Codorus Valley Bancorp Inc (CVLY, Financial) filed Quarterly Report for the period ended 2009-09-30.
CODORUS VALLEY BANCORP, INC. is a bank holding company engaged in general banking business. Codorus Valley Bancorp Inc has a market cap of $24.3 million; its shares were traded at around $6 with and P/S ratio of 0.6. The dividend yield of Codorus Valley Bancorp Inc stocks is 2%. Codorus Valley Bancorp Inc had an annual average earning growth of 15.4% over the past 5 years.
The $247,000 increase in the provision for loan losses was due to a decline in loan quality as a result of the long-drawn economic recession, depressed real estate values and increased unemployment. A significant increase in the loan portfolio balance during the current period also required an increase in the provision. The $1,225,000 or 25 percent increase in noninterest expenses was due primarily to increases in personnel expense, Federal Deposit Insurance Corporation (FDIC) insurance premiums and foreclosed real estate expenses. The $455,000 or 17 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 $192,000 increase in FDIC insurance premiums was the result of an industry-wide increase in assessment rates and an increase in the volume of deposits upon which the assessment is based. The $224,000 increase in foreclosed real estate costs reflected an increase in the number of properties acquired in satisfaction of debts. Net interest income for the three-month period ended September 30, 2009, was $6,151,000, an increase of $1,017,000 or 19 percent above the third 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 3.22 percent for the third quarter of 2009, compared to 3.52 percent for the third quarter of 2008. Net interest margin is net interest income (tax equivalent basis) as a percentage of average earning assets. The $130,000 or 8 percent increase in noninterest income was due primarily to an increase in gains from a larger volume of sales of mortgages. An increase in income from bank owned life insurance, which reflected additional investment in 2008, also contributed to the increase in noninterest income. The $271,000 decrease in income tax was the result of a decrease in pretax income and an increase in tax exempt income.
The Corporation earned net income available to common shareholders of $1,620,000 or $0.40 per share ($0.40 diluted) for the nine-month period ended September 30, 2009, compared to $3,624,000 or $0.92 per share ($0.91 diluted), for the same period of 2008. The $2,004,000 or 55 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 $3,514,000 or 24 percent increase in noninterest expense was due primarily to an increase in operating expenses associated with expansion of the banking franchise, an increase in Federal Deposit Insurance Corporation (FDIC) deposit insurance premiums, and an increase in carrying costs and loss provisions associated with impaired loans and foreclosed real estate. During 2008, the Corporation added three full service financial centers to its banking franchise bringing the total number of financial centers to seventeen, fifteen located in Pennsylvania and two located in Maryland. Current period FDIC insurance premiums totaled $1,154,000, an increase of $916,000 or 385 percent above the nine-month period ended September 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. Carrying costs and loss provisions associated with impaired loans and foreclosed real estate increased $405,000 above the prior year, which reflected increases in the volume of impaired loans and foreclosed real estate. 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 nine-month period ended September 30, 2009, was $16,939,000, an increase of $1,262,000 or 8 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 3.10 percent for the first nine months of 2009, compared to 3.75 percent for the same period in 2008. Total noninterest income was $5,653,000 for the current nine-month period, an increase of $452,000 or 9 percent above 2008, as adjusted to exclude securities gains. The increase in noninterest income was primarily attributable to increases in gains from the sale of mortgages and income from bank owned life insurance. The provision for income tax for the current period was a $298,000 credit (benefit), compared to a $1,112,000 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.
Interest expense for the nine-month period ended September 30, 2009 totaled $12,695,000, an increase of $933,000 or 8 percent above 2008 due primarily to an increase in the average volume of interest bearing liabilities. Total interest bearing liabilities averaged $697 million at an average rate of 2.43 percent for the current period, compared to $517 million and 3.04 percent, respectively, for the first nine months of 2008. The $180 million or 35 percent increase in interest bearing liabilities was the result of increases in the average volume of time deposits, money market deposits and long-term debt. Federally insured bank deposits continue to provide a safe haven to our clients who are increasingly concerned about the economic recession, volatility in the capital markets and rising unemployment. The addition of three financial centers in 2008 and competitive pricing also contributed to the increase in deposit volumes. The increase in long-term debt provided the financing for a leverage strategy, which is discussed in the Long-term Debt section of this report.
