Form 10-Q/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended: March 31, 2009
or
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition from
_____
to
_____
Commission file number: 0-13814
Cortland Bancorp
(Exact name of registrant as specified in its charter)
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Ohio
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34-1451118 |
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(State or other jurisdiction of Incorporation or organization)
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(I.R.S. Employer Identification No.) |
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194 West Main Street, Cortland, Ohio
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44410 |
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(Address of principal executive offices)
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(Zip code) |
(330) 637-8040
(Registrants telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition of accelerated
filer and large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange
Act.
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Large accelerated filer o |
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Accelerated filer þ |
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Non-accelerated filer o |
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Small reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
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TITLE OF CLASS
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SHARES OUTSTANDING |
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Common Stock, No Par Value
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at May 6, 2009 4,525,556 Shares |
Cortland Bancorp
EXPLANATORY NOTE
This Amendment No.1 on Form 10-Q/A amends our Form 10-Q for the quarter ended March 31, 2009,
filed with the Securities and Exchange Commission on May 15, 2009. This Form 10-Q/A amends PART 1
FINANCIAL INFORMATION Item 1. Financial Statements, Cortland Bancorp and Subsidiaries,
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED) ON PAGE 4. The amended
statement has changes to the break down of Comprehensive loss for the three months ended March 31,
2009 and also amends the additional information which breaks out the COMPONENTS OF OTHER
COMPREHENSIVE LOSS (INCOME) for both March 31, 2009 and 2008 which was originally labeled
DISCLOSURE OF RECLASSIFICATION FOR AVAILABLE FOR SALE SECURITY GAINS AND LOSSES.
This Form 10-Q/A only amends portions of the CONSOLIDATED STATEMENT OF CHANGES IN
SHAREHOLDERS EQUITY (UNAUDITED). No other Item in the Form 10-Q filed on May 15, 2009 is amended,
modified or updated hereby. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, new
certifications of our principal executive officer and principal financial officer are being filed
as exhibits to this Amendment No. 1 on Form 10-Q/A.
This amendment No.1 on form 10-Q/A does not reflect events occurring after the filing of the
original 10-Q or modify or update those disclosures affected by subsequent events.
CORTLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
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(Unaudited) |
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MARCH 31, |
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DECEMBER 31, |
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2009 |
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2008 |
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ASSETS |
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Cash and due from banks |
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$ |
6,358 |
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$ |
8,394 |
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Interest bearing deposits |
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46,291 |
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18,449 |
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Total cash and cash equivalents |
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52,649 |
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26,843 |
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Investment securities available for sale (Note 3) |
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110,097 |
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121,348 |
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Investment
securities held to maturity (estimated fair value of
$63,688 at March 31, 2009 and $71,210 at December 31, 2008) (Note 3) |
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62,778 |
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70,406 |
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Total loans (Note 4) |
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236,411 |
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246,017 |
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Less allowance for loan losses (Note 4) |
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(2,585 |
) |
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(2,470 |
) |
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Net loans |
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233,826 |
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243,547 |
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Premises and equipment |
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7,505 |
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7,571 |
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Bank owned
life insurance |
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12,862 |
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12,748 |
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Other assets |
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13,683 |
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10,902 |
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Total assets |
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$ |
493,400 |
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$ |
493,365 |
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LIABILITIES |
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Noninterest-bearing deposits |
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$ |
56,717 |
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$ |
58,635 |
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Interest-bearing deposits |
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325,354 |
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321,318 |
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Total deposits |
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382,071 |
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379,953 |
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Federal Home Loan Bank advances |
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62,500 |
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62,500 |
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Other short term borrowings |
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6,112 |
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5,648 |
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Subordinated debt |
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5,155 |
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5,155 |
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Other liabilities |
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4,227 |
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4,081 |
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Total liabilities |
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460,065 |
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457,337 |
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SHAREHOLDERS EQUITY |
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Common stock $5.00 stated value authorized
20,000,000 shares; issued 4,728,267 in 2009 and 2008 |
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23,641 |
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23,641 |
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Additional paid-in capital |
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20,850 |
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21,078 |
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Retained earnings |
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5,083 |
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6,480 |
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Accumulated other comprehensive loss |
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(12,646 |
) |
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(11,078 |
) |
Treasury
stock at cost, 202,630 at March 31, 2009 and 230,800 at December 31, 2008 |
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(3,593 |
) |
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(4,093 |
) |
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Total shareholders equity |
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33,335 |
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36,028 |
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Total liabilities and shareholders equity |
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$ |
493,400 |
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$ |
493,365 |
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See accompanying notes to the unaudited consolidated financial statements
of Cortland Bancorp and Subsidiaries
2
CORTLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Amounts in thousands, except per share data)
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THREE MONTHS ENDED |
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MARCH 31, |
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2009 |
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2008 |
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INTEREST INCOME |
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Interest and fees on loans |
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$ |
3,851 |
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$ |
3,905 |
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Interest and dividends on investment securities: |
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Taxable interest income |
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1,029 |
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1,546 |
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Nontaxable interest income |
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349 |
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|
389 |
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Dividends |
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40 |
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|
44 |
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Interest on mortgage-backed securities |
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1,192 |
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|
1,103 |
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Other interest income |
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20 |
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79 |
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Total interest income |
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6,481 |
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7,066 |
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INTEREST EXPENSE |
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Deposits |
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1,835 |
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|
2,477 |
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Borrowed funds |
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703 |
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|
833 |
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Subordinated debt |
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43 |
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79 |
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Total interest expense |
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2,581 |
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|
3,389 |
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Net interest income |
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|
3,900 |
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|
3,677 |
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Provision for loan losses |
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|
151 |
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|
75 |
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
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3,749 |
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3,602 |
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OTHER INCOME |
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Fees for other customer services |
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|
537 |
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|
554 |
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Investment
securities gains net |
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|
87 |
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|
|
73 |
|
IMPAIRMENT
LOSSES ON INVESTMENT SECURITIES: |
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Impairment
losses on investment securities |
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|
(10,312 |
) |
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Non
credit-related losses on securities not expected to be sold
recognized in other comprehensive income before tax |
|
|
6,584 |
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|
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|
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Net impairment
losses on investment securities |
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(3,728 |
) |
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Gain on sale of loans net |
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|
71 |
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|
10 |
|
Other real estate (losses) gains net |
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|
(14 |
) |
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|
51 |
|
Earnings on bank owned life insurance |
