Codorus Valley Bancorp, Inc. (“Codorus Valley”, or the
“Corporation”) (NASDAQ: CVLY), parent company of PeoplesBank, A
Codorus Valley Company (“PeoplesBank”, or the “Bank”), today
reported net income of $5.5 million or $0.57 per diluted common
share, for the quarter ended December 31, 2023. This compares to
net income of $7.9 million or $0.83 per diluted common share, for
the quarter ended December 31, 2022, representing a decrease of
$2.4 million or 30.4 percent, and compares to net income of $5.9
million or $0.61 per diluted common share for the third quarter of
2023, representing a decrease of $400,000 or 7.8
percent. Excluding the impact of $956,000 in
merger-related expenses, net income and diluted earnings per share,
respectively, were $6.2 million(1) and $0.64(1) for the quarter
ended December 31, 2023. For the year ended December 31, 2023, net
income was $25.0 million or $2.59 per diluted share, compared to
$20.1 million or $2.10 per diluted share, for the year ended
December 31, 2022, representing an increase of $4.9 million or 24.3
percent. Excluding the impact of $956,000 in merger-related
expenses, net income and diluted earnings per share, respectively,
were $25.7 million(1) and $2.67(1) for the year ended December 31,
2023.
(1) Net income excluding merger-related expenses, diluted
earnings per share excluding merger-related expenses, tangible book
value per share and tangible book value per share without
accumulated other comprehensive loss are non-GAAP financial
measures. Please see Financial Highlights for disclosure and
reconciliation of non-GAAP financial measures.
"Our robust performance in the fourth quarter is
a testament to the dedicated efforts of our team over the past
several years, resulting in Codorus Valley achieving its highest
annual earnings on record. We attribute this success to our
unwavering commitment to enhancing the client experience, fostering
Associate engagement, and making a positive impact on the
community, while also focusing on creating shareholder value.
Despite the challenges faced by the banking industry in 2023, our
steady loan production and prudent utilization of customer deposits
have allowed us to maintain a strong net interest margin and
mitigate the effects of margin compression. The continued
improvement in our capital ratios positions us favorably for the
upcoming exciting phase in our growth cycle. We are eager to
leverage the momentum we’ve generated when we join forces with
Orrstown Financial Services later this year to establish the
premier regional community bank serving South Central Pennsylvania,
Central Maryland and the Greater Baltimore area," stated Craig L.
Kauffman, President, and Chief Executive Officer.
REVIEW OF RESULTS
Balance Sheet
Loans
Loans increased $72.8 million from December 31,
2022 to December 31, 2023, an annualized growth rate of 4.5
percent. Nonperforming assets decreased $7.5 million, or 65.1
percent to $4.0 million from December 31, 2022 to December 31,
2023.
Investment Securities
Investment Securities increased $4.3 million to
$349.8 million at December 31, 2023 compared to $345.5 million at
December 31, 2022. The Bank sold $4.7 million of investment
securities, realizing a net loss of $388,000 during the first
quarter of 2023, improving the security portfolio yield by three
basis points. The tax-equivalent yield on securities for the three
months ended December 31, 2023 was 2.84 percent, compared to 2.55
percent for the three months ended December 31, 2022 and 2.75
percent for the three months ended September 30, 2023. The
unrealized loss on the securities portfolio was $40.6 million at
December 31, 2023, compared to $45.5 million at December 31, 2022
and $56.0 million at September 30, 2023.
Borrowings
FHLB advances and other short-term borrowings
increased $45.0 million to $56.5 million at December 31, 2023
compared to $11.6 million at December 31, 2022, as the Bank added
liquidity to the balance sheet during the recent industry turmoil
to provide an added measure of liquidity in the event the Bank were
to experience outsized deposit withdrawals. FHLB
advances and other short-term borrowings increased $17.4 million or
44.6 percent from $39.1 million at September 30, 2023.
Deposits
Total Deposits decreased $69.9 million, or 3.6
percent from December 31, 2022 to December 31, 2023, ending the
period at $1.87 billion. From year-end 2022 to December
31, 2023, noninterest-bearing demand accounts decreased $84.6
million or 18.2 percent, and interest-bearing demand accounts
increased $14.7 million or 1.0 percent. During that same period,
savings accounts decreased $30.1 million or 18.7 percent and money
market accounts decreased $2.5 million or less than 1.0 percent.
Offsetting the decreases, certificates of deposit increased by
$69.9 million or 18.3 percent. As a result of the change in deposit
mix, the average cost of interest-bearing deposits increased to
2.59 percent for the quarter ended December 31, 2023, compared to
0.90 percent for the quarter ended December 31, 2022 and 2.31
percent for the quarter ended September 30, 2023. For the year
ended December 31, 2023, the average cost of interest-bearing
deposits increased to 2.08 percent, compared to 0.47 percent for
the year ended December 31, 2022. We anticipate downward pressure
on net interest margin to continue into early 2024 due to the cost
of deposits and the slope of the interest rate curve.
Income Statement
The Corporation’s net interest income for the
three months ended December 31, 2023 was $19.2 million, a decrease
of 10.7 percent when compared to $21.5 million for the three months
ended December 31, 2022 and a decrease of 1.1 percent when compared
to $19.4 million for the three months ended September 30, 2023. The
Corporation’s tax-equivalent net interest margin (“NIM”) was 3.61
percent for the three months ended December 31, 2023, compared to
3.98 percent for the same period in 2022 and 3.64 percent for the
quarter ended September 30, 2023. Net interest income for the year
ended December 31, 2023 was $79.0 million, an increase of 5.0
percent when compared to $75.3 million for the year ended December
31, 2022. The Corporation’s tax-equivalent NIM was 3.76 percent for
the year ended December 31, 2023, compared to 3.39 percent for the
year ended December 31, 2022.
The Corporation’s provision for credit losses,
which includes provision for credit losses on unfunded commitments
in 2023, for the three months ended December 31, 2023 was a
reversal of $767,000 compared to a reversal of the provision for
loan losses of $544,000 for the three months ended December 31,
2022 and a provision for credit losses of $251,000 for the quarter
ended September 30, 2023. The Corporation’s
nonperforming assets ratio was 0.23 percent at December 31, 2023, a
67.1 percent decrease from the nonperforming assets ratio of 0.70
percent at December 31, 2022. On January 1, 2023, the Corporation
adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic
326) and now measures estimated credit losses on financial
instruments at the time of origination using the current expected
credit loss (“CECL”) methodology. At adoption of the CECL
methodology in the first quarter of 2023, the allowance for credit
losses increased $2.8 million and the net impact to retained
earnings was $2.1 million.
Noninterest income for the three months ended
December 31, 2023 was $4.2 million, an increase of $770,000 or 22.2
percent, compared to noninterest income of $3.5 million for the
three months ended December 31, 2022 and an increase of $47,000 or
1.1 percent compared to the three months ended September 30,
2023. The increase in the current quarter compared to
the prior year, was primarily due to higher other income related to
swap fees, income from bank owned life insurance related to the
purchase of new policies and trust/investment service fees.
Noninterest income for the year ended December 31, 2023 was $16.5
million, an increase of $1.6 million or 10.8 percent compared to
noninterest income of $14.9 million for the year ended December 31,
2022. Higher trust and investment service fees, service charges on
deposits, other income related to interest rate swap fees, income
from bank owned life insurance and gains on sale of assets held for
sale in the current period were partially offset by a decrease in
gains on sale of loans and a loss on sale of securities compared to
the year ended December 31, 2022.