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CODORUS VALLEY BANCORP, INC. is a bank holding company engaged in general banking business. Codorus Valley Bancorp Inc has a market cap of $24.3 million; its shares were traded at around $6 with and P/S ratio of 0.6. The dividend yield of Codorus Valley Bancorp Inc stocks is 2%. 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 $831,000 or $0.21 per share ($0.21 diluted) for the three-month period ended September 30, 2009, compared to $1,130,000 or $0.28 per share ($0.28 diluted), for the third quarter of 2008. The $299,000 or 26 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 $247,000 increase in the provision for loan losses was due to a decline in loan quality as a result of the long-drawn economic recession, depressed real estate values and increased unemployment. A significant increase in the loan portfolio balance during the current period also required an increase in the provision. The $1,225,000 or 25 percent increase in noninterest expenses was due primarily to increases in personnel expense, Federal Deposit Insurance Corporation (FDIC) insurance premiums and foreclosed real estate expenses. The $455,000 or 17 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 $192,000 increase in FDIC insurance premiums was the result of an industry-wide increase in assessment rates and an increase in the volume of deposits upon which the assessment is based. The $224,000 increase in foreclosed real estate costs reflected an increase in the number of properties acquired in satisfaction of debts. Net interest income for the three-month period ended September 30, 2009, was $6,151,000, an increase of $1,017,000 or 19 percent above the third 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 3.22 percent for the third quarter of 2009, compared to 3.52 percent for the third quarter of 2008. Net interest margin is net interest income (tax equivalent basis) as a percentage of average earning assets. The $130,000 or 8 percent increase in noninterest income was due primarily to an increase in gains from a larger volume of sales of mortgages. An increase in income from bank owned life insurance, which reflected additional investment in 2008, also contributed to the increase in noninterest income. The $271,000 decrease in income tax was the result of a decrease in pretax income and an increase in tax exempt income.
The Corporation earned net income available to common shareholders of $1,620,000 or $0.40 per share ($0.40 diluted) for the nine-month period ended September 30, 2009, compared to $3,624,000 or $0.92 per share ($0.91 diluted), for the same period of 2008. The $2,004,000 or 55 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 $3,514,000 or 24 percent increase in noninterest expense was due primarily to an increase in operating expenses associated with expansion of the banking franchise, an increase in Federal Deposit Insurance Corporation (FDIC) deposit insurance premiums, and an increase in carrying costs and loss provisions associated with impaired loans and foreclosed real estate. During 2008, the Corporation added three full service financial centers to its banking franchise bringing the total number of financial centers to seventeen, fifteen located in Pennsylvania and two located in Maryland. Current period FDIC insurance premiums totaled $1,154,000, an increase of $916,000 or 385 percent above the nine-month period ended September 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. Carrying costs and loss provisions associated with impaired loans and foreclosed real estate increased $405,000 above the prior year, which reflected increases in the volume of impaired loans and foreclosed real estate. 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 nine-month period ended September 30, 2009, was $16,939,000, an increase of $1,262,000 or 8 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 3.10 percent for the first nine months of 2009, compared to 3.75 percent for the same period in 2008. Total noninterest income was $5,653,000 for the current nine-month period, an increase of $452,000 or 9 percent above 2008, as adjusted to exclude securities gains. The increase in noninterest income was primarily attributable to increases in gains from the sale of mortgages and income from bank owned life insurance. The provision for income tax for the current period was a $298,000 credit (benefit), compared to a $1,112,000 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.
Interest expense for the nine-month period ended September 30, 2009 totaled $12,695,000, an increase of $933,000 or 8 percent above 2008 due primarily to an increase in the average volume of interest bearing liabilities. Total interest bearing liabilities averaged $697 million at an average rate of 2.43 percent for the current period, compared to $517 million and 3.04 percent, respectively, for the first nine months of 2008. The $180 million or 35 percent increase in interest bearing liabilities was the result of increases in the average volume of time deposits, money market deposits and long-term debt. Federally insured bank deposits continue to provide a safe haven to our clients who are increasingly concerned about the economic recession, volatility in the capital markets and rising unemployment. The addition of three financial centers in 2008 and competitive pricing also contributed to the increase in deposit volumes. The increase in long-term debt provided the financing for a leverage strategy, which is discussed in the Long-term Debt section of this report.
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