.  The stock trades on the NASDAQ Over the Counter Bulletin Board (OTC BB) under the symbol CLDB.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Company will open its newest office on February 8, 2002.  The office, which is located in the newly constructed Victor Hills Plaza located at 6538 South Avenue in Boardman, Ohio, will be open six days a week, and is under the management of Judy Larson, who can be reached at (330) 629-9151.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <p class="MsoBodyText" align="left"> </p> <hr> <p align="left"><b>November 28, 2001</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"><o:p>  </o:p> </span></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that, at the November 27, 2001 meeting of the Board of Directors of Cortland Bancorp, a regular quarterly dividend of $0.22 per share, a special dividend of $0.15 per share and a 3% stock dividend were declared.  All three dividends are payable to shareholders of record as of December 14, 2001.  Payment and distribution to shareholders will occur on January 3, 2002.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">For the third quarter ended September 30, 2001, the Company earned $1.516 million, or $0.40 per share, a 9% increase over second quarter results and up 14% from the same quarter a year ago.  The Company reported earnings of $4.178 million for the first nine months of 2001, an increase of $357,000 over the comparable period last year.  Earnings per share of $1.10 represented a 10% improvement over last year’s performance for the first nine months.</p> <p class="MsoBodyText" align="left">In January of 2001, the Board of Directors of Cortland Bancorp announced a program authorizing the repurchase of up to 4.9% of the Company’s common stock, primarily for purposes of facilitating its dividend reinvestment plan.  Under a similar program instituted last year, the Company repurchased approximately 3.5% of its outstanding common shares.  Under the 2001 Repurchase Program, the Company has acquired 39,745 shares to date at an average price of $18.73 per share.</p> <p class="MsoBodyText" align="left">The Company is a financial holding company with $436 million in assets headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through twelve community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades on the NASDAQ OTC BB under the symbol CLDB, with approximately 3.8 million shares outstanding.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p align="left"><b>November 5, 2001</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"> <o:p>   </span></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that, for the first nine months of 2001, Cortland Bancorp earned $4.178 million, representing earnings per share of $1.10 per share, a 10% increase over the comparable period of 2000 when the Company earned $1.00 per share.  During the third quarter ended September 30, 2001, the Company earned $1.516 million, up 14% from the $1.329 million earned during the third quarter a year ago.  Third quarter earnings per share were $0.40 in 2001, an increase of $0.05 from the $0.35 earned in last year’s third quarter.  Mr. Platt noted that, during the third quarter of 2001, the Company’s operating expenses were 1.6% less than last year when the Company incurred additional legal costs to settle a long-standing lawsuit in Pennsylvania.  He noted that, year to date, non interest expenses are tracking 4.3% below last year. Costs were lower as, in addition to the aforementioned legal matter, asset quality remained within acceptable guidelines limiting collection and foreclosure expense, while recent investments in technology and infrastructure continued to produce productivity gains.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Mr. Platt noted that, “The speed and depth of plunging interest rates this year have provided bankers with a special set of challenges in trying to maintain profit margins.”  He indicated that the Company’s net interest margin (representing the difference between the interest income that the Company recognizes on earning assets and what it pays out in interest expense to support those assets) stabilized during the third quarter, but remains 5.1% lower on a year to date basis.  Mr. Platt indicated that the Company has been able to offset this decline in net interest margin primarily through effective expense control and increases in other sources of income, which exhibited a 56.3% increase for the third quarter of 2001 over last year, and a 54.4% increase for the full nine month period.  Dilution of the net interest margin due to quality concerns has not been an issue this year, although asset quality has recently begun to show the effects of a slowing economy.  As of September 30, 2001, loans 30 days or more beyond their contractual due date increased to 2.0% of total loans compared to just 1.0% at mid-year and 1.3% a year ago.  