UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[x] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 1999.

Commission file number 0-13814

Registrant’s telephone number, including area code: (330) 637-8040

Securities registered pursuant to Section l2(b) of the Act: None

Securities registered pursuant to Section l2(g) of the Act:

Common Stock, no par value

Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 during the preceding l2 months (or for shorter periods that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes   x   No     

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of the chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment of this Form 10-K [ x ].

The aggregate market value of the voting stock held by nonaffiliates of the registrant as of March 14, 2000:

Common Stock, No Par Value — $58,131,133

      The number of shares outstanding of the issuer’s classes of common stock as of March 14, 2000:

Common Stock, No Par Value — 3,735,934 shares

DOCUMENTS INCORPORATED BY REFERENCE

		Portions of the Annual Shareholders Report for the year ended December 31, 1999 are incorporated by reference into Part I, Item VI and Part II.
		Portions of the Proxy Statement for the annual shareholders meeting to be held April 11, 2000 are incorporated by reference into Part III.

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CORTLAND BANCORP
FORM 10-K
1999

INDEX

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PART I

Item 1. Business

General

THE CORPORATION

      The registrant, Cortland Bancorp (also referred to as the “Corporation” or the “Company”), is a bank holding company which was incorporated under the laws of the State of Ohio in 1984, and is registered under the Bank Holding Company Act of l956, as amended. Its subsidiaries are the Cortland Savings and Banking Company (“Cortland Banks” or the “Bank”), which was acquired at the Corporation’s inception in l985, and New Resources Leasing Company, which was formed in 1988. The Corporation and its subsidiaries operate in one industry, domestic banking.

      The Corporation conducts no business activities except for investment in securities as permitted under the Bank Holding Company Act.

      The business of the Corporation and its subsidiaries is not seasonal to any significant extent and is not dependent on any single customer or group of customers.

CORTLAND BANKS

      Cortland Banks is a full service, state chartered bank engaged in commercial and retail banking and trust services. Cortland Banks’ commercial and consumer banking services include checking accounts, savings accounts, time deposit accounts, commercial, mortgage and installment loans, leasing, night depository, automated teller services, safe deposit boxes, money order services, travelers checks, utility bill payments and other miscellaneous services normally offered by commercial banks. In addition, Cortland Banks offers discount brokerage services, while the Bank’s Trust Department provides access to a broad range of fiduciary services. Business is conducted at a total of thirteen offices, nine of which are located in Trumbull County, Ohio. Two offices are located in the communities of Windham and Mantua, Portage County, Ohio, one office is located in the community of Williamsfield, Ashtabula County, Ohio, and another is located in the community of Boardman, Mahoning County, Ohio. Chartered by the State of Ohio, Cortland Banks is also a member of the Federal Reserve System.

NEW RESOURCES LEASING COMPANY

      New Resources Leasing Company was formed in December 1988 as a separate entity to handle the function of commercial and consumer leasing. The wholly owned subsidiary has been inactive since incorporation.

SUPERVISION AND REGULATION

      The Corporation is subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) pursuant to the Bank Holding Company Act of l956, as amended. Generally, this Act limits the business of bank holding companies to owning or controlling banks and engaging in such other activities as the Federal Reserve Board may determine to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. The Company has made application to the Federal Reserve, under the provisions of the Gramm-Leach-Bliley Act of 1999, which became effective March 12, 2000, to convert to a Financial Holding Company.

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Supervision and Regulation (Continued):

      Cortland Banks, as a state banking organization, is subject to periodic examination and regulation by the Federal Reserve Bank of Cleveland and the State of Ohio Division of Banks. Cortland Banks is a member of the Federal Reserve System and its’ deposits are insured by the Bank Insurance Fund (BIF) administered by the Federal Deposit Insurance Corporation (FDIC).