Noninterest expense was $17.3 million for the
fourth quarter 2023, an increase of $1.9 million or 12.6 percent,
as compared to noninterest expense of $15.3 million for the fourth
quarter 2022 and an increase of $1.4 million compared to
noninterest expense of $15.9 million for the third quarter of
2023. Noninterest expense was $63.5 million for the
year ended December 31, 2023, an increase of $1.9 million or 3.1
percent compared to noninterest expense of $61.6 million for the
year ended December 31, 2022. During the fourth quarter 2023, the
Corporation announced it has entered into an agreement to merge
with Orrstown. For the three months and year ended December 31,
2023, merger-related expenses totaled $956,000, which included due
diligence costs, legal expenses and investment banking expenses
related to delivery of a fairness opinion to its Board of
Directors. The Corporation expects to incur additional
merger-related expenses in 2024 as it works toward consummation of
the merger with Orrstown and the related merger and integration of
PeoplesBank with and into Orrstown Bank. In addition to
merger-related expenses, noninterest expense was impacted in the
current period by higher variable compensation accruals, offset by
lower settlement expense.
Income tax expense for the quarter ended
December 31, 2023 was $1.4 million compared to $2.2 million for the
same period in 2022 and $1.5 million in the quarter ended September
30, 2023. The effective tax rate for the three-month periods ended
December 31, 2023, December 31, 2022 and September 30, 2023 was
20.8 percent, 21.7 percent and 20.2 percent,
respectively. Income tax expense for the year ended
December 31, 2023 was $6.9 million compared to $5.6 million for the
year ended December 31, 2022. The effective tax rate for the year
ended December 31, 2023 and December 31, 2022 was 21.6 percent and
21.7 percent, respectively.
Capital
Shareholders’ equity totaled $199.6 million at
December 31, 2023, an increase of $22.3 million from $177.3 million
at December 31, 2022. The increase was primarily attributable to
net income of $25.0 million, partially offset by dividends paid of
$6.3 million during the year and a $2.1 million impact at the
adoption of CECL at January 1, 2023. Other changes are related to
accumulated other comprehensive loss and issuance of treasury
stock.
Book value per share was $20.70 and $18.51 at
December 31, 2023 and December 31, 2022, respectively. Tangible
book value per share and tangible book value per share without
accumulated other comprehensive loss (1) increased to $20.46 per
share and $23.68 per share, respectively, at December 31, 2023 from
$18.27 per share and $21.90 per share, respectively, at December
31, 2022, primarily the result of changes in shareholders’ equity
discussed above. The Corporation’s common equity tier 1 capital
ratio was 12.81 percent at December 31, 2023, an increase from
12.04 percent at December 31, 2022. At December 31, 2023, all
capital ratios applicable to the Bank were above regulatory minimum
levels and the Bank met the “well-capitalized” criteria under
current bank regulatory guidelines. (Note that the regulatory
“well-capitalized” definition is not applicable to small bank
holding companies such as the Corporation).
Liquidity Risk Management
The Bank maintains a well-diversified deposit
base and has a comparatively low level of uninsured deposits. At
December 31, 2023, 83% of the Bank’s deposits were estimated to be
FDIC-insured, and an additional 7% of deposits were fully
collateralized.
The overall deposit and liquidity position of
the Bank and the Corporation remain positive, with overall deposits
exceeding the level at December 31, 2019, the start of the
pandemic, by $282.8 million or 17.8 percent.
Although the Bank had not utilized the Federal
Reserve’s Bank Term Funding Facility as of December 31, 2023, the
program has attractive features, such as being able to borrow based
on the par values (rather than market values) of a bank’s
investment securities that are pledged as collateral. For this
reason, the program would be considered among the Bank’s other
wholesale borrowing options if additional liquidity was needed.
The Bank is a member of the IntraFi Network®,
which provides reciprocal deposit alternatives allowing our clients
to have the benefit of additional FDIC insurance coverage, and
assisting the Bank in the management of its liquidity needs.
Dividend Declared
On January 9, 2024, the Board of Directors of
the Corporation declared a regular quarterly cash dividend of $0.17
per share, payable on February 13, 2024 to common shareholders of
record at the close of business on January 23, 2024.
Agreement and Plan of Merger with Orrstown Financial
Services, Inc. (“Orrstown”)
On December 12, 2023, Codorus Valley Bancorp
Inc. (NASDAQ: CVLY) and Orrstown Financial Services Inc. (NASDAQ:
ORRF) announced that the companies entered into an Agreement and
Plan of Merger pursuant to which Codorus Valley Bancorp, Inc. will
be merged with and into Orrstown, with Orrstown as the surviving
corporation (the “Merger”). Promptly following the Merger, Codorus
Valley’s wholly-owned subsidiary, PeoplesBank, will be merged with
and into Orrstown Bank, with Orrstown Bank as the surviving bank.
Subject to receipt of regulatory and shareholder approvals, CVLY
expects the merger to be completed in the third quarter of 2024.
“We are excited to be partnering with Orrstown to build long-term
value for our clients, associates, shareholders and community.
Thank you to our shareholders for your long-standing investment in
our company,” noted Craig L. Kauffman, “and, to our clients, we
very much look forward to continuing to serve your financial
needs.”
Certain Accounting Matters
Accounting standards require the consideration
of subsequent events occurring after the balance sheet date for
matters that require adjustment to, or disclosure in, the
consolidated financial statements. The review period for subsequent
events extends up to and includes the filing date of a public
company’s financial statements when filed with the SEC.
Accordingly, the consolidated financial information in this
announcement is subject to change.
The Corporation uses certain non-GAAP (Generally
Accepted Accounting Principles) financial measures in this Press
Release. The Corporation’s management believes that the
supplemental non-GAAP information provided in this press release is
utilized by market analysts and others to evaluate the
Corporation’s financial condition and results of operations and,
therefore, such information is useful to investors. These measures
have limitations as analytical tools and should not be considered a
substitute for analysis of results under GAAP. These non-GAAP
financial measures are reconciled to the most comparable measures
following the “Financial Highlights” section of this press
release.
Annualized, proforma, projected, and estimated numbers used
herein are for illustrative purposes only, are not forecasts and
may not reflect actual results.
About Codorus Valley Bancorp,
Inc.
Codorus Valley Bancorp, Inc. is the largest
independent financial services holding company headquartered in
York, Pennsylvania. Codorus Valley primarily operates through its
financial services subsidiary, PeoplesBank, A Codorus Valley
Company. PeoplesBank offers a full range of consumer, business,
wealth management, and mortgage services at financial centers
located in communities throughout South Central Pennsylvania and
Central Maryland. Codorus Valley Bancorp, Inc.’s Common Stock is
listed on the NASDAQ Global Market under the symbol
“CVLY”.
