Condensed Financial Information - Parent Company

12 Months Ended

Dec. 31, 2013

Condensed Financial Information - Parent Company

NOTE 15 - CONDENSED FINANCIAL INFORMATION – PARENT COMPANY

Below is condensed financial information of Cortland Bancorp (parent company only). In this information, the Parent’s investment in subsidiaries is stated at cost, including equity in the undistributed earnings of the subsidiaries, adjusted for any unrealized gains or losses on available-for-sale securities.

BALANCE SHEETS

(Amounts in thousands)

	December 31,
	2013			2012
ASSETS
Cash	$	204		$	244
Investment in bank subsidiary		45,813			45,583
Investment in non-bank subsidiary		15			15
Subordinated note from subsidiary bank		6,000			6,000
Other assets		3,478			3,520
Total assets	$	55,510		$	55,362
LIABILITIES
Other liabilities	$	820		$	755
Subordinated debt (Note 7)		5,155			5,155
Total liabilities		5,975			5,910
SHAREHOLDERS’ EQUITY
Common stock		23,641			23,641
Additional paid-in capital		20,833			20,850
Retained earnings		11,502			10,262
Accumulated other comprehensive loss		(2,888	)		(1,707	)
Treasury stock		(3,553	)		(3,594	)
Total shareholders’ equity		49,535			49,452
Total liabilities & shareholders’ equity	$	55,510		$	55,362

STATEMENTS OF INCOME

(Amounts in thousands)

	Years ended December 31,
	2013			2012			2011
Dividends from bank subsidiary	$	544		$	136		$	—
Interest and dividend income		96			107			98
Investment securities (losses) gains		—			(16	)		51
Other income		99			113			114
Interest on subordinated debt		(90	)		(100	)		(92	)
Other expenses		(380	)		(340	)		(362	)
Income (loss) before income tax and equity in undistributed earnings of subsidiaries		269			(100	)		(191	)
Income tax benefit		104			125			85
Equity in undistributed earnings of subsidiaries		1,411			2,888			4,178
Net income	$	1,784		$	2,913		$	4,072
Comprehensive income	$	603		$	3,869		$	3,867

STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Years ended December 31,
	2013			2012			2011
Cash flows (deficit) from operating activities
Net income	$	1,784		$	2,913		$	4,072
Adjustments to reconcile net income to net cash flow (deficit) from operating activities:
Equity in undistributed net income of subsidiaries		(1,411	)		(2,888	)		(4,178	)
Deferred tax benefit		(6	)		(14	)		(14	)
Investment securities losses (gains)		—			16			(51	)
Change in other assets and liabilities		113			(180	)		28
Net cash flows (deficit) from operating activities		480			(153	)		(143	)
Cash flows from investing activities
Proceeds from sales of securities		—			77			—
Net cash flows from investing activities		—			77			—
Cash deficit from financing activities
Dividends paid		(544	)		(136	)		—
Treasury shares reissued		24			—			—
Net cash deficit from financing activities		(520	)		(136	)		—
Net change in cash		(40	)		(212	)		(143	)
Cash
Beginning of year		244			456			599
End of year	$	204		$	244		$	456