|
|
135 |
|
|
|
134 |
|
Other non-interest income |
|
|
84 |
|
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|
49 |
|
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|
|
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Total other income |
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(2,828 |
) |
|
|
871 |
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OTHER EXPENSES |
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Salaries and employee benefits |
|
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1,838 |
|
|
|
1,787 |
|
Net occupancy and equipment expense |
|
|
492 |
|
|
|
480 |
|
State and local taxes |
|
|
105 |
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|
|
139 |
|
FDIC expense |
|
|
80 |
|
|
|
11 |
|
Bank exam and audit expense |
|
|
108 |
|
|
|
115 |
|
Office supplies |
|
|
99 |
|
|
|
94 |
|
Other operating expenses |
|
|
558 |
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|
|
531 |
|
|
|
|
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Total other expenses |
|
|
3,280 |
|
|
|
3,157 |
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|
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|
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|
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|
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INCOME
(LOSS) BEFORE FEDERAL INCOME TAXES |
|
|
(2,359 |
) |
|
|
1,316 |
|
|
|
|
|
|
|
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|
Federal
income tax expense (benefit) |
|
|
(962 |
) |
|
|
282 |
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|
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NET
INCOME (LOSS) |
|
$ |
(1,397 |
) |
|
$ |
1,034 |
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BASIC EARNINGS PER COMMON SHARE (NOTE 6) |
|
$ |
(0.31 |
) |
|
$ |
0.23 |
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DILUTED EARNINGS PER COMMON SHARE (NOTE 6) |
|
$ |
(0.31 |
) |
|
$ |
0.23 |
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CASH DIVIDENDS DECLARED PER SHARE |
|
$ |
|
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$ |
0.21 |
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|
See accompanying notes to the unaudited consolidated financial statements
of Cortland Bancorp and Subsidiaries
3
CORTLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (UNAUDITED)
(Amounts in thousands)
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ACCUMULATED |
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TOTAL |
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ADDITIONAL |
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OTHER |
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SHARE- |
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COMMON |
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PAID-IN |
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RETAINED |
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COMPREHENSIVE |
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TREASURY |
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HOLDERS |
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STOCK |
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CAPITAL |
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EARNINGS |
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LOSS |
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STOCK |
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EQUITY |
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THREE MONTHS ENDED MARCH 31, 2008 |
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BALANCE AT JANUARY 1, 2008 |
|
$ |
23,200 |
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|
$ |
20,976 |
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|
$ |
9,386 |
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|
$ |
(94 |
) |
|
$ |
(4,644 |
) |
|
$ |
48,824 |
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Cumulative effect of adjustment from adoption of
of Emerging Issues Task Force issue 06-04 |
|
|
|
|
|
|
|
|
|
|
(539 |
) |
|
|
|
|
|
|
|
|
|
|
(539 |
) |
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|
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Balance after cummulative effect of adjustment |
|
|
23,200 |
|
|
|
20,976 |
|
|
|
8,847 |
|
|
|
(94 |
) |
|
|
(4,644 |
) |
|
|
48,285 |
|
|
|
|
|
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Comprehensive loss: |
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|
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|
|
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Net income |
|
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|
|
|
|
|
|
|
|
1,034 |
|
|
|
|
|
|
|
|
|
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|
1,034 |
|
Other comprehensive loss,
net of tax: |
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|
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|
|
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|
|
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|
|
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Unrealized losses on available-
for-sale securities, net of
reclassification adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,591 |
) |
|
|
|
|
|
|
(1,591 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(557 |
) |
|
|
|
|
|
|
|
|
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|
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|
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|
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Common stock transactions: |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Treasury shares reissued |
|
|
|
|
|
|
(64 |
) |
|
|
|
|
|
|
|
|
|
|
300 |
|
|
|
236 |
|
Treasury shares purchased |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(148 |
) |
|
|
(148 |
) |
Cash dividends declared |
|
|
|
|
|
|
|
|
|
|
(967 |
) |
|
|
|
|
|
|
|
|
|
|
(967 |
) |
|
|
|
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|
BALANCE AT MARCH 31, 2008 |
|
$ |
23,200 |
|
|
$ |
20,912 |
|
|
$ |
8,914 |
|
|
$ |
(1,685 |
) |
|
$ |
(4,492 |
) |
|
$ |
46,849 |
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED MARCH 31, 2009 |
|
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|
|
BALANCE AT JANUARY 1, 2009 |
|
$ |
23,641 |
|
|
$ |
21,078 |
|
|
$ |
6,480 |
|
|
$ |
(11,078 |
) |
|
$ |
(4,093 |
) |
|
$ |
36,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
(1,397 |
) |
|
|
|
|
|
|
|
|
|
|
(1,397 |
) |
Other comprehensive loss,
net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
gains on available for-sale securities, net of reclassification adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,777 |
|
|
|
|
|
|
|
2,777 |
|
Other
comprenhensive loss, related to securities for which other than
temporary impairment has been recognized in earnings, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,345 |
) |
|
|
|
|
|
|
(4,345 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,965 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Treasury shares reissued |
|
|
|
|
|
|
(228 |
) |
|
|
|
|
|
|
|
|
|
|
500 |
|
|
|
272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE AT MARCH 31, 2009 |
|
$ |
23,641 |
|
|
$ |
20,850 |
|
|
$ |
5,083 |
|
|
$ |
(12,646 |
) |
|
$ |
(3,593 |
) |
|
$ |
33,335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARCH 31, |
|
|
|
2009 |
|
|
2008 |
|
|
COMPONENTS OF
OTHER COMPREHENSIVE LOSS (INCOME): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized holding losses on
available-for-sale securities
arising during the period, net of tax |
|
$ |
(3,971 |
) |
|
$ |
(1,543 |
) |
Less: Reclassification adjustment
for net gains realized in net income, net of tax |
|
|
(57 |
) |
|
|
(48 |
) |
Less: Reclassification adjustment
for other than temporary impairment losses on debt securities, net of tax |
|
|
2,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized losses on available-
for-sale securities, net of tax |
|
$ |
(1,568 |
) |
|
$ |
(1,591 |
) |
|
|
|
|
|
|
|
See accompanying notes to the unaudited consolidated financial statements
of Cortland Bancorp and Subsidiaries
4
CORTLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
FOR THE |
|
|
|
THREE MONTHS ENDED |
|
|
|
MARCH 31, |
|
|
|
2009 |
|
|
2008 |
|
NET CASH FLOWS FROM OPERATING ACTIVITIES |
|
$ |
798 |
|
|
$ |
777 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchases of securities available for sale |
|
|
(137 |
) |
|
|
(6,912 |
) |
Purchases of securities held to maturity |
|
|
|
|
|
|
(20,857 |
) |
Proceeds from call, maturity and principal
payments on securities |
|
|
12,989 |
|
|
|
38,569 |
|
Net decrease ( increase) in loans made to customers |
|
|
9,402 |
|
|
|
(3,282 |
) |
Proceeds from disposition of other real estate |
|
|
|
|
|
|
190 |
|
Purchases of premises and equipment |
|
|
(100 |
) |
|
|
(484 |
) |
|
|
|
|
|
|
|
Net cash flows from investing activities |
|
|
22,154 |
|
|
|
7,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Net increase (decrease) in deposit accounts |
|
|
2,118 |
|
|
|
(5,485 |
) |
Proceeds from Federal Home Loan Bank advances |
|
|
|
|
|
|
4,000 |
|
Pay down of Federal Home Loan Bank borrowings |
|
|
|
|
|
|
|
|
Net increase (decrease) in short term borrowings |
|
|
464 |
|
|
|
(1,453 |
) |
Dividends paid |
|
|
|
|
|
|
(967 |
) |
Purchases of treasury stock |
|
|
|
|
|
|
(148 |
) |
Treasury shares reissued |
|
|
272 |
|
|
|
236 |
|
|
|
|
|
|
|
|
Net cash flows from financing activities |
|
|
2,854 |
|
|
|
(3,817 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
25,806 |
|
|
|
4,184 |
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS |
|
|
|
|
|
|
|
|
Beginning of period |
|
|
26,843 |
|
|
|
9,441 |
|
|
|
|
|
|
|
|
End of period |
|
$ |
52,649 |
|
|
$ |
13,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURES |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
2,626 |
|
|
$ |
3,426 |
|
Income taxes paid |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to the unaudited consolidated financial statements
of Cortland Bancorp and Subsidiaries
5
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
1.) Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States (U.S.GAAP) for interim
financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring items) considered necessary for a fair presentation
have been included. Operating results for the three months ended March 31, 2009 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2009.
These interim unaudited consolidated financial statements should be read in conjunction with our
annual audited financial statements as of December 31, 2008, included in our Form 10-K for the year
ended December 31, 2008, filed with the United States Securities and Exchange Commission. The
accompanying consolidated balance sheet at December 31, 2008, has been derived from the audited
consolidated balance sheet but does not include all of the information and footnotes required by
U.S. GAAP for complete financial statements.
2.) Reclassifications:
Certain items contained in the 2008 financial statements have been reclassified to conform to
the presentation for 2009. Such reclassifications had no effect on the net results of operations.
3.) Investment Securities:
Securities classified as held to maturity are those that management has the positive intent
and ability to hold to maturity. Securities held to maturity are stated at cost, adjusted for
amortization of premiums and accretion of discounts, with such amortization or accretion included
in interest income.
Securities classified as available for sale are those that could be sold for liquidity,
investment management, or similar reasons even though management has no present intentions to do
so. Securities available for sale are carried at fair value using the specific identification
method. Changes in the unrealized gains and losses on available for sale securities are recorded
net of tax effect as a component of comprehensive income.
Trading securities are principally held with the intention of selling in the near term.
Trading securities are carried at fair value with changes in fair value reported in the
Consolidated Statements of Income (unaudited).
Securities are evaluated periodically to determine whether a decline
in their value is other-than-temporary. Management utilizes criteria
such as the magnitude and duration of the decline, in addition to the
reasons underlying the decline, to determine whether the loss in
value is other-than-temporary. The term
other-than-temporary is not intended to indicate that the
decline is permanent, but indicates that the prospect for a near-term
recovery of value is not necessarily favorable, or that there is a
lack of evidence to support a realizable value equal to or greater
than the carrying value of the investment. Once a decline in value is
determined to be other-than-temporary, the value of the security is
reduced and a corresponding charge to earnings is recognized.
6
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
Realized gains or losses on dispositions are based on net proceeds and the adjusted carrying
amount of securities sold, or called using the specific identification method. The table below
sets forth the proceeds and gains or losses realized on securities sold or called for the period
ended:
|
|
|
|
|
|
|
|
|
|
|
Three Months |
|
|
|
March 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Proceeds on securities sold |
|
None |
|
|
None |
|
Gross realized gains |
|
None |
|
|
None |
|
Gross realized losses |
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
Proceeds on securities called |
|
$ |
7,804 |
|
|
$ |
25,411 |
|
Gross realized gains |
|
|
87 |
|
|
|
73 |
|
Gross realized losses |
|
None |
|
|
None |
|
Securities available for sale, carried at fair value, totaled $110,097 at March 31, 2009 and
$121,348 at December 31, 2008 representing 63.69% and 63.28%, respectively, of all investment
securities. These levels provide an adequate level of liquidity in managements opinion.
Investment securities with a carrying value of approximately $107,059 at March 31, 2009 and
$104,162 at December 31, 2008 were pledged to secure deposits and for other purposes.
7
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The amortized cost and estimated fair value of debt securities at March 31, 2009, by
contractual maturity, are shown below. Expected maturities may differ from contractual maturities
because borrowers have the right to call or prepay certain obligations with or without call or
prepayment penalties.
