EXHIBIT 99.1
Codorus Valley Bancorp, Inc.
Reports Second QuarterEarnings for 2013
FOR IMMEDIATE NEWS RELEASE—York,Pennsylvania (July 15, 2013)
Codorus Valley Bancorp, Inc. (Nasdaq: CVLY), the parent company of PeoplesBank, A Codorus Valley Company, today announced net income available to common shareholders (earnings) of $2,583,000 or $0.57 per share basic, $0.56 per share diluted, for the quarter ended June 30, 2013, compared to earnings of $2,708,000 or $0.61 per share basic, $0.60 per share diluted, for the quarter ended June 30, 2012. For the first six months of 2013, net income available to common shareholders was $5,182,000 or $1.15 per share basic, $1.13 per share diluted, compared to $4,810,000 or $1.09 per share basic, $1.08 per share diluted earned in the first six months of 2012.
Second quarter commentary
Items worthy of mention for the quarter ending June 30, 2013, compared to June 30, 2012, include:
| · | Net income available to common shareholders for the second quarter of 2013 decreased 5 percent compared to the second quarter of 2012 primarily as a result of an increase in the provision for loan losses. |
| · | On July 9, 2013, the Corporation declared a regular quarterly cash dividend of $0.12 per common share, payable on August 13, 2013, to shareholders of record at the close of business on July 23, 2013. This quarterly cash dividend is $0.01 or 9 percent more than the cash dividend paid in the previous quarter. |
| · | On June 30, 2013, the nonperforming assets ratio was 1.89 percent, compared to 3.28 percent on June 30, 2012. |
| · | On May 16, 2013, PeoplesBank opened its newest banking office at 118 Carlisle Road in Downtown Hanover, Pennsylvania. |
| · | On June 30, 2013, total assets were approximately $1.1 billion, representing a $54 million or 5 percent increase, compared to June 30, 2012. |
Additional financial information, which is unaudited, is provided in the Financial Highlights section of this Earnings Release.
Review of operations
For the six month period ending June 30, 2013, net income available to common shareholders increased $372,000 or 8 percent compared to the first six months of 2012. The increase in earnings was due primarily to increases in net interest income and noninterest income and a decrease in preferred stock dividends as described below.
The $699,000 or 4 percent pretax increase in net interest income was due primarily to a decrease in funding costs resulting from a larger proportion of low cost core deposits to total deposits and lower rates generally paid on all deposit products, which reflected unusually low market interest rates. The average balance of interest earning assets, principally commercial loans, increased approximately $49 million or 5 percent for the first six months of 2013, compared to the same period of 2012. While the volume of earning assets increased, its effect on interest income was largely offset by lower yields, a reflection of the low interest rate environment.
The $306,000 or 8 percent pretax increase in noninterest income was primarily the result of increases in income from trust and investment services fees, service fees on deposits and gains from the sale of residential mortgage loans, all of which represented normal business growth.
The $134,000 or 52 percent decrease in preferred stock dividends was the result of a decrease in the dividend rate caused by the addition of loans that qualified for the U.S. Treasury’s Small Business Lending Fund Program. The annualized dividend rate in effect for the period ended June 30, 2013 was 1 percent, compared to approximately 2 percent for the period ended June 30, 2012.
Review of financial condition
On June 30, 2013, total assets were approximately $1.1 billion, representing a $54 million or 5 percent increase, compared to June 30, 2012. Compared to one year ago, asset growth occurred primarily in the commercial loan portfolio and was funded by an increase in core deposits. The growth of core deposits is a particular focus of the Corporation because the rates are relatively low, are a source of fee income and provide the opportunity to cross-sell other financial products and services. The Corporation excludes time deposits in its definition of core deposits.
As a result of profitable operations, the Corporation’s capital level remained sound as evidenced by capital ratios that exceed current regulatory requirements for well capitalized institutions.
About Codorus Valley Bancorp, Inc. and PeoplesBank, A Codorus Valley Company
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, comprised currently of nineteen financial centers located throughout York County, Pennsylvania and in Hunt Valley, Bel Air and Westminster, Maryland. Construction is underway on the newest banking office located at 3160 Carlisle Road, Dover, Pennsylvania, with a planned opening in September of this year. In addition to a full range of business and consumer banking services, the Company also offers mortgage banking, wealth management, and real estate settlement services. Additional information is available on the bank’s website atwww.peoplesbanknet.com.