Cautionary Note Regarding
Forward-looking Statements
This Press Release may contain forward-looking
statements by Codorus Valley Bancorp, Inc. (“Codorus Valley”, or
the “Corporation”). Forward-looking statements may include
information concerning the financial condition, results of
operations and business of the Corporation and its subsidiaries and
include, but are not limited to, statements regarding expectations
or predictions of future financial or business performance or
conditions relating to the Corporation and its operations. These
forward-looking statements may include statements with respect to
the Corporation’s beliefs, plans, objectives, goals, expectations,
anticipations, estimates and intentions, that are subject to
significant risks and uncertainties, and are subject to change
based on various factors (some of which are beyond the
Corporation’s control). Forward-looking statements may also
include, but are not limited to, discussions of strategy, financial
projections and estimates and their underlying assumptions,
statements regarding plans, objectives, goals, expectations or
consequences, and statements about future performance, expenses,
operations, or products and services of the Corporation and its
subsidiaries. Forward-looking statements can be identified by the
use of words such as “may,” “should,” “could,” “will,” “could,”
“believes,” “plans,” “expects,” “estimates,” “forecasts,”
“intends,” “anticipates,” “projects,” “strives to,” “seeks,”
“intends” or similar words or expressions.
Forward-looking statements are not historical
facts, nor should they be relied upon as providing assurance of
future performance. Forward-looking statements are based on current
beliefs, expectations and assumptions regarding the future of the
Corporation’s business, including its pending merger (the “Merger”)
with Orrstown Financial Services, Inc. (“Orrstown”), future plans
and strategies, projections, anticipated events and trends, the
economy and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks, and changes in circumstances that are
difficult to predict and many of which are outside of the
Corporation’s control. Note that the following factors, among
others, 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 these forward-looking statements:
- changes or volatility in market
interest rates and the persistence of an inflationary environment
in the U.S. and our market areas and the potential for an economic
downturn or recession;
- the effects of financial challenges
at other banking institutions that could lead to depositor concerns
that spread within the banking industry causing disruptive deposit
outflows and other destabilizing results;
- legislative and regulatory changes,
and the uncertain impact of new laws and regulations;
- monetary and fiscal policies of the
federal government;
- the effects of changes in
accounting policies and practices;
- ineffectiveness of the
Corporation’s business strategy due to changes in current or future
market conditions;
- changes in deposit flows, the cost
of funds, demand for loan products and the demand for financial
services;
- the remaining effects of the
COVID-19 pandemic, including on the Corporation’s credit quality
and operations as well as its impact on general economic
conditions;
- competition; market volatility,
market downturns, changes in consumer behavior, business
closures;
- adverse changes in the quality or
composition of the Corporation’s loan, investment and
mortgage-backed securities portfolios, including from the effects
of the recent inflationary environment;
- geographic concentration of the
Corporation’s business;
- deterioration of commercial real
estate values;
- the adequacy of loan loss
reserves;
- deterioration in the credit quality
of borrowers;
- the Corporation’s ability to
attract and retain key personnel, especially in light of the
pending Merger with Orrstown;
- the impact of operational risks,
including the risk of human error, failure or disruption of
internal processes and systems, including of the Corporation’s
information and other technology systems;
- failure or circumvention of our
internal controls;
- the Corporation’s ability to keep
pace with technological changes;
- breaches of security or failures of
the Corporation to identify and adequately address cybersecurity
and data breaches;
- changes in government regulation
and supervision and the potential for negative consequences
resulting from regulatory examinations, investigations and
violations, in particular, the effect that such occurrences could
have on the pending Merger with Orrstown;
- the effects of adverse outcomes
from claims and litigation;
- occurrence of natural or man-made
disasters or calamities, including health emergencies, the spread
of infectious diseases, epidemics or pandemics, an outbreak or
escalation of hostilities or other geopolitical instabilities, the
effects of climate change or extraordinary events beyond the
Corporation's control, and the Corporation’s ability to deal
effectively with disruptions caused by the foregoing; and
- economic, competitive, governmental
and technological factors affecting the Corporation’s operations,
markets, products, services and fees.
In addition to the foregoing factors with
respect to the Corporation’s business, the following factors and
uncertainties exist with respect to the pending Merger with
Orrstown:
- the occurrence of any event, change
or other circumstances that could give rise to the right of one or
both of the parties to terminate the definitive agreement and plan
of merger between the Corporation and Orrstown;
- the outcome of any legal
proceedings that may be instituted against the Corporation or
Orrstown;
- delays in completing the proposed
Merger;
- the failure to obtain necessary
regulatory approvals (and the risk that such approvals may result
in the imposition of conditions that could adversely affect the
combined company or the expected benefits of the proposed Merger)
or shareholder approvals;
- the failure to satisfy any of the
other conditions to the proposed Merger on a timely basis or at
all, including the ability of the Corporation or Orrstown to meet
expectations regarding the timing, completion and accounting and
tax treatments of the proposed Merger;
- the possibility that the
anticipated benefits of the proposed Merger are not realized when
expected or at all, including as a result of the impact of, or
problems arising from, the integration of the two companies or as a
result of the strength of the economy and competitive factors in
the areas where the Corporation and Orrstown do business;
- the possibility that the proposed
Merger may be more expensive to complete than anticipated,
including as a result of unexpected factors or events;
- the possibility that revenues
following the proposed Merger may be lower than expected; the
impact of certain restrictions during the pendency of the proposed
Merger on the parties’ ability to pursue certain business
opportunities and strategic transactions;
- diversion of management’s attention
from ongoing business operations and opportunities;
- potential adverse reactions or
changes to business or employee relationships, including those
resulting from the announcement or the completion of the proposed
Merger;
- the ability to complete the
proposed Merger and integration of the Corporation and Orrstown
successfully;
- the dilution caused by Orrstown’s
issuance of additional shares of its capital stock in connection
with the proposed Merger; and
- the potential impact of general
economic, political or market factors on the companies or the
proposed Merger and other factors that may affect future results of
the Corporation or Orrstown.
The Corporation does not commit to update or revise any
forward-looking statements, whether written or oral, that may be
made from time to time by or on behalf of the Corporation to
reflect events or circumstances occurring after the date of this
report. Further information regarding Codorus Valley,
Orrstown and factors which could affect the forward-looking
statements contained herein can be found in Codorus Valley’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2022,
its Quarterly Reports on Form 10-Q for the periods ended March 31,
2023, June 30, 2023 and September 30, 2023, and its other filings
with the SEC, and in Orrstown’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2022, its Quarterly Reports on Form
10-Q for the periods ended March 31, 2023, June 30, 2023 and
September 30, 2023, and its other filings with the SEC. SEC filings
are available free of charge on the SEC’s website at
www.sec.gov.
No Offer or Solicitation
This communication is not a proxy statement or solicitation or a
proxy, consent or authorization with respect to any securities or
in respect of the proposed Merger and shall not constitute an offer
to sell or a solicitation of an offer to buy the securities of
Orrstown, Codorus Valley or the combined company, nor shall there
be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offer of securities shall be deemed to be made except by means
of a prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Additional Information About the Merger and Where to
Find It
In connection with the proposed Merger, Orrstown intends to file
a registration statement on Form S-4 with the SEC that will include
a joint proxy statement of Codorus Valley and Orrstown and a
prospectus of Orrstown, which will be distributed to the
shareholders of Codorus Valley and Orrstown in connection with
their votes on the Merger of Codorus Valley with and into Orrstown
and the issuance of Orrstown common stock in the proposed
transaction.
INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE
REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS WHEN
THEY BECOME AVAILABLE (AND ANY OTHER DOCUMENTS FILED WITH THE SEC
IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY
REFERENCE INTO THE JOINT PROXY STATEMENT/PROSPECTUS) BECAUSE SUCH
DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED
MERGER AND RELATED MATTERS.
Investors and security holders will be able to obtain these
documents, and any other documents Orrstown and Codorus Valley have
filed with the SEC, free of charge at the SEC’s website,
www.sec.gov, or by accessing Orrstown’s website at
www.Orrstown.com under the “Investor Relations” link and then
under the heading “Documents,” or by accessing Codorus Valley’s
website at ir.peoplesbanknet.com. In addition, documents filed with
the SEC by Orrstown or Codorus Valley will be available free of
charge by writing to (i) Orrstown at 4750 Lindle Road, Harrisburg,
PA 17111, Attention: Neil Kalani or (ii) Codorus Valley at 105
Leader Heights Road, York, PA 17403, Attention: Daniel R.
Stolzer.
Participants in the Solicitation
The directors, executive officers and certain other members of
management and employees of Orrstown may be deemed to be
participants in the solicitation of proxies from the shareholders
of Orrstown in connection with the proposed Merger. Information
about Orrstown’s directors and executive officers is included in
the proxy statement for its 2023 annual meeting of Orrstown’s
shareholders, which was filed with the SEC on March 31, 2023.
The directors, executive officers and certain other members of
management and employees of Codorus Valley may also be deemed to be
participants in the solicitation of proxies in connection with the
proposed Merger from the shareholders of Codorus Valley.
Information about the directors and executive officers of Codorus
Valley is included in the proxy statement for its 2023 annual
meeting of Codorus Valley shareholders, which was filed with the
SEC on March 31, 2023.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the proposed Merger may be obtained by reading the joint proxy
statement/prospectus regarding the proposed Merger when it becomes
available. Free copies of this document may be obtained as
described above.
Questions or comments concerning this Press Release
should be directed to:
Codorus Valley Bancorp, Inc. |
|
Craig L. Kauffman |
Larry D. Pickett |
President and CEO |
Chief Financial Officer |
717-747-1501 |
717-747-1502 |
ckauffman@peoplesbanknet.com |
lpickett@peoplesbanknet.com |
|
|
CODORUS VALLEY BANCORP, INC. |
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
|
December 31, |
|
December 31, |
(Dollars in thousands, except share and per share data) |
|
2023 |
|
|
2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
|
Interest bearing deposits with banks |
$ |
10,882 |
|
|
$ |
99,777 |
|
Cash and due
from banks |
|
22,809 |
|
|
|
20,662 |
|
Total cash and cash
equivalents |
|
33,691 |
|
|
|
120,439 |
|
Securities, available-for-sale, at fair value (amortized cost
$390,397 at December 31, 2023 |
|
|
|
|
and
$390,900 at December 31, 2022, respectively) |
|
349,767 |
|
|
|
345,457 |
|
Restricted
investment in bank stocks, at cost |
|
3,146 |
|
|
|
955 |
|
Loans held
for sale |
|
822 |
|
|
|
154 |
|
Loans (net
of deferred fees of $3,752 - 2023 and $3,813 - 2022) |
|
1,705,608 |
|
|
|
1,632,857 |
|
Less-allowance for credit losses (1) |
|
(20,506 |
) |
|
|
(20,736 |
) |
Net loans |
|
1,685,102 |
|
|
|
1,612,121 |
|
Premises and
equipment, net |
|
19,563 |
|
|
|
21,136 |
|
Operating
leases right-of-use assets |
|
2,746 |
|
|
|
3,072 |
|
Goodwill |
|
2,301 |
|
|
|
2,301 |
|
Other assets |
|
94,656 |
|
|
|
89,417 |
|
Total
assets |
$ |
2,191,794 |
|
|
$ |
2,195,052 |
|
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Noninterest bearing |
$ |
379,288 |
|
|
$ |
463,853 |
|
Interest bearing |
|
1,494,054 |
|
|
|
1,479,366 |
|
Total deposits |
|
1,873,342 |
|
|
|
1,943,219 |
|
Short-term
borrowings |
|
56,541 |
|
|
|
11,605 |
|
Long-term
debt and junior subordinated debt |
|
11,520 |
|
|
|
11,550 |
|
Subordinated
notes - face amount $31,000 (less discount and debt |
|
|
|
|
|
issuance cost of $155 at December 31, 2023 and $236 at
December 31, 2022) |
|
30,845 |
|
|
|
30,764 |
|
Operating
leases liabilities |
|
2,848 |
|
|
|
3,204 |
|
Allowance
for credit losses on off-balance sheet credit exposures |
|
2,278 |
|
|
|
0 |
|
Other liabilities |
|
14,815 |
|
|
|
17,410 |
|
Total
liabilities |
|
1,992,189 |
|
|
|
2,017,752 |
|
Shareholders' equity |
|
|
|
|
|
Preferred
stock, par value $2.50 per share; |
|
|
|
|
|
1,000,000 shares authorized; no shares
issued or outstanding |
|
0 |
|
|
|
0 |
|
Common
stock, par value $2.50 per share; 30,000,000 shares
authorized; |
|
|
|
|
|
shares issued: 9,883,660 at December 31, 2023 and
December 31, 2022; |
|
|
|
|
|
and shares outstanding: 9,642,851 at December 31, 2023
and 9,581,230 at December 31, 2022 |
|
24,709 |
|
|
|
24,709 |
|
Additional
paid-in capital |
|
142,633 |
|
|
|
141,896 |
|
Retained
earnings |
|
68,633 |
|
|
|
52,146 |
|
Accumulated
other comprehensive loss |
