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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ________________
Commission file number 0-15536.
CODORUS VALLEY BANCORP, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2428543
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Manchester Street, P.O. Box 67, Glen Rock, Pennsylvania 17327
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 717-846-1970
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered
NOT APPLICABLE NOT APPLICABLE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $2.50 per share
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes_X_ No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
1
On February 27, 1996, the aggregate market value of the Registrant's voting
stock held by non-affiliates was approximately, $25,757,424.
As of February 27, 1996, Codorus Valley Bancorp, Inc. had 995,793 shares of
common stock outstanding, par value $2.50 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Document: Parts:
1995 Annual Report to Stockholders I, II and IV
Proxy Statement for the Annual Meeting of
Stockholders to be held May 21, 1996. III and IV
2
Codorus Valley Bancorp, Inc.
Form 10-K Index
Part I Page
Item 1 Business............................................ 4
Item 2 Properties.......................................... 8
Item 3 Legal Proceedings................................... 9
Item 4 Submission of Matters to a Vote of Security Holders. 9
Part II
Item 5 Market for the Registrant's Common Equity and
Related Stockholder Matters......................... 9
Item 6 Selected Financial Data............................. 10
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 10
Item 8 Financial Statements and Supplementary Data......... 10
Item 9 Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................. 10
Part III
Item 10 Directors and Executive Officers of the Registrant. 10
Item 11 Executive Compensation............................. 10
Item 12 Security Ownership of Certain Beneficial Owners
and Management..................................... 10
Item 13 Certain Relationships and Related Transactions..... 11
Part IV
Item 14 Exhibits, Financial Statement Schedules, and Reports
on Form 8-K........................................ 11
Signatures......................................... 13
3
PART I
Item 1: Business
Codorus Valley Bancorp, Inc. ("Bancorp" or the "Registrant") is a Pennsylvania
business incorporated October 7, 1986. On March 2, 1987 Bancorp became effective
as a bank holding company, pursuant to the Bank Holding Company Act of 1956, as
amended, with Peoples Bank of Glen Rock ("Peoples Bank" or the "Bank") as its
wholly-owned banking subsidiary. Since commencing operations, Bancorp's business
has consisted primarily of managing and supervising the Bank, and its principal
source of income has been dividends paid by the Bank. At December 31, 1995
Bancorp had total consolidated assets of $234.7 million, total deposits and
other liabilities of $213.7 million, and total stockholders' equity of $21
million.
Peoples Bank of Glen Rock
Peoples Bank of Glen Rock, organized in 1934, is a Pennsylvania chartered bank
and is not a member of the Federal Reserve System. Peoples Bank offers a full
range of commercial and consumer banking services through seven full service
banking office locations in southern York County, Pennsylvania. It also offers
trust and investment services at a separate office located in Pine Grove
Commons, York, Pennsylvania. The deposits of Peoples Bank are insured by the
Federal Deposit Insurance Corporation to the extent provided by law. At December
31, 1995 Peoples Bank had total loans of $160 million and total deposits of
$212.5 million.
The Bank is not dependent for deposits nor exposed by loan concentration to a
single customer or to a small group of customers. Accordingly, losses from a
single customer, or small customer group, would not have a material adverse
effect on the financial condition of the Bank. At year end 1995 approximately
12% of total outstanding loans were concentrated in the real estate development
industry, compared to 13% at year end 1994.
Non-Banking Subsidiary
On June 20, 1991, SYC Realty Company, Inc. ("SYC Realty") was incorporated as a
wholly-owned subsidiary of the Registrant. This non-bank subsidiary was created
primarily for the purpose of disposing selected properties obtained from the
Bank in satisfaction of debts previously contracted. SYC Realty commenced
business operations in October 1995. To date, the financial impact of this
subsidiary's operations on the Registrant and the Bank has been immaterial.
4
Competition
The banking industry in Peoples Bank's service area, principally southern York
County, Pennsylvania, is extremely competitive. The Bank competes with
commercial banks and other financial service providers such as thrifts, credit
unions, consumer finance companies, investment firms, and mortgage companies.
