Exec's retirement package, low gains affect 2005 earnings

The sputtering economy has hurt the bank's loan portfolio.

CORTLAND — Reduced earnings on investments and payments made to Rodger Platt, former company president and chairman, reduced the earnings of Cortland Bancorp in 2005.

The company, which is the parent of Cortland Banks, said it earned $1.09 million in the fourth quarter, compared with $1.31 million in the same quarter of 2004. For all of 2005, the bank holding company earned $4.33 million, compared with $4.84 million in 2004.

K. Ray Mahan, who replaced Platt as chairman, said earnings for 2005 suffered from reduced gains on investments and the cost of Platt's retirement.

The board last year approved a $243,000 retirement bonus for Platt for his 40 years with the company and agreed to pay him $60,000 a year for 15 years.

Excluding these one-time costs, the company's earnings per share last year were 98 cents, down a penny from 2004.

Mahan also noted the region's economy has been "particularly slow in recovering from the last economic recession."

He said the company's loan quality measures remain acceptable, but the loan portfolio has been hurt by delinquencies, foreclosures and bankruptcies.

Loans that are past-due 30 days or more represented 2.95 percent of total loans at the end of the year, compared with 2.45 percent for a year earlier.

Underperforming assets — which includes restructured loans, loans past due 90 days or more and real estate acquired in foreclosure — increased to 0.83 percent of total assets, up from 0.76 percent a year earlier.