UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________.
COMMISSION FILE NUMBER: 0-15536
CODORUS VALLEY BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 2428543
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 Leader Heights Road, P.O. Box 2887, York, Pennsylvania 17405
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(Address of principal executive offices) (Zip Code)
(717) 747-1519
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(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common
Stock, $2.50 par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period 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 the disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). [ ] The aggregate market value of Codorus
Valley Bancorp, Inc.'s voting stock held by non-affiliates was approximately
$37,060,000 as of June 30, 2002.
The aggregate market value of Codorus Valley Bancorp, Inc.'s voting stock held
by non-affiliates was approximately $35,909,000 as of March 7, 2003.
As of March 7, 2003, Codorus Valley Bancorp, Inc. had 2,697,035 shares of common
stock outstanding, par value $2.50 per share.
continued
1
DOCUMENTS INCORPORATED BY REFERENCE
2002 Annual Report to Stockholders Parts I, II and IV
Proxy Statement for the Annual Meeting of Stockholders to
be held May 20, 2003 Parts III and IV
2
CODORUS VALLEY BANCORP, INC.
FORM 10-K INDEX
PAGE
PART I
Item 1 Business.............................................................................. 4
Item 2 Properties............................................................................ 9
Item 3 Legal proceedings..................................................................... 10
Item 4 Submission of matters to a vote of security holders................................... 11
PART II
Item 5 Market for Codorus Valley Bancorp, Inc.'s common equity
and related stockholder matters...................................................... 11
Item 6 Selected financial data............................................................... 11
Item 7 Management's discussion and analysis of financial
condition and results of operations.................................................. 12
Item 7A Quantitative and qualitative disclosures
about market risk................................................................... 12
Item 8 Financial statements and supplementary data........................................... 13
Item 9 Changes in and disagreements with accountants on
accounting and financial disclosure.................................................. 13
PART III
Item 10 Directors and executive officers, Codorus Valley Bancorp, Inc......................... 14
Item 11 Executive compensation................................................................ 14
Item 12 Security ownership of certain beneficial owners and management........................ 14
Item 13 Certain relationships and related transactions........................................ 14
Item 14 Controls and procedures............................................................... 14
PART IV
Item 15 Exhibits, financial statement schedules, and reports on Form 8-K...................... 15
Signatures....................................................................................... 18
Certifications................................................................................... 20
Exhibit index.................................................................................... 23
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PART I
FORWARD-LOOKING STATEMENTS:
Management of Codorus Valley Bancorp, Inc. (Codorus Valley) has made
forward-looking statements in the Annual Report on Form 10-K. These
forward-looking statements may be subject to risks and uncertainties.
Forward-looking statements include the information concerning possible or
assumed future results of operations of Codorus Valley Bancorp, Inc. and its
subsidiaries, PeoplesBank, A Codorus Valley Company (PeoplesBank) and SYC Realty
Company, Inc. When words such as "believes," "expects," "anticipates" or similar
expressions occur in this report, management is making forward-looking
statements.
Shareholders should note that many factors, some of which are discussed
elsewhere in the report and in the documents that management incorporates by
reference, could affect the future financial results of Codorus Valley and
subsidiaries, both individually and collectively, and could cause those results
to differ materially from those expressed in the forward-looking statements
contained or incorporated by reference in this Annual Report on Form 10-K. These
factors include the following:
- operating, legal and regulatory risks;
- economic, political and competitive forces affecting banking,
securities, asset management and credit services businesses; and
- the risk that management's analysis of these risks and forces could be
incorrect and/or that the strategies developed to address them could be
unsuccessful.
CRITICAL ACCOUNTING ESTIMATES:
Disclosure of Codorus Valley's significant accounting policies is included in
Note 1 to the consolidated financial statements on pages 6 through 9 of the
Annual Report to Stockholders (Exhibit 13). Some of these policies are
particularly sensitive requiring that significant judgements, estimates and
assumptions be made by management. Additional information is contained in
Management's Discussion and Analysis for the most sensitive of these issues,
including the provision and allowance for loan losses, located on pages 28 and
34 of Exhibit 13. The pro forma impact on net income and earnings per share from
stock-based compensation can be found in Note 13--Stock Option Plans, located on
pages 16 and 17 of Exhibit 13.
Management discussed the development and selection of critical accounting
estimates and related Management Discussion and Analysis disclosure with the
Audit Committee. There were no material changes made to critical accounting
estimates during the periods presented within.
ITEM 1: BUSINESS
Codorus Valley Bancorp, Inc. is a Pennsylvania business corporation,
incorporated on October 7, 1986. On March 2, 1987, Codorus Valley became a bank
holding company, under the Bank Holding Company Act of 1956. PeoplesBank is its
wholly owned bank subsidiary. SYC Realty Co., Inc. is its wholly owned nonbank
subsidiary. Codorus Valley's business consists primarily of managing
PeoplesBank, and its principal source of income is dividends received from
PeoplesBank. On December 31, 2002, Codorus Valley had total consolidated assets
of $350 million, total deposits and other liabilities of $318 million, and total
stockholders' equity of $32 million.
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BANK SUBSIDIARY
PeoplesBank, organized in 1934, is a Pennsylvania chartered bank. It is not a
member of the Federal Reserve System. PeoplesBank offers a full range of
business and consumer banking services through eleven financial centers located
throughout York County, Pennsylvania. It also offers investment, insurance,
trust and real estate services. The Federal Deposit Insurance Corporation
insures the deposits of PeoplesBank to the maximum extent provided by law. On
December 31, 2002, PeoplesBank had total loans of $236 million and total
deposits of $293 million.