Forward-looking statements
Codorus Valley Bancorp, Inc. has made forward-looking statements in this Press Announcement. 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 Announcement, the Company 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 Announcement. Those factors include, but are not limited to: credit risk, changes in market interest rates, competition, economic downturn or recession, and government regulation and supervision. The Company 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 Earnings Release should be directed to:
Larry J. Miller
Vice-Chairman, President, and CEO
Codorus Valley Bancorp, Inc.
717-747-1500
888-846-1970
lmiller@peoplesbanknet.com
Codorus Valley Bancorp, Inc.
Financial Highlights
Condensed Consolidated Statements of Income (Unaudited)
(in thousands of dollars, except per share data)
| | | Three months ended | | | Six months ended | |
| | | June 30, | | | June 30, | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
| Interest income | | $ | 11,473 | | | $ | 11,692 | | | $ | 22,834 | | | $ | 23,085 | |
| Interest expense | | | 2,172 | | | | 2,640 | | | | 4,381 | | | | 5,331 | |
| Net interest income | | | 9,301 | | | | 9,052 | | | | 18,453 | | | | 17,754 | |
| Provision for loan losses | | | 560 | | | | 250 | | | | 820 | | | | 500 | |
| Noninterest income | | | 2,038 | | | | 1,906 | | | | 4,045 | | | | 3,739 | |
| Noninterest expense | | | 7,157 | | | | 6,952 | | | | 14,410 | | | | 14,222 | |
| Income before income taxes | | | 3,622 | | | | 3,756 | | | | 7,268 | | | | 6,771 | |
| Provision for income taxes | | | 977 | | | | 977 | | | | 1,961 | | | | 1,702 | |
| Net income | | | 2,645 | | | | 2,779 | | | | 5,307 | | | | 5,069 | |
| Preferred stock dividends | | | 62 | | | | 71 | | | | 125 | | | | 259 | |
| Net income available to common shareholders | | $ | 2,583 | | | $ | 2,708 | | | $ | 5,182 | | | $ | 4,810 | |
| Basic earnings per common share | | $ | 0.57 | | | $ | 0.61 | | | $ | 1.15 | | | $ | 1.09 | |
| Diluted earnings per common share | | $ | 0.56 | | | $ | 0.60 | | | $ | 1.13 | | | $ | 1.08 | |
Condensed Consolidated Statements of Financial Condition (Unaudited)
(in thousands of dollars)
| | | June 30, | | | December 31, | | | June 30, | | | | |
| | | 2013 | | | 2012 | | | 2012 | | | | |
| Cash and short term investments | | $ | 64,816 | | | $ | 49,757 | | | $ | 56,008 | | | | | |
| Investment securities | | | 224,277 | | | | 236,925 | | | | 238,494 | | | | | |
| Loans | | | 769,744 | | | | 740,225 | | | | 708,038 | | | | | |
| Allowance for loan losses | | | (9,459 | ) | | | (9,302 | ) | | | (8,690 | ) | | | | |
| Net loans | | | 760,285 | | | | 730,923 | | | | 699,348 | | | | | |
| Premises and equipment, net | | | 13,029 | | | | 11,493 | | | | 10,658 | | | | | |
| Other assets | | | 36,643 | | | | 30,639 | | | | 40,043 | | | | | |
| Total assets | | $ | 1,099,050 | | | $ | 1,059,737 | | | $ | 1,044,551 | | | | | |
| | | | | | | | | | | | | | | | | |
| Deposits | | $ | 924,850 | | | $ | 901,307 | | | $ | 878,043 | | | | | |
| Borrowed funds | | | 63,663 | | | | 50,171 | | | | 61,468 | | | | | |
| Other liabilities | | | 7,281 | | | | 6,928 | | | | 6,918 | | | | | |
| Shareholders’ equity | | | 103,256 | | | | 101,331 | | | | 98,122 | | | | | |
| Total liabilities and shareholders’ equity | | $ | 1,099,050 | | | $ | 1,059,737 | | | $ | 1,044,551 | | | | | |
Codorus Valley Bancorp, Inc.
