Codorus Valley Bancorp Inc (CVLY, Financial) filed Quarterly Report for the period ended 2009-06-30.
CODORUS VALLEY BANCORP INC. is a bank holding company engaged in general banking business. Codorus Valley Bancorp Inc has a market cap of $26.2 million; its shares were traded at around $6.5001 with and P/S ratio of 0.6. The dividend yield of Codorus Valley Bancorp Inc stocks is 1.8%. Codorus Valley Bancorp Inc had an annual average earning growth of 15.4% over the past 5 years.
The $729,000 or 80 percent increase in the provision for loan losses was due to a decline in loan quality as a result of the long-drawn economic recession, declining real estate values and increased unemployment. A significant increase in the loan portfolio balance during the current period also contributed to the increase in the provision. The $1,278,000 or 26 percent increase in noninterest expenses was due primarily to increases in personnel expense and Federal Deposit Insurance Corporation (FDIC) insurance premiums. The $482,000 or 18 percent increase in personnel expense resulted from staff additions associated with planned business growth, particularly expansion of the banking franchise in the prior year. The $550,000 or 573 percent increase in FDIC insurance premiums was the result of an industry-wide increase in assessment rates, an increase in the volume of deposits upon which the assessment is based, and a special assessment totaling $382,000 (or $252,000 after tax). Effective June 30, 2009, the FDIC imposed a special assessment on all commercial financial institutions, based on 5 basis points of total assets less Tier 1 capital. Net interest income for the three-month period ended June 30, 2009, was $5,692,000, an increase of $590,000 or 12 percent above the second quarter of 2008 due primarily to an increase in the average volume of earning assets, principally business loans and investment securities. The net interest margin was 3.09 percent for the second quarter of 2009, compared to 3.69 percent for the second quarter of 2008. Net interest margin is net interest income (tax equivalent basis) as a percentage of average earning assets. The $238,000 or 13 percent increase in noninterest income was due primarily to an increase in gains from a larger volume of sales of mortgages. The $501,000 decrease in income tax was the result of a decrease in pretax income and an increase in tax exempt income.
For the second quarter of 2009, total interest expense increased $496,000 or 13 percent above the second quarter of 2008 due to a larger volume of interest bearing liabilities. Total interest bearing liabilities averaged $706 million at an average rate of 2.43 percent for the current quarter, compared to $513 million and 2.96 percent, respectively, for the second quarter of 2008. The $193 million or 38 percent increase in average interest bearing liabilities was the result of strong growth in the average volume of time deposits and money market deposits. The increase in the average volume of long-term debt, which provided the financing for a leverage strategy described elsewhere in this report, also contributed to the increase in interest bearing liabilities. In April 2009, PeoplesBank paid off a $15 million/2% Federal Home Loan Bank of Pittsburgh advance prior to its August 2010 maturity to reduce excess liquidity and interest expense. The early payoff resulted in a $24,000 prepayment penalty that was recognized in the current period as a miscellaneous expense.
The Corporation earned net income available to common shareholders of $789,000 or $0.20 per share ($0.20 diluted) for the six-month period ended June 30, 2009, compared to $2,494,000 or $0.63 per share ($0.63 diluted), for the same period of 2008. The $1,705,000 or 68 percent decrease in net income available to common shareholders was primarily the result of increases in the provision for loan losses, noninterest expenses and preferred dividends, which offset increases in net interest income and noninterest income and a decrease in income taxes.
The $2,289,000 or 24 percent increase in noninterest expense was due primarily to an increase in operating expenses associated with expansion of the banking franchise and an increase in Federal Deposit Insurance Corporation (FDIC) deposit insurance premiums. During 2008, the Corporation added three full service financial centers to its banking franchise bringing the total number of financial centers to 17, 15 located in Pennsylvania and 2 located in Maryland. Current period FDIC insurance premiums totaled $876,000, an increase of $724,000 or 476 percent above the six-month period ended June 30, 2008. Of the total insurance premiums, $382,000 (or $252,000 after tax) pertained to a special FDIC assessment effective June 30, 2009, which was imposed on all commercial financial institutions. The remaining increase in deposit insurance premiums was caused by an industry-wide increase in assessment rates by the FDIC and an increase in the volume of deposits upon which the assessment is based. A $242,000 non-recurring cost of restructuring employee benefit plans in the current period also contributed to the increase in noninterest expense. Restructuring the benefit plans resulted in a federal income tax benefit so that the overall transaction had an insignificant impact on net income.
Net interest income for the six-month period ended June 30, 2009, was $10,788,000, an increase of $245,000 or 2 percent above the same period in 2008 due to a larger volume of earning assets, principally business loans and investment securities. The net interest margin was 3.04 percent for the first six months of 2009, compared to 3.88 percent for the same period in 2008. Total noninterest income was $3,905,000 for the current six-month period, an increase of $322,000 or 10 percent above 2008, as adjusted to exclude securities gains. The increase in noninterest income was attributable to an increase in gains from the sale of mortgages. The provision for income tax for the current period was a $373,000 credit (benefit), compared to a $766,000 expense for the same period in 2008. The decrease in income tax was the result of a decrease in pretax income, an increase in tax-exempt income and the recognition of a non-recurring $242,000 tax benefit associated with restructuring employee benefit plans.