PeoplesBank is not dependent on deposits or exposed to a loan concentration to a
single customer, or a small group of customers. Therefore, losses from a single
customer, or small customer group, would not have a material adverse effect on
the financial condition of PeoplesBank. At year-end 2002, the largest
indebtedness of a single PeoplesBank client was $3,811,000 or 1.6 percent of the
total loan portfolio.
At year-end 2002, the loan portfolio included one industry concentration that
exceeded 10 percent of total loans. The commercial leasing industry accounted
for 16 percent of total loans. Commercial leasing pertains to borrowers who
lease real estate for business purposes. Comparatively, at year-end 2001, the
commercial leasing industry accounted for 21 percent of total loans.
In 1999, PeoplesBank created SYC Insurance Services, Inc. (SYC Insurance) as a
wholly owned subsidiary, to sell nondeposit investment products. SYC Insurance
began operations in January 2000. Products sold by SYC Insurance are not FDIC
insured, not obligations of or guaranteed by PeoplesBank and are subject to
investment risk including the possible loss of principal.
In 1998, PeoplesBank created SYC Settlement Services, Inc. (SYC Settlement), as
a wholly owned subsidiary, to provide real estate settlement services. SYC
Settlement began operations in January 1999. Historically, SYC Insurance and SYC
Services have not had a material impact on consolidated operating results.
NONBANK SUBSIDIARY
On June 20, 1991, SYC Realty Company, Inc., was incorporated as a wholly owned
subsidiary of Codorus Valley Bancorp, Inc. Codorus Valley created this nonbank
subsidiary primarily for the purpose of disposing of selected properties
obtained from PeoplesBank in satisfaction of debts previously contracted. SYC
Realty commenced business operations in October 1995. To date, the financial
impact of this subsidiary's operations on Codorus Valley and PeoplesBank has not
been material.
COMPETITION
The banking industry in PeoplesBank's service area, principally York County,
Pennsylvania, and northern Maryland is extremely competitive. PeoplesBank
competes with commercial banks and other financial service providers such as
thrifts, credit unions, consumer finance companies, investment firms and
mortgage companies. Some financial service providers operating in PeoplesBank's
service area operate on a national and regional scale and possess resources
greater than those of PeoplesBank.
SUPERVISION AND REGULATION
Codorus Valley Bancorp, Inc. is registered as a bank holding company and is
subject to the regulations of the Board of Governors of the Federal Reserve
System under the Bank Holding Company Act of 1956, as amended. The Bank Holding
Company Act requires bank holding companies to file periodic
5
reports with and is subject to examination by the Federal Reserve. The Federal
Reserve issued regulations under the Bank Holding Company Act that require a
bank holding company to serve as a source of financial and managerial strength
to its subsidiary banks. As a result, the Federal Reserve may require Codorus
Valley to use its resources to provide adequate capital funds to PeoplesBank
during periods of financial stress or adversity.
The Bank Holding Company Act prohibits Codorus Valley from acquiring direct or
indirect control of more than 5 percent of the outstanding voting stock of any
bank, or substantially all of the assets of any bank, or merging with another
bank holding company, without the prior approval of the Federal Reserve. The
Pennsylvania Department of Banking must also approve any similar transaction.
Pennsylvania law permits Pennsylvania bank holding companies to control an
unlimited number of banks.
The Bank Holding Company Act restricts Codorus Valley to engaging in activities
that the Federal Reserve has found to be closely related to banking, and which
are expected to produce benefits for the public that will outweigh any
potentially adverse effects. To this end, the Bank Holding Company Act prohibits
Codorus Valley from engaging in most nonbanking businesses, or acquiring
ownership or control of more than 5 percent of the outstanding voting stock of
any company engaged in a nonbanking business, unless the Federal Reserve has
determined that the nonbanking business is closely related to banking. Under the
Bank Holding Company Act, the Federal Reserve may require a bank holding company
to end a nonbanking business if it constitutes a serious risk to the financial
soundness and stability of any bank subsidiary of the bank holding company.
The operations of PeoplesBank are subject to federal and state statutes
applicable to banks chartered under the banking laws of the Commonwealth of
Pennsylvania and whose deposits are insured by the Federal Deposit Insurance
Corporation.
The FDIC is the primary federal regulator of PeoplesBank. It regularly examines
banks in such areas as loss allowances, loans, investments, management practices
and other aspects of operations. These examinations are designed for the
protection of PeoplesBank's depositors rather than Codorus Valley's
shareholders. PeoplesBank must furnish annual and quarterly reports to the FDIC.
Federal and state banking laws and regulations govern such things as: the scope
of a bank's business, the investments a bank may make, the reserves against
deposits a bank must maintain, the types and terms of loans a bank may make and
the collateral it may take, the activities of a bank with respect to mergers and
consolidations, the establishment of branches, and the sale of nondeposit
investment products by the bank and its insurance subsidiary. The Pennsylvania
Insurance Department, the SEC and the NASD control and supervise the licensing
and activities of employees engaged in the sale of nondeposit investment
products.
Pennsylvania business and banking laws restrict dividend payments if certain
conditions are met, and Codorus Valley and PeoplesBank are subject to regulatory
capital requirements. More information about dividend restrictions and capital
requirements can be found in Note 11--Regulatory Matters, to the financial
statements of the 2002 Annual Report to Stockholders.