|
|
|
|
|
|
|
|
|
|
|
AMORTIZED |
|
|
ESTIMATED |
|
|
|
COST |
|
|
FAIR VALUE |
|
|
|
|
|
|
|
|
|
|
Investment securities
available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one
year or less |
|
$ |
1,000 |
|
|
$ |
1,003 |
|
Due after one year
through five years |
|
|
4,141 |
|
|
|
4,261 |
|
Due after five years
through ten years |
|
|
2,387 |
|
|
|
2,506 |
|
Due after ten years |
|
|
42,188 |
|
|
|
19,994 |
|
|
|
|
|
|
|
|
|
|
|
49,716 |
|
|
|
27,764 |
|
Mortgage-backed securities |
|
|
75,792 |
|
|
|
78,584 |
|
|
|
|
|
|
|
|
Total |
|
$ |
125,508 |
|
|
$ |
106,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMORTIZED |
|
|
ESTIMATED |
|
|
|
COST |
|
|
FAIR VALUE |
|
|
Investment securities
held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due in one year or less |
|
$ |
18,358 |
|
|
$ |
18,444 |
|
Due after one year
through five years |
|
|
2,838 |
|
|
|
2,928 |
|
Due after five years
through ten years |
|
|
8,828 |
|
|
|
8,974 |
|
Due after ten years |
|
|
18,880 |
|
|
|
19,601 |
|
|
|
|
|
|
|
|
|
|
|
48,904 |
|
|
|
49,947 |
|
Mortgage-backed securities |
|
|
13,874 |
|
|
|
13,741 |
|
|
|
|
|
|
|
|
Total |
|
$ |
62,778 |
|
|
$ |
63,688 |
|
|
|
|
|
|
|
|
8
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The amortized cost and estimated fair value of investment securities available for sale and
investment securities held to maturity as of March 31, 2009, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS |
|
|
GROSS |
|
|
ESTIMATED |
|
|
|
AMORTIZED |
|
|
UNREALIZED |
|
|
UNREALIZED |
|
|
FAIR |
|
|
|
COST |
|
|
GAINS |
|
|
LOSSES |
|
|
VALUE |
|
|
Investment securities
available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government
agencies and
corporations |
|
$ |
10,336 |
|
|
$ |
563 |
|
|
$ |
|
|
|
$ |
10,899 |
|
Obligations of states
and political
subdivisions |
|
|
7,283 |
|
|
|
313 |
|
|
|
45 |
|
|
|
7,551 |
|
Mortgage-backed and
related securities |
|
|
75,792 |
|
|
|
2,853 |
|
|
|
61 |
|
|
|
78,584 |
|
Trust
preferred pools/collateralized debt obligations |
|
|
30,995 |
|
|
|
|
|
|
|
22,783 |
|
|
|
8,212 |
|
Corporate securities |
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
125,508 |
|
|
|
3,729 |
|
|
|
22,889 |
|
|
|
106,348 |
|
Other securities |
|
|
3,749 |
|
|
|
|
|
|
|
|
|
|
|
3,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available
for sale |
|
$ |
129,257 |
|
|
$ |
3,729 |
|
|
$ |
22,889 |
|
|
$ |
110,097 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS |
|
|
GROSS |
|
|
ESTIMATED |
|
|
|
AMORTIZED |
|
|
UNREALIZED |
|
|
UNREALIZED |
|
|
FAIR |
|
|
|
COST |
|
|
GAINS |
|
|
LOSSES |
|
|
VALUE |
|
|
Investment securities
held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
Securities |
|
$ |
133 |
|
|
$ |
18 |
|
|
$ |
|
|
|
$ |
151 |
|
U.S. Government
agencies and
corporations |
|
|
27,413 |
|
|
|
358 |
|
|
|
|
|
|
|
27,771 |
|
Obligations of states
and political
subdivisions |
|
|
21,358 |
|
|
|
713 |
|
|
|
46 |
|
|
|
22,025 |
|
Mortgage-backed and
related securities |
|
|
13,874 |
|
|
|
346 |
|
|
|
479 |
|
|
|
13,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total held to
maturity |
|
$ |
62,778 |
|
|
$ |
1,435 |
|
|
$ |
525 |
|
|
$ |
63,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following provides a summary of the amortized cost and estimated fair value of investment
securities available for sale and investment securities held to maturity as of December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS |
|
|
GROSS |
|
|
ESTIMATED |
|
|
|
AMORTIZED |
|
|
UNREALIZED |
|
|
UNREALIZED |
|
|
FAIR |
|
|
|
COST |
|
|
GAINS |
|
|
LOSSES |
|
|
VALUE |
|
|
Investment securities
available for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Government
agencies and
corporations |
|
$ |
11,314 |
|
|
$ |
561 |
|
|
$ |
|
|
|
$ |
11,875 |
|
Obligations of states
and political
subdivisions |
|
|
7,293 |
|
|
|
289 |
|
|
|
84 |
|
|
|
7,498 |
|
Mortgage-backed and
related securities |
|
|
80,073 |
|
|
|
2,067 |
|
|
|
162 |
|
|
|
81,978 |
|
Trust
preferred pools/collateralized debt obligations |
|
|
34,600 |
|
|
|
6 |
|
|
|
19,460 |
|
|
|
15,146 |
|
Corporate securities |
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
|
1,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt securities |
|
|
134,382 |
|
|
|
2,923 |
|
|
|
19,706 |
|
|
|
117,599 |
|
Other securities |
|
|
3,749 |
|
|
|
|
|
|
|
|
|
|
|
3,749 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total available
for sale |
|
$ |
138,131 |
|
|
$ |
2,923 |
|
|
$ |
19,706 |
|
|
$ |
121,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS |
|
|
GROSS |
|
|
ESTIMATED |
|
|
|
AMORTIZED |
|
|
UNREALIZED |
|
|
UNREALIZED |
|
|
FAIR |
|
|
|
COST |
|
|
GAINS |
|
|
LOSSES |
|
|
VALUE |
|
|
Investment securities
held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury
Securities |
|
$ |
134 |
|
|
$ |
18 |
|
|
$ |
|
|
|
$ |
152 |
|
U.S. Government
agencies and
corporations |
|
|
32,894 |
|
|
|
407 |
|
|
|
50 |
|
|
|
33,251 |
|
Obligations of states
and political
subdivisions |
|
|
22,626 |
|
|
|
726 |
|
|
|
49 |
|
|
|
23,303 |
|
Mortgage-backed and
related securities |
|
|
14,752 |
|
|
|
265 |
|
|
|
513 |
|
|
|
14,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total held to
maturity |
|
$ |
70,406 |
|
|
$ |
1,416 |
|
|
$ |
612 |
|
|
$ |
71,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The following is a summary of the fair value of securities with unrealized losses and an aging of
those unrealized losses at March 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months |
|
|
12 months or longer |
|
|
Total |
|
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
Obligations of states and
political subdivisions |
|
$ |
2,109 |
|
|
$ |
64 |
|
|
$ |
841 |
|
|
$ |
27 |
|
|
$ |
2,950 |
|
|
$ |
91 |
|
Mortgage-backed and related
securities |
|
|
431 |
|
|
|
13 |
|
|
|
3,987 |
|
|
|
527 |
|
|
|
4,418 |
|
|
|
540 |
|
Trust
preferred pools/collateralized
debt obligations |
|
|
898 |
|
|
|
350 |
|
|
|
7,314 |
|
|
|
22,433 |
|
|
|
8,212 |
|
|
|
22,783 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
3,438 |
|
|
$ |
427 |
|
|
$ |
12,142 |
|
|
$ |
22,987 |
|
|
$ |
15,580 |
|
|
$ |
23,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above table represents 79 investment securities where the current value is less than the
related amortized cost.
The following is a summary of the fair value of securities with unrealized losses and an aging of
those unrealized losses at December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months |
|
|
12 months or longer |
|
|
Total |
|
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
Fair |
|
|
Unrealized |
|
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
|
Value |
|
|
Losses |
|
U.S.
Government agencies and
corporations. |
|
$ |
3,947 |
|
|
$ |
50 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
3,947 |
|
|
$ |
50 |
|
Obligations of states and
political subdivisions |
|
|
2,906 |
|
|
|
105 |
|
|
|
370 |
|
|
|
28 |
|
|
|
3,276 |
|
|
|
133 |
|
Mortgage-backed and related
securities |
|
|
7,046 |
|
|
|
526 |
|
|
|
12,098 |
|
|
|
149 |
|
|
|
19,144 |
|
|
|
675 |
|
Trust
preferred pools/collateralized
debt obligations |
|
|
2,737 |
|
|
|
1,944 |
|
|
|
12,199 |
|
|
|
17,516 |
|
|
|
14,936 |
|
|
|
19,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
16,636 |
|
|
$ |
2,625 |
|
|
$ |
24,667 |
|
|
$ |
17,693 |
|
|
$ |
41,303 |
|
|
$ |
20,318 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above table represents 135 investment securities where the current value is less than
the related amortized cost.
The Company reviews investment debt securities on an ongoing basis for the presence of other
than temporary impairment (OTTI) with formal reviews performed quarterly. OTTI losses on
individual investment securities were recognized during the first quarter 2009 according to FSP FAS
115-2 and FAS 124-2 issued by the FASB on April 9, 2009. This new guidance requires that
credit-related OTTI be recognized in earnings while noncredit-related OTTI on securities not
expected to be sold is recognized in other comprehensive income (loss) (OCI). The credit-related
OTTI recognized in earnings during the first quarter 2009 related to securities newly deemed other
than temporarily impaired. The credit-related OTTI recognized during
the first quarter 2009 was
$3.7 million and was solely related to available-for-sale
securities newly having a book value of $11.5 million. Noncredit-related OTTI on these
securities, which are not expected to be sold, was $6.6 million and was recognized in OCI during
the first quarter 2009.
The unrealized losses on the Companys investment in U.S. Government agencies and
corporations, obligations, of states and political subdivisions, and mortgage-backed and related
securities were caused by changes in market rates and related spreads, as well as reflecting
current distressed conditions in the credit markets and the markets on-going reassessment of
appropriate liquidity and risk premiums. It is expected that the securities would not be settled at
a price less than the amortized cost of the Companys investment because the decline in market
value is attributable to changes in interest rates and relative spreads and not credit quality, and
because the Company does not intend to sell those investments and it
is not more likely than not that the Company will be required to
sell the investments before recovery of its amortized cost basis less
any current-period credit loss. The Company does not consider those investments to be
other-than-temporarily impaired at March 31, 2009.
The unrealized loss on investments in corporate securities relates to Collateralized
Debt Obligations, (CDOS), representing pools of trust preferred debt primarily issued by bank
holding companies and insurance companies. The net unrealized loss on these securities at March 31,
2009 was $22,783 as compared to a $19,454 loss at December 31, 2008. At March 31, 2009, the
Company recognized $3,728 of other-than-temporary losses attributable to six CDOs with a cost
basis of $11,539. The impairment charges were recognized after
determining the likely future cash flows
of these securities had been adversely impacted from the previous quarter.
