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Section 1: 8-K (FORM 8K DATED OCTOBER 17, 2019)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  October 17, 2019

 

 

CODORUS VALLEY BANCORP, INC.

(Exact name of registrant as specified in its charter)

 

PENNSYLVANIA

(State or other jurisdiction of incorporation)

 

0-15536

23-2428543

(Commission file number)

(IRS employer ID)

 

105 Leader Heights Road, PO Box 2887, York, Pennsylvania

17405-2887

(Address of principal executive office)

(Zip Code)

 

Registrant’s telephone number, including area code - (717) 747-1519

 

N/A

(Former name, address and fiscal year, if changed since last report.)

 

 

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $2.50 par value

CVLY

NASDAQ Global Market

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

o   Written communications pursuant to Rule 425 under the Securities Act  (17 CFR 230.425) 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 

o   Pre-commencement communications pursuant to Rule 14d-2(b)under the Exchange Act (17 CFR 240.14d-2(b)) 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by checkmark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)

 

Emerging growth company o

 

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o

 

 

 

 

 

CODORUS VALLEY BANCORP, INC.

 

FORM 8-K

 

Item 2.02 Results of Operations and Financial Condition.

 

On October 17, 2019, Codorus Valley Bancorp, Inc. (Codorus Valley) issued a Press Release, attached as Exhibit 99.1, announcing the results of operations, in summary form, for the period ended September 30, 2019 compared to the period ended September 30, 2018.

 

Item 9.01 Financial Statements and Exhibits

 

(d)  Exhibits. 

     

  No. Description

 

99.1

Press release of Codorus Valley Bancorp, Inc., dated October 17, 2019.

 

 

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

    CODORUS VALLEY BANCORP, INC.
       

Date:

October 17, 2019

 

By:     /s/ Larry D. Pickett

 

 

 

Larry D. Pickett, CPA

 

 

 

Treasurer

 

 

 

(Principal Financial and Accounting Officer)

 

 

 

 

 

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Section 2: EX-99.1 (PRESS RELEASE DATED OCTOBER 17, 2019)

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

October 17, 2019

 

Codorus Valley Bancorp, Inc. 

Reports Third Quarter 2019 Earnings

 

YORK, Pa. – Codorus Valley Bancorp, Inc. (Codorus Valley, or the Corporation) (NASDAQ: CVLY), parent company of PeoplesBank, A Codorus Valley Company (PeoplesBank), today announced net income of $5.2 million or $0.53 per share basic and $0.52 per share diluted, for the quarter ended September 30, 2019, as compared to net income of $5.1 million or $0.51 per share basic and diluted, for the quarter ended September 30, 2018. For the first nine months of 2019, net income was $14.2 million or $1.43 per share basic and $1.42 per share diluted, compared to $15.2 million or $1.54 per share basic and $1.53 per share diluted, for the first nine months of 2018. Earnings per share as reported were adjusted for a 5 percent stock dividend declared by the Board of Directors of the Corporation on October 8, 2019, payable on December 10, 2019 to shareholders of record at the close of business on October 22, 2019.

 

“Earnings for the third quarter 2019 increased slightly from the same period in 2018,” stated Larry J. Miller, Chairman, President/CEO. Miller continued, “In August 2019, PeoplesBank opened its twelfth Retirement Community Office at Bethany Village, a continuing care retirement community located in Mechanicsburg, PA. August 2019 also marked the one-year anniversary of the opening of the new Oregon Pike location in Lancaster County, PA. We have been pleased with the number of new retail and business clients we have served and the positive growth in loans and deposits since our opening. Our positive experience this past year has further validated the growth opportunities for PeoplesBank in the Lancaster market. In September, we announced plans to open a Lancaster City location in spring 2020.”

 

The Corporation’s net interest income for the three months ended September 30, 2019 was $16.0 million, a decrease of $400,000 or 2.6 percent when compared to the net interest income of $16.4 million for the same period in 2018. For the nine months ended September 30, 2019, net interest income was $47.8 million, reflecting a decrease of $100,000 or 0.1 percent compared to $47.9 million for the nine months ended September 30, 2018. The Corporation’s tax-equivalent net interest margin was 3.68 percent for the nine months ended September 30, 2019 compared to the tax-equivalent net interest margin of 3.88 percent for the same period in 2018. The decrease was attributed to a temporary increase in balance sheet liquidity and changes in the yield curve.

