EXHIBIT 99.1
CODORUS VALLEY BANCORP, INC. REPORTS INCREASED EARNINGS AND
DECLARATION OF A CASH DIVIDEND
FOR IMMEDIATE RELEASE -- York, Pennsylvania (July 17, 2007) -- Codorus
Valley Bancorp, Inc. (Nasdaq: CVLY), the parent company of PeoplesBank, today
announced earnings of $1,627,000 or $.44 per share ($.43 diluted) for the
quarter ended June 30, 2007. This represents a $204,000 or 14% increase over the
$1,423,000 or $.39 per share ($.38 diluted) for the same quarter of 2006.
Current quarter earnings were favorably impacted by an increase in net interest
income which resulted from an increase in interest earning assets, principally
business loans, and increased business loan fees.
For the first six months of 2007, earnings were $3,396,000 or $.92 per
share ($.90 diluted), compared to $2,784,000 or $.76 per share ($.74 diluted)
for 2006. The $612,000 or 22% increase in current year-to-date earnings was
positively impacted by an $839,000 pre-tax ($554,000 after-tax) first quarter
recovery of loan losses that were incurred by PeoplesBank during 2002-2003. Due
to the adequacy of the Company's allowance for loan losses the full amount of
the recovery was recorded as a reduction to the loan loss provision.
In spite of higher funding costs and a decrease in net interest margin
(3.84% vs. 4.17%), attributable to a flat US treasury yield curve and
competitive pricing pressures, the company increased net interest income by 6%
due largely to an increase in interest earning assets. The positive effect on
net income for 2007 from the reduction in loan loss provision and increase in
interest earning assets more than offset an increase in noninterest expense.
Noninterest expense increased 13% for the first six months of 2007 due
primarily to increased personnel costs, caused by the timing of performance
incentives and staff additions associated with normal business growth, and the
recognition of an $185,000 ($122,000 after-tax) prepayment penalty on the early
pay-down of a $2 million Federal Home Loan Bank advance. The Company paid down
the advance, which had an above market interest rate, to reduce interest expense
in future periods.
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On June 30, 2007, total assets were approximately $582 million,
representing a $65 million or 13% increase above June 30, 2006. Asset growth
occurred primarily in business loans and investment securities, which were
funded by strong deposit growth. Additional detailed financial information is
provided in the Financial Highlights section of this Press Announcement.
Codorus Valley recently announced that its Board of Directors declared a
regular quarterly cash dividend of $.135 per share, payable on or before August
14, 2007, to shareholders of record July 24, 2007.
Codorus Valley Bancorp, Inc. is a financial services holding company
headquartered at the Codorus Valley Corporate Center, 105 Leader Heights Road,
York, Pennsylvania. Codorus Valley primarily operates through its financial
services subsidiary, PeoplesBank, a Codorus Valley Company. PeoplesBank provides
a full range of business and consumer banking services through fourteen
financial centers located throughout York County, Pennsylvania and a loan
production office in Towson, Maryland. Mortgage banking, wealth management, and
real estate settlement services are also offered by the company. Additional
information is available on the bank's website at www.peoplesbanknet.com.
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.
QUESTIONS OR COMMENTS CONCERNING THIS PRESS ANNOUNCEMENT SHOULD BE DIRECTED TO
THE FOLLOWING:
Larry J. Miller Jann Allen Weaver
Vice-Chairman, President, and CEO Treasurer
Codorus Valley Bancorp, Inc. Codorus Valley Bancorp, Inc.