Read the The complete Report
CODORUS VALLEY BANCORP INC. is a bank holding company engaged in general banking business. Codorus Valley Bancorp Inc has a market cap of $26.2 million; its shares were traded at around $6.5001 with and P/S ratio of 0.6. The dividend yield of Codorus Valley Bancorp Inc stocks is 1.8%. Codorus Valley Bancorp Inc had an annual average earning growth of 15.4% over the past 5 years.
Highlight of Business Operations:
The Corporation earned net income available to common shareholders of $49,000 or $0.01 per share ($0.01 diluted) for the three-month period ended June 30, 2009, compared to $971,000 or $0.25 per share ($0.24 diluted), for the second quarter of 2008. The $922,000 or 95 percent decrease in net income available to common shareholders was attributable to increases in the provision for loan losses, noninterest expenses and preferred dividends, which offset increases in net interest income and noninterest income and a decrease in income taxes.The $729,000 or 80 percent increase in the provision for loan losses was due to a decline in loan quality as a result of the long-drawn economic recession, declining real estate values and increased unemployment. A significant increase in the loan portfolio balance during the current period also contributed to the increase in the provision. The $1,278,000 or 26 percent increase in noninterest expenses was due primarily to increases in personnel expense and Federal Deposit Insurance Corporation (FDIC) insurance premiums. The $482,000 or 18 percent increase in personnel expense resulted from staff additions associated with planned business growth, particularly expansion of the banking franchise in the prior year. The $550,000 or 573 percent increase in FDIC insurance premiums was the result of an industry-wide increase in assessment rates, an increase in the volume of deposits upon which the assessment is based, and a special assessment totaling $382,000 (or $252,000 after tax). Effective June 30, 2009, the FDIC imposed a special assessment on all commercial financial institutions, based on 5 basis points of total assets less Tier 1 capital. Net interest income for the three-month period ended June 30, 2009, was $5,692,000, an increase of $590,000 or 12 percent above the second quarter of 2008 due primarily to an increase in the average volume of earning assets, principally business loans and investment securities. The net interest margin was 3.09 percent for the second quarter of 2009, compared to 3.69 percent for the second quarter of 2008. Net interest margin is net interest income (tax equivalent basis) as a percentage of average earning assets. The $238,000 or 13 percent increase in noninterest income was due primarily to an increase in gains from a larger volume of sales of mortgages. The $501,000 decrease in income tax was the result of a decrease in pretax income and an increase in tax exempt income.
For the second quarter of 2009, total interest expense increased $496,000 or 13 percent above the second quarter of 2008 due to a larger volume of interest bearing liabilities. Total interest bearing liabilities averaged $706 million at an average rate of 2.43 percent for the current quarter, compared to $513 million and 2.96 percent, respectively, for the second quarter of 2008. The $193 million or 38 percent increase in average interest bearing liabilities was the result of strong growth in the average volume of time deposits and money market deposits. The increase in the average volume of long-term debt, which provided the financing for a leverage strategy described elsewhere in this report, also contributed to the increase in interest bearing liabilities. In April 2009, PeoplesBank paid off a $15 million/2% Federal Home Loan Bank of Pittsburgh advance prior to its August 2010 maturity to reduce excess liquidity and interest expense. The early payoff resulted in a $24,000 prepayment penalty that was recognized in the current period as a miscellaneous expense.
The Corporation earned net income available to common shareholders of $789,000 or $0.20 per share ($0.20 diluted) for the six-month period ended June 30, 2009, compared to $2,494,000 or $0.63 per share ($0.63 diluted), for the same period of 2008. The $1,705,000 or 68 percent decrease in net income available to common shareholders was primarily the result of increases in the provision for loan losses, noninterest expenses and preferred dividends, which offset increases in net interest income and noninterest income and a decrease in income taxes.
The $2,289,000 or 24 percent increase in noninterest expense was due primarily to an increase in operating expenses associated with expansion of the banking franchise and an increase in Federal Deposit Insurance Corporation (FDIC) deposit insurance premiums. During 2008, the Corporation added three full service financial centers to its banking franchise bringing the total number of financial centers to 17, 15 located in Pennsylvania and 2 located in Maryland. Current period FDIC insurance premiums totaled $876,000, an increase of $724,000 or 476 percent above the six-month period ended June 30, 2008. Of the total insurance premiums, $382,000 (or $252,000 after tax) pertained to a special FDIC assessment effective June 30, 2009, which was imposed on all commercial financial institutions. The remaining increase in deposit insurance premiums was caused by an industry-wide increase in assessment rates by the FDIC and an increase in the volume of deposits upon which the assessment is based. A $242,000 non-recurring cost of restructuring employee benefit plans in the current period also contributed to the increase in noninterest expense. Restructuring the benefit plans resulted in a federal income tax benefit so that the overall transaction had an insignificant impact on net income.
Net interest income for the six-month period ended June 30, 2009, was $10,788,000, an increase of $245,000 or 2 percent above the same period in 2008 due to a larger volume of earning assets, principally business loans and investment securities. The net interest margin was 3.04 percent for the first six months of 2009, compared to 3.88 percent for the same period in 2008. Total noninterest income was $3,905,000 for the current six-month period, an increase of $322,000 or 10 percent above 2008, as adjusted to exclude securities gains. The increase in noninterest income was attributable to an increase in gains from the sale of mortgages. The provision for income tax for the current period was a $373,000 credit (benefit), compared to a $766,000 expense for the same period in 2008. The decrease in income tax was the result of a decrease in pretax income, an increase in tax-exempt income and the recognition of a non-recurring $242,000 tax benefit associated with restructuring employee benefit plans.
Read the The complete Report