During September 2008, the U.S. government placed mortgage finance companies Federal National
Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC), under
conservatorship, giving management control to their regulator, the Federal Housing Finance Agency,
or FHFA, and providing both companies with access to credit from the U.S. Treasury. Debt
obligations now provide an explicit guarantee of the full faith and credit of the United States
government to existing and future debt holders of Fannie Mae and Freddie Mac limited to the period
under which they are under conservatorship.
In response to the takeover, the Federal Deposit Insurance Corporation tentatively approved a
rule, proposed by all four federal bank regulators, that eases capital requirements for federally
insured depository institutions that hold FNMA and FHLMC corporate debt, subordinated debt,
mortgage guarantees and derivatives.
Adversely affected by these actions were the value of the common stock and preferred stock of
both FNMA and FHLMC. Neither the Company nor its bank subsidiary owned any common or preferred
shares of either FNMA or FHLMC.
10
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
4.) Concentration of Credit Risk and Off Balance Sheet Risk:
The Company currently does not enter into derivative financial instruments including futures,
forwards, interest rate risk swaps, option contracts, or other financial instruments with similar
characteristics. The Company also does not participate in any partnerships that might give rise to
off-balance sheet liabilities.
The Company, through its subsidiary bank, is a party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit, standby letters of credit, and
financial guarantees. Such instruments involve, to varying degrees, elements of credit risk in
excess of the amount recognized on the balance sheet. The contract or notional amounts of those
instruments reflect the extent of involvement the Company has in particular classes of financial
instruments.
In the event of nonperformance by the other party, the Companys exposure to credit loss on
these financial instruments is represented by the contract or notional amount of the instrument.
The Company uses the same credit policies in making commitments and conditional obligations as it
does for instruments recorded on the balance sheet. The amount and nature of collateral obtained,
if any, is based on managements credit evaluation.
|
|
|
|
|
|
|
|
|
|
|
CONTRACT OR |
|
|
|
NOTIONAL AMOUNT |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Financial instruments whose contract
amount represents credit risk: |
|
|
|
|
|
|
|
|
Commitments to extend credit: |
|
|
|
|
|
|
|
|
Fixed rate |
|
$ |
1,809 |
|
|
$ |
1,301 |
|
Variable |
|
|
33,176 |
|
|
|
35,699 |
|
Standby letters of credit |
|
|
873 |
|
|
|
850 |
|
Commitments to extend credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Generally these financial arrangements
have fixed expiration dates or other termination clauses and may require payment of a fee. Standby
letters of credit are conditional commitments issued by the Companys subsidiary bank to guarantee
the performance of a customer to a third party. Since many of these commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily represent future
cash requirements. The Bank evaluates each customers creditworthiness on a case-by-case basis.
The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is
based on managements credit evaluation of the counterparty. Collateral held varies but may
include accounts receivable, inventory, property, plant and equipment and income producing
commercial properties.
The Companys subsidiary bank also offers limited overdraft protection as a non-contractual
courtesy which is available to demand deposit accounts in good standing for business, personal or
household use. The Company reserves the right to discontinue this service without prior notice.
The available amount of overdraft protection on depositors accounts not included in the table
above at March 31, 2009 totaled $11,625 and $11,536 at December 31, 2008. The total average daily
balance of overdrafts used in 2009 was $130 and $161 in 2008, or approximately 1.1% of the total
aggregate overdraft protection available to depositors at March 31, 2009 and 1.4% at December 31,
2008.
11
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The Company, through its subsidiary bank, grants residential, consumer and commercial loans,
and also offers a variety of saving plans to customers located primarily in Northeast Ohio and
Western Pennsylvania. The following represents the composition of the loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
1-4 family residential mortgages |
|
|
28.0 |
% |
|
|
28.1 |
% |
Commercial mortgages |
|
|
55.4 |
% |
|
|
52.3 |
% |
Consumer loans |
|
|
3.4 |
% |
|
|
3.3 |
% |
Commercial loans |
|
|
7.8 |
% |
|
|
11.3 |
% |
Home equity loans |
|
|
5.4 |
% |
|
|
5.0 |
% |
There are $418 in mortgage loans held for sale included in 1-4 family residential mortgages as
of March 31, 2009, and $236 at December 31, 2008. These loans are carried, in the aggregate, at the
lower of cost or estimated market value based on secondary market prices.
The following table sets forth the aggregate balance of underperforming loans for each of the
following categories at March 31, 2009 and December 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Loans accounted for on a
non-accrual basis |
|
$ |
693 |
|
|
$ |
858 |
|
|
|
|
|
|
|
|
|
|
Loans contractually past due
90 days or more as to
interest or principal
payments (not included in
non-accrual loans above) |
|
NONE |
|
|
NONE |
|
|
|
|
|
|
|
|
|
|
Loans considered troubled debt
restructurings (not included
in non-accrual loans or loans
contractually past due above) |
|
|
412 |
|
|
|
432 |
|
12
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The following shows the amounts of contractual interest income and interest income actually
reflected in income on loans accounted for on a non-accrual basis and loans considered troubled
debt restructuring for the three months ended March 31, 2009 and 2008.
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2009 |
|
|
2008 |
|
Gross interest income that would have been recorded
if the loans had been current in accordance with
their original terms (contractual interest income) |
|
$ |
23 |
|
|
$ |
52 |
|
Interest income actually included in income on the loans |
|
|
9 |
|
|
|
5 |
|
A loan is placed on a non-accrual basis whenever sufficient information is received to
question the collectibility of the loan or any time legal proceedings are initiated involving a
loan. When a loan is placed on non-accrual status, any interest that has been accrued and not
collected on the loan is charged against earnings. Cash payments received while a loan is
classified as non-accrual are recorded as a reduction to principal or reported as interest income
according to managements judgment as to collectibility of principal.
A loan is returned to accrual status when either all of the principal and interest amounts
contractually due are brought current and future payments are, in managements opinion,
collectible, or when it otherwise becomes well secured and in the process of collection. When a
loan is charged-off, any interest accrued but not collected on the loan is charged against
earnings.
Loans are considered impaired when, based on current information and events, it is probable
the Company will be unable to collect all amounts due in accordance with the original contractual
terms of the loan agreement, including scheduled principal and interest payments. If a loan is
impaired, a specific valuation allowance is allocated, if necessary. Impaired loans are generally
included in non-accrual loans. Management does not individually evaluate certain smaller balance
loans for impairment as such loans are evaluated on an aggregate basis. These loans include 1 4
family, consumer and home equity loans. Impaired loans were evaluated using the fair value of
collateral as the measurement method. Impaired loans, or portions thereof, are charged off when
deemed uncollectible.
Impaired loans were as follows:
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Balance of impaired loans with no allocated allowance |
|
$ |
937 |
|
|
$ |
483 |
|
Balance of impaired loans with an allocated allowance |
|
|
636 |
|
|
|
441 |
|
|
|
|
|
|
|
|
Total recorded investment in impaired loans |
|
$ |
1,573 |
|
|
$ |
924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of the allowance allocated to impaired loans |
|
$ |
341 |
|
|
$ |
262 |
|
|
|
|
|
|
|
|
Average balance of impaired loans |
|
$ |
1,064 |
|
|
$ |
1,489 |
|
|
|
|
|
|
|
|
The impaired loans included in the table above were primarily comprised of collateral
dependent commercial loans. Interest income recognized on these loans subsequent to their
classification as impaired was $7 for the three months ended March 31, 2009 and $37 for the twelve
months ended December 31, 2008.
Loans in the amount of $25,532 as of March 31, 2009, and $27,499 as of December 31, 2008 were
not included in any of the above categories and were not currently considered impaired, but which
can be considered to be potential problem loans.
Any loans classified for regulatory purposes as loss, doubtful, substandard, or special
mention that have not been disclosed above either do not (i) represent or result from trends or
uncertainties which management reasonably expects will materially impact future operating results,
liquidity, or capital resources, or (ii) represent material credits about which management is aware
of any information which causes management to have serious doubts as to the ability of such
borrowers to comply with the loan repayment terms.
13
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The following is an analysis of the allowance for loan losses for the periods ended March 31,
2009 and March 31, 2008:
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
|
$ |
2,470 |
|
|
$ |
1,621 |
|
Loan charge-offs: |
|
|
|
|
|
|
|
|
1 4 family residential mortgages |
|
|
7 |
|
|
|
140 |
|
Commercial mortgages |
|
|
|
|
|
|
31 |
|
Consumer loans and other loans |
|
|
57 |
|
|
|
56 |
|
Commercial loans |
|
|
2 |
|
|
|
1 |
|
Home equity loans |
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
|
66 |
|
|
|
245 |
|
|
|
|
|
|
|
|
|
|
Recoveries on previous loan losses |
|
|
|
|
|
|
|
|
1 4 family residential mortgages |
|
|
|
|
|
|
|
|
Commercial mortgages |
|
|
1 |
|
|
|
1 |
|
Consumer loans and other loans |
|
|
29 |
|
|
|
34 |
|
Commercial loans |
|
|
|
|
|
|
|
|
Home equity loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 |
|
|
|
35 |
|
Net charge-offs |
|
|
(36 |
) |
|
|
(210 |
) |
Provision charged to operations |
|
|
151 |
|
|
|
75 |
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
2,585 |
|
|
$ |
1,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of annualized net charge-offs
to average loans outstanding |
|
|
0.06 |
% |
|
|
0.38 |
% |
|
|
|
|
|
|
|
For each of the periods presented above, the provision for loan losses charged to operations
is based on managements judgment after taking into consideration all known factors connected with
the collectibility of the existing portfolio. Management evaluates the portfolio in light of
economic conditions, changes in the nature and volume of the portfolio, industry standards and
other relevant factors. Specific factors considered by management in determining the amounts
charged to operations include previous loan loss experience; the status of past due interest and
principal payments; the quality of financial information supplied by customers; the cash flow
coverage and trends evidenced by financial information supplied by customers; the nature and
estimated value of any collateral supporting specific loan credits; risk classifications determined
by the Companys loan review systems or as the result of the regulatory examination process; and
general economic conditions in the lending area of the Companys bank subsidiary. Key risk factors
and assumptions are systematically updated to reflect actual experience and changing circumstances.