 

There was no provision for loan losses for the three months ended September 30, 2019 compared to $1.3 million for the same period in 2018. The decreased provision expense was primarily attributed to a decline in loan balances and an increase in specific reserve allocations for impaired assets of $1.1 million, which were primarily offset by declines in the general reserve. The increase in specific reserve allocations was primarily attributable to the transfers of three commercial credits to nonaccrual status during the third quarter. For the nine months ended September 30, 2019, the provision for loan losses was $2.3 million compared to $1.8 million for the first nine months of 2018. The Corporation’s nonperforming assets ratio was 2.26 percent as of September 30, 2019, an increase from the nonperforming assets ratio as of December 31, 2018 of 1.67 percent and an increase from the nonperforming assets ratio as of September 30, 2018 of 1.00 percent.

 

 

 

 

Noninterest income for the third quarter of 2019 was $3.5 million, an increase of $200,000, or 5.0 percent, as compared to noninterest income of $3.3 million for the third quarter of 2018. For the first nine months of 2019, noninterest income was $10.3 million, an increase of $200,000, or 2.7 percent compared to $10.1 million for the first nine months of 2018. Higher trust and investment services fees and income from bank owned life insurance was offset by lower gains on sale of loans held for sale.

 

Noninterest expense was $12.9 million for the third quarter of 2019, an increase of $900,000, or 7.1 percent, as compared to noninterest expense of $12.0 million for the third quarter of 2018. For the first nine months of 2019, noninterest expenses totaled $37.9 million, an increase of $1.0 million, or 2.8 percent, as compared to $36.9 million for the first nine months of 2018. Higher personnel costs accounted for the majority of the increase, which was offset by lower charitable donations.

 

Income tax expense for the quarter ended September 30, 2019 and 2018 was $1.4 million. Income tax expense for the nine months ended September 30, 2019 was $3.8 million compared to $4.0 million for the same period in 2018. The effective tax rates for the three months ended September 30, 2019 and 2018 were 21.6 percent and 21.4 percent, respectively. The effective tax rates for the nine months ended September 30, 2019 and 2018 were 21.2 percent and 21.0 percent, respectively.

 

Other News

 

As recently announced, on October 8, 2019, the Board of Directors of the Corporation declared a regular quarterly cash dividend of $0.16 per share, payable on November 12, 2019 to shareholders of record at the close of business on October 22, 2019.

 

Also on October 8, 2019, a 5 percent common stock dividend was declared, payable on December 10, 2019 to shareholders of record at the close of business on October 22, 2019.

 

In August, PeoplesBank announced plans to close the Fallston Financial Center located in Fallston, Maryland. Clients who are housed at the Fallston location are being reassigned to the Perry Hall Financial Center, located seven miles away. The location will close effective December 6, 2019.

 

PeoplesBank announced in September plans to open a Financial Center in Lancaster City at 101 N. Queen Street in early spring 2020. This location will be part of a newly updated mixed use four story building that includes retail, office and residential living.

 

We continue to purchase shares of the Corporation’s stock under the Share Repurchase Program (the “Program”), which began in June. As of September 30, 2019, the Corporation has repurchased 156,800 shares in the amount of $3,530,989. Repurchased shares are retained as treasury shares to be available for future issuance, with 23,236 shares reissued as of September 30, 2019.

 

 

 

 

About Codorus Valley Bancorp, Inc.

 

Codorus Valley Bancorp, Inc. is the largest independent financial services holding company headquartered in York, Pennsylvania. Codorus Valley primarily operates through its financial services subsidiary, PeoplesBank, A Codorus Valley Company. PeoplesBank offers a full range of consumer, business, wealth management, and mortgage services at financial centers located in communities throughout South Central Pennsylvania and Central Maryland. Codorus Valley Bancorp, Inc.’s Common Stock is listed on the NASDAQ Global Market under the symbol CVLY.

