Layout 1 (Page 1) - Investor Relations
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Layout 1 (Page 1) - Investor Relations
Codorus Valley Bancorp, Inc. is headed in the right DIRECTION as reflected by our financial performance in 2006. Our steady, strong growth and the diligent execution of our strategic plan have translated into increased value for our shareholders and clients. Our VISION for the future is clear. As we move forward, we will continue to build upon our deep roots and rich heritage while providing our clients with innovative services to meet their financial needs. And, we will remain committed to our role in leading the efforts to improve the quality of life for those who live and work in the communities we serve, which gives us meaning and PURPOSE that our team members grasp with enthusiasm. Our direction, vision, and purpose are clear, and we appreciate the support of our shareholders as we remain focused on our efforts to ensure continued success for your company. A CLEAR DIRECTION VISION PURPOSE Codorus Valley Bancorp, Inc. Annual Report 2006 Total Assets in millions $548 Net Income per share, basic $1.53 $476 $1.33 $408 $350 $1.16 $373 $1.00 $0.90 02 03 04 05 Cash Dividends per share 06 $0.49 $0.45 $0.37 $0.39 02 03 04 05 06 Return on Average Shareholders’ 13.0% 12.3% Equity 11.5% $0.42 10.1% 10.3% Rodney L. Krebs (left) Chairman Codorus Valley Bancorp, Inc. and PeoplesBank Larry J. Miller (right) Vice Chairman President and Chief Executive Officer Codorus Valley Bancorp, Inc. and PeoplesBank 02 03 04 05 06 02 03 04 05 06 DIRECTION Selected Financial Data 2006 S U M M A R Y O F O P E R AT I O N S (in thousands) Interest income Interest expense Net interest income Provision for loan losses Noninterest income Noninterest expense Income before income taxes Provision for income taxes Net income P E R C O M M O N S H A R E (adjusted for stock dividends) Net income, basic Net income, diluted Cash dividends paid Stock dividends distributed Book value Cash dividend payout ratio Weighted average shares outstanding Weighted average diluted shares outstanding * includes two 5% stock dividends $ $ 33,319 15,077 18,242 650 5,465 15,890 7,167 1,845 5,322 $ $ $ 1.53 1.49 0.49 10%* $ 12.21 32.0% 3,489,229 3,571,019 2005 $ $ 25,572 9,149 16,423 775 5,003 14,482 6,169 1,552 4,617 $ $ $ 1.33 1.30 0.45 5% $ 11.11 33.6% 3,475,192 3,544,479 2004 $ $ 2003 20,469 6,545 13,924 420 4,626 12,769 5,361 1,353 4,008 $ $ $ 1.16 1.14 0.42 5% $ 10.38 36.3% 3,453,571 3,525,296 $ $ 19,964 6,898 13,066 553 4,380 12,290 4,603 1,171 3,432 $ $ $ 2002 $ $ 20,674 8,907 11,767 515 3,534 11,008 3,778 677 3,101 1.00 0.99 0.39 5% $ 9.80 38.7% 3,443,823 3,483,064 $ $ $ 0.90 0.90 0.37 5% $ 9.36 40.7% 3,437,487 3,452,296 P R O F I TA B I L I T Y R AT I O S Return on average shareholders' equity (ROE) Return on average assets (ROA) Net interest margin Efficiency ratio 13.0% 1.05% 3.97% 65.1% 12.3% 1.06% 4.16% 66.1% 11.5% 1.03% 4.01% 67.6% 10.3% 0.96% 4.13% 69.9% 10.1% 0.91% 3.88% 70.7% C A P I TA L R AT I O S Tier 1 risk-based capital Total risk-based capital Average shareholders’ equity to average assets 12.0% 12.7% 8.1% 10.6% 11.3% 8.6% 11.8% 12.3% 9.0% 11.1% 11.7% 9.3% 11.3% 11.9% 9.0% S U M M A RY O F F I N A N C I A L C O N D I T I O N AT Y E A R - E N D (in thousands) Investment securities Loans Assets Deposits Borrowings Equity O T H E R D ATA Number of bank offices Number of employees (full-time equivalents) Wealth Management assets, market value (in thousands) $ 80,926 407,260 548,212 456,645 45,339 42,786 $ 14 168 $ 259,453 $ 69,664 369,631 476,052 385,154 49,493 38,729 $ 74,140 300,260 407,671 329,537 39,493 35,982 14 163 12 146 213,735 $ 180,314 Annual Report 2006 1 $ 74,069 262,363 372,547 304,282 31,234 33,789 $ 11 143 $ 137,186 79,723 238,546 349,897 292,627 23,253 32,223 11 163 $ 113,106 To Our Shareholders It is my pleasure to report the excellent financial results of your Company last year. By almost any measure, the performance of Codorus Valley Bancorp, Inc. and its financial services subsidiary, PeoplesBank, A Codorus Valley