The Company maintains an allowance for losses on unfunded commercial lending commitments to
provide for the risk of loss inherent in these arrangements. The allowance is computed using a
methodology similar to that used to determine the allowance for loan losses. This allowance is
reported as a liability on the balance sheet within accrued expenses and other liabilities, while
the corresponding provision for these losses is recorded as a component of other expense.
Certain asset-specific loans are evaluated individually for impairment, based on managements
best estimate of discounted cash repayments and the anticipated proceeds from liquidating
collateral. The actual timing and amount of repayments and the ultimate realizable value of the
collateral may differ from managements estimates.
The expected loss for certain other commercial credits utilizes internal risk ratings. These
loss estimates are sensitive to changes in the customers risk profile, the realizable value of
collateral, other risk factors and the related loss
experience of other credits of similar risk. Consumer credits generally employ statistical loss
factors, adjusted for other risk indicators, applied to pools of similar loans stratified by asset
type. These loss estimates are sensitive to changes in delinquency status and shifts in the
aggregate risk profile.
14
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
5.) Legal Proceedings:
The Bank is involved in legal actions arising in the ordinary course of business. In the
opinion of management, the outcomes from these matters, either individually or in the aggregate,
are not expected to have any material effect on the Company.
6.) Earnings Per Share and Capital Transactions:
The following table sets forth the computation of basic earnings per common share and diluted
earnings per common share. Basic earnings per share is computed by dividing net income by the
weighted average number of shares outstanding during the applicable period.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2009 |
|
|
2008 |
|
|
|
|
|
|
|
|
|
|
Net Income
(loss) |
|
$ |
(1,397 |
) |
|
$ |
1,034 |
|
Weighted average common
shares outstanding* |
|
|
4,525,326 |
|
|
|
4,489,630 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share* |
|
$ |
(0.31 |
) |
|
$ |
0.23 |
|
Diluted earnings per share* |
|
$ |
(0.31 |
) |
|
$ |
0.23 |
|
Dividends declared per share* |
|
$ |
0.00 |
|
|
$ |
0.21 |
|
|
|
|
* |
|
Average shares outstanding and the resulting per share amounts have been restated to give
retroactive effect to the two 1% stock dividends in 2009. |
7.) Stock Repurchase Program
On February 27, 2007, the Companys Board of Directors approved a Stock Repurchase Program
which permitted the Company to repurchase up to 100,000 shares of its outstanding common shares in
the over-the-counter market or in privately negotiated transactions in accordance with applicable
regulations of the Securities and Exchange Commission. Based on the value of the Companys stock on
February 27, 2007, the commitment to repurchase the stock over the program was approximately
$1,715.
On August 14, 2007, the Companys Board of Directors authorized the repurchase of up to an
additional 100,000 shares of its outstanding common shares in over-the-counter market or in
privately negotiated transactions. Based on the value of the Companys stock on August 14, 2007,
the commitment to repurchase these additional shares over the program was approximately $1,635.
On November 27, 2007, the Companys Board of Directors increased to 300,000 shares the size of
its current stock buyback program by authorizing the repurchase of up to an additional 100,000
shares of its outstanding common shares in the over-the-counter market or in privately negotiated
transactions. Based on the value of the Companys stock on November 27, 2007, the commitment to
repurchase these additional shares over the program was approximately $1,375.
The repurchase program terminated on February 28, 2009. Repurchased shares are designated as
treasury shares, available for general corporate purposes, including possible use in connection
with the Companys dividend reinvestment program, employee benefit plans, acquisitions or other
distributions. Under the program the Company repurchased 205,986 shares in 2007, 51,817 shares in
2008 and none in 2009. The Company reissued 28,170 shares to existing shareholders through its
dividend reinvestment program during 2009, net of repurchased fractional shares.
15
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
8.) Subordinated Debt
In July 2007 a trust formed by the Company issued $5,000 of floating rate trust preferred
securities as part of a pooled offering of such securities due December 2037. The Bancorp owns all
$155 of the common securities related to this trust. The Company issued subordinated debentures to
the trust at an interest rate that floats quarterly at the 3-month Libor rate plus 1.45% in
exchange for the proceeds of the trust preferred offering. The debentures constitute the assets of
this trust. The Company may redeem the subordinated debentures, in whole or in part, at a premium
declining ratably to par in September 2012.
In
accordance with FASB Interpretation No.46, as revised in December 2003, the trust is not
consolidated with the Companys financial statements. Accordingly, the Company does not report the
securities issued by the trust as liabilities, but instead reports as liabilities the subordinated
debentures issued by the Company and held by the trust. The subordinated debentures qualify as
Tier 1 capital for regulatory purposes in determining and evaluating the Companys capital
adequacy.
9.) Fair Value Measurements (SFAS No. 157)
Effective January 1, 2008, the Company adopted the provisions of FAS No. 157, Fair Value
Measurements, for financial assets and financial liabilities. FAS No. 157 provides enhanced
guidance for using fair value to measure assets and liabilities. The standard applies whenever
other standards require or permit assets or liabilities to be measured at fair value. The standard
does not expand the use of fair value in any new circumstances. The FASB issued Staff Position No.
157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting
Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or
Measurement under Statement 13, which removed leasing transactions accounted for under FAS No. 13
and related guidance from the scope of FAS No. 157. On April 9, 2009, the Financial Accounting Standards Board (FASB)
issued FASB Staff Position No. 157-4 (FSP 157-4), Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly, which the
Company elected to early adopt this FSP and the results have been
applied on the financial statements and disclosures herein, without a
material impact on the consolidated financial statements. FSP 157-4 provides guidance for determining fair value if there has been a significant
decrease in the volume and level of activity for an asset or liability in relation to normal market activity. In that
circumstance, transactions or quoted prices may not be determinative of fair value. Significant adjustments may be necessary to quoted
prices or alternative valuation techniques may be required in order to determine the fair value of the asset or liability under current
market conditions. The adoption of FSP 157-4 resulted in the use of valuation techniques other than quoted prices for the valuation of
the Companys collateralized debt obligations.
FAS No. 157 establishes a hierarchal disclosure framework associated with the level of pricing
observability utilized in measuring assets and liabilities at fair value. The three broad levels
defined by FAS No. 157 hierarchy are as follows:
Level 1: Quoted prices are available in active markets for identical assets or liabilities as of
the reported date.
Level 2: Pricing inputs are other than quoted prices in active markets, which are either directly
or indirectly observable as of the reported date. The nature of these assets and liabilities
include items for which quoted prices are available but which trade less frequently, and items that
are fair valued using other financial instruments, the parameters of which can be directly
observed.
Level 3: Assets and liabilities that have little to no pricing observability as of the reported
date. These items do not have two-way markets and are measured using managements best estimate of
fair value, where inputs into the determination of fair value require significant management
judgment or estimation.
16
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
The
following tables presents the assets reported on the consolidated statements of financial
condition at their fair value as of March 31, 2009 and
December 31, 2008 by level within the fair value hierarchy. As
required by SFAS No. 157, financial assets and liabilities are classified in their entirety based
on the lowest level of input that is significant to the fair value measurement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at 3/31/09 Using |
|
|
|
|
|
|
|
Quoted Prices in |
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Markets for |
|
|
Significant Other |
|
|
Significant |
|
|
|
|
|
|
|
Identical Assets |
|
|
Observable Inputs |
|
|
Unobservable Inputs |
|
Description |
|
03/31/09 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Sale Securities |
|
$ |
106,348 |
|
|
None |
|
|
$ |
97,034 |
|
|
$ |
9,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value Measurements at 12/31/08 Using |
|
|
|
|
|
|
|
Quoted Prices in |
|
|
|
|
|
|
|
|
|
|
|
|
|
Active Markets for |
|
|
Significant Other |
|
|
Significant |
|
|
|
|
|
|
|
Identical Assets |
|
|
Observable Inputs |
|
|
Unobservable Inputs |
|
Description |
|
12/31/08 |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available for Sale Securities |
|
$ |
117,599 |
|
|
None |
|
|
$ |
101,351 |
|
|
$ |
16,248 |
|
The
following table presents the changes in the Level 3 fair-value category for the three
months ended March 31, 2009. The Company classifies financial instruments in Level 3 of the
fair-value hierarchy when there is reliance on at least one significant unobservable input to the
valuation model. In addition to these unobservable inputs, the valuation models for Level 3
financial instruments typically also rely on a number of inputs that are readily observable either
directly or indirectly.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
losses |
|
|
|
|
|
|
|
Net realized/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in net |
|
|
|
|
|
|
|
Unrealized gains/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income for the |
|
|
|
|
|
|
|
(losses) included in |
|
|
Transfers |
|
|
Purchases |
|
|
|
|
|
|
period relating |
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
in and/or |
|
|
issuances |
|
|
|
|
|
|
to assets held at |
|
|
|
January 1, |
|
|
Noninterest |
|
|
Comprehensive |
|
|
out of |
|
|
and |
|
|
March 31, |
|
|
March 31, |
|
|
|
2009 |
|
|
Income |
|
|
Income |
|
|
Level 3 |
|
|
settlements |
|
|
2009 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
Available for sale |
|
$ |
16,248 |
|
|
$ |
(3,728 |
) |
|
$ |
(3,206 |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
9,314 |
|
|
$ |
(3,728 |
) |
On September 30, 2008, the Company changed its valuation technique for pooled trust preferred
holdings available-for-sale. Previously, the Company relied on prices compiled by third party
vendors using observable market data (Level 2) to determine the values of these securities.
