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Stonegate Capital Partners Updates Coverage on Cortland Bancorp (CLDB)

DALLAS, TX / ACCESSWIRE / December 4, 2019 / Cortland Bancorp (CLDB):

The full report can be accessed by clicking on the following link: http://stonegateinc.com/reports/CLDB%20Q3FY19.pdf


Cortland Bancorp (the Company or Cortland) was incorporated in Ohio in 1984 and is the bank holding company of The Cortland Savings and Banking Company (the Cortland Bank); the Company owns all outstanding shares of the Cortland Bank. The Cortland Bank is a full-service Ohio-chartered commercial bank engaging in commercial and retail banking and also offers investment services under its Cortland Private Wealth Management brand. Cortland Bank was originally founded in 1892. Cortland currently has 14 branch locations and 1 loan production office and last reported ~160 employees. The branch locations cover five Ohio counties in three NE Ohio markets, which include the Mahoning Valley, Cleveland, and Akron-Canton.


Cortland Bank has a long history of providing superior customer service, being deeply rooted in the communities that it serves while offering a full suite of banking and investment options to these NE Ohio markets. The seasoned management team has developed a sound business model and a stable geographic base from which to continue its disciplined growth strategy. Given the Company's track record of successful branch additions, combined with expanding profitability, strong credit metrics, and operational efficiency, we anticipate continued growth going forward.

  • Long history of building the brand - Cortland has built a solid brand name in the Ohio markets that it serves, currently being the 6th largest bank with ~ $700M in assets and a history that goes back to 1892; CLDB has always had a focus on asset quality with minimal losses reported over the years.
  • Strong leadership - The management team is comprised of industry veterans, each possessing decades of experience in banking as well as expertise in the various aspects of retail and commercial lending, giving them the capability to compete with the larger banks in their areas on deals of almost any size. Company insiders as a whole (executives + directors) own ~10% of outstanding CLDB shares and are thus truly invested in the success of the business.
  • Community-focused - The Company has recruited directors with ties to communities in which they serve and a commitment to the bank through stock ownership and development efforts. Cortland also hires experienced team members at each location with a focus on supporting the local customer and business owner with a level of service beyond that of the competition, and many with industry-specific backgrounds that can cater to certain customer concentrations. Importantly, decisions are made locally, enabling the bank to remain nimble for its customers.
  • Full-service offerings - Beyond the basics of banking, Cortland has a full-service suite of offerings for its clients, including treasury management, "private" banking and wealth management services, among others, which cater to the small- to medium-sized business owners often driving the local economy.
  • Successful growth strategy - The Company has continued to expand its branch operations into targeted growth markets of NE Ohio over the years with great success; furthermore, Cortland has increased its asset base by gaining additional business with its current clientele, which it is able to do given the variety of banking and investment options that each branch can deliver.
  • Valuation - Combining our thoughts on CLDB versus current regional comps, as well as 5-year historical trading multiples for its comp set, we believe CLDB should trade in a P/E range of 11x to 15x with a mid-point of 13x. Using this range on our FY19 EPS estimate results in a valuation range of $20.41 to $27.83 with a mid-point of $24.12. Further details are on page 7

About Stonegate Capital Partners

Stonegate Capital Partners is a Dallas-based corporate advisory firm dedicated to serving the specialized needs of small-cap public companies. Since our inception, our mission has been to find innovative, undervalued public companies for our network of leading institutional investors who seek high-quality investment opportunities.


Stonegate Capital Partners
Shane Martin, CFA
(214) 987-4121

SOURCE: Stonegate Capital Partners

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