The Federal Reserve Act imposes restrictions on a subsidiary bank of a bank
holding company, such as PeoplesBank. The restrictions affect extensions of
credit to the bank holding company and its subsidiaries, investments in the
stock or other securities of the bank holding company and its subsidiaries, and
taking such stock or securities as collateral for loans. The Federal Reserve Act
and the Federal Reserve regulations also place limitations and reporting
requirements on extensions of credit by a bank to the principal shareholders of
its parent holding company, among others, and to related interests
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of such principal shareholders. In addition, such legislation and regulation may
affect the terms upon which any person becoming a principal shareholder of a
holding company may obtain credit from banks with which the subsidiary bank
maintains a correspondent relationship.
PeoplesBank and the banking industry in general, are affected by the monetary
and fiscal policies of government agencies, including the Federal Reserve.
Through open market securities transactions and changes in its discount rate and
reserve requirements, the Board of Governors of the Federal Reserve exerts
considerable influence over the cost and availability of funds for lending and
investment.
A brief discussion of recent federal agency pronouncements that affect Codorus
Valley and/or PeoplesBank follows.
REGULATION W Under the Federal Reserve Act, transactions between a bank and its
"affiliates" are quantitatively and qualitatively restricted. The Federal
Deposit Insurance Act applies Sections 23A and 23B to insured nonmember banks in
the same manner and to the same extent as if they were members of the Federal
Reserve System. In October 2002, the Federal Reserve issued Regulation W(Reg W),
effective April 1, 2003, which codifies prior regulations under Sections 23A and
23B of the Federal Reserve Act and interpretative guidance with respect to
affiliate transactions. Reg W incorporates the exemption from the affiliate
transaction rules but expands the exemption to cover the purchase of any type of
loan or extension of credit from an affiliate. Affiliates of a bank include,
among other entities, the bank's holding company and companies that are under
common control with the bank. The company is considered to be an affiliate of
the bank. In general, subject to certain specified exemptions, a bank or its
subsidiaries are limited in the ability to engage in "covered transactions" with
affiliates:
- to an amount equal to 10% of the bank's capital and surplus, in the
case of covered transactions with any one affiliate; and
- to an amount equal to 20% of the bank's capital and surplus, in the
case of covered transactions with all affiliates.
In addition, a bank and its subsidiaries may engage in covered transactions and
other specified transactions only on terms and under circumstances that are
substantially the same, or at least as favorable to the bank or its subsidiary,
as those prevailing at the time for comparable transactions with nonaffiliated
companies. A "covered transaction" includes:
- a loan or extension of credit to an affiliate;
- a purchase of, or an investment in, securities issued by an affiliate;
- a purchase of assets from an affiliate, with some exceptions;
- the acceptance of securities issued by an affiliate as collateral for a
loan or extension of credit to any party; and
- the issuance of a guarantee, acceptance or letter of credit on behalf
of an affiliate.
In addition, under Regulation W:
- a bank and its subsidiaries may not purchase a low-quality asset from
an affiliate;
- covered transactions and other specified transactions between a bank or
its subsidiaries and an affiliate must be on terms and conditions that
are consistent with safe and sound banking practices; and
- with some exceptions, each loan or extension of credit by a bank to an
affiliate must be secured by collateral with a market value ranging
from 100% to 130%, depending on the type of collateral and the amount
of the loan or extension of credit.
7
Reg W generally excludes all nonbank and nonsavings association subsidiaries of
banks from treatment as affiliates, except to the extent that the Federal
Reserve Board decides to treat these subsidiaries as affiliates.
Concurrently with the adoption of Reg W, the Federal Reserve Board has proposed
a regulation, which would further limit the amount of loans that could be
purchased by a bank from an affiliate to not more than 100% of the bank's
capital and surplus.
SARBANES-OXLEY ACT OF 2002 On July 30, 2002, President Bush signed into law the
Sarbanes-Oxley Act of 2002, or SOA. The stated goals of the SOA are to increase
corporate responsibility, to provide for enhanced penalties for accounting and
auditing improprieties at publicly traded companies and to protect investors by
improving the accuracy and reliability of corporate disclosures pursuant to the
securities laws.
The SOA is the most far-reaching U.S. securities legislation enacted in some
time. The SOA generally applies to all companies, both U.S. and non-U.S., that
file or are required to file periodic reports with the Securities and Exchange
Commission (SEC) under the Securities Exchange Act of 1934. Given the extensive
SEC role in implementing rules relating to many of the SOA's new requirements,
the final scope of these requirements remains to be determined.
The SOA includes very specific additional disclosure requirements and new
corporate governance rules, requires the SEC and securities exchanges to adopt
extensive additional disclosure, corporate governance and other related rules
and mandates further studies of certain issues by the SEC. The SOA represents
significant regulation of the accounting profession, and has greatly impacted
state corporate law, such as the relationship between a board of directors and
management and between a board of directors and its committees.
The SOA addresses, among other matters:
- audit committees for all reporting companies;
- certification of financial statements by the chief executive officer
and the chief financial officer;
- the forfeiture of bonuses or other incentive-based compensation and
profits from the sale of an issuer's securities by directors and senior
officers in the twelve month period following initial publication of
any financial statements that later require restatement;
- a prohibition on insider trading during pension plan black out periods;
- disclosure of off-balance sheet transactions;
- expedited filing requirements for Form 4's;
- disclosure of a code of ethics and filing of a Form 8-K for a change or
waiver of such code;
- "real time" filing of periodic reports;
- the formation of a public accounting oversight board;
- auditor independence; and
- various increased criminal penalties for violations of securities laws.