Company, exceeded expectations in 2006. These results were achieved despite a flat and sometimes inverted U.S. Treasury yield curve, the pressures of which are forecasted to continue through 2007. DIRECTION As you review the 2006 financial information contained in this report and in the Form 10-K, it will become clear that all of the Company’s key ratios and performance measurements are headed in the right direction. “We make a living by what we get. We make a life by what we give.” —Sir Winston Churchill Net income for 2006 was up over 15 percent, totaling $5.3 million. The total return on Codorus Valley common stock was more than 18 percent in 2006. Assets in the Wealth Management Division were up over 21 percent, to now total almost $260 million, and deposits at PeoplesBank grew over 18 percent, to end the year at over $456 million. We are especially proud of one significant historic milestone we achieved last year; total assets of the Company topped the half-billion mark, ending the year at $548 million, or an increase of 15 percent. These results are directly related to the strategies developed and implemented by the Leadership Team, the actions taken and approved by your Board of Directors, and the diligent, focused efforts of each and every member of the staff. VISION The primary forces that establish the strategic vision for the Company and that lay the groundwork for its direction are its Board of Directors and Leadership Team. Both groups contain individuals with diverse backgrounds, perspectives, and tenures with the Company, and both groups experienced changes during 2006. VISION After serving Codorus Valley as a member of the Board of Directors for 18 years, Mrs. M. Carol Druck resigned from the Board in June for the purposes of retirement. Mrs. Druck worked diligently and faithfully to increase the Company’s presence in the community and her in-depth knowledge of the real estate industry greatly contributed to the Mortgage Banking Division’s success. We sincerely thank Carol for her many contributions and wish her good health and happiness in retirement. In July, Mr. William H. Simpson was named to the Board of Directors of the Company. Mr. Simpson is the former President/CEO of Susquehanna Pfaltzgraff Co. and is currently Vice Chairman of Susquehanna Real Estate LP. Mr. Simpson has extensive business experience, as well as legendary community involvement. We look forward to Bill’s leadership and counsel as we continue to grow the Company and to serve the needs of our community. PeoplesBank welcomed Steven C. Skoff, Esq. to its Leadership Team in October as Senior Vice President and leader of the newly-formed Wealth Management Division. The Wealth Management Division is comprised of the assets in the Trust and Investment Services Division and the assets under control of Codorus Valley Financial Advisors, Inc., a subsidiary of PeoplesBank. In 2006, the Wealth Management Division generated in excess of $2.6 million in revenue, and we look forward to the integration of these important segments of the Company. We also welcomed Nathan A. Eifert to the Leadership Team in June as Vice President and Director of Marketing. Nathan brings many years of diversified banking experience to the Company, and his creativity and energy have already positively impacted the public’s perception of the Company and the services that we offer. Codorus Valley Bancorp, Inc. 2 Sadly, I must report the passing of someone who provided great vision and direction for the predecessors of this Company, and served as its first Chairman of the Board of Directors. William U. Kapp, retired President and Chief Executive Officer of the then Peoples Bank of Glen Rock, died earlier this year. Mr. Kapp was born and raised in the borough of Glen Rock, where the Company has provided financial services since 1864. Bill quickly matured as a man on the beaches of the South Pacific during World War II. A perfect example of the Greatest Generation, Bill served with distinction with the U.S. Marine Corps and received the Purple Heart Medal for injuries received in action on