|
(31,082 |
) |
|
|
(34,764 |
) |
Treasury
stock shares outstanding, at cost: 240,809 shares at December 31,
2023 |
|
|
|
|
|
and 302,430 at December 31, 2022 |
|
(5,288 |
) |
|
|
(6,687 |
) |
Total shareholders'
equity |
|
199,605 |
|
|
|
177,300 |
|
Total liabilities and
shareholders' equity |
$ |
2,191,794 |
|
|
$ |
2,195,052 |
|
|
|
|
|
|
|
(1) Beginning January 1, 2023, calculation is based on current
expected loss methodology. Prior to January 1,
2023, calculation was based on incurred loss methodology. |
|
|
|
|
|
|
CODORUS VALLEY
BANCORP, INC. |
|
|
|
|
|
|
|
Consolidated
Statements of Income (Unaudited) |
|
|
|
|
|
|
|
|
Three months
ended |
|
|
Twelve months
ended |
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
(dollars in thousands, except per share data) |
2023 |
|
2023 |
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
26,967 |
|
|
$ |
26,000 |
|
|
$ |
21,676 |
|
|
$ |
100,804 |
|
|
$ |
73,139 |
|
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
2,781 |
|
|
|
2,562 |
|
|
|
2,374 |
|
|
|
10,292 |
|
|
|
7,455 |
|
Tax-exempt |
|
108 |
|
|
|
106 |
|
|
|
110 |
|
|
|
414 |
|
|
|
427 |
|
Dividends |
|
(90 |
) |
|
|
44 |
|
|
|
14 |
|
|
|
22 |
|
|
|
44 |
|
Other |
|
176 |
|
|
|
361 |
|
|
|
1,226 |
|
|
|
1,766 |
|
|
|
3,588 |
|
Total interest income |
|
29,942 |
|
|
|
29,073 |
|
|
|
25,400 |
|
|
|
113,298 |
|
|
|
84,653 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
9,800 |
|
|
|
8,740 |
|
|
|
3,382 |
|
|
|
30,754 |
|
|
|
7,261 |
|
Federal
funds purchased and other short-term borrowings |
|
385 |
|
|
|
377 |
|
|
|
13 |
|
|
|
1,237 |
|
|
|
48 |
|
Long-term
debt and junior subordinated debt |
|
222 |
|
|
|
215 |
|
|
|
175 |
|
|
|
839 |
|
|
|
616 |
|
Subordinated notes |
|
369 |
|
|
|
369 |
|
|
|
369 |
|
|
|
1,476 |
|
|
|
1,476 |
|
Total interest expense |
|
10,776 |
|
|
|
9,701 |
|
|
|
3,939 |
|
|
|
34,306 |
|
|
|
9,401 |
|
Net interest income |
|
19,166 |
|
|
|
19,372 |
|
|
|
21,461 |
|
|
|
78,992 |
|
|
|
75,252 |
|
(Recovery
of) provision for credit losses - loans (1) |
|
(833 |
) |
|
|
128 |
|
|
|
(544 |
) |
|
|
(244 |
) |
|
|
2,890 |
|
Provision
for credit losses - unfunded commitments (1) |
|
66 |
|
|
|
123 |
|
|
|
0 |
|
|
|
389 |
|
|
|
0 |
|
Net interest income after
provision for credit losses |
|
19,933 |
|
|
|
19,121 |
|
|
|
22,005 |
|
|
|
78,847 |
|
|
|
72,362 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trust and
investment services fees |
|
1,261 |
|
|
|
1,293 |
|
|
|
1,109 |
|
|
|
5,031 |
|
|
|
4,549 |
|
Income from
mutual fund, annuity and insurance sales |
|
299 |
|
|
|
315 |
|
|
|
289 |
|
|
|
1,306 |
|
|
|
1,247 |
|
Service
charges on deposit accounts |
|
1,529 |
|
|
|
1,598 |
|
|
|
1,458 |
|
|
|
6,153 |
|
|
|
5,503 |
|
Income from
bank owned life insurance |
|
405 |
|
|
|
396 |
|
|
|
315 |
|
|
|
1,452 |
|
|
|
1,256 |
|
Other
income |
|
773 |
|
|
|
549 |
|
|
|
401 |
|
|
|
2,771 |
|
|
|
1,880 |
|
Gain on sale
of loans held for sale |
|
27 |
|
|
|
42 |
|
|
|
4 |
|
|
|
75 |
|
|
|
625 |
|
(Loss) gain
on sale of assets held for sale |
|
(54 |
) |
|
|
0 |
|
|
|
13 |
|
|
|
64 |
|
|
|
(87 |
) |
Loss on sales of securities |
|
0 |
|
|
|
0 |
|
|
|
(119 |
) |
|
|
(388 |
) |
|
|
(119 |
) |
Total noninterest income |
|
4,240 |
|
|
|
4,193 |
|
|
|
3,470 |
|
|
|
16,464 |
|
|
|
14,854 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel |
|
10,031 |
|
|
|
9,412 |
|
|
|
8,937 |
|
|
|
37,974 |
|
|
|
35,061 |
|
Occupancy of
premises, net |
|
926 |
|
|
|
853 |
|
|
|
1,004 |
|
|
|
3,637 |
|
|
|
3,848 |
|
Furniture
and equipment |
|
924 |
|
|
|
798 |
|
|
|
851 |
|
|
|
3,438 |
|
|
|
3,402 |
|
Professional
and legal |
|
444 |
|
|
|
549 |
|
|
|
345 |
|
|
|
1,839 |
|
|
|
2,626 |
|
Marketing |
|
304 |
|
|
|
347 |
|
|
|
592 |
|
|
|
1,314 |
|
|
|
1,932 |
|
FDIC
insurance |
|
244 |
|
|
|
245 |
|
|
|
148 |
|
|
|
983 |
|
|
|
765 |
|
Debit card
processing |
|
520 |
|
|
|
546 |
|
|
|
481 |
|
|
|
1,976 |
|
|
|
1,703 |
|
Charitable
donations |
|
644 |
|
|
|
62 |
|
|
|
600 |
|
|
|
1,637 |
|
|
|
1,571 |
|
External
data processing |
|
1,015 |
|
|
|
974 |
|
|
|
1,064 |
|
|
|
4,042 |
|
|
|
3,884 |
|
Settlement
expenses |
|
0 |
|
|
|
0 |
|
|
|
1,000 |
|
|
|
0 |
|
|
|
1,000 |
|
Merger-related expenses |
|
956 |
|
|
|
0 |
|
|
|
0 |
|
|
|
956 |
|
|
|
0 |
|
(Recovery
of) impaired loan carrying cost |
|
(119 |
) |
|
|
107 |
|
|
|
34 |
|
|
|
(348 |
) |
|
|
546 |
|
Other |
|
1,396 |
|
|
|
2,003 |
|
|
|
291 |
|
|
|
6,020 |
|
|
|
5,230 |
|
Total noninterest expense |
|
17,285 |
|
|
|
15,896 |
|
|
|
15,347 |
|
|
|
63,468 |
|
|
|
61,568 |
|
Income before income taxes |
|
6,888 |
|
|
|
7,418 |
|
|
|
10,128 |
|
|
|
31,843 |
|
|
|
25,648 |
|
Provision for income taxes |
|
1,435 |
|
|
|
1,501 |
|
|
|
2,196 |
|
|
|
6,870 |
|
|
|
5,556 |
|
Net
income |
$ |
5,453 |
|
|
$ |
5,917 |
|
|
$ |
7,932 |
|
|
$ |
24,973 |
|
|
$ |
20,092 |
|
Net income per share,
basic |
|
0.57 |
|
|
|
0.62 |
|
|
|
0.83 |
|
|
|
2.60 |
|
|
|
2.11 |
|
Net income per share,
diluted |
|
0.57 |
|
|
|
0.61 |
|
|
|
0.83 |
|
|
|
2.59 |
|
|
|
2.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Beginning January
1, 2023, calculation is based on current expected loss methodology.