The SOA contains provisions, which became effective upon enactment on July 30,
2002 and provisions, which will become effective at a later time. The SEC has
been delegated the task of enacting rules to implement various provisions with
respect to, among other matters, disclosure in periodic filings pursuant to the
Exchange Act.
USA PATRIOT ACT OF 2001 In October of 2001, the USA Patriot Act of 2001 was
enacted in response to the terrorist attacks in New York, Pennsylvania and
Washington D.C. which occurred on September 11,
8
2001. The Patriot Act is intended to strengthen U.S. law enforcement's and the
intelligence communities' abilities to work cohesively to combat terrorism on a
variety of fronts. The potential impact of the Patriot Act on financial
institutions of all kinds is significant and wide ranging. The Patriot Act
contains sweeping anti-money laundering and financial transparency laws and
imposes various regulations, including standards for verifying client
identification at account opening, and rules to promote cooperation among
financial institutions, regulators and law enforcement entities in identifying
parties that may be involved in terrorism or money laundering.
Periodically, various types of federal and state legislation are proposed that
could result in additional regulation of, and restrictions on, the business of
Codorus Valley and PeoplesBank. It cannot be predicted whether such legislation
will be adopted or, if adopted, how such legislation would affect the business
of Codorus Valley and its subsidiaries. As a consequence of the extensive
regulation of commercial banking activities in the United States of America,
Codorus Valley and PeoplesBank's business is particularly susceptible to being
affected by federal legislation and regulations that may increase the cost of
doing business. Except as specifically described above, management believes that
the effect of the provisions of the aforementioned legislation on the liquidity,
capital resources, and results of operations of Codorus Valley will not be
material. Management is not aware of any other current specific recommendations
by regulatory authorities or proposed legislation, which, if they were
implemented, would have a material adverse effect upon the liquidity, capital
resources or results of operations. Although the general cost of compliance with
numerous and multiple federal and state laws and regulations does have, and in
the future my have, a negative impact on Codorus Valley's results of operations.
OTHER INFORMATION
On December 31, 2002, PeoplesBank had 151 full-time employees, 20 part-time
employees and 7 seasonal employees. Employees are not covered by a collective
bargaining agreement and management considers its relations with employees to be
good.
The required Statistical Information for Item 1 can be found in Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations of this report.
ITEM 2: PROPERTIES
Codorus Valley Bancorp, Inc. owns the following property in fee, subject to two
liens. A local financial institution holds a first lien for approximately $1.8
million and Codorus Valley's wholly owned subsidiary PeoplesBank holds a second
lien for approximately $2.1 million.
Codorus Valley Corporate Center--The Corporate Center is located at 105
Leader Heights Road, York Township, York, PA. This facility serves as
the corporate headquarters and is approximately 40,000 square feet.
Approximately sixty-seven percent of the leasable space is leased to
PeoplesBank; the remaining thirty-three percent, most of which is
currently leased, is available for lease to nonaffiliated parties. The
Corporate Center is adjacent to PeoplesBank's Data Operations Center
and the Leader Heights office.
PeoplesBank owns the following properties in fee and without liens:
Glen Rock Office--Located at 1 Manchester Street in the borough of Glen
Rock, PA. Two bank-owned parking lots are located nearby on Hanover
Street and at 7 Manchester Street in the borough of Glen Rock.
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Jacobus Office--Located at 1 North Main Street in the borough of
Jacobus, PA.
Jefferson Office--Located at 6 Baltimore Street in Jefferson Borough,
PA. A bank-owned parking lot is located nearby at 10 Baltimore Street
in Jefferson Borough.
York New Salem Office--Located at 320 North Main Street in the borough
of York New Salem, PA.
Leader Heights Office--This facility serves as both a banking office
and data operations center. It is located at 109 Leader Heights Road in
York Township, PA.
Cape Horn Office--Located at 2587 Cape Horn Road, Red Lion in the
Township of Windsor, PA.
East York Office--Located at 2701 Eastern Boulevard, York in the
Township of Springettsbury, PA.
PeoplesBank leases the following properties:
Stewartstown Office--Located at 2 Ballast Lane in the borough of
Stewartstown, PA. This office is a 1,278 square foot unit of a business
complex known as Village Square at Stewartstown. The lease, signed
November 29, 1993, is for a twenty-year term with four five-year term
options.
South Hanover Office--Located at 1400 Baltimore Street, Hanover in Penn
Township, PA. This office is a 1,850 square foot unit adjacent to a
Rutter's Farm Store and gas station. The lease, effective February 1,
2001, is for a fifteen-year term with three five-year options.
East Market Street Office--Located at 118 E. Market Street, York City,
PA. This office is a 1,750 square foot unit located in the City of
York. Management has negotiated a short-term lease for this space.
West Philadelphia Street Office--Located at 221 W. Philadelphia Street,
York City, PA. This office is a 2,814 square foot unit located in the
City of York. The lease, effective December 10, 2002, is for an
eight-year term with two five-year renewal options.
West Market Street Office--Located at 312 West Market Street, York
City, PA. A building and lot, located in the City of York, is being
leased under a short-term lease arrangement. The lease, effective
September 9, 2002, is for an initial six-month term. Management
anticipates that the lease will be terminated on April 30, 2003. On or
about that date, management plans to relocate the six-member staff
located at the West Market Street Office to the Codorus Valley
Corporate Center.
All of the above properties are located in York County, Pennsylvania and, in the
opinion of management, are adequate for the business purposes of Codorus Valley
and its subsidiaries.