Competition:

      Cortland Banks actively competes with state and national banks located in the Ohio counties of Trumbull, Portage, Ashtabula and Mahoning. It also competes with a large number of other financial institutions, such as savings and loan associations, insurance companies, consumer finance companies, credit unions and commercial finance and leasing companies, for deposits, loans and service business. Money market mutual funds, brokerage houses and similar institutions provide in a relatively unregulated environment many of the financial services offered by banks. In the opinion of management, the principal methods of competition are the rates of interest charged for loans, the rates of interest paid for funds, the fees charged for services and the availability of services.

Employees:

      At March 14, 2000, the Corporation and its subsidiaries had 148 full-time and 45 part-time employees. The Corporation considers its relations with its employees to be satisfactory.

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Statistical Disclosure

I. DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS’ EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL

      Information relating to I — Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential is set forth in the Corporation’s 1999 Annual Report to Shareholders under the pages indicated below and is incorporated herein by reference:

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II. INVESTMENT PORTFOLIO

      A. The following table shows the book value of investment securities by type of obligation at the dates indicated:

      B. A summary of securities held at December 3l, l999, classified according to the earlier of next repricing or the maturity date and the weighted average yield for each range of maturities, is set forth below. Fixed rate mortgage-backed securities are classified by their estimated contractual cash flow, adjusted for current prepayment assumptions. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

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II. INVESTMENT PORTFOLIO (continued)

      As of December 31, 1999, there were $4,948 in callable U.S. Government Agencies and $1,517 in callable U.S. Treasury Securities that given current and expected interest rate environments, are likely to be called within the one year time horizon. These securities are categorized according to their contractual maturities, with $2,467 maturing after five years, but within ten years and $3,998 maturing after 10 years.

      As of December 31, 1999, there were $11,936 in callable U.S. Government Agencies and $1,606 in callable U.S. Treasury Securities that, given current and expected interest rate environments, are likely to be called within the time frame defined as after one year but within five years. These securities are categorized according to their contractual maturities, with $9,542 maturing after five years, but within ten years, and $4,000 maturing after 10 years.

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III. LOAN PORTFOLIO (ALL DOMESTIC)

A. TYPES OF LOANS

      Information relating to III – Loan Portfolio – A. Types of Loans is set forth in the Corporation’s 1999 Annual Report to Shareholders, Page 34, Loan Loss Experience and is incorporated herein by reference.

B. MATURITIES AND SENSITIVITIES OF LOANS TO INTEREST RATES

(In Thousands of Dollars)

      The following schedule sets forth maturities based on remaining scheduled repayments of principal or next repricing opportunity for loans (excluding mortgage and consumer loans) as of December 31, 1999:

      The following schedule sets forth loans as of December 31, 1999 based on next repricing opportunity for floating and adjustable interest rate products, and by remaining scheduled principal payments for loan products with fixed rates of interest. Mortgage and consumer loans have again been excluded.

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C. RISK ELEMENTS

(In Thousands of Dollars)

1. Nonaccrual, Past Due and Restructured Loans

      The following table sets forth the aggregate balance of underperforming loans for each of the following categories for the years indicated:

      The following shows the amounts of contractual interest income and interest income actually reflected in income on loans accounted for on a nonaccrual basis and loans considered troubled debt restructuring as of December 31, 1999.

(In Thousands of Dollars)

      A loan is placed on a nonaccrual 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 charged-off, any interest that has been accrued and not collected on the loan is charged against earnings.

      Impaired loans are generally included in nonaccrual loans. Management does not individually evaluate certain smaller balance loans for impairment as such loans are evaluated on an aggregate basis. These loans generally include 1 – 4 family, consumer and home equity loans. Impaired loans are generally evaluated using the fair value of collateral as the measurement method. At December 31, 1999, 1998 and 1997 the recorded investment in impaired loans was $517, $719 and $1,365 while the allocated portion of the allowance for loan losses for such loans was $52, $98 and $213 respectively. Interest income recognized on impaired loans using the cash basis was $4, $9 and $116, respectively.