Prior to January 1, 2023, calculation was based on incurred
loss methodology. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Codorus Valley
Bancorp, Inc. |
|
|
|
|
Financial
Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Financial
Data (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly |
|
Year-to-Date |
|
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
December 31, |
|
|
|
4th Qtr |
|
3rd Qtr |
|
2nd Qtr |
|
1st Qtr |
|
4th Qtr |
|
2023 |
|
2022 |
Earnings and Per Share Data (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,453 |
|
|
$ |
5,917 |
|
|
$ |
6,611 |
|
|
$ |
6,992 |
|
|
$ |
7,932 |
|
|
$ |
24,973 |
|
$ |
20,092 |
|
Basic
earnings per share |
|
$ |
0.57 |
|
|
$ |
0.62 |
|
|
$ |
0.69 |
|
|
$ |
0.73 |
|
|
$ |
0.83 |
|
|
$ |
2.60 |
|
$ |
2.11 |
|
Diluted
earnings per share |
|
$ |
0.57 |
|
|
$ |
0.61 |
|
|
$ |
0.69 |
|
|
$ |
0.73 |
|
|
$ |
0.83 |
|
|
$ |
2.59 |
|
$ |
2.10 |
|
Cash
dividends paid per share |
|
$ |
0.17 |
|
|
$ |
0.17 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.15 |
|
|
$ |
0.66 |
|
$ |
0.60 |
|
Book value
per share |
|
$ |
20.70 |
|
|
$ |
19.06 |
|
|
$ |
19.34 |
|
|
$ |
19.28 |
|
|
$ |
18.51 |
|
|
$ |
20.70 |
|
$ |
18.51 |
|
Tangible
book value per share (2) |
|
$ |
20.46 |
|
|
$ |
18.82 |
|
|
$ |
19.10 |
|
|
$ |
19.04 |
|
|
$ |
18.27 |
|
|
$ |
20.46 |
|
$ |
18.27 |
|
Tangible
book value per share without AOCI (8) |
|
$ |
23.68 |
|
|
$ |
23.28 |
|
|
$ |
22.81 |
|
|
$ |
22.26 |
|
|
$ |
21.90 |
|
|
$ |
23.68 |
|
$ |
21.90 |
|
Average
shares outstanding |
|
|
9,629 |
|
|
|
9,616 |
|
|
|
9,600 |
|
|
|
9,585 |
|
|
|
9,566 |
|
|
|
9,608 |
|
|
9,532 |
|
Average
diluted shares outstanding |
|
|
9,644 |
|
|
|
9,631 |
|
|
|
9,610 |
|
|
|
9,612 |
|
|
|
9,589 |
|
|
|
9,625 |
|
|
9,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Ratios (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
average assets (3) |
|
|
1.00 |
|
|
|
1.08 |
|
|
|
1.22 |
|
|
|
1.29 |
|
|
|
1.43 |
|
|
|
1.15 |
|
|
0.87 |
|
Return on
average equity (3) |
|
|
11.69 |
|
|
|
12.64 |
|
|
|
14.17 |
|
|
|
15.45 |
|
|
|
18.50 |
|
|
|
13.47 |
|
|
11.08 |
|
Net interest
margin (4) |
|
|
3.61 |
|
|
|
3.64 |
|
|
|
3.81 |
|
|
|
4.00 |
|
|
|
3.98 |
|
|
|
3.76 |
|
|
3.39 |
|
Efficiency
ratio (5) |
|
|
73.28 |
|
|
|
66.95 |
|
|
|
64.19 |
|
|
|
59.05 |
|
|
|
60.87 |
|
|
|
65.75 |
|
|
67.79 |
|
Net overhead
ratio (3)(6) |
|
|
2.40 |
|
|
|
2.14 |
|
|
|
2.10 |
|
|
|
1.93 |
|
|
|
2.13 |
|
|
|
2.14 |
|
|
2.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loan
charge-offs to average loans (3) |
|
|
0.03 |
|
|
|
(0.15 |
) |
|
|
0.20 |
|
|
|
0.15 |
|
|
|
0.24 |
|
|
|
0.05 |
|
|
0.31 |
|
Allowance
for credit losses to total loans (7) |
|
|
1.20 |
|
|
|
1.26 |
|
|
|
1.23 |
|
|
|
1.31 |
|
|
|
1.27 |
|
|
|
1.20 |
|
|
1.27 |
|
Nonperforming assets to total loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and foreclosed real estate |
|
|
0.23 |
|
|
|
0.47 |
|
|
|
0.70 |
|
|
|
0.55 |
|
|
|
0.70 |
|
|
|
0.23 |
|
|
0.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios (%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
equity to average assets |
|
|
8.57 |
|
|
|
8.55 |
|
|
|
8.58 |
|
|
|
8.38 |
|
|
|
7.75 |
|
|
|
8.52 |
|
|
7.87 |
|
Tier 1
leverage capital ratio |
|
|
10.75 |
|
|
|
10.50 |
|
|
|
10.38 |
|
|
|
10.20 |
|
|
|
9.77 |
|
|
|
10.75 |
|
|
9.77 |
|
Common
equity Tier 1 capital ratio |
|
|
12.81 |
|
|
|
12.52 |
|
|
|
12.37 |
|
|
|
12.19 |
|
|
|
12.04 |
|
|
|
12.81 |
|
|
12.04 |
|
Tier 1
risk-based capital ratio |
|
|
13.37 |
|
|
|
13.08 |
|
|
|
12.94 |
|
|
|
12.76 |
|
|
|
12.61 |
|
|
|
13.37 |
|
|
12.61 |
|
Total
risk-based capital ratio |
|
|
16.26 |
|
|
|
16.01 |
|
|
|
15.85 |
|
|
|
15.75 |
|
|
|
15.57 |
|
|
|
16.26 |
|
|
15.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) per share amounts
and shares outstanding were adjusted for stock dividends |
|
|
|
|
|
|
|
|
|
(2) non-GAAP measure -
book value less goodwill and core deposit intangibles; see
reconciliation below |
|
|
|
|
(3) annualized for the quarterly periods presented |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) net interest
income (tax-equivalent) as a percentage of average interest earning
assets |
|
|
|
|
|
|
|
|
(5) noninterest
expense as a percentage of net interest income and noninterest
income (tax-equivalent) |
|
|
|
|
|
|
(6) noninterest
expense less noninterest income as a percentage of average
assets |
|
|
|
|
|
|
|
|
(7) excludes loans held for sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8) non-GAAP measure -
book value less accumulated other comprehensive income; see
reconciliation below |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures (Tangible Book Value
and Tangible Book Value without AOCI and Adjusted Net Income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
(in
thousands, except per share data) |
|
4th Qtr |
|
3rd Qtr |
|
2nd Qtr |
|
1st Qtr |
|
4th Qtr |
|
|
|
|
|
Total
Shareholders' Equity |
|
$ |
199,605 |
|
|
$ |
183,363 |
|
|
$ |
185,869 |
|
|
$ |
184,946 |
|
|
$ |
177,300 |
|
|
|
|
|
|
Less:
Goodwill and Other Intangible Assets |
|
|
(2,301 |
) |
|
|
(2,302 |
) |
|
|
(2,302 |
) |
|
|
(2,303 |
) |
|
|
(2,303 |