However, SFAS 157 assumes that fair values of financial assets are determined in an orderly
transaction and not a forced liquidation or distressed sale at the measurement date. Based on
financial market conditions at September 30, 2008, the Company concluded that the fair values
obtained from third party vendors reflected forced liquidation or distressed sales for these trust
preferred securities. Therefore, the Company estimated fair value based on a discounted cash flow
methodology using appropriately adjusted discount rates reflecting nonperformance and liquidity
risks. The change in the valuation technique for these trust preferred securities resulted in a
transfer of these securities into Level 3 financial assets.
The Company conducts other-than-temporary impairment analysis on a quarterly basis. The
initial indication of other-than-temporary impairment for both debt and equity securities is a
decline in the market value below the amount recorded for an investment. A decline in value that is
considered to be other-than-temporary is recorded as a loss within non-interest income in the
consolidated statement of income. In determining whether an impairment is other than temporary,
the Company considers a number of factors, including, but not limited to, the length of time and
extent to which the market value has been less than cost, recent events specific to the issuer,
including investment downgrades by rating agencies and economic conditions of its industry, and the
Companys intent and ability to retain the security for a period of time sufficient to allow for a
recovery in market value or maturity. Among the factors that are considered in determining the
Companys intent and ability is a review of its capital adequacy, interest rate risk position and
liquidity.
The Company also considers the issuers financial condition, capital strength and near-term
prospects. In addition, for debt securities the Company considers the cause
of the price decline (general level of interest rates and industry- and issuer-specific factors),
current ability to make future payments in a timely manner and the issuers ability to service
debt. The assessment of a securitys ability to recover any decline in market value, the ability of
the issuer to meet contractual obligations and the Companys intent and ability to retain the
security require considerable judgment.
17
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
Certain of the corporate debt securities are accounted for under EITF 99-20, Recognition of
Interest Income and Impairment on Purchased Beneficial Interests that Continue to Be Held by a
Transferor in Securitized Financial Assets. For investments within the scope of EITF 99-20 at
acquisition, the Company evaluates current available information in estimating the future cash
flows of these securities and determines whether there have been favorable or adverse changes in
estimated cash
flows from the cash flows previously projected. The Company considers the structure and term of the
pool and the financial condition of the underlying issuers.
Specifically, the evaluation incorporates factors such as interest rates and appropriate risk
premiums, the timing and amount of interest and principal payments and the allocation of payments
to the various note classes. Current estimates of cash flows are based on the most recent trustee
reports, announcements of deferrals or defaults, expected future default rates and other relevant
market information.
The Company
owns 32 collateralized debt obligation securities (CDO) totaling $35,110 (par value) that are backed by
trust preferred securities issued by banks, thrifts, insurance companies and real estate investment
trusts. These securities were all rated investment grade at
inception.
During the second half of 2008 and the first quarter of
2009, factors outside the Companys control impacted the fair
value of these securities and will likely continue to do so for the
foreseeable future. These factors include but are not limited to:
guidance on fair value accounting, issuer credit deterioration,
issuer deferral and default rates, potential failure or government
seizure of underlying financial institutions or insurance companies,
ratings agency actions, regulatory actions. As a result of changes in
these and various other factors during the first quarter 2009,
Moodys Investors Service, Fitch Ratings and Standards and Poors
downgraded multiple CDO securities, including securities held by the
Company. Thirty-one of the CDO securities held by the Company are now
considered to be below investment grade, with one security still
rated investment grade. The deteriorating economic, credit and
financial conditions experienced in 2008 and 2009 have resulted in
illiquid and inactive financial markets and severely depressed prices
for these securities.
The Company analyzed the cash flow characteristics of these
securities within the scope of EITF 99-20. The Company determined
that for 26 of these securities, it does not intend to sell
the securities and it is not more likely than not that the Company
will be required to sell the securities before recovery of its
amortized cost basis. It was determined that there was no adverse
change in the cash flows for these 26 securities. The Company
does not consider the investment in these assets to be
other-than-temporarily impaired at March 31, 2009. However, there is
a risk that subsequent evaluations could result in recognition of
other-than-temporary impairment charges in the future. Upon completion of
the March 31, 2009 analysis, our model indicated
other-than-temporary impairment on the remaining six securities, all of which experienced additional defaults or deferrals during the period. These six
securities had other-than-temporary impairment losses of $10.3 million, of which $3.7 million was
recorded as expense and $6.6 million was recorded in other comprehensive income. These six
securities remained classified as available for sale at
March 31, 2009, and together, the 32 securities subjected to EITF 99-20 accounted for $22.8 million of the unrealized loss in the
trust preferred pools/collateralized debt obligations category at March 31, 2009.
The following table details the six debt securities with other-than-temporary impairment,
their credit ratings at March 31, 2009 and the related losses recognized in earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alesco Preferred |
|
|
|
|
|
|
|
|
|
PreTSL II |
|
|
|
|
|
|
PreTSL |
|
|
|
|
|
|
Funding VIII |
|
|
Tropic CDO V |
|
|
|
|
|
|
Mezzanine |
|
|
PreTSL |
|
|
XVI D |
|
|
PreTSL |
|
|
Class E Notes 1 |
|
|
Class B-1L |
|
|
|
|
|
|
Moodys |
|
|
VIII B-3 |
|
|
Fitch |
|
|
XVI D |
|
|
Moodys |
|
|
Moodys |
|
|
|
|
|
|
Rated
Ca |
|
|
Rated Ca |
|
|
Rated
C |
|
|
Rated C |
|
|
Rated Ca |
|
|
Rated Ca |
|
|
Total |
|
Amount of Other-Than
Temporary Impairment
Related to credit loss
at January 1, 2009 |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Addition |
|
|
53 |
|
|
|
88 |
|
|
|
37 |
|
|
|
72 |
|
|
|
293 |
|
|
|
3,185 |
|
|
|
3,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Other-Than-
Temporary Impairment
Related to credit loss
at March 31, 2009 |
|
$ |
53 |
|
|
$ |
88 |
|
|
$ |
37 |
|
|
$ |
72 |
|
|
$ |
293 |
|
|
$ |
3,185 |
|
|
$ |
3,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
market for these securities at March 31, 2009 is not active and markets for similar
securities are also not active. The inactivity was evidenced first by a significant widening of
the bid-ask spread in the brokered markets in which CDOs trade and then by a significant
decrease in the volume of trades relative to historical levels. The new issue market is also
inactive as no new trust preferred CDOs have been issued since 2007. There are currently very few market
participants who are willing and or able to transact for these
securities. Thus market value for
these securities remains very depressed relative to historical levels. For example, the yield spreads for the broad market
of investment grade and high yield corporate bonds reached all time wide levels versus Treasuries at the end of November and remain near those levels
today.
18
CORTLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in thousands, except for per share amounts)
Given conditions in the debt markets today and the absence of observable transactions in the
secondary and the new issue markets, we determined:
|
|
|
The few observable transactions and market quotations that are available are not
reliable for purposes of determining fair value at March 31,
2009; |
|
|
|
An income valuation approach technique (present value technique) that maximizes the use
of relevant observable inputs and maximizes the use of unobservable inputs will be equally
or more representative of fair value than the market approach valuation technique used at
prior measurement dates; and |
|
|
|
The CDOs will be classified within Level 3 of the fair value hierarchy because the
Company determined that significant adjustments are required to determine fair value at the
measurement date. |
The
CDO valuations were derived by an independent third party valuation
service. Our approach to
determining fair value involved these steps:
|
1. |
|
The credit quality of the collateral is estimated using average probability of default values
for each issuer (adjusted for rating levels). |
|
|
2. |
|
The default probabilities also considered the potential for correlation among issuers within the
same industry (e.g. banks with other banks). |
|
|
3. |
|
The cash flows were forecast for the underlying collateral and applied to each CDO tranche to
determine the resulting distribution among the securities. |
|
|
4. |
|
The expected cash flows were
discounted to calculate the present value of the security. |
|
|
5. |
|
The effective discount rates on an overall basis generally range from 3.91% to 24.72% and are
highly dependent upon the credit quality of the collateral, the relative position of the tranche in
the capital structure of the CDO and the prepayment assumptions. |
The
following tables present the assets measured on a nonrecurring basis on the consolidated
statements of financial condition at their fair value as of
March 31, 2009 and December 31, 2008 by level within the
fair value hierarchy. Impaired loans that are collateral dependent are written down to fair value
through the establishment of specific reserves. Techniques used to value the collateral that secure
the impaired loan include: quoted market prices for identical assets classified as Level 1 inputs;
observable inputs, employed by certified appraisers, for similar assets classified as Level 2
inputs. In cases where valuation techniques included inputs that are unobservable and are based on
estimates and assumptions developed by management based on the best information available under
each circumstance, the asset valuation is classified as Level 3 inputs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2009 |
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets Measured on a Nonrecurring Basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired Loans |
|
$ |
|
|
|
$ |
1,232 |
|
|
$ |
|
|
|
$ |
1,232 |
|
Other Real
Estate Owned |
|
|
|
|
|
|
1,145 |
|
|
|
|
|
|
|
1,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2008 |
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|
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Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Assets Measured on a Nonrecurring Basis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired Loans |
|
$ |
|
|
|
$ |
179 |
|
|
$ |
|
|
|
$ |
179 |
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|
Impaired
Loans: A loan is considered to be impaired when, based on current information and
events, it is probable that the Company will be unable to collect all amounts due (both interest
and principal) according to the contractual terms of the loan agreement. Impaired loans are
measured, as a practical expedient, at the loans observable market price or the fair market value
of the collateral if the loan is collateral dependent. At March 31, 2009, the recorded investment
in impaired loans was $1,573, with a related reserve of $341
resulting in a net balance of $1,232. At December 31, 2008 the
recorded investment in impaired loans was $441 with a related reserve
of $262 resulting in a net balance of $179.