717-747-1500 717-747-1502
888-846-1970 888-846-1970
lmiller@peoplesbanknet.com jweaver@peoplesbanknet.com
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Condensed Consolidated Statements of Income
(in thousands of dollars, except per share data)
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2007 2006 2007 2006
------ ------ ------- -------
Interest income $9,838 $7,949 $19,044 $15,737
Interest expense 4,748 3,504 9,329 6,596
------ ------ ------- -------
Net interest income 5,090 4,445 9,715 9,141
Provision for loan losses 35 145 (884) 355
Noninterest income 1,375 1,416 2,602 2,611
Loss on sale of securities (7) 0 (7) 0
Gain on sale of mortgages 63 61 157 149
Noninterest expense 4,300 3,842 8,756 7,763
------ ------ ------- -------
Income before income taxes 2,186 1,935 4,595 3,783
Income taxes 559 512 1,199 999
------ ------ ------- -------
Net income $1,627 $1,423 $ 3,396 $ 2,784
====== ====== ======= =======
Basic earnings per share $ 0.44 $ 0.39 $ 0.92 $ 0.76
Diluted earnings per share $ 0.43 $ 0.38 $ 0.90 $ 0.74
Condensed Consolidated Statements of Financial Condition
(in thousands of dollars)
June 30, December 31, June 30,
2007 2006 2006
-------- ------------ --------
Cash and short term investments $ 36,081 $ 35,372 $ 32,212
Investment securities 83,350 80,926 68,868
Loans 437,158 407,260 390,601
Allowance for loan losses (3,098) (3,126) (2,925)
Premises and equipment, net 10,203 10,495 10,889
Other assets 17,992 17,285 16,876
-------- -------- --------
Total assets $581,686 $548,212 $516,521
======== ======== ========
Deposits $491,138 $456,645 $427,072
Borrowed funds 41,224 45,339 46,142
Other liabilities 4,465 3,442 3,112
Shareholders' equity 44,859 42,786 40,195
-------- -------- --------
Total liabilities and
shareholders' equity $581,686 $548,212 $516,521
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Selected Financial Data
Quarterly Year-to-Date
----------------------------------------------- June 30,
2007 2007 2006 2006 2006 ---------------
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 2007 2006
------- ------- ------- ------- ------- ------ ------
Earnings and Per Share Data (1)
(in thousands, except per share data)
Net income $1,627 $1,769 $1,131 $1,407 $1,423 $3,396 $2,784
Basic earnings per share $ 0.44 $ 0.48 $ 0.31 $ 0.38 $ 0.39 $ 0.92 $ 0.76
Diluted earnings per share $ 0.43 $ 0.47 $ 0.30 $ 0.38 $ 0.38 $ 0.90 $ 0.74
Cash dividends per share $0.129 $0.129 $0.122 $0.118 $0.112 $0.258 $0.224
Book value per share $12.18 $12.04 $11.63 $11.46 $10.99 $12.18 $10.99
Average shares outstanding 3,683 3,678 3,676 3,661 3,659 3,680 3,659
Average diluted shares outstanding 3,774 3,768 3,767 3,745 3,743 3,771 3,743
Performance Ratios (%)
Return on average assets 1.13 1.28 0.85 1.08 1.15 1.20 1.14
Return on average equity 14.45 16.13 10.56 13.63 14.17 15.28 13.98
Return on average realized equity (2) 14.38 16.03 10.50 13.42 14.02 15.19 13.79
Net interest margin (3) 3.91 3.76 3.77 3.88 4.01 3.84 4.17
Efficiency ratio (4) 63.7 72.3 66.8 63.0 63.3 67.8 63.8
Asset Quality Ratios (%)
Net loan charge-offs (recoveries) to
average loans (5) (0.02) (0.82) (0.01) 0.10 (0.02) (0.41) (0.02)
Allowance for losses to total loans 0.71 0.71 0.77 0.75 0.75 0.71 0.75
Nonperforming assets to total loans
and other real estate 1.72 0.99 1.09 1.38 1.44 1.72 1.44
Capital Ratios (%)
Average equity to average assets 7.82 7.91 8.00 7.96 8.12 7.86 8.16
Tier 1 leverage capital ratio 9.58 9.73 9.83 9.98 10.25 9.58 10.25
Tier 1 risk-based capital ratio 11.77 11.86 11.99 12.11 12.15 11.77 12.15
Total risk-based capital ratio 12.43 12.53 12.71 12.81 12.85 12.43 12.85
(1) per share amounts and shares outstanding were adjusted for stock dividends
(2) excludes accumulated other comprehensive income (loss), principally
unrealized gains (losses) on investment securities
(3) net interest income (tax-equivalent) as a percentage of average earning
assets
(4) noninterest expense as a percentage of net interest income and noninterest
income (tax-equivalent)
(5) quarterly and year-to-date net loan charge-offs (recoveries) are annualized
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