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CLDB > SEC Filings for CLDB > Form 8-K on 15-Mar-2013All Recent SEC Filings

Show all filings for CORTLAND BANCORP INC | Request a Trial to NEW EDGAR Online Pro

Form 8-K for CORTLAND BANCORP INC


15-Mar-2013

Results of Operations and Financial Condition


Item 2.02 Results of Operations and Financial Condition

The Company is announcing revised earnings for the fourth quarter and year ended December 31, 2012. After the Company's earnings release on January 31, 2013, the Company determined that an additional provision for loan losses of $1.9 million will be required as a result of further information obtained by the Company about one of its commercial loan customers.

During the first quarter of 2013, the Company became aware that one of its commercial loan customers had recognized material losses and that the borrower is insolvent and contemplating a bankruptcy filing. We do not believe that we will recover the amount owed from the collateral.

Given the doubtful realization of this loan principal represented by funds advanced under the line of credit as of year-end, the Company is charging off the balance of the loan amounts advanced under the line of credit as of December 31, 2012 in the amount of $1.9 million. The Company will continue to work with this borrower in an attempt to recover part of the charge-off. Any amounts recovered in subsequent periods will be reported as recoveries through its Allowance for Loan Losses.

An additional provision for loan losses equivalent to the charge-off of $1.9 million will be recognized in the Statement of Consolidated Income for the year ended December 31, 2012.

With the recognition of the additional provision, net of the income tax effect, the Company's previously announced net income of $4.2 million for the year ended December 31, 2012, or $.92 per common share, is now revised to $2.9 million, or $.64 per common share. Return on assets and return on equity is revised from .79% and 8.60% to .55% and 5.99%, respectively. Net charge-offs for the year are revised to $2.25 million, or .78% of average total loans. The allowance for loan losses is now 1.21% of total loans and 67.5% of nonperforming loans. The Company's regulatory capital ratios remain above the amounts necessary for the Company to be deemed well-capitalized at December 31, 2012, as follows:

                                                   Company Ratio              Well-Capitalized
Tier I capital to risk weighted assets                      13.15 %                        6.00 %
Total risk-based capital to risk weighted
assets                                                      14.10 %                       10.00 %
Tier I capital to average assets                            10.24 %                        5.00 %

Likewise, for the fourth quarter ended December 31, 2012, the Company's previously announced net income of $803,000, or $.17 per share, is now revised to a net loss of $464,000 or $(.11) per share.

The Company will file its annual report on Form 10-K by March 29, 2013. Attached as Exhibit 99 are unaudited financial highlights with all revisions included.

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