Other Real Estate Owned (OREO): Real Estate acquired through
foreclosure or deed-in-lieu of foreclosure is included in other
assets. Such real estate is carried at the lower of cost or fair
value less estimated costs to sell. Any reduction from the carrying
value of the related loan to fair value at the time of acquisition is
accounted for as a loan loss. Any subsequent reduction in fair market
value is reflected as a valuation allowance through a charge to
income. Costs of significant property improvements are capitalized,
whereas costs relating to holding and maintaining the property are
charged to expense. At March 31, 2009 the recorded investment in
OREO was $1,169 with a valuation allowance of $24 resulting in a net
balance of $1,145. At December 31, 2008 the recorded investment
in OREO was $819 with a valuation allowance of $10 resulting in a net
balance of $809.
19
CORTLAND BANCORP AND SUBSIDIARIES
PART II OTHER INFORMATION
Item 6. Exhibits
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
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Exhibit Description |
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Form |
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Exhibit |
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Date |
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Herewith |
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2 |
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Plan of acquisition,
reorganization, arrangement,
liquidation or succession
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N/A |
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3.1 |
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Restated Amended Articles of
Cortland Bancorp reflecting
amendment dated May 18, 1999.
Note: filed for purposes of SEC
reporting compliance only. This
restated document has not been
filed with the State of Ohio
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10-K
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3.1 |
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03/16/06 |
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3.2 |
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Code of Regulations, as amended |
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For the Bancorp
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10-K
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3.2 |
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03/16/06 |
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For Cortland Savings and Banking
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10-K
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3.2 |
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03/15/07 |
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4 |
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The rights of holders of equity
securities are defined in portions
of the Articles of Incorporation
and Code of Regulations as
referenced in Exhibits 3.1 and
3.2
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10-K
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4 |
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03/16/06 |
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*10.1 |
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Group Term Carve Out Plan dated
February 23, 2001, by The Cortland
Savings and Banking Company with
each executive officer other than
Rodger W. Platt and with selected
other officers, as amended by the
August 2002 letter amendment
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10-K
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10.1 |
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03/16/06 |
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*10.2 |
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Group Term Carve Out Plan Amended
Split Dollar Policy Endorsement
entered into by The Cortland
Savings and Banking Company on
December 15, 2003 with Stephen A.
Telego, Sr.
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10-K
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10.2 |
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03/16/06 |
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20
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
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Exhibit Description |
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Form |
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Exhibit |
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Date |
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Herewith |
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*10.3 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and Jerry A. Carleton, dated as of
December 18,
2007
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10-K
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10.3 |
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03/17/08 |
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*10.4 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and David C. Cole, dated as of
December 18, 2007
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10-K
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10.4 |
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03/17/08 |
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*10.5 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and George E. Gessner, dated as of
December 18, 2007
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10-K
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10.5 |
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03/17/08 |
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*10.6 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and William A. Hagood, dated as of
October 12, 2003
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10-K
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10.6 |
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03/16/06 |
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*10.7 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and James E. Hoffman III, dated as
of December 18, 2007
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10-K
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10.7 |
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03/17/08 |
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*10.8 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and Neil J. Kaback, dated as of
December 18, 2007
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10-K
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10.8 |
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03/17/08 |
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*10.9 |
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Director Retirement Agreement
between Cortland Bancorp and K.
Ray Mahan, dated as of March 1,
2001
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10-K
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10.9 |
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03/16/06 |
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*10.10 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and Richard B. Thompson, dated as
of December 18, 2007
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10-K
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10.10 |
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03/17/08 |
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*10.11 |
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Amended Director Retirement
Agreement between Cortland Bancorp
and Timothy K. Woofter, dated as
of December 18, 2007
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10-K
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10.11 |
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03/17/08 |
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21
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
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Exhibit Description |
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Form |
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Exhibit |
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Date |
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Herewith |
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*10.12 |
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|
Form of Split Dollar Agreement
entered into by Cortland Bancorp
and each of Directors David C.
Cole, George E. Gessner, William
A. Hagood, James E. Hoffman III,
K. Ray Mahan, and Timothy K.
Woofter as of February 23, 2001,
as of March 1, 2004, with Director
Neil J. Kaback, and as of October
1, 2001, with Director Richard B.
Thompson;
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10-K
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10.12 |
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03/16/06 |
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as amended on December 26, 2006,
for Directors Cole, Gessner,
Hoffman, Mahan, Thompson, and
Woofter;
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10-K
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10.12 |
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3/15/07 |
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Amended Split Dollar Agreement and
Endorsement entered into by
Cortland Bancorp as of December
18, 2007, with Director Jerry A.
Carleton
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10-K
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10.12 |
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03/17/08 |
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*10.13 |
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Split Dollar Agreement between The
Cortland Savings and Banking
Company and Rodger W. Platt dated
of as February 23, 2001, as
amended on August 15, 2002, and
September 29, 2005
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10-K
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10.13 |
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03/16/06 |
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*10.14 |
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Endorsement Split Dollar Agreement
between The Cortland Savings and
Banking Company and Rodger W.
Platt dated as of September 29,
2005
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10-K
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10.14 |
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03/16/06 |
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*10.15 |
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Form of Indemnification Agreement
entered into by Cortland Bancorp
with each of its directors as of
May 24, 2005
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10-K
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10.15 |
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03/16/06 |
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*10.16 |
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Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Rodger W. Platt, dated as of
August 15, 2002
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10-K
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10.16 |
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03/16/06 |
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22
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
|
Exhibit Description |
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Form |
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Exhibit |
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Date |
|
Herewith |
|
*10.17 |
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|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Timothy Carney, dated
as of December 3, 2008
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8-K
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10.17 |
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12/12/08 |
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*10.18 |
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Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Lawrence A. Fantauzzi,
dated as of December 3, 2008
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8-K
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10.18 |
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12/12/08 |
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*10.19 |
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Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and James M. Gasior, dated
as of December 3, 2008
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8-K
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10.19 |
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12/12/08 |
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*10.20 |
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Second Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Marlene Lenio, dated as of
December 3, 2008
|
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8-K
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10.20 |
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12/12/08 |
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*10.21 |
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Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Craig Phythyon, dated as of
December 3, 2008
|
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8-K
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10.21 |
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12/12/08 |
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*10.22 |
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Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Stephen A. Telego,
Sr., dated as of December 3, 2008
|
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8-K
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10.22 |
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12/12/08 |
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*10.23 |
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Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Danny L. White, dated
as of December 3, 2008
|
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8-K
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10.23 |
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12/12/08 |
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23
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
|
Exhibit Description |
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Form |
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Exhibit |
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Date |
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Herewith |
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*10.24 |
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Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Timothy Carney, dated
as of December 3, 2008
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8-K
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10.24 |
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12/12/08 |
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*10.25 |
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Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Lawrence A. Fantauzzi,
dated as of December 3, 2008
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8-K
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10.25 |
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12/12/08 |
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*10.26 |
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Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and James M. Gasior, dated
as of December 3, 2008
|
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8-K
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10.26 |
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12/12/08 |
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*10.27 |
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Second Amended Split Dollar
Agreement between The Cortland
Savings and Banking Company and
Marlene Lenio, dated as of
December 3, 2008
|
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8-K
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10.27 |
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12/12/08 |
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*10.28 |
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Amended Split Dollar Agreement and
Endorsement between The Cortland
Savings and Banking Company and
Craig Phythyon, dated as of
December 3, 2008
|
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8-K
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10.28 |
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12/12/08 |
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*10.29 |
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Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Stephen A. Telego,
Sr., dated as of December 3, 2008
|
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8-K
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10.29 |
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12/12/08 |
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*10.30 |
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Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Danny L. White, dated
as of December 3, 2008
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8-K
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10.30 |
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12/12/08 |
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24
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Incorporated by Reference |
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Exhibit |
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Filing |
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Filed |
No. |
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Exhibit Description |
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Form |
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Exhibit |
|
Date |
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Herewith |
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*10.31 |
|
|
Severance Agreement entered into
by Cortland Bancorp and The
Cortland Savings and Banking
Company in December 3, 2008, with
each of Timothy Carney, Lawrence
A. Fantauzzi, James M. Gasior, and
Stephen A. Telego, Sr.
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8-K
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10.31 |
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12/12/08 |
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*10.32 |
|
|
Severance Agreement entered into
by Cortland Bancorp and The
Cortland Savings and Banking
Company in December 3, 2008, with
each of Marlene Lenio, Craig M.
