Please wait while we load the requested 10-K report or click the link below:
|January 31, 2014||Contact: James M. Gasior|
|President and CEO|
Cortland Bancorp Earns $1.8 Million or $0.39 per Share in 2013;
Volcker Rule Charges Reduces 2013 Net Income by $1.3 Million, or $0.28 per Share
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 CDOs totaling $3.4 million, deemed permissible under the ruling which provided exemptions for certain CDOs.
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 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 CDOs held in our investment portfolio have provided $200,000 of interest income on average over their seven to ten year holding period.
The following information was filed by Cortland Bancorp Inc (CLDB) on Friday, January 31, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
View differences made from one year to another to evaluate Cortland Bancorp Inc's financial trajectory
Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were
removed , and by Cortland Bancorp Inc.