 

Forward-looking Statements

 

Codorus Valley Bancorp, Inc. has made forward-looking statements in this Press Release. These forward-looking statements are subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future results of operations of the Corporation and its subsidiaries. When words such as “believes,” “expects,” “anticipates,” or similar expressions occur in this Press Release, the Corporation is making forward-looking statements. Note that many factors could affect the future financial results of the Corporation and its subsidiaries, both individually and collectively, and could cause those results to differ materially from those expressed in the forward-looking statements contained in this Press Release. Those factors include, but are not limited to: credit risk, changes in market interest rates, inability to achieve merger-related synergies, competition, economic downturn or recession, and government regulation and supervision. The Corporation provides greater detail regarding these as well as other factors in its 2018 Form 10-K and 2019 Form 10-Qs, including Risk Factors sections of those reports, and in its subsequent SEC filings. The Corporation undertakes no obligation to update or revise any forward-looking statements.

 

Accounting standards require the consideration of subsequent events occurring after the balance sheet date for matters that require adjustment to, or disclosure in, the consolidated financial statements. The review period for subsequent events extends up to and including the filing date of a public company’s financial statements when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information in this announcement is subject to change.

 

Questions or comments concerning this Press Release should be directed to:

 

Codorus Valley Bancorp, Inc.  
Larry J. Miller, Chairman, President and CEO Larry D. Pickett, CPA - Treasurer
717-747-1500 717-747-1502
[email protected] [email protected]

 

 

 

 

Codorus Valley Bancorp, Inc.

Financial Highlights

 

Condensed Consolidated Statements of Income (Unaudited)

(in thousands of dollars, except per share data)

 

   Three months ended  Nine months ended
   September 30,  September 30,
   2019  2018  2019  2018
Interest income  $21,466   $20,796   $63,877   $59,223 
Interest expense   5,453    4,364    16,090    11,367 
Net interest income   16,013    16,432    47,787    47,856 
Provision for loan losses   0    1,300    2,250    1,800 
Noninterest income   3,473    3,307    10,338    10,067 
Noninterest expense   12,851    12,002    37,916    36,882 
Income before income taxes   6,635    6,437    17,959    19,241 
Provision for income taxes   1,432    1,377    3,806    4,044 
Net income  $5,203   $5,060   $14,153   $15,197 
Basic earnings per share  $0.53   $0.51   $1.43   $1.54 
Diluted earnings per share  $0.52   $0.51   $1.42   $1.53 

 

Condensed Consolidated Statements of Financial Condition (Unaudited)

(in thousands of dollars)

 

   September 30,  December 31,  September 30,
   2019  2018  2018
Cash and short term investments  $127,346   $96,782   $85,348 
Investment securities   167,469    155,515    152,211 
Loans   1,500,391    1,489,807    1,497,822 
Allowance for loan losses   (21,164)   (19,144)   (18,234)
Net loans   1,479,227    1,470,663    1,479,588 
Premises and equipment, net   26,782    24,724    24,844 
Operating leases right-of-use assets   2,408    0    0 
Goodwill   2,301    2,301    2,301 
Other assets   63,863    57,495    56,479 
Total assets  $1,869,396   $1,807,480   $1,800,771 
                
Deposits  $1,560,024   $1,495,280   $1,470,259 
Borrowed funds   105,588    122,332    143,934 
Operating leases liabilities   2,579    0    0 
Other liabilities   11,832    11,122    12,981 
Shareholders' equity   189,373    178,746    173,597 
Total liabilities and shareholders' equity  $1,869,396   $1,807,480   $1,800,771 

 

 

 

 

Codorus Valley Bancorp, Inc.
Financial Highlights

 

Selected Financial Data (Unaudited)

 