) |
|
|
|
|
|
Tangible
Shareholders' Equity |
|
$ |
197,304 |
|
|
$ |
181,061 |
|
|
$ |
183,567 |
|
|
$ |
182,643 |
|
|
$ |
174,997 |
|
|
|
|
|
|
Add:
Accumulated Other Comprehensive Loss |
|
|
31,082 |
|
|
|
42,869 |
|
|
|
35,650 |
|
|
|
30,941 |
|
|
|
34,764 |
|
|
|
|
|
|
Tangible
Shareholders' Equity without AOCI |
|
$ |
228,386 |
|
|
$ |
223,930 |
|
|
$ |
219,217 |
|
|
$ |
213,584 |
|
|
$ |
209,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Shares Outstanding |
|
|
9,644 |
|
|
|
9,619 |
|
|
|
9,611 |
|
|
|
9,594 |
|
|
|
9,581 |
|
|
|
|
|
|
Book Value
Per Share |
|
$ |
20.70 |
|
|
$ |
19.06 |
|
|
$ |
19.34 |
|
|
$ |
19.28 |
|
|
$ |
18.51 |
|
|
|
|
|
|
Effect of
Intangible Assets |
|
|
(0.24 |
) |
|
|
(0.24 |
) |
|
|
(0.24 |
) |
|
|
(0.24 |
) |
|
|
(0.24 |
) |
|
|
|
|
|
Tangible Book Value Per Share |
|
$ |
20.46 |
|
|
$ |
18.82 |
|
|
$ |
19.10 |
|
|
$ |
19.04 |
|
|
$ |
18.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Value
Per Share |
|
$ |
20.70 |
|
|
$ |
19.06 |
|
|
$ |
19.34 |
|
|
$ |
19.28 |
|
|
$ |
18.51 |
|
|
|
|
|
|
Effect of
Intangible Assets and AOCI |
|
|
(3.46 |
) |
|
|
(4.70 |
) |
|
|
(3.95 |
) |
|
|
(3.47 |
) |
|
|
(3.87 |
) |
|
|
|
|
|
Tangible Book Value Per Share without AOCI |
|
$ |
17.24 |
|
|
$ |
14.37 |
|
|
$ |
15.39 |
|
|
$ |
15.81 |
|
|
$ |
21.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly |
|
|
|
Year-to-Date |
|
|
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
December 31, |
|
|
|
|
|
(in
thousands, except per share data) |
|
4th Qtr |
|
4th Qtr |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Average
Diluted Shares Outstanding |
|
|
9,644 |
|
|
|
9,589 |
|
|
|
|
|
9,625 |
|
|
|
9,560 |
|
|
|
|
|
|
Net
Income |
|
$ |
5,453 |
|
|
$ |
7,932 |
|
|
|
|
|
24,973 |
|
|
|
20,092 |
|
|
|
|
|
|
Plus:
Merger-related expenses |
|
|
956 |
|
|
|
- |
|
|
|
|
|
956 |
|
|
|
- |
|
|
|
|
|
|
Less:
Related tax effect |
|
|
200 |
|
|
|
- |
|
|
|
|
|
200 |
|
|
|
- |
|
|
|
|
|
|
Adjusted Net Income |
|
$ |
6,209 |
|
|
$ |
7,932 |
|
|
|
|
$ |
25,729 |
|
|
$ |
20,092 |
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
$ |
0.64 |
|
|
$ |
0.83 |
|
|
|
|
$ |
2.67 |
|
|
$ |
2.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This report contains
certain financial information determined by methods other than in
accordance with GAAP. This non-GAAP disclosure has limitation as an
analytical tool |
|
and should not be
considered in isolation or as a substitute for the analysis of the
Corporation's results as reported under GAAP, nor is it necessarily
comparable to non-GAAP |
|
performance measures
that may be presented by other companies. Our management uses this
non-GAAP measure in its analysis of our performance because it
believes this measure |
|
is material and will be used as a measure of our performance by
investors. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANALYSIS OF
NET INTEREST
INCOME |
Average
Balances and Interest Rates, Taxable-Equivalent Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, 2023 |
|
|
September 30, 2023 |
|
|
December 31, 2022 |
|
(Dollars in
thousands) |
|
Average Balance |
|
Taxable-Equivalent Interest |
|
Taxable-Equivalent Rate |
|
|
Average Balance |
|
Taxable-Equivalent Interest |
|
Taxable-Equivalent Rate |
|
|
Average Balance |
|
Taxable-Equivalent Interest |
|
Taxable-Equivalent Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits with banks |
|
$ |
12,724 |
|
$ |
176 |
|
|
5.46 |
% |
|
$ |
26,772 |
|
$ |
361 |
|
|
5.35 |
% |
|
$ |
132,772 |
|
$ |
1,226 |
|
|
3.66 |
% |
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
371,949 |
|
|
2,691 |
|
|
2.87 |
|
|
|
371,603 |
|
|
2,606 |
|
|
2.78 |
|
|
|
366,923 |
|
|
2,388 |
|
|
2.58 |
|
Tax-exempt |
|
|
22,476 |
|
|
132 |
|
|
2.33 |
|
|
|
22,523 |
|
|
128 |
|
|
2.25 |
|
|
|
25,601 |
|
|
137 |
|
|
2.13 |
|
Total investment securities |
|
|
394,426 |
|
|
2,822 |
|
|
2.84 |
|
|
|
394,126 |
|
|
2,734 |
|
|
2.75 |
|
|
|
392,524 |
|
|
2,524 |
|
|
2.55 |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable (1) |
|
|
1,682,403 |
|
|
26,797 |
|
|
6.32 |
|
|
|
1,677,117 |
|
|
25,829 |
|
|
6.11 |
|
|
|
1,598,206 |
|
|
21,499 |
|
|
5.34 |
|
Tax-exempt |
|
|
21,359 |
|
|
210 |
|
|
3.90 |
|
|
|
21,721 |
|
|
213 |
|
|
3.89 |
|
|
|
22,829 |
|
|
222 |
|
|
3.85 |
|
Total loans |
|
|
1,703,762 |
|
|
27,007 |
|
|
6.29 |
|
|
|
1,698,838 |
|
|
26,042 |
|
|
6.08 |
|
|
|
1,621,035 |
|
|
21,721 |
|
|
5.32 |
|
Total earning assets |
|
|
2,110,913 |
|
|
30,005 |
|
|
5.64 |
|
|
|
2,119,736 |
|
|
29,137 |
|
|
5.45 |
|
|
|
2,146,331 |
|
|
25,471 |
|
|
4.71 |
|
Other assets
(2) |
|
|
65,067 |
|
|
|
|
|
|
|
71,008 |
|
|
|
|
|
|
|
66,173 |
|
|
|
|
|
Total assets |
|
$ |
2,175,980 |
|
|
|
|
|
|
$ |
2,190,744 |
|
|
|
|
|
|
$ |
2,212,504 |
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing demand |
|
$ |
914,832 |
|
|
5,918 |
|
|
2.57 |
% |
|
$ |
917,983 |
|
|
5,542 |
|
|
2.40 |
% |
|
$ |
942,286 |
|
|
2,561 |
|
|
1.08 |
% |
Savings |
|
|
136,622 |
|
|
11 |
|
|
0.03 |
|
|
|
146,038 |
|
|
11 |
|
|
0.03 |
|
|
|
163,184 |
|
|
12 |
|
|
0.03 |
|
Time |
|
|
447,884 |
|
|
3,873 |
|
|
3.43 |
|
|
|
435,439 |
|
|
3,187 |
|
|
2.90 |
|
|
|
383,013 |
|
|