ITEM 3: LEGAL PROCEEDINGS
On March 19, 2003, In the Net Sports, LLC, James B. Murphy and Barbara S. Murphy
filed a counterclaim against PeoplesBank in the Court of Common Pleas of Dauphin
County, Pennsylvania, alleging, among other things, that PeoplesBank: breached
an implied-in-fact agreement to the claimants
10
related to loans made to the claimants; intentionally interfered with the
claimants' existing contracts and prospective business relations; and made
certain misrepresentations to the claimants. The claimants allege to have
incurred unliquidated losses and other damages in excess of $3.9 million and
exemplary damages in excess of $35,000. The counterclaim was filed in response
to a complaint filed by PeoplesBank whereby PeoplesBank alleges that the
claimants defaulted on a promissory note resulting in damages to PeoplesBank in
excess of $1.2 million. Management believes there are substantial defenses to
this lawsuit and intends to defend it vigorously. The impact of the final
disposition of this lawsuit cannot be assessed at this time. Counsel believes
that the claim may qualify as a "covered claim" under PeoplesBank's lender
liability insurance policy, which should cover the defense and indemnification
of PeoplesBank for said claim. The factual discovery process has not been
completed. Although Codorus Valley expects to incur costs in defending these
claims, based on the results of its investigation thus far and preliminary
discussions with its lawyers, Codorus Valley currently does not believe the
ultimate resolution of the claims will have a material impact on its financial
condition or results of operations.
Codorus Valley is involved in no other material litigation other than routine
litigation incident to the nature of its business. In addition, management is
not aware of any material proceedings pending, threatened or contemplated
against Codorus Valley and PeoplesBank by government authorities.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5: MARKET FOR CODORUS VALLEY BANCORP, INC.'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market and dividend information appearing in the 2002 Annual Report to
Stockholders, under the caption Stock, Dividend and Broker Information, is
incorporated by reference in response to this item and is included on page 39 of
Exhibit 13.
As of March 7, 2003, Codorus Valley had approximately 973 stockholders of
record.
Related stockholder information appearing in the 2002 Annual Report to
Stockholders, under the caption Stockholders' Equity and Capital Adequacy,
included in Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations, is incorporated by reference in response to
this item and is included on page 32 of Exhibit 13.
Information appearing in the 2003 Proxy Statement, under the caption "Equity
Compensation Plan Information" is incorporated by reference in response to this
item.
ITEM 6: SELECTED FINANCIAL DATA
Information appearing in the 2002 Annual Report to Stockholders, under the
caption Selected Financial Data, is incorporated by reference in response to
this item and is included on page 1 of Exhibit 13.
11
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Consolidated Financial Condition and
Results of Operations in the 2002 Annual Report to Stockholders is incorporated
by reference in response to this item and is included on pages 23 through 38 of
Exhibit 13.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information appearing in the 2002 Annual Report to Stockholders, under the
caption Market Risk Management included in Management's Discussion and Analysis
of Consolidated Financial Condition and Results of Operations, is incorporated
by reference in response to this item and is included on pages 36 through 38 of
Exhibit 13.
The Asset-Liability Management Committee of PeoplesBank manages interest rate
risk primarily through sensitivity analysis, which is described on pages 37 and
38 of Exhibit 13. Periodically, it may also use a gap analysis as a secondary
means for managing interest rate risk. The gap analysis begins by assigning
interest rate sensitive assets and interest rate sensitive liabilities into
future time periods, typically one year, based on a scheduled maturity or
repricing date. Repriceable liabilities are then subtracted from repriceable
assets to determine a difference, or gap. The measurement process relies on many
assumptions such as the amount and timing of repriceable cash flows from
interest rate sensitive assets and liabilities. The following assumptions are
made about repriceable cash flows from interest rate sensitive assets:
- - variable rate instruments reprice daily,
- - adjustable rate instruments reprice at the interest maturity date,
- - fixed rate loans reprice at their scheduled maturity date and include
estimated prepayments,
- - fixed rate investment securities, except for mortgage-backed instruments,
reprice at their scheduled maturity date, or call date if more appropriate,
and
- - fixed rate mortgage-backed instruments reprice based on principal paydown
estimates.
Generally, cash flow assumptions for interest sensitive assets apply to interest
sensitive liabilities with the exception of NOW and savings deposits which do
not have scheduled maturities. Technically, NOW and savings deposits can be
repriced at any time. Historically, NOW and savings deposits and rates have been
relatively stable despite changes in market interest rates. This stability
assumption was made in the current measurement process.
A schedule showing balance sheet repricing characteristics and an estimate of
gap at December 31, 2002 is provided below. The gap is one way to measure how a
change in market interest rates might impact net interest income for specific
time frames. For example, the cumulative gap in the "181-365" repricing category
represents a one year net asset position of $47.3 million or 14.8 percent of
interest earning assets on December 31, 2002. The asset sensitive gap position
implies that over the next year net income will increase if market interest
rates rise and decrease if rates decline. The theory is that more assets will
reprice, at higher market interest rates, than the liabilities that fund them.
A gap analysis is limited in its usefulness since it represents a one-day
position, which is continually changing and not necessarily indicative of
Codorus Valley's position at any other time. Gap analysis does not consider the
complexity of interest rate relationships and spreads depending on the
direction, magnitude and timing of changes in market interest rates.
Additionally, it does not consider the impact of financial strategies that
management could employ. Due to its limitations, interest rate risk
12
implications from a gap analysis may differ significantly from the results of an
interest sensitivity/simulation analysis.