the island of Peleliu. Returning to Glen Rock, Bill spent his entire career working for Peoples Bank of Glen Rock. He also served as an elected member of the Glen Rock School Board and the Southern York County Joint School District Board. To honor him, PeoplesBank has endowed a scholarship in his name at the Southern York County School District Foundation. Bill loved his family, his country and community, and his work. For many, he will long be remembered for his dry sense of humor, candor, and quiet laugh. For me, Bill was a role model, a mentor, and a dear friend. PURPOSE Creating long-term shareholder value and improving the quality of life for our employees and community continues to be the mission of Codorus Valley Bancorp, Inc. We believe in this mission, and it serves as our collective purpose. About three years ago, the Leadership Team of your Company underwent a thorough, and at times exhaustive, examination of the Company’s strengths and the needs and opportunities within our community. We determined that our people, and their community involvement, were your Company’s greatest attributes. They actively take part in numerous local organizations by giving of their time, talents, energy, and financial resources. As the largest independent financial services company headquartered in York County, Codorus Valley has a duty and purpose to assume an active role in our community. We support our staff’s non-profit activities by providing funding to many charitable organizations. Over the past six years, we have provided in excess of $1 million to deserving York County non-profit organizations through the Educational Improvement Tax Credit program. And looking solely at 2006, we provided more in charitable contributions to local non-profit organizations than we spent in advertising and promoting the Company’s brand! We feel strongly that the money was invested wisely. Larry J. Miller Vice Chairman, President and Chief Executive Officer Clearly, we are making a difference in our community and others are noticing your Company for all the right reasons. Early last year, PeoplesBank was awarded the 2006 Public Service Award from the York County Conservation District. This award was due in part to the bank’s efforts of quickly providing temporary financing to the Farm & Natural Lands Trust in order to purchase a property that will become part of the Codorus State Park. And later in the year, PeoplesBank was recognized by the Central Penn Business Journal as a finalist for the Corporate Citizen of the Year award. According to the Journal, this award was created to honor select businesses for their outstanding contributions to Central Pennsylvania and to recognize their strong dedication to success, business, and community. These recognitions were truly an honor for everyone on our staff. Direct dial: 717.747.1500 E-mail at: [email protected] We sincerely acknowledge and appreciate the investment you have made in the Company and the confidence you have placed in all of us. We also acknowledge that the performance of the Company is directly related to the economic and social vitality of our community, which in turn improves the quality of life for everyone who lives, works, and plays in York County. We would not be able to accomplish this mission without your continued support. On behalf of the Board of Directors, Leadership Team, and everyone associated with the Company, thank you for being a shareholder in Codorus Valley Bancorp, Inc. Please let us know how we may improve our services, our Company or our community. Sincerely, Annual Report 2006 3 Corporate Information CORPORATE PROFILE Codorus Valley Bancorp, Inc. (Codorus Valley), incorporated in 1986, is a one-bank holding company headquartered in York, Pennsylvania that provides a full range of financial services through its subsidiary, PeoplesBank, A Codorus Valley Company (PeoplesBank). Codorus Valley is a publicly held corporation whose stock is traded on the NASDAQ Global Market under the symbol CVLY. PeoplesBank, with origins dating back to 1864, is focused on acquiring and