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C. RISK ELEMENTS (Continued)

(In Thousands of Dollars)

      2. Potential Problem Loans

      As of December 31, 1999 there were $1,462 loans, not included in the above categories and not considered impaired, but which can be considered potential problem loans. Management does not currently anticipate any loss as a result of these potential problem loans.

      Any loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been disclosed above 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.

IV. SUMMARY OF LOAN LOSS EXPERIENCE

      A. Analysis of the Allowance for Loan Loss

	Information relating to IV — Summary of Loan Loss Experience — A. Analysis of the Allowance for Loan Loss is set forth in the Corporation’s 1999 Annual Report to Shareholders, Page 33, Loan Loss Experience and is incorporated herein by reference.

      G. Breakdown of the Allowance for Loan Losses

	Information relating to IV — Summary of Loan Loss Experience — G. Breakdown of the Allowance for Loan Losses is set forth in the Corporation’s 1999 Annual Report to Shareholders under the pages indicated below and is incorporated herein by reference.

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V. DEPOSITS (ALL DOMESTIC)

      A. Average Deposits and Average Rates Paid on Deposit Categories

	Information relating to V — Deposits — A. Average Deposits and Rates is set forth in the Corporation’s 1999 Annual Report to Shareholders, Pages 25 & 26, Three Year Summary Average Balance Sheet, Yields and Rates and is incorporated herein by reference.

      B.

	Not applicable

      C.

	Not applicable

      D. Summary of Time Deposits of $100,000 or More

	Information relating to V — Deposits — D. Summary of Time Deposits of $100,000 or More by Maturity Range, is set forth in the Corporation’s 1999 Annual Report to Shareholders, Page 16, Note 6, Deposits and is incorporated herein by reference.

VI. RETURN ON EQUITY AND ASSETS

      Information relating to VI — Return on Equity and Assets is set forth in the Corporation’s 1999 Annual Report to Shareholders, page 27, Selected Financial Data.

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Item 2. Properties

CORTLAND BANCORP’S PROPERTY

      Cortland Bancorp owns no property. Operations are conducted at l94 West Main Street, Cortland, Ohio.

CORTLAND BANKS’ PROPERTY

      Cortland Banks’ main office (as described in its charter) is located at l94 West Main Street, Cortland, Ohio. Administrative offices are located at the main office.

      The other offices are:

      The Brookfield, Windham, Hubbard, Niles, Boardman and Niles Park Plaza offices are leased, while all of the other above offices are owned by Cortland Banks.

Item 3. Legal Proceedings

      The Company’s subsidiary bank was a defendant in a class action lawsuit Frank Slentz, Et Al. V. Cortland Savings and Banking Company, involving purchased interests in two campgrounds.

      On October 20, 1997 the judge presiding over this case filed a judgment entry dismissing all claims against the Bank without prejudice. The judgment was appealed by the plaintiffs. On March 2, 1999, the United States Court of Appeals for the Sixth Circuit affirmed the decision of the district court to grant summary judgment in favor of the defendant Bank. The plaintiffs have the right to appeal to the United States Supreme Court. Plaintiffs have also filed a similar suit in the Common Pleas Court of Trumbull County. Accordingly, the ultimate outcome of this litigation presently cannot be determined, and therefore no provision for any liability relative to such litigation has been made in the accompanying consolidated financial statements.

      The Bank is also involved in other legal actions arising in the ordinary course of business. In the opinion of management, the outcome of these matters is not expected to have a material effect on the Company.

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Item 4. Submission of Matters to a Vote of Security Holders

      No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

Executive Officers of the Registrant

                   The names, ages and positions of the executive officers as of March 14, 2000 are as follows:

      All of the officers listed above will hold office until the next annual meeting of shareholders and until their successors are duly elected and qualified.

Principal Occupation and Business Experience of Executive Officers

      During the past five years the business experience of each of the executive officers has been as follows:

      Rodger W. Platt has been Chairman of the Board of Cortland Bancorp and the subsidiary bank since November l987. He has been a Director and President of Cortland Bancorp since its formation in April of l985. He has been a Director of the subsidiary bank since l974 and has been President since l976.

