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James M. Gasior
President & CEO
Cortland Bancorp Reports Earnings for the First Quarter 2020 and Declares Dividend of $ .14 Per Share
Financial results include an increase in mortgage loan originations and special provisions for credit losses due to COVID-19
Community response includes assisting local businesses with more than 400 CARES Act PPP loans totaling in excess of $56 million
CORTLAND, Ohio May 7, 2020 Cortland Bancorp (NASDAQ: CLDB) announced its first quarter 2020 financial results which included the ongoing impact of the COVID-19 pandemic. Net income for the first three months of 2020 was $1.4 million, or $.32 per share, versus $2.1 million, or $.49 per share, for the first quarter of 2019.
The decrease in earnings was precipitated by a $600,000 charge to earnings for the provision for credit losses directly attributable to the current COVID-19 pandemic. Specifically, increases in the allowance for credit losses were recognized in the qualitative factor allocations for specific concentrations of credit in various loan portfolio segments as a result of current economic conditions. James M. Gasior, President and CEO commented, Although the ultimate impact to businesses is unknown at the current time, an increase in credit provisioning is warranted given the economic disruption and uncertainty associated with the COVID-19 pandemic.
In addition, $41 million of loan prepayments in the fourth quarter of 2019 and interest rate reductions by the Federal Open Market Committee (FOMC) over the last three quarters contributed to a contraction in the Companys net interest margin for the quarter ended March 31, 2020. The margin contracted to 3.56% from 3.74% in the previous quarter and from 3.90% in the first quarter 2019. Total average loans of $502 million increased 1% both from the previous quarter and from the prior year first quarter, reflecting the softness in loan demand in the current environment. Average deposits of $593 million increased by 2% from the first quarter last year and remained flat on a linked quarter basis.
The return on average assets ratio was .77% for the Company for this first quarter, while the return on average equity ratio was 6.89%.
Cortland Bancorp remained well capitalized with total risk-based capital to risk-weighted assets of 14.08% and tangible equity to tangible assets of 10.27%.
The following information was filed by Cortland Bancorp Inc (CLDB) on Thursday, May 7, 2020 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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