nurturing financial relationships with small and mid-sized businesses. It also provides personal banking, mortgage banking, wealth management, and real estate settlement services. PeoplesBank is the largest community bank headquartered and managed in York County where it currently operates fourteen financial centers. CORPORATE HEADQUARTERS Codorus Valley Bancorp, Inc. is headquartered at the Codorus Valley Corporate Center, 105 Leader Heights Road, York, PA 17403. STOCK, DIVIDEND, AND BROKER INFORMATION The shares of Codorus Valley Bancorp, Inc. are traded on the NASDAQ Global Market under the symbol CVLY. Codorus Valley had approximately 939 shareholders of record as of December 31, 2006. The following table sets forth dividends paid per share and the high and low sales prices for Codorus Valley as reported by NASDAQ during the periods indicated. The sales prices and cash dividends per share listed are adjusted for stock dividends. 2006 2005 Quarter High Low Dividends per share High Low Dividends per share First Second Third Fourth $19.50 19.52 19.05 21.25 $17.25 17.61 17.86 18.38 $0.118 0.118 0.124 0.129 $17.70 17.91 18.80 18.11 $15.98 15.96 15.43 16.33 $0.108 0.108 0.113 0.118 For further information, we refer you to the following market makers in our common stock: Boenning & Scattergood, Inc. 1-800-842-8928 Ferris, Baker Watts, Inc. 1-877-840-0012 PURPOSE Codorus Valley Bancorp, Inc. 4 INTERNET INFORMATION Information about products and services that are offered by Codorus Valley and its subsidiaries is available on the Internet at www.peoplesbanknet.com. FINANCIAL INFORMATION The Annual Report on Form 10-K is filed with the Securities and Exchange Commission (SEC). Copies of this document and other SEC filings by Codorus Valley Bancorp, Inc. may be obtained electronically at PeoplesBank’s website at www.peoplesbanknet.com (select Investor Relations, then select SEC Filings), or the SEC’s website at www.sec.gov/edgarhp.htm. Copies can also be obtained without charge by writing to: Treasurer, Codorus Valley Bancorp, Inc., P.O. Box 2887, York, PA 17405-2887. ANNUAL SHAREHOLDERS MEETING The Annual Meeting of Shareholders will be held on Tuesday, May 15, 2007, at 9:00 a.m. Eastern Time, at the Codorus Valley Corporate Center, 105 Leader Heights Road, York, PA 17403. TRANSFER AGENT Wells Fargo Bank, N.A., Shareowner Services, 161 North Concord Exchange, South St. Paul, MN 55075. Phone 1-800-468-9716. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN Information regarding the Corporation’s Dividend Reinvestment and Stock Purchase Plan may be obtained by contacting the transfer agent above. FINANCIAL CENTERS Brogue 2510 Delta Road Brogue, PA 17309-9106 John S. Eaton, Jr., Manager Jacobus 1 North Main Street, P.O. Box 176 Jacobus, PA 17407-0176 Barbara J. Wilson, Manager West York 1477 Carlisle Road York, PA 17404-4729 Mark E. Kotzman, Manager Cape Horn 2587 Cape Horn Road Red Lion, PA 17356-9057 Marisa G. Baublitz, Manager Jefferson 6 Baltimore Street, P.O. Box 127 Codorus, PA 17311-0127 Tammy L. Ford, Manager York New Salem 320 North Main Street, P.O. Box 278 York New Salem, PA 17371-0278 Algard P. Shaffer, Manager City of York 48 East Market Street York, PA 17401-1219 James W. Coombes, Manager Leader Heights 109 Leader Heights Road York, PA 17403-5137 Wendy M. Livingston, Manager All Financial Centers have a 24-Hour ATM on-site for customer convenience. City of York 221 West Philadelphia Street Suite 114 York, PA 17401-2992 James W. Coombes, Manager New Freedom 26 East Main Street New Freedom, PA 17349-9748 Mark S. Moscynski, Manager Contact Information To contact any Financial Center location, the Client Care Center, or any bank employee, please call us at 717-846-1970 or 1-888-846-1970. South Hanover 1400 Baltimore Street Hanover, PA 17331-8528 Christopher M. Aulbach, Manager Electronic Access Internet Banking and Online Bill Payment Services are available at www.peoplesbanknet.com. East York 2701 Eastern Boulevard York, PA 17402-2907 Carol A. Gross, Manager Glen Rock 1 Manchester Street, P.O. Box 67 Glen Rock, PA 17327-0067 Connie