808 |
|
|
0.84 |
|
Total interest bearing deposits |
|
|
1,499,338 |
|
|
9,800 |
|
|
2.59 |
|
|
|
1,499,460 |
|
|
8,740 |
|
|
2.31 |
|
|
|
1,488,483 |
|
|
3,382 |
|
|
0.90 |
|
Short-term
borrowings |
|
|
36,836 |
|
|
385 |
|
|
4.15 |
|
|
|
38,726 |
|
|
377 |
|
|
3.86 |
|
|
|
12,605 |
|
|
13 |
|
|
0.40 |
|
Long-term
debt and junior subordinated debt |
|
|
14,395 |
|
|
222 |
|
|
6.12 |
|
|
|
14,356 |
|
|
215 |
|
|
5.94 |
|
|
|
14,858 |
|
|
175 |
|
|
4.68 |
|
Subordinated
notes |
|
|
30,838 |
|
|
369 |
|
|
4.75 |
|
|
|
30,818 |
|
|
369 |
|
|
4.75 |
|
|
|
30,757 |
|
|
369 |
|
|
4.76 |
|
Total interest bearing liabilities |
|
|
1,581,406 |
|
|
10,776 |
|
|
2.70 |
|
|
|
1,583,360 |
|
|
9,701 |
|
|
2.43 |
|
|
|
1,546,703 |
|
|
3,939 |
|
|
1.01 |
|
Noninterest
bearing deposits |
|
|
388,589 |
|
|
|
|
|
|
|
401,734 |
|
|
|
|
|
|
|
476,347 |
|
|
|
|
|
Other
liabilities |
|
|
19,473 |
|
|
|
|
|
|
|
18,439 |
|
|
|
|
|
|
|
17,974 |
|
|
|
|
|
Shareholders' equity |
|
|
186,511 |
|
|
|
|
|
|
|
187,211 |
|
|
|
|
|
|
|
171,480 |
|
|
|
|
|
Total liabilities and shareholders'
equity |
|
$ |
2,175,980 |
|
|
|
|
|
|
$ |
2,190,744 |
|
|
|
|
|
|
$ |
2,212,504 |
|
|
|
|
|
Net interest
income (tax equivalent basis) |
|
|
|
$ |
19,229 |
|
|
|
|
|
|
|
$ |
19,436 |
|
|
|
|
|
|
|
$ |
21,533 |
|
|
|
|
Net interest
margin (3) |
|
|
|
|
|
3.61 |
% |
|
|
|
|
|
3.64 |
% |
|
|
|
|
|
3.98 |
% |
Tax
equivalent adjustment |
|
|
|
|
(63 |
) |
|
|
|
|
|
|
|
(64 |
) |
|
|
|
|
|
|
|
(72 |
) |
|
|
|
Net interest
income |
|
|
|
$ |
19,166 |
|
|
|
|
|
|
|
$ |
19,372 |
|
|
|
|
|
|
|
$ |
21,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average balances
include nonaccrual
loans. |
(2) Average balances
include bank owned life insurance and foreclosed real
estate. |
(3) Net interest
income (tax-equivalent basis) annualized as a percentage of average
interest earning
assets. |
|
ANALYSIS OF
NET INTEREST
INCOME |
Average
Balances and Interest Rates, Taxable-Equivalent Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
(Dollars in
thousands) |
|
Average Balance |
|
Taxable-Equivalent Interest |
|
Taxable-Equivalent Rate |
|
|
Average Balance |
|
Taxable-Equivalent Interest |
|
Taxable-Equivalent Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing deposits with banks |
|
$ |
35,542 |
|
$ |
1,766 |
|
|
4.97 |
% |
|
$ |
300,922 |
|
$ |
3,588 |
|
|
1.19 |
% |
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
370,774 |
|
|
10,314 |
|
|
2.78 |
|
|
|
323,011 |
|
|
7,499 |
|
|
2.32 |
|
Tax-exempt |
|
|
22,776 |
|
|
506 |
|
|
2.22 |
|
|
|
25,545 |
|
|
536 |
|
|
2.10 |
|
Total investment securities |
|
|
393,550 |
|
|
10,820 |
|
|
2.75 |
|
|
|
348,556 |
|
|
8,035 |
|
|
2.31 |
|
Loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable (1) |
|
|
1,654,614 |
|
|
100,114 |
|
|
6.05 |
|
|
|
1,557,289 |
|
|
72,558 |
|
|
4.66 |
|
Tax-exempt |
|
|
21,988 |
|
|
854 |
|
|
3.88 |
|
|
|
18,200 |
|
|
730 |
|
|
4.01 |
|
Total loans |
|
|
1,676,602 |
|
|
100,968 |
|
|
6.02 |
|
|
|
1,575,489 |
|
|
73,288 |
|
|
4.65 |
|
Total earning assets |
|
|
2,105,694 |
|
|
113,554 |
|
|
5.39 |
|
|
|
2,224,967 |
|
|
84,911 |
|
|
3.82 |
|
Other assets
(2) |
|
|
70,027 |
|
|
|
|
|
|
|
79,891 |
|
|
|
|
|
Total assets |
|
$ |
2,175,721 |
|
|
|
|
|
|
$ |
2,304,858 |
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing demand |
|
$ |
908,860 |
|
|
19,532 |
|
|
2.15 |
% |
|
$ |
975,583 |
|
$ |
4,562 |
|
|
0.47 |
% |
Savings |
|
|
148,395 |
|
|
45 |
|
|
0.03 |
|
|
|
162,701 |
|
|
49 |
|
|
0.03 |
|
Time |
|
|
422,276 |
|
|
11,177 |
|
|
2.65 |
|
|
|
414,784 |
|
|
2,650 |
|
|
0.64 |
|
Total interest bearing deposits |
|
|
1,479,531 |
|
|
30,754 |
|
|
2.08 |
|
|
|
1,553,068 |
|
|
7,261 |
|
|
0.47 |
|
Short-term
borrowings |
|
|
33,229 |
|
|
1,237 |
|
|
3.72 |
|
|
|
11,987 |
|
|
48 |
|
|
0.40 |
|
Long-term
debt |
|
|
14,489 |
|
|
839 |
|
|
5.79 |
|
|
|
18,741 |
|
|
616 |
|
|
3.29 |
|
Subordinated
debentures |
|
|
30,808 |
|
|
1,476 |
|
|
4.79 |
|
|
|
30,727 |
|
|
1,476 |
|
|
4.80 |
|
Total interest bearing liabilities |
|
|
1,558,057 |
|
|
34,306 |
|
|
2.20 |
|
|
|
1,614,523 |
|
|
9,401 |
|
|
0.58 |
|
Noninterest
bearing deposits |
|
|
413,126 |
|
|
|
|
|
|
|
494,969 |
|
|
|
|
|
Other
liabilities |
|
|
19,186 |
|
|
|
|
|
|
|
14,073 |
|
|
|
|
|
Shareholders' equity |
|
|
185,352 |
|
|
|
|
|
|
|
181,293 |
|
|
|
|
|
Total liabilities and shareholders'
equity |
|
$ |
2,175,721 |
|
|
|
|
|
|
$ |
2,304,858 |
|
|
|
|
|
Net interest
income (tax equivalent basis) |
|
|
|
$ |
79,248 |
|
|
|
|
|
|
|
$ |
75,510 |
|
|
|
|
Net interest
margin (3) |
|
|
|
|
|
3.76 |
% |
|
|
|
|
|
3.39 |
% |
Tax
equivalent adjustment |
|
|
|
|
(256 |
) |
|
|
|
|
|
|
|
(258 |
) |
|
|
|
Net interest
income |
|
|
|
$ |
78,992 |
|
|
|
|
|
|
|
$ |
75,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average
balances include nonaccrual loans. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Average balances include bank owned life insurance and
foreclosed real estate. |
|
|
|
|
|
|
|
|
|
|
(3) Net interest
income (tax-equivalent basis) annualized as a percentage of average
interest earning assets. |
|
|
|
|
|
|
|
|
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