Net loans recognized as a loss during the first nine months of 2001 remained at a relatively tame 0.06% of average loans outstanding, while the Company’s allowance for loan losses at September 30, 2001 represented 1.4% of loans outstanding, providing adequate protection against future loan losses.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Mr. Platt stated that the Company continues to execute a conservative strategy, deploying assets in low risk sectors, while pursuing moderate, sustainable growth, with a commitment to strong capital levels.  Over the past twelve months asset growth has remained moderate at 2.4%, with total assets increasing by $10.4 million to $436 million, up from the $425.6 million reported at September 30, 2000.  Capital ratios remain well above regulatory minimums, with equity capital continuing to represent more than 11% of assets.  Loans, up $9.6 million since a year ago, represent 64% of customer deposit balances.  Assets when weighted for risk represent a modest 52.7% of total assets.  The Company’s results provide shareholders with a return on average equity of 11.3% for the first nine months of 2001, while generating a return on average assets of 1.29%.  During the first nine months of 2000, the Company’s return on average equity was 11.4%, with a return on average assets of 1.21%.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">On January 23, 2001, the Company’s board of directors approved a stock buyback program, authorizing the repurchase of a maximum of 187,000 additional shares, or approximately 4.9% of the Company’s common stock.  The program expires not later than February 6, 2002.  Results of the program will depend on market conditions, with no guarantee as to the exact number of shares that will actually be repurchased.  During the quarter ended September 30, 2001, the Company repurchased 8,069 shares, bringing the total number of shares repurchased under this current program to 33,374, or 0.9% of the outstanding shares.  During the first nine months of 2001, the Company also reissued 56,932 shares to those stockholders participating in the Company’s dividend reinvestment program.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Over the past twelve months, the Company has provided stockholders with $1.12 in cash dividends for each share owned, representing a dividend payout of 78% of the Company’s earnings during that period.  During that same period, the Company’s book value has climbed 7.2%, from $12.58 per share to $13.48 per share.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.</p> <hr> <p align="left"><b>August 30, 2001</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"> <o:p> </o:p> </span></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that at the August 28, 2001 meeting of the Board of Directors of Cortland Bancorp a quarterly dividend of $0.22 per share was declared.  The dividend is payable to shareholders of record as of September 14, 2001.  Payment and distribution to shareholders will occur on October 1, 2001.</p> <p class="MsoBodyText" align="left">For the quarter ended June 30, 2001, the Company earned $1.389 million, or $0.36 per share, a 9.1% increase over first quarter results.  The Company reported earnings of $2.662 million for the first six months of 2001, an increase of 6.8% over last year’s first half.  Earnings per share of $0.70 represented a 7.7% improvement over last year’s performance for the same six month period.  Over the past twelve months, the Company’s book value has climbed 9.5%, from $11.82 to $12.94 per share.</p> <p class="MsoBodyText" align="left">In January of 2001, the Board of Directors of Cortland Bancorp announced a program authorizing the repurchase of up to 4.9% of the Company’s common stock, primarily for purposes of facilitating its dividend reinvestment plan.  Under a similar program operative last year, the Company repurchased approximately 3.5% of the outstanding common shares.  Under the 2001 Repurchase Program, the Company has acquired 30,642 shares to date at an average price of $18.44 per share.</p> <p class="MsoBodyText" align="left">The Company is a financial holding company with $438 million in assets headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through twelve community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades on the NASDAQ OTC BB under the symbol CLDB, with approximately 3.8 million shares outstanding.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p align="left"><b>August 7, 2001</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"> <o:p> </o:p> </span></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that, for the first six months of 2001, Cortland Bancorp’s earnings grew by 6.8% to $2.662 million or $0.70 per share.  During the comparable period of 2000, the Company earned $2.492 million or $0.65 per share.  During the second quarter ended June 30, 2001, the Company earned $1.389 million, up 14.4% from the $1.214 million earned during the second quarter a year ago.  Second quarter earnings per share were $0.36 in 2001, an increase of $0.04 from the $0.32 earned in last year’s second quarter.  