After
At December 31, 2002 0-30 31-90 91-180 181-365 1-2 2-5 5
(dollars in thousands) Days Days Days Days Years Years Years Total
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Interest earning assets:
Interest earning deposits $ 42 $ 0 $ 100 $ 100 $ 0 $ 0 $ 0 $ 242
Securities,available-for-sale 3,423 2,625 1,828 6,465 13,137 35,118 7,770 70,366
Securities, held-to-maturity 0 0 0 0 0 0 9,357 9,357
Loans held for sale 4,586 0 0 0 0 0 0 4,586
Loans 90,008 9,993 14,194 27,680 31,665 55,725 4,695 233,960
-----------------------------------------------------------------------------------
Total $ 98,059 $ 12,618 $16,122 $34,245 $44,802 $ 90,843 $ 21,822 $318,511
Interest bearing liabilities:
NOW deposits $ 3,485 $ 0 $ 1,743 $ 0 $ 0 $ 0 $ 29,623 $ 34,851
Money market deposits 5,063 4,661 7,193 13,985 0 0 43,036 73,938
Savings deposits 1,302 0 651 0 0 0 11,070 13,023
Time CDs less than $100,000 20,525 7,697 10,943 15,022 28,769 31,852 0 114,808
Time CDs $100,000 and above 6,934 1,687 2,027 3,323 4,918 6,998 0 25,887
Short-term borrowings 7,089 0 0 0 0 0 0 7,089
Long-term borrowings 38 76 114 227 1,506 7,158 7,045 16,164
-----------------------------------------------------------------------------------
Total $ 44,436 $ 14,121 $22,671 $32,557 $35,193 $ 46,008 $ 90,774 $285,760
Period gap $ 53,623 $ (1,503) $(6,549) $ 1,688 $ 9,609 $ 44,835 $(68,952) $ 32,751
Cumulative gap $ 53,623 $ 52,120 $45,571 $47,259 $56,869 $ 101,703 $ 32,751
Cumulative gap as a % of
interest earning assets
at December 31, 2002 16.8 16.4 14.3 14.8 17.9 31.9 10.3
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Codorus Valley's Consolidated Financial Statements and the Notes thereto, in the
2002 Annual Report to Stockholders, are incorporated by reference in response to
this item and are included on pages 2 through 21 of Exhibit 13. Table 13-Summary
of Quarterly Financial Data included in Management's Discussion and Analysis of
Consolidated Financial Condition and Results of Operations, in the 2002 Annual
Report to Stockholders, is incorporated by reference in response to
supplementary financial data and is included on page 38 of Exhibit 13.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On June 12, 2001, the boards of directors of Codorus Valley and PeoplesBank
approved a resolution, based on recommendations by management and the audit
committee of Codorus Valley, to engage Beard Miller Company LLP as Codorus
Valley's independent accountant. Beard Miller Company LLP replaced Ernst & Young
LLP (Ernst & Young), the prior independent accountant.
Ernst & Young's report on Codorus Valley's consolidated financial statements for
2000 contained no adverse opinion or disclaimer of opinion or qualification as
to uncertainty, audit scope or accounting principles. During the fiscal year
2000 and interim periods, there were no disagreements or reportable events
relating to any matter of accounting principles or practices, financial
statement disclosure or
13
auditing scope or procedure, which Ernst & Young would have referred to in
connection with their report if the disagreement was not resolved to their
satisfaction. Codorus Valley acknowledges that disagreements required to be
reported in response to the preceding sentence include both those resolved to
Ernst & Young's satisfaction and those not resolved to Ernst & Young's
satisfaction. Codorus Valley further acknowledges that disagreements
contemplated by this rule are those, which occurred at the decision-making
level, i.e., between Codorus Valley personnel responsible for the presentation
of its financial statements and Ernst & Young personnel responsible for
rendering its report. There have been no reportable events within the meaning of
Item 304 of Regulation S-K.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS, CODORUS VALLEY BANCORP, INC.
Information appearing in the Proxy Statement relating to the 2003 Annual Meeting
of Stockholders to be held May 20, 2003 (Proxy Statement), under the captions
"Information as to Nominees and Directors" and "Board of Directors and Executive
Officers" is incorporated by reference in response to this item. Information
regarding Section 16(a) Beneficial Ownership Reporting Compliance follows.
Section 16(a) of the Securities Exchange Act of 1934, requires that the
corporation's officers and directors, and persons who own more than 10% of the
registered class of the corporation's equity securities, file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than 10% shareholders are required by SEC
regulation to furnish the corporation with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of Forms 3, 4 and 5 and amendments
thereto received by it, or written representations from certain reporting
persons that no Form 5 was required for that reporting person, the corporation
believes that during the period from January 1, 2002 through December 31, 2002,
its officers and directors were in compliance with all filing requirements
applicable to them.
ITEM 11: EXECUTIVE COMPENSATION
Information appearing in the Proxy Statement, under the captions "Executive
Officers' Compensation," "Board of Directors Report on Executive Compensation"
and "Performance Graph" is incorporated by reference in response to this item.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information appearing in the Proxy Statement, under the caption "Beneficial
Ownership of Codorus Valley Bancorp, Inc.'s Stock Owned by Principal Owners and
Management" and "Equity Compensation Plan Information" is incorporated by
reference in response to this item.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information appearing in the Proxy Statement, under the caption "Certain
Relationships and Related Transactions," is incorporated by reference in
response to this item.