L. Kiser, Manager Stewartstown 2 Ballast Lane, P.O. Box 925 Stewartstown, PA 17363-0925 Terry R. Kernan, Manager We’re committed to everyone in our community —including the furry residents! Throughout 2006, PeoplesBank led various fundraising efforts to support the York County SPCA, including our successful Pennies for Puppies program. Al Shaffer (left), a veteran PeoplesBank employee for 44 years, and his staff are shown presenting a check to the SPCA representing the funds they raised during a three-hour car wash at the York New Salem financial center. Because of their efforts and the generosity of our clients who dropped coins in our Pennies for Puppies canisters, we raised almost $6,000 for the SPCA in 2006. PhoneconnecT® 24-Hour Telephone Banking 717-747-1555 or 1-888-767-1555 Annual Report 2006 5 Photo taken on the terrace of the Codorus Valley Corporate Center. Codorus Valley Bancorp, Inc. 6 Board of Directors CODORUS VALLEY BANCORP, INC. AND PEOPLESBANK Rodney L. Krebs Chairman—Codorus Valley Bancorp, Inc. and PeoplesBank President—Springfield Contractors, Inc. Larry J. Miller Vice Chairman, President, and Chief Executive Officer Codorus Valley Bancorp, Inc. and PeoplesBank Clearly, we are making a difference in our community and others are noticing your Company for all the right reasons. D. Reed Anderson, Esquire Stock and Leader Attorney at Law MacGregor S. Jones Retired Automobile Dealer William H. Simpson Vice Chairman—Susquehanna Real Estate LP Dallas L. Smith President—Bruce V. Smith, Inc. Donald H. Warner President—Warners Motor Express, Inc. Hon. Michael L. Waugh 28th Senatorial District Commonwealth of Pennsylvania DIRECTORS EMERITUS—PEOPLESBANK M. Carol Druck Barry A. Keller George A. Trout, D.D.S. Bernard F. Young 1 2 3 4 5 6 1. D. Reed Anderson 2. MacGregor S. Jones 7 3. Larry J. Miller 8 4. Rodney L. Krebs 5. William H. Simpson 6. Donald H. Warner 7. Dallas L. Smith 8. Hon. Michael L. Waugh Annual Report 2006 7 Photo taken in the Board Room of the Codorus Valley Corporate Center. Pictured left to right: Scott T. Weaver, Nathan A. Eifert, Diane E. Hill, Todd A. Tyson, Karen L. Botts, Kent A. Ketterman, Jann Allen Weaver, Larry J. Miller, Harry R. Swift, Matthew A. Clemens, Lynn D. Crenshaw, William H. Thompson, Keith L. Sheffer, David J. Cover, Steven C. Skoff. Codorus Valley Bancorp, Inc. 8 Executive Officers and Leadership Group PEOPLESBANK, A CODORUS VALLEY COMPANY Larry J. Miller President and Chief Executive Officer Harry R. Swift, Esquire Executive Vice President, Cashier, and General Counsel Jann Allen Weaver, CPA Executive Vice President and Chief Financial Officer Matthew A. Clemens, SPHR Senior Vice President—Human Resources Division David J. Cover, CRSP Senior Vice President—Trust and Investment Services Division Lynn D. Crenshaw Senior Vice President—Retail Sales and Service Division Kent A. Ketterman Senior Vice President—Business Banking Division Steven C. Skoff, Esquire Senior Vice President—Wealth Management Division Todd A. Tyson, CFSSP Senior Vice President—General Services Division and Security Officer Scott T. Weaver Senior Vice President—Administrative Services Division Hundreds of thousands of people enjoy one of York County’s oldest and largest events each year—the York Fair. This past year, York County’s oldest and largest bank—PeoplesBank—showed its support for this family tradition by sponsoring two areas of the Fair. Karen L. Botts Vice President—Information Technology Division Nathan A. Eifert Vice President—Director of Marketing Visitors of all ages enjoyed the PeoplesBank Pavilion where they could rest their feet while enjoying the sights and smells of the Fair. Children were treated to special events at Maverick’s Kids Station, where they received information about our Maverick’s Kids Savings Account while participating in craft activities and having photo IDs made. Diane E. Hill, CPA Vice President and Auditor Keith L. Sheffer Vice President—Mortgage Banking Division William H. Thompson, CLU, CHFC Executive Vice President—Codorus Valley Financial Advisors, Inc. Annual Report 2006 