Mr. Platt noted that, during the second quarter of 2001, the Company’s operating expenses were 10.6% less than last year when the Company incurred additional costs to both settle a long-standing lawsuit in Pennsylvania and consolidate two area offices into a single operation.  He noted that, year to date, non interest expenses are tracking 6.1% below last year.  In addition to the aforementioned factors, this improvement reflects lower costs due to improved asset quality and productivity gains from investments in technology and infrastructure, with the average number of full time equivalent employees having declined to 167 from 174 a year ago.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Company’s net interest margin, representing the difference between the interest income that the Company recognizes on its earning assets and what it pays out in interest expense to support those assets, declined by 8.0% from last year’s second quarter and by 7.3% on a year to date basis.  The decline in the net interest margin was primarily offset by increases in other sources of income, which exhibited an increase of 37.3% for the second quarter of 2001 compared to 2000, and an increase of 53.4% for the similar six month period comparisons.  There was little dilution of the net interest margin due to quality concerns, for as previously noted, asset quality remained strong despite a slowing economy.  As of June 30, 2001, loans 30 days or more beyond their contractual due date represented 1.0% of total loans compared to 1.4% a year ago.  Net loans recognized as a loss during the first six months of 2001 represented 0.06% of average loans outstanding compared to a loss ratio of 0.16% for the same period last year.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">According to Mr. Platt, the Company seeks to present investors with a conservative profile, deploying assets in low risk sectors, while pursuing moderate, sustainable growth and maintaining strong capital levels.  Over the past twelve months asset growth has remained moderate at 3.8%, with total assets increasing by $16.0 million to $438.4 million, up from the $422.4 million reported at June 30, 2000.  Capital ratios remain well above regulatory minimums, with equity capital continuing to represent more than 11% of assets.  With loans representing 62% of customer deposit balances, assets when weighted for risk represent a very modest 52% of total assets.  The Company provided shareholders with a return on average equity of 10.9% during the first half of 2001 while generating a return on average assets of 1.24%.  During the first six months of 2000, the Company’s return on shareholders’ equity was 11.2% with a return on assets of 1.19%.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">On February 3, 2001, the Company’s stock repurchase program initiated in 2000 concluded with the Company having repurchased 3.6% of the outstanding shares.  On January 23rd of this year, the Company’s board of directors approved a similar program, authorizing the repurchase of a maximum of 187,000 additional shares, or approximately 4.9% of the Company’s common stock.  This program will expire not later than February 6, 2002.  Results of the program will depend on market conditions, with no guarantee as to the exact number of shares that will actually be repurchased.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">During the quarter ended June 30, 2001, the Company repurchased 11,866 shares, bringing the total number of shares repurchased under this current program to 25,305, or 0.7% of the outstanding shares.  During the first six months of 2001, the Company also reissued 44,612 of its shares to those stockholders participating in the Company’s dividend reinvestment program.  Over the past twelve months, the Company has provided stockholders with $1.07 in cash dividends for each share owned, representing a pay-out of 77% of the Company’s earnings during that period.  During that same period, shareholders have seen the book value of their investment climb 6.3%, from $12.17 per share to $12.94 per share.  The stock trades on the NASDAQ OTC BB under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p align="left"><b>May 23, 2001</b><span style="font-size:14.0pt; mso-bidi-font-size:10.0pt"> <o:p> </o:p> </span></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that at the May 22, 2001 meeting of the Board of Directors of Cortland Bancorp a quarterly dividend of $0.22 per share was declared.  The dividend is payable to shareholders of record as of June 15, 2001, and will be distributed to shareholders on July 2, 2001.  For the period ending March 31, 2001, the Company recently reported earnings of $1.273 million, or $0.33 per share, paralleling last year’s first quarter results.  Over the past twelve months, the Company has seen its book value climb 10.7%, from $11.65 to $12.90 per share.