Some of the financial services providers operating in Peoples Bank's service
area operate on a regional scale and possess resources greater than those of
Peoples Bank.
Supervision and Regulation
Codorus Valley Bancorp, Inc. is subject to regulation by the Pennsylvania
Department of Banking, the Federal Reserve Board ("FRB") and the Securities and
Exchange Commission ("SEC"). Bancorp is restricted to activities which are found
by the Federal Reserve Board to be closely related to banking, and which are
expected to produce benefits for the public that will outweigh any potentially
adverse effects.
Provisions of the Bank Holding Company Act of 1956, as amended, ("BHC Act")
requires Bancorp to secure the prior approval of the Federal Reserve Board
before it owns or controls, directly or indirectly, more than 5% of the voting
shares or substantially all of the assets of any institution, including another
bank.
Bancorp is required to file an annual report with the FRB and any additional
information required pursuant to the BHC Act. The FRB may also make examinations
of Bancorp and each of its subsidiaries. Subsidiary banks of a bank holding
company are subject to certain restrictions imposed by the BHC Act on any
extensions of credit to the bank holding company or any of its subsidiaries,
investments in the stock or securities thereof, and on the taking of such stock
or securities as collateral for loans to any borrower. A bank holding company
and its subsidiaries are also prevented from engaging in certain tie-in
arrangements in connection with any extension of credit, lease or sale of
property or furnishing of services.
Peoples Bank of Glen Rock is subject to regulation by the Pennsylvania
Department of Banking, the Federal Deposit Insurance Corporation ("FDIC") and
the Federal Reserve Board. Federal and state laws and regulations govern, among
other things, the scope of a bank's business, the investments a bank may make,
the reserves against deposits a bank must maintain, loans a bank makes and
collateral it takes, the activities of a bank with respect to mergers and
consolidations, and the establishment of branches.
The earnings of the Bank are also affected by domestic economic conditions and
the monetary and fiscal policies of the United States government and its
agencies.
5
The passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 and the Riegle Community Development and Regulatory Improvement Act may
have a significant impact upon the Registrant. The key provisions pertain to
interstate banking and interstate branching as well as a reduction in the
regulatory burden on the banking industry. Since September 1995, bank holding
companies may acquire banks in other states without regard to state law. In
addition, banks can merge with other banks in another state beginning in June,
1997. States may adopt laws preventing interstate branching but, if so, no
out-of-state bank can establish a branch in such state and no bank in such state
may branch outside the state. During July 1995, Pennsylvania amended the
provisions of its Banking Code to authorize full interstate banking and
branching under Pennsylvania law and to facilitate the operations of interstate
banks in Pennsylvania. As a result of legal and industry changes, management
predicts that consolidation will continue as the financial services industry
strives for greater cost efficiencies and market share.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"),
also has impact on how the Bank conducts its business. FDICIA's risk-based
assessment system is designed to promote safety and soundness in the banking and
thrift industries by making the deposit insurance system fairer to well-run
institutions and by encouraging weaker institutions to improve their financial
condition. Current information about the Bancorp's deposit insurance premiums is
provided in the 1995 Annual Report to Shareholders, within the Management's
Discussion section under the subheading non-interest expenses. Information about
Bancorp's capital ratios can be found in the 1995 Annual Report, within the
Management's Discussion section under the subheading stockholder's equity
(including Table 10). Bancorp's and the Bank's capital ratios exceed current
regulatory requirements for well capitalized banks. "Truth-in-Savings" a
separate subtitle within FDICIA, called the "Bank Enterprize Act of 1991,"
requires truth-in-savings on consumer deposit accounts so that consumers can
make meaningful comparisons between the competing claims of banks with regard to
deposit accounts and products. The Bank has been providing information to
depositors concerning the terms of their deposit accounts, and in particular the
annual percentage yield in compliance with this law.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") reformed supervisory, enforcement and penalty provisions relative to
financial service companies.