9 Bank Officers and Managers VICE PRESIDENTS ASSISTANT VICE PRESIDENTS Gregg A. Elicker Vice President—Administrative Services Steven E. Miller Assistant Vice President and Loan Review Officer Terrence M. Gingrow Vice President—Business Banking Kelly L. Rosenzweig Assistant Vice President and Assistant Controller Jeffrey E. Grove Vice President—Business Banking Timothy S. Wise Assistant Vice President—Administrative Services Dawn C. Paul Vice President and Controller Stephen T. Sherman Vice President—Business Banking OTHER OFFICERS AND MANAGERS Phyllis A. Crumley Retail Services Officer Christine A. Myers Manager—Deposit Services Donna A. Massa Training Officer Mary Anne Seitz Training Officer Sarah A. McPherson Trust Officer Ronald E. Talbert Senior Regional Business Banking Officer Debra A. Messersmith Manager—Floating Teller Pool Natalie L. Thompson Human Resources Officer Stephanie R. Miller Manager—Trust Operations Dorcas J. Warner Settlement Officer—Credit Services Carol E. Montony Manager—Client Care Center Tamara L. Wildasin Senior Commercial Credit Review Officer Barbara J. Myers Corporate Secretary Codorus Valley Bancorp, Inc. 10 Codorus Valley Financial Advisors, Inc. OFFICERS LICENSED AGENTS Harry R. Swift, Esquire President William H. Thompson, CLU, CHFC Joseph H. Zilligen, CLU, CHFC William H. Thompson, CLU, CHFC Executive Vice President Larry J. Miller Vice President and Secretary David J. Garber Richard B. Shuster Jason R. Weber Jann Allen Weaver, CPA Treasurer and Assistant Secretary Todd A. Tyson, CFSSP Vice President SYC Settlement Services, Inc. OFFICERS Harry R. Swift, Esquire President Jann Allen Weaver, CPA Treasurer and Assistant Secretary Larry J. Miller Vice President and Secretary Scott T. Weaver Vice President PeoplesBank, A Codorus Valley Company ADVISORY COMMITTEE MEMBERS Cindy E. Baugher President—Baugher Motors, Inc. Richard D. Hupper, Ed.D. Retired Educator Keith R. Brown Retired Personal Care Administrator Samuel E. Keeney President—Sam Keeney Organ and Piano Center, Inc. Evans N. Fishel President—H. Norman Fishel & Son, Inc. Claude W. Rohrbaugh President—B & R Electrical Contractors, Inc. William W. Gemmill, Jr. Owner—W. W. Gemmill Plumbing, Heating & Air Conditioning Annual Report 2006 11 Codorus Valley Bancorp, Inc. 12 Significant Events April 18, 1864 National Banking Charter No. 435 is issued to the First National Bank in Glen Rock. March 14, 1919 The bank reorganizes and is issued a new charter under the name of the Trust Company of Glen Rock. January 24, 1934 Peoples Bank of Glen Rock incorporates with $50,000 in capital. February 18, 1963 Peoples Bank of Glen Rock acquires the Codorus National Bank of Jefferson. As we mark the 20th anniversary of Codorus Valley Bancorp, Inc., and the 10th anniversary of the opening of the Codorus Valley Corporate Center, we also reflect on our deep York County roots. When we first started serving the citizens of Glen Rock in 1864, we embarked on a mission to provide our neighbors with the financial services they needed to improve their lives. Today, as the largest independent financial institution headquartered in York County, we remain committed to that mission. Since1864 October 10, 1986 The Leader Heights facility opens and houses the Data Operations Center. March 2, 1987 Codorus Valley Bancorp, Inc. becomes effective as the holding company of Peoples Bank of Glen Rock. February 4, 1997 Peoples Bank of Glen Rock changes its name to PeoplesBank, A Codorus Valley Company. April 25, 1997 Codorus Valley Bancorp, Inc. stock is listed on NASDAQ under the symbol CVLY. August 21, 1997 The 42,380 square foot Codorus Valley Corporate Center opens. June 30, 2006 Total consolidated assets of the Company top the $500,000,000 milestone. Codorus Valley Bancorp, Inc. Codorus Valley Corporate Center 105 Leader Heights Road York, PA 17403-5137 (888) 846-1970 IN MEMORY OF WILLIAM U. KAPP 1918-2007 Proud Father Decorated Marine Community Steward Devoted Mentor Extraordinary Leader Farewell, friend. www.peoplesbanknet.com
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