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">In January of 2001, the Board of Directors of Cortland Bancorp announced a program authorizing the repurchase of up to 4.9% of the Company’s common stock, primarily for purposes of facilitating its dividend reinvestment plan.  Under a similar program operative last year, the Company repurchased approximately 3.5% of the outstanding common shares.  Under the 2001 Repurchase Program, the Company has acquired 13,649 shares to date at an average price of $17.58 per share.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Company is a financial holding company with $432 million in assets headquartered in Cortland, Ohio.  Originally founded in 1892, the Company’s bank subsidiary conducts business through twelve community banking offices located in Trumbull, Mahoning, Portage and Ashtabula counties in northeastern Ohio.  The stock trades on the NASDAQ OTC under the symbol CLDB, with approximately 3.8 million shares outstanding.</p> <hr> <p align="left"><b>May 9, 2001</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced today that Cortland Bancorp earned $1.273 million during the first quarter of 2001, paralleling the $1.278 million earned during the first quarter a year ago.  Earnings per share of $0.33 equaled the amount earned during last year’s first quarter.  Total assets of $432.2 million at March 31, 2001 represented a slight increase of $2.7 million over the $429.5 million in assets that were held on March 31, 2000.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">Mr. Platt indicated that the Company continues to favor a conservative approach to growth emphasizing asset quality, productivity and a strong capital base.  Despite accumulating evidence of a slowing economy, loans ninety days or more beyond their contractual due date actually declined by 11.6% year-over-year, with non accrual loans now measuring 0.91% of total loans compared to 1.05% a year ago.  The number of full time equivalent employees at March 31st declined from 173 a year ago to 164, primarily through attrition, boosting the ratio of assets per employee, a key productivity measure, from $2.44 million to $2.64 million.  Capital ratios remain well above regulatory minimums, with equity capital representing more than 11% of assets.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">During the first quarter of 2001, tax equivalent interest income increased from the same quarter last year by $100,000, as the yield on average earning assets increased to 7.76% from 7.64% last year.  Meanwhile interest expense increased by $388,000, the cumulative effect of customers having shifted funds from checking and savings account products to higher cost certificates of deposit in response to higher interest rates over the past year.  Net loans charged off during the quarter slowed to an annualized rate of 0.05% of loans, resulting in a loan loss provision $25,000 smaller than last year.  Net gains realized on investment securities increased by $121,000 as issuers retired debt prior to scheduled maturity in response to rapidly declining interest rates.  Other non-interest income sources contributed an additional $153,000 over last year on increased revenues from other customer services and earnings on bank owned life insurance policies purchased last quarter in conjunction with the adoption of new benefit programs.  Other non interest expense increased by $67,000, or 2.5% compared to a year ago, while the Company’s effective tax rate declined from 26% to 24% reflecting an increase in income attributable to tax advantaged sources.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The net result was a 1.2% return on average assets, the same as last year, and a 10.4% return on average shareholder’s equity compared to 11.4% a year ago.  The year-over-year decline in the return on equity was  primarily due to an increase in the Company’s equity account as the result of unrealized appreciation in the Company’s investment securities available for sale.  As of quarter’s end, the book value of the Company’s common stock had increased to $12.90 per share from $11.65 a year ago.  During the quarter, the Company’s board of directors declared a quarterly dividend of $0.22 per share, up from $0.17 a year ago.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">On February 3, 2001, the stock repurchase program initiated in 2000 concluded with the Company having repurchased 3.6% of the outstanding shares.  On January 23, 2001, the Board of Directors of Cortland Bancorp approved a new program, authorizing the repurchase of a maximum of 187,000 shares, or approximately 4.9% of the Company’s common stock.  The program will expire not later than February 6, 2002.  Results will depend on market conditions with no guarantee as to the exact number of shares that will actually be repurchased.  During the quarter ended March 31, 2001, the Company had repurchased 13,439 shares under the new program.  The stock trades on the NASDAQ OTC under the symbol CLDB.