Financial Highlights
Selected Financial Data (Unaudited)
| | | Quarterly | | | Year-to-Date | |
| | | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | | | June 30, | |
| | | 2nd Qtr | | | 1st Qtr | | | 4th Qtr | | | 3rd Qtr | | | 2nd Qtr | | | 2013 | | | 2012 | |
Earnings and Per Share Data (7)
(in thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | |
| Net income available to common shareholders | | $ | 2,583 | | | $ | 2,599 | | | $ | 2,391 | | | $ | 1,809 | | | $ | 2,708 | | | $ | 5,182 | | | $ | 4,810 | |
| Basic earnings per common share | | $ | 0.57 | | | $ | 0.58 | | | $ | 0.53 | | | $ | 0.41 | | | $ | 0.61 | | | $ | 1.15 | | | $ | 1.09 | |
| Diluted earnings per common share | | $ | 0.56 | | | $ | 0.57 | | | $ | 0.53 | | | $ | 0.40 | | | $ | 0.60 | | | $ | 1.13 | | | $ | 1.08 | |
| Cash dividends paid per common share | | $ | 0.110 | | | $ | 0.110 | | | $ | 0.105 | | | $ | 0.105 | | | $ | 0.086 | | | $ | 0.220 | | | $ | 0.172 | |
| Book value per common share | | $ | 17.31 | | | $ | 17.42 | | | $ | 17.03 | | | $ | 16.90 | | | $ | 16.45 | | | $ | 17.31 | | | $ | 16.45 | |
| Tangible book value per common share | | $ | 17.31 | | | $ | 17.42 | | | $ | 17.03 | | | $ | 16.86 | | | $ | 16.41 | | | $ | 17.31 | | | $ | 16.41 | |
| Average common shares outstanding | | | 4,506 | | | | 4,485 | | | | 4,468 | | | | 4,449 | | | | 4,432 | | | | 4,496 | | | | 4,424 | |
| Average diluted common shares outstanding | | | 4,589 | | | | 4,568 | | | | 4,541 | | | | 4,522 | | | | 4,495 | | | | 4,578 | | | | 4,472 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Ratios (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Return on average assets (4) | | | 0.98 | | | | 1.01 | | | | 0.93 | | | | 0.71 | | | | 1.07 | | | | 0.99 | | | | 0.99 | |
| Return on average equity (4) | | | 10.13 | | | | 10.39 | | | | 9.69 | | | | 7.50 | | | | 11.43 | | | | 10.26 | | | | 10.53 | |
| Return on average realized equity (1)(4) | | | 10.63 | | | | 10.98 | | | | 10.35 | | | | 8.04 | | | | 12.23 | | | | 10.80 | | | | 11.28 | |
| Net interest margin (2) | | | 3.79 | | | | 3.86 | | | | 3.82 | | | | 3.70 | | | | 3.88 | | | | 3.83 | | | | 3.87 | |
| Efficiency ratio (3) | | | 60.86 | | | | 62.42 | | | | 63.03 | | | | 72.48 | | | | 60.88 | | | | 61.64 | | | | 63.58 | |
| Net overhead ratio (6)(4) | | | 1.91 | | | | 1.99 | | | | 2.02 | | | | 2.38 | | | | 1.95 | | | | 1.95 | | | | 2.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Asset Quality Ratios (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loan charge-offs to average loans (4) | | | 0.31 | | | | 0.04 | | | | 0.05 | | | | 0.31 | | | | 0.25 | | | | 0.18 | | | | 0.15 | |
| Allowance for loan losses to total loans (5) | | | 1.23 | | | | 1.25 | | | | 1.26 | | | | 1.20 | | | | 1.23 | | | | 1.23 | | | | 1.23 | |
| Nonperforming assets to total loans and foreclosed real estate | | | 1.89 | | | | 2.04 | | | | 1.64 | | | | 2.14 | | | | 3.28 | | | | 1.89 | | | | 3.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Capital Ratios (%) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Average equity to average assets | | | 9.67 | | | | 9.73 | | | | 9.55 | | | | 9.44 | | | | 9.38 | | | | 9.70 | | | | 9.40 | |
| Tier 1 leverage capital ratio | | | 10.28 | | | | 10.29 | | | | 10.02 | | | | 9.83 | | | | 9.87 | | | | 10.28 | | | | 9.87 | |
| Tier 1 risk-based capital ratio | | | 13.52 | | | | 13.52 | | | | 13.59 | | | | 13.41 | | | | 13.61 | | | | 13.52 | | | | 13.61 | |
| Total risk-based capital ratio | | | 14.68 | | | | 14.70 | | | | 14.79 | | | | 14.55 | | | | 14.77 | | | | 14.68 | | | | 14.77 | |
(1) excludes accumulated other comprehensive income (loss), principally unrealized gains (losses) on investment securities
(2) net interest income (tax-equivalent) as a percentage of average interest earning assets
(3) noninterest expense as a percentage of net interest income and noninterest income (tax-equivalent)
(4) annualized for the quarterly periods presented
(5) excludes loans held for sale
(6) noninterest expense less noninterest income as a percentage of average assets
(7) per share amounts and shares outstanding were adjusted for the common stock dividend distributed December 11, 2012
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