   Quarterly  Year-to-Date
   2019  2019  2019  2018  2018  September 30,
   3rd Qtr  2nd Qtr  1st Qtr  4th Qtr  3rd Qtr  2019  2018
Earnings and Per Share Data (1)                     
(in thousands, except per share data)                     
Net income  $5,203   $4,859   $4,091   $4,345   $5,060   $14,153   $15,197 
Basic earnings per share  $0.53   $0.49   $0.41   $0.44   $0.51   $1.43   $1.54 
Diluted earnings per share  $0.52   $0.49   $0.41   $0.44   $0.51   $1.42   $1.53 
Cash dividends paid per share  $0.152   $0.152   $0.152   $0.141   $0.141   $0.456   $0.423 
Tangible book value per share (2)  $19.10   $18.69   $18.18   $17.78   $17.35   $19.10   $17.35 
Book value per share  $19.33   $18.92   $18.41   $18.01   $17.59   $19.33   $17.59 
Average shares outstanding   9,860    9,926    9,927    9,887    9,868    9,904    9,848 
Average diluted shares outstanding   9,923    9,991    9,997    9,977    9,980    9,971    9,949 
                                    
Performance Ratios (%)                                   
Return on average assets (3)   1.12    1.06    0.91    0.96    1.14    1.03    1.16 
Return on average equity (3)   10.98    10.45    9.04    9.84    11.66    10.17    11.97 
Net interest margin (4)   3.60    3.75    3.69    3.78    3.86    3.68    3.88 
Efficiency ratio (5)   65.48    62.42    66.35    66.43    60.30    64.72    63.12 
Net overhead ratio (3)(6)   2.01    1.93    2.07    2.15    1.95    2.00    2.06 
                                    
Asset Quality Ratios (%)                                   
Net loan (recoveries) charge-offs to average loans (3)   0.00    0.03    0.03    0.00    0.06    0.02    0.02 
Allowance for loan losses to total loans (7)   1.42    1.44    1.34    1.29    1.22    1.42    1.22 
Nonperforming assets to total loans and foreclosed real estate   2.26    1.82    1.95    1.67    1.00    2.26    1.00 
                                    
Capital Ratios (%)                                   
Average equity to average assets   10.16    10.13    10.02    9.80    9.74    10.11    9.73 
Tier 1 leverage capital ratio   10.50    10.58    10.58    10.46    10.39    10.50    10.39 
Common equity Tier 1 capital ratio   12.33    12.49    12.16    12.15    11.82    12.33    11.82 
Tier 1 risk-based capital ratio   13.00    13.16    12.84    12.83    12.49    13.00    12.49 
Total risk-based capital ratio   14.25    14.42    14.09    14.08    13.73    14.25    13.73 

 

(1) per share amounts and shares outstanding were adjusted for stock dividends

(2) book value less goodwill and core deposit intangibles

(3) annualized for the quarterly periods presented

(4) net interest income (tax-equivalent) as a percentage of average interest earning assets

(5) noninterest expense as a percentage of net interest income and noninterest income (tax-equivalent)

(6) noninterest expense less noninterest income as a percentage of average assets

(7) excludes loans held for sale

 

Reconciliation of Non-GAAP Financial Measure (Tangible Book Value)

 

   2019  2019  2019  2018  2018
(in thousands, except per share data)  3rd Qtr  2nd Qtr  1st Qtr  4th Qtr  3rd Qtr
Total Shareholders' Equity  $189,373   $187,520   $182,807   $178,746   $173,597 
Less: Preferred Stock   0    0    0    0    0 
Less: Goodwill and Other Intangible Assets   (2,313)   (2,314)   (2,315)   (2,316)   (2,318)
Tangible Shareholders' Equity  $187,060   $185,206   $180,492   $176,430   $171,279 
                          
Common Shares Outstanding   9,794    9,909    9,930    9,925    9,872 
Book Value Per Share  $19.33   $18.92   $18.41   $18.01   $17.59 
                          
Book Value Per Share  $19.33   $18.92   $18.41   $18.01   $17.59 
Effect of Intangible Assets   (0.24)   (0.23)   (0.23)   (0.23)   (0.23)
Tangible Book Value Per Share  $19.10   $18.69   $18.18   $17.78   $17.35 

 

This report contains certain financial information determined by methods other than in accordance with GAAP. This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for the analysis of the Corporation’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Our management uses this non-GAAP measure in its analysis of our performance because it believes this measure is material and will be used as a measure of our performance by investors.

 

 

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