<span style="font-size:10.0pt"><o:p> </o:p> </span></p> <hr> <p align="left"><b>March 2, 2001</b></p> <p class="MsoBodyText" align="left">Chairman Rodger W. Platt announced that the Board of Directors of Cortland Bancorp has declared a quarterly dividend of $0.22 per share.  The dividend is payable to shareholders of record as of March 15, 2001, and is payable to shareholders on April 2, 2001.<o:p> </o:p> </p> <p class="MsoBodyText" align="left"> For the year ended December 31, 2000, the Company’s core earnings of $5.11 million were up 7.5% over the $4.75 million earned in 1999.  Core earnings exclude any gain or loss on securities and loans sold and certain other non recurring items.  Net income from all sources also totaled $5.11 million in 2000, up $248,000 from the $4.86 million earned in 1999.  Earnings per share registered $1.34 in 2000 versus $1.27 in 1999, an increase of 5.5%.  The Company’s book value at December 31, 2000 measured $12.59 per share, up 9.1% from the prior year.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">During 2000 average assets increased by 3.7%, with year end assets closing at $429.5 million.  Capital ratios remain strong with equity capital representing more than 11% of assets. The Company generated a return on average equity of 11.3%, up from 10.8% in 1999, with the return on average assets improving to 1.21% from the 1.19% achieved in 1999.  The Company continues to portray a low risk profile, with risk-weighted assets representing just 51.3% of total assets.  Underperforming assets (an asset quality measure that includes restructured loans, loans past due 90 days or more, and real estate acquired in foreclosure) measured 0.42% of total assets as of December 31, 2000, down from 0.72% a year ago.<o:p> </o:p> </p> <p class="MsoBodyText" align="left">The Board of Directors of Cortland Bancorp recently announced a program authorizing management to repurchase up to 4.9% of the Company’s common stock.  Under a similar program last year, the Company repurchased approximately 3.5% of the outstanding common shares.  The stock trades on the NASDAQ OTC under the symbol CLDB, with approximately 3.8 million shares outstanding.</p> <hr> <h4 align="left"><b>February 2, 2001</b></h4> <p align="left">Chairman Rodger W. Platt announced today that Cortland Bancorp had achieved record earnings for the seventh consecutive year.  Cortland Bancorp’s earnings were up 5.1% from the $4.86 million earned in 1999 to $5.11 million in the year 2000.  Earnings per share grew at a slightly faster pace, benefiting from the Company’s stock repurchase program initiated in February of 2000. At $1.34, earnings per share were up 5.5% from the $1.27 achieved last year.  Core earnings, which exclude any gain or loss on securities and loans sold and certain other non recurring items, were essentially identical to reported earnings, amounting to $5.112 million compared to $4.753 million in 1999, an increase of $359,000 or 7.5%.<o:p> </o:p> </p> <p align="left"> For the quarter ended December 31, 2000, the Company’s earnings increased by 8.4%.  At $1.289 million, fourth quarter earnings represented an increase of $100,000 over the $1.189 million earned during the same quarter a year ago.  Earnings per share for the quarter were up 9.7%, measuring $0.34 compared to the prior year’s  $0.31 per share.  Core earnings, which exclude any gain or loss on securities and loans sold and certain other non recurring items, amounted to $1.102 million compared to $1.169 million a year ago, a decrease of  $67,000 or 5.7%.<o:p> </o:p> </p> <p align="left"> The decline in fourth quarter core earnings primarily reflected additional expenses related to the Company’s introduction of Internet Banking products during the quarter; legal costs associated with on-going litigation; and a slight tightening of the Company’s net interest margin (the difference between what the Company earns on loans and investments and what it pays in interest on deposits and borrowings) resulting from the continued tight monetary policy of the Federal Reserve. As a ratio to the Company’s average earning assets, the net interest margin narrowed from 4.3% to 4.2% during the fourth quarter.  For the full year, the Company’s net interest margin was 4.3%, the same as in both 1999 and 1998.<o:p> </o:p> </p> <p align="left"> Mr. Platt noted that the financial results for 2000 were achieved with only a modest increase in the asset base, which reflected a 3.7% growth rate in average assets.  Year-over-year, total assets were up 1.5%, measuring $429.5 million as of December 31, 2000 compared to $423.2 million a year ago.  Mr. Platt noted that while the economic environment weakened considerably during the second half of 2000, the Company’s asset quality remained strong, with loans 30 days or more beyond their contractual due date representing 1.23% of total loans compared to 1.54% a year ago.  As of December 31, 2000, underperforming assets (a measure that includes restructured loans, loans