Cortland Bancorp Earns $1.8 Million or $0.39 per Share in 2013;

January 31, 2014
Download File

CORTLAND, Ohio – January 31, 2014 -- Cortland Bancorp (OTCQB: CLDB), the holding company for Cortland Savings and Banking Company, today reported 2013 profits were impacted by charges for its investment portfolio due to regulatory changes mandated by the Volcker Rule.  In 2013, Cortland earned $1.8 million, or $0.39 per share, compared to $2.9 million, or $0.64 per share in 2012.  Excluding the charges for the investment portfolio, which were $2.0 million pre-tax and $1.3 million after tax, Cortland would have earned $3.1 million, or $0.68 per share, in 2013.


“The regulatory initiated charge to our trust preferred securities portfolio, although significant, is considered non-operational,” said James M. Gasior, President and Chief Executive Officer.  “Our core banking operations have been performing well and are gaining momentum going into the new year.  Our net interest margin is expanding, loan demand is robust and asset quality continues to improve.” 

The fourth quarter 2013 results were negatively impacted by a $1.3 million, or $0.28 per share after tax cost, as a result of $2.0 million in other-than-temporary impairment (“OTTI”) losses recognized on $10.5 million of trust preferred securities, a form of collateralized debt obligations (CDOs). The CDO securities were among those considered disallowed under the revised final “Volcker Rule”, which originated from the Dodd-Frank Act. The Company continues to hold other CDO’s totaling $3.4 million, deemed permissible under the ruling which provided exemptions for certain CDO’s.

“The ruling prohibiting banks from holding certain CDOs was unexpected by many of us within the industry,” Gasior noted.  “The results of this regulatory change required many banks to abruptly recognize impairment charges.  It also eliminates the ability of banks to hold these securities through maturity by mandating divestiture by July 2015.  The vast majority of banks, including Cortland, had both the ability and intention to hold these securities through maturity.  The CDO’s held in our investment portfolio have provided $200,000 of interest income on average over their seven to ten year holding period.”

2013 and Fourth Quarter Highlights (at, or for the period ended December 31, 2013):

  • In 2013, Earnings Per Share (“EPS”) was $0.39 and would have been $0.67 excluding OTTI charges.
  • Cortland reported a net loss of $0.11 per share in both the fourth quarters of 2013 and 2012. Excluding the OTTI charges, fourth quarter 2013 EPS would have been $0.17. 
  • Net interest margin was 3.63% for the reporting quarter, up from 3.44% in the fourth quarter 2012 and 3.42% in the preceding quarter.
  • Loans increased 9.2% to $346.8 million from $317.3 million a year ago.
  • Continued improvement in asset quality with non-accrual loans, net charge-offs and provision for loan losses all declined in the quarter and the year.  Nonperforming assets decreased to 0.56% of total loans at year end, from 0.94% of total loans a year ago.
  • Cortland Bancorp, and its subsidiary bank, The Cortland Savings and Banking Company remained well capitalized with Total risk-based capital to risk-weighted assets of 14.10% and 13.68%, respectively. 
  • Paid a fourth quarter cash dividend of $0.03 per share, for a total of $0.12 for 2013.


In the fourth quarter of 2013, the OTTI charge drove the quarter’s results to a net loss of $462,000, or $0.11 per share, versus the fourth quarter 2012 net loss of $464,000 or $0.11 per share. The fourth quarter loss in 2012 was driven by the $1.9 million charge-off and provision for a single borrower which reduced net income for the quarter by $1.3 million.

For additional information about Cortland Banks visit

To view the entire press release and selected financial data please download the attachment.

Member FDIC
Equal Housing Lender
© 2015 Cortland Banks [NMLS#531589]  |  Privacy Policy
Site Map  |  Contact Us  |  Employees  | Careers  |  News Room  |  About