ITEM 14: CONTROLS AND PROCEDURES
Codorus Valley maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the company files or
submits under the Securities Exchange Act of 1934 is
14
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed within 90 days of
the filing date of this report, the chief executive and chief financial officers
of Codorus Valley concluded that Codorus Valley's disclosure controls and
procedures were adequate.
A summary of critical accounting policies can be found in Note 1 to the
consolidated financial statements beginning on page 6 of the Annual Report to
Stockholders (Exhibit 13). Codorus Valley made no significant changes in its
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of the controls by the chief
executive and chief financial officers.
PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Form 10-K report.
1. Financial Statements
The following consolidated statements of Codorus Valley Bancorp,
Inc. are included by reference in Part II, Item 8 hereof:
Report of Independent Auditors
Consolidated Statements of Financial Condition
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Stockholders' Equity
Notes to Consolidated Financial Statements
2. Financial Statement Schedules
Required financial statement schedules are omitted. This
information is either not applicable, not required or is shown in
the respective financial statements or in the notes thereto.
3. Exhibits filed as part of 10-K pursuant to Item 601 of Regulation
S-K.
Exhibit
Number Description of Exhibit
3(i) Articles of Incorporation (Incorporated by
reference to Exhibit 3(i) to Current Report on
Form 8-K, filed with the Commission on March 29,
2001.)
3(ii) By-laws (Incorporated by reference to Exhibit 3(ii)
to Current Report on Form 8-K, filed with the
Commission on March 29, 2001.)
4 Rights Agreement Dated as of November 4, 1995
(Incorporated by reference to Current Report on Form
8-K, filed with the Commission on March 29, 2001.)
10.1 1996 Stock Incentive Plan (Incorporated by reference
to Exhibit 99 of Registration Statement No. 333-9277
on Form S-8, filed with the Commission on July 31,
1996.)
15
10.2 Amendment to the Employment Agreement by and among
PeoplesBank, A Codorus Valley Company, Codorus Valley
Bancorp, Inc. and Larry J. Miller dated October 1,
1997, including Executive Employment Agreement dated
January 1, 1993 between Codorus Valley Bancorp, Inc.,
Peoples Bank of Glen Rock and Larry J. Miller.
(Incorporated by reference to Exhibit 10.1 to
Registrant's current Report on Form 8-K, dated and
filed with the Commission on March 20, 2003.)
10.3 Change of Control Agreement between PeoplesBank, A
Codorus Valley Company, Codorus Valley Bancorp, Inc.
and Jann A. Weaver, dated October 1, 1997.
(Incorporated by reference to Exhibit 10.2 to the
Registrant's Current Report on Form 8-K, dated and
filed with the Commission on March 20, 2003.)
10.4 Change of Control Agreement between PeoplesBank, A
Codorus Valley Company, Codorus Valley Bancorp, Inc.
and Harry R. Swift, dated October 1, 1997.
(Incorporated by reference to Exhibit 10.3 to the
Registrant's Current Report on Form 8-K, filed with
the Commission on March 20, 2003.)
10.5 1998 Independent Directors Stock Option Plan
(Incorporated by reference to Exhibit 4.3 of
Registrant Statement No. 333-61851 on Form S-8, filed
with the Commission on August 19, 1998.)
10.6 2000 Stock Incentive Plan (Incorporated by reference
to Exhibit 4.3 of Registration Statement No.
333-40532 on Form S-8, filed with the Commission on
June 30, 2000.)
10.7 2001 Employee Stock Bonus Plan (Incorporated by
reference to Exhibit 99.1 of Registration Statement
No. 333-68410 on Form S-8, filed with the Commission
on August 27, 2001.)
11 Statement re: Computation of Earnings Per Share
(Incorporated by reference to Exhibit 13 hereof, 2002
Annual Report to Stockholders at Note 1 to the
Consolidated Financial Statements.)
13 Excerpts from the Annual Report to Stockholders for
fiscal year ended December 31, 2002.
16 Letter re: Change in Certifying Accountant
(Incorporated by reference to Exhibit 16.1 of Form
8-K/A filed with the Commission on June 25, 2001.)
21 List of subsidiaries of Codorus Valley Bancorp, Inc.
23.1 Consent of Beard Miller Company LLP, Independent
Auditors
23.2 Consent of Ernst & Young LLP, Independent Auditors
24 Power of Attorney
99 Report of Independent Auditors
16
(b) Reports on Form 8-K - None.
17
SIGNATURES
Under the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
authorized undersigned.
Codorus Valley Bancorp, Inc. (Registrant)
/s/ Larry J. Miller
- -------------------
Larry J. Miller, President Date: March 25, 2003
and Chief Executive Officer
Under 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 dated indicated.
Signature and Capacity
/s/ George A. Trout, DDS Chairman of the Board of 3/25/03
- ------------------------------- Directors and Director
George A. Trout, DDS
/s/ Larry J. Miller President, Chief Executive Officer 3/25/03
- ------------------------------- and Director
Larry J. Miller
(Principal Executive Officer)
/s/ Rodney L. Krebs Vice Chairman of the Board 3/25/03
- ------------------------------- of Directors and Director
Rodney L. Krebs
/s/ D. Reed Anderson Director 3/25/03
- -------------------------------
D. Reed Anderson, Esq.
/s/ M. Carol Druck Director 3/25/03
- -------------------------------
M. Carol Druck
/s/ MacGregor S. Jones Director 3/25/03
- -------------------------------
MacGregor S. Jones
/s/ Dallas L. Smith Director 3/25/03
- -------------------------------
Dallas L. Smith
_______________________________ Director 3/25/03
Donald H. Warner
/s/ Michael L. Waugh Director 3/25/03
- -------------------------------
Michael L. Waugh
/s/ Jann A. Weaver Treasurer and Assistant Secretary 3/25/03
- -------------------------------
Jann A. Weaver
(Principal Financial Officer)
18
SIGNATURES, continued
/s/ Harry R. Swift Vice President and Secretary 3/25/03
- -------------------------------
Harry R. Swift, Esq.