Periodically, legislation is enacted which has the effect of increasing the cost
of doing business, limiting or expanding permissible activities or affecting the
competitive balance between banks and other financial institutions. Proposals to
change the laws and regulations governing the operations and taxation of banks,
bank holding companies, and other financial institutions are frequently made in
Congress, and before various bank regulatory agencies. No predictions can be
made as to the likelihood of any major changes or the impact such changes might
have on the assets, earnings or capital of the Bancorp and its subsidiary bank.
6
Other information
At December 31, 1995 the Bank had one hundred and twenty (120) full-time
employees and sixteen (16) part-time employees.
The required Statistical Information for Item I can be found in Item 7,
"Management's Discussion and Analysis" of this report.
7
Item 2: Properties
Codorus Valley Bancorp, Inc., the holding company, owns in fee and without liens
the following properties.
Trust and Investment Services Office
Located at 120 Pine Grove Commons, Pine Grove Road, York, PA. This office
is a 1,575 square foot (approximately) unit of a business condominium
complex known as Pine Grove Commons. This space is leased to its
subsidiary, Peoples Bank of Glen Rock. The lease, as signed on August 17,
1990, is for a five year term and is renewable every five years thereafter
at the option of the lessee. The lessee pays annual rent of $18,900 during
the said term in monthly installments of $1,575. The fixed rent may be
adjusted annually in reference to the Consumer Price Index as described in
the lease agreement.
Headquarters facility site
A one acre (approximately) parcel of land located at 105 Leader Heights
Road in York Township, PA was purchased in 1995. This land, adjacent to the
Bank's Data Operations Center and banking office, coupled with real estate
already owned by the Bank will serve as the site for a headquarters
facility.
Peoples Bank of Glen Rock, the banking subsidiary of the Registrant, owns the
following properties in fee and without liens.
Glen Rock Office: Serves as both a corporate headquarters and banking office.
It is located at the intersection of Hanover and Manchester Streets in the
borough of Glen Rock, PA. A bank-owned parking lot is located nearby on
Hanover Street.
Jacobus Office: Located at 1 North Main Street in the borough of
Jacobus, PA.
Jefferson Office: Located at 6 Baltimore Street in the borough of
Jefferson, PA. A bank-owned parking lot is located nearby at 10
Baltimore Street.
York New Salem Office: Located at 320 North Main Street in the
borough of York New Salem, PA.
Leader Heights Office: Serves as both a banking office and data operations
center. It is located at 109 Leader Heights Road in York Township, PA. In
addition, the Bank owns a small tract of adjoining land which it may use
for future development.
Cape Horn Office: Located at 2587 Cape Horn Road, Red Lion in the
township of Windsor, PA.
8
Human Resources Office: Located at 7 Manchester Street in the
borough of Glen Rock, PA. This office is a frame dwelling located
next to the Glen Rock banking office.
Peoples Bank of Glen Rock leases the following property.
Stewartstown Office: Located at 2 Ballast Lane in the borough of
Stewartstown, PA. This office is a 1,278 square foot unit of a business
complex known as Village Square at Stewartstown. The lease, as signed on
November 29, 1993 is for a twenty year term. The minimum annual rent for
years 1 thru 4 is $15,656, payable in monthly installments of $1,305.
Thereafter, the minimum annual rent will increase at four year intervals.
All of the above properties are located in York County, Pennsylvania and are
adequate for the business purposes of the Registrant and its subsidiaries.
Item 3: Legal Proceedings
Various legal actions or proceedings, arising in the ordinary course of
business, are pending involving the Corporation or its subsidiaries. In the
opinion of management, these matters are without merit or immaterial in terms of
the Corporation's liquidity, capital resources, and results of operations.
Item 4: Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5: Market for the Corporation's Common Equity and Related
Stockholder Matters
Market and dividend information appearing in the 1995 Annual Report to
Stockholders at Exhibit 13 under the caption "Stock, Dividend and Broker