      Lawrence A. Fantauzzi has been the Controller of Cortland Bancorp and the subsidiary bank since April l987. He became Treasurer and Chief Financial Officer of Cortland Bancorp and the subsidiary bank in December 1992. He became a Director of New Resources Leasing Company in November 1995, and Senior Vice President of the subsidiary bank in April 1996. In February 1999, he was elected Secretary of the Corporation and appointed to the Board of Directors of Cortland Bancorp and the subsidiary bank.

      James M. Gasior is the Senior Vice President of Lending and Administration of Cortland Bancorp and it’s subsidiary bank. Prior to April 1999, he had been the Senior Vice President and Chief Operations Officer from April 1996 through March 1999, and the Vice President and Chief Operations Officer of Cortland Bancorp and subsidiary from June 1993 through March 1996. He became a Director of New Resources Leasing Company in November 1995. Prior to June 1993, he was Chief Audit Officer of the subsidiary bank.

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PART II

      Information relating to Items 5, 6, 7, 7A and 8 is set forth in the Corporation’s l999 Annual Report to Shareholders under the pages indicated below and is incorporated herein by reference:

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PART III

Item 10. Directors and Executive Officers of the Registrant

      Information relating to directors of the Corporation will be set forth in the Corporation’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its annual meeting of shareholders to be held April 11, 2000. Such information is incorporated herein by reference. Information relating to executive officers of the Corporation is set forth in Part I. Pages 2-7 and 10

Item 11. Executive Compensation

      Information relating to this item will be set forth in the Corporation’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its annual meeting of shareholders to be held April 11, 2000. Such information is incorporated herein by reference. Pages 4-7

Item 12. Security Ownership of Certain Beneficial Owners and Management

      None

Item 13. Certain Relationships and Related Transactions

      Information relating to this item will be set forth in the Corporation’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its annual meeting of shareholders to be held April 11, 2000. Such information is incorporated herein by reference. Pages 2 and 8

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PART IV

Item l4. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)		l. Financial Statements
		Included in Part II of this report:

		Item 8., Financial Statements and Accompanying Information, is set forth in the Corporation’s l999 Annual Report to Shareholders and is incorporated by reference in Part II of this report.

(a)		2. Financial Statement Schedules
		Included in Part IV of this report as Exhibit 23:

	Independent Accountants’ Consent
	Schedules:

	All schedules are omitted because they are not applicable.

(a)		3. Exhibits
		The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears at page IV-3 hereof and is incorporated herein by reference.
(b)		Report on Form 8-K
		No reports on Form 8-K were filed for the three months ended December 31, 1999.

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SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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.

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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INDEX TO EXHIBITS

      The following exhibits are filed or incorporated by reference as part of this report:

      3.i. Articles of Incorporation of the Corporation as currently in effect and any amendments thereto,(incorporated by reference to Registrant’s Registration Statement on Form S-3 filed on October 28, 1993, exhibit A).

      3.ii. Bylaws and/or Code of Regulations of the Corporation as currently in effect (incorporated herein by reference to Registrant’s Registration Statement on Form S-3 on October 28, 1993, exhibit B).

      4 The rights of holders of equity securities are defined in portions of the Articles of Incorporation and Bylaws as referenced in 3.l. and 3.2.

      11 Statement regarding computation of earnings per share (filed herewith).

      13 Annual Report to security holders (filed herewith).

      21 Subsidiaries of the Registrant (filed herewith).

      23 Consents of experts and counsel — Consent of independent accountants (filed herewith).

      27 Financial Data Schedule (filed herewith).

      Copies of any exhibits will be furnished to shareholders upon written request. Requests should be directed to Lawrence A. Fantauzzi, Secretary, Cortland Bancorp, l94 West Main Street, Cortland, Ohio 444l0.

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