/s/ Diane E. Hill Vice President 3/25/03
- -------------------------------
Diane E. Hill
19
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Codorus Valley Bancorp, Inc.
(the "Company") on Form 10-K for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission (the "Report"), I, Larry J. Miller,
President and CEO, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company as of the dates and for the periods
expressed in the Report.
Date: March 25, 2003 /s/ Larry J. Miller
--------------------------------
Larry J. Miller
President and CEO
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Codorus Valley Bancorp, Inc.
(the "Company") on Form 10-K for the period ending December 31, 2002, as filed
with the Securities and Exchange Commission (the "Report"), I, Jann A. Weaver,
Treasurer and Assistant Secretary, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company as of the dates and for the periods
expressed in the Report.
Date: March 25, 2003 /s/ Jann A. Weaver
--------------------------------
Jann A. Weaver
Treasurer and Assistant Secretary
20
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Larry J. Miller, President and CEO, certify, that:
1. I have reviewed this annual report on Form 10-K of Codorus
Valley Bancorp, Inc.
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report.
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report.
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the design or
operation of the internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated
in this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: March 25, 2003 /s/ Larry J. Miller
----------------------------------
Larry J. Miller, President and CEO
21
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jann A. Weaver, Treasurer and Assistant Secretary, certify, that:
1. I have reviewed this annual report on Form 10-K of Codorus
Valley Bancorp, Inc.
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report.
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual report.
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(a) designed such disclosure controls and procedures to
ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the design or
operation of the internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial
data and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated
in this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: March 25, 2003 /s/ Jann A. Weaver
-----------------------------
Jann A. Weaver, Treasurer and
Assistant Secretary
22
EXHIBIT INDEX
Page # in
manually signed
Exhibit original
Number Description of Exhibit Form 10-K
- ------ ---------------------- ---------
3(i) Articles of Incorporation (Incorporated by reference to
Exhibit 3(i) to Current Report on Form 8-K, filed with the
Commission on March 29, 2001.)
3(ii) By-laws (Incorporated by reference to Exhibit 3(ii) to current
Report on Form 8-K, filed with the Commission on March 29,
2001.)
4 Rights Agreement Dated as of November 4, 1995 (Incorporated by
reference to Current Report on Form 8-K, filed with the
Commission on March 29, 2001.)
10.1 1996 Stock Incentive Plan (Incorporated by reference to
Exhibit 99 of Registration Statement No. 333-9277 on Form S-8,
filed with the Commission on July 31, 1996.)
10.2 Amendment to the Employment Agreement by and among
PeoplesBank, A Codorus Valley Company, Codorus Valley Bancorp,
Inc. and Larry J. Miller dated October 1, 1997, including
Executive Employment Agreement dated January 1, 1993 between
Codorus Valley Bancorp, Inc., Peoples Bank of Glen Rock and
Larry J. Miller. (Incorporated by reference to Exhibit 10.1 to
Registrant's Current Report on Form 8-K, dated and filed with
the Commission on March 20, 2003.)
10.3 Change of Control Agreement between PeoplesBank, A Codorus
Valley Company, Codorus Valley Bancorp, Inc. and Jann A.
Weaver, dated October 1, 1997. (Incorporated by reference to
Exhibit 10.2 to the Registrant's Current Report on Form 8-K,
filed with the Commission on March 20, 2003.)
10.4 Change of Control Agreement between PeoplesBank, A Codorus
Valley Company, Codorus Valley Bancorp, Inc. and Harry R.
Swift, dated October 1, 1997. (Incorporated by reference to
Exhibit 10.3 to the Registrant's Current Report on Form 8-K,
dated and filed with the Commission March 20, 2003.)
10.5 1998 Independent Directors Stock Option Plan (Incorporated by
reference to Exhibit 4.3 of Registration Statement No.
333-61851 on Form S-8, filed with the Commission on August 19,
1998.)
10.6 2000 Stock Incentive Plan (Incorporated by reference to
Exhibit 4.3 of Registration Statement No. 333-40532 on Form
S-8, filed with the Commission on June 30, 2000.)
23
10.7 2001 Employee Stock Bonus Plan (Incorporated by reference to
Exhibit 99.1 of Registration Statement No. 333-68410 on Form
S-8, filed with the Commission on August 27, 2001.)
11 Statement re: Computation of Earnings Per Share (Incorporated
by reference to Exhibit 13, 2002 Annual Report to Stockholders
at Note 1 to the Consolidated Financial Statements.) 33
13 Excerpts from the Annual Report to Stockholders for fiscal
year ended December 31, 2002. 25-64
16 Letter re: Change in Certifying Accountant (Incorporated by
reference to Exhibit 16.1 of Form 8-K/A filed with the Commission
on June 25, 2001.)
21 List of subsidiaries of the Registrant 65
23.1 Consent of Beard Miller Company LLP, Independent Auditors 66
23.2 Consent of Ernst & Young LLP, Independent Auditors 67
24 Power of Attorney 68
99 Report of Independent Auditors, Ernst & Young LLP 70
24