Phythyon, Barbara Sandrock, and
Danny L. White
|
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8-K
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10.32 |
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12/12/08 |
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11 |
|
|
Statement re computation of per
share earnings
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See Note 6 of
financial
statements
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15 |
|
|
Letter re unaudited interim
financial statements
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N/A |
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18 |
|
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Letter re change in accounting
principles
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N/A |
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19 |
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Report furnished to security
holders
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N/A |
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22 |
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Published report regarding matters
submitted to vote of security
holders
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N/A |
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23 |
|
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Consents of experts and counsel
Consent of independent registered
public Accounting firms
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N/A |
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24 |
|
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Power of Attorney
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N/A |
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25
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Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
31.1 |
|
|
Certification of the Chief
Executive Officer under Rule
13a-14(a)
|
|
|
|
|
|
|
|
|
|
√ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
Certification of the Chief
Financial Officer under Rule
13a-14(a)
|
|
|
|
|
|
|
|
|
|
√ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32 |
|
|
Section 1350 Certification of
Chief Executive Officer and Chief
Financial Officer required under
section 906 of the Sarbanes-Oxley
Act of 2002
|
|
|
|
|
|
|
|
|
|
√ |
|
|
|
* |
|
Management contract or compensatory plan or arrangement. |
|
|
|
Copies of any exhibits will be furnished to shareholders upon written request. Requests should be directed to James Gasior,
Secretary, Cortland Bancorp, 194 West Main Street, Cortland, Ohio 44410. |
26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
Cortland Bancorp
(Registrant)
|
|
DATED: August 14, 2009 |
/s/ Lawrence A. Fantauzzi
|
|
|
Lawrence A. Fantauzzi |
|
|
President
(Chief Executive Officer) |
|
|
|
|
DATED: August 14, 2009 |
/s/ James M. Gasior
|
|
|
James M. Gasior |
|
|
Secretary
(Chief Financial Officer) |
|
27
EXHIBIT INDEX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
2 |
|
|
Plan of acquisition,
reorganization, arrangement,
liquidation or succession
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
|
Restated Amended Articles of
Cortland Bancorp reflecting
amendment dated May 18, 1999.
Note: filed for purposes of SEC
reporting compliance only. This
restated document has not been
filed with the State of Ohio
|
|
10-K
|
|
|
3.1 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
|
Code of Regulations, as amended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Bancorp
|
|
10-K
|
|
|
3.2 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For Cortland Savings and Banking
|
|
10-K
|
|
|
3.2 |
|
|
03/15/07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
The rights of holders of equity
securities are defined in portions
of the Articles of Incorporation
and Code of Regulations as
referenced in Exhibits 3.1 and
3.2
|
|
10-K
|
|
|
4 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.1 |
|
|
Group Term Carve Out Plan dated
February 23, 2001, by The Cortland
Savings and Banking Company with
each executive officer other than
Rodger W. Platt and with selected
other officers, as amended by the
August 2002 letter amendment
|
|
10-K
|
|
|
10.1 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.2 |
|
|
Group Term Carve Out Plan Amended
Split Dollar Policy Endorsement
entered into by The Cortland
Savings and Banking Company on
December 15, 2003 with Stephen A.
Telego, Sr.
|
|
10-K
|
|
|
10.2 |
|
|
03/16/06 |
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
*10.3 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and Jerry A. Carleton, dated as of
December 18,
2007
|
|
10-K
|
|
|
10.3 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.4 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and David C. Cole, dated as of
December 18, 2007
|
|
10-K
|
|
|
10.4 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.5 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and George E. Gessner, dated as of
December 18, 2007
|
|
10-K
|
|
|
10.5 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.6 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and William A. Hagood, dated as of
October 12, 2003
|
|
10-K
|
|
|
10.6 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.7 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and James E. Hoffman III, dated as
of December 18, 2007
|
|
10-K
|
|
|
10.7 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.8 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and Neil J. Kaback, dated as of
December 18, 2007
|
|
10-K
|
|
|
10.8 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.9 |
|
|
Director Retirement Agreement
between Cortland Bancorp and K.
Ray Mahan, dated as of March 1,
2001
|
|
10-K
|
|
|
10.9 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.10 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and Richard B. Thompson, dated as
of December 18, 2007
|
|
10-K
|
|
|
10.10 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.11 |
|
|
Amended Director Retirement
Agreement between Cortland Bancorp
and Timothy K. Woofter, dated as
of December 18, 2007
|
|
10-K
|
|
|
10.11 |
|
|
03/17/08 |
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
*10.12 |
|
|
Form of Split Dollar Agreement
entered into by Cortland Bancorp
and each of Directors David C.
Cole, George E. Gessner, William
A. Hagood, James E. Hoffman III,
K. Ray Mahan, and Timothy K.
Woofter as of February 23, 2001,
as of March 1, 2004, with Director
Neil J. Kaback, and as of October
1, 2001, with Director Richard B.
Thompson;
|
|
10-K
|
|
|
10.12 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as amended on December 26, 2006,
for Directors Cole, Gessner,
Hoffman, Mahan, Thompson, and
Woofter;
|
|
10-K
|
|
|
10.12 |
|
|
3/15/07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended Split Dollar Agreement and
Endorsement entered into by
Cortland Bancorp as of December
18, 2007, with Director Jerry A.
Carleton
|
|
10-K
|
|
|
10.12 |
|
|
03/17/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.13 |
|
|
Split Dollar Agreement between The
Cortland Savings and Banking
Company and Rodger W. Platt dated
of as February 23, 2001, as
amended on August 15, 2002, and
September 29, 2005
|
|
10-K
|
|
|
10.13 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.14 |
|
|
Endorsement Split Dollar Agreement
between The Cortland Savings and
Banking Company and Rodger W.
Platt dated as of September 29,
2005
|
|
10-K
|
|
|
10.14 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.15 |
|
|
Form of Indemnification Agreement
entered into by Cortland Bancorp
with each of its directors as of
May 24, 2005
|
|
10-K
|
|
|
10.15 |
|
|
03/16/06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.16 |
|
|
Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Rodger W. Platt, dated as of
August 15, 2002
|
|
10-K
|
|
|
10.16 |
|
|
03/16/06 |
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
*10.17 |
|
|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Timothy Carney, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.17 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.18 |
|
|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Lawrence A. Fantauzzi,
dated as of December 3, 2008
|
|
8-K
|
|
|
10.18 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.19 |
|
|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and James M. Gasior, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.19 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.20 |
|
|
Second Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Marlene Lenio, dated as of
December 3, 2008
|
|
8-K
|
|
|
10.20 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.21 |
|
|
Amended Salary Continuation
Agreement between The Cortland
Savings and Banking Company and
Craig Phythyon, dated as of
December 3, 2008
|
|
8-K
|
|
|
10.21 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.22 |
|
|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Stephen A. Telego,
Sr., dated as of December 3, 2008
|
|
8-K
|
|
|
10.22 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.23 |
|
|
Third Amended and Restated Salary
Continuation Agreement between The
Cortland Savings and Banking
Company and Danny L. White, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.23 |
|
|
12/12/08 |
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
*10.24 |
|
|
Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Timothy Carney, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.24 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.25 |
|
|
Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Lawrence A. Fantauzzi,
dated as of December 3, 2008
|
|
8-K
|
|
|
10.25 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.26 |
|
|
Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and James M. Gasior, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.26 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.27 |
|
|
Second Amended Split Dollar
Agreement between The Cortland
Savings and Banking Company and
Marlene Lenio, dated as of
December 3, 2008
|
|
8-K
|
|
|
10.27 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.28 |
|
|
Amended Split Dollar Agreement and
Endorsement between The Cortland
Savings and Banking Company and
Craig Phythyon, dated as of
December 3, 2008
|
|
8-K
|
|
|
10.28 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.29 |
|
|
Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Stephen A. Telego,
Sr., dated as of December 3, 2008
|
|
8-K
|
|
|
10.29 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.30 |
|
|
Third Amended Split Dollar
Agreement and Endorsement between
The Cortland Savings and Banking
Company and Danny L. White, dated
as of December 3, 2008
|
|
8-K
|
|
|
10.30 |
|
|
12/12/08 |
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference |
|
|
Exhibit |
|
|
|
|
|
|
|
|
|
Filing |
|
Filed |
No. |
|
Exhibit Description |
|
Form |
|
Exhibit |
|
Date |
|
Herewith |
|
*10.31 |
|
|
Severance Agreement entered into
by Cortland Bancorp and The
Cortland Savings and Banking
Company in December 3, 2008, with
each of Timothy Carney, Lawrence
A. Fantauzzi, James M. Gasior, and
Stephen A. Telego, Sr.
|
|
8-K
|
|
|
10.31 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*10.32 |
|
|
Severance Agreement entered into
by Cortland Bancorp and The
Cortland Savings and Banking
Company in December 3, 2008, with
each of Marlene Lenio, Craig M.
Phythyon, Barbara Sandrock, and
Danny L. White
|
|
8-K
|
|
|
10.32 |
|
|
12/12/08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
Statement re computation of per
share earnings
|
|
|
|
See Note 6 of
financial
statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15 |
|
|
Letter re unaudited interim
financial statements
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
|
Letter re change in accounting
principles
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
Report furnished to security
holders
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
Published report regarding matters
submitted to vote of security
holders
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23 |
|
|
Consents of experts and counsel
Consent of independent registered
public Accounting firms
|
|
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
Power of Attorney
|
|
|
|
|
N/A |
|
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Incorporated by Reference |
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|
Exhibit |
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Filing |
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Filed |
No. |
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Exhibit Description |
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Form |
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Exhibit |
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Date |
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Herewith |
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31.1 |
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Certification of the Chief
Executive Officer under Rule
13a-14(a)
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√ |
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31.2 |
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Certification of the Chief
Financial Officer under Rule
13a-14(a)
|
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|
|
|
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√ |
|
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32 |
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Section 1350 Certification of
Chief Executive Officer and Chief
Financial Officer required under
section 906 of the Sarbanes-Oxley
Act of 2002
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√ |
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* |
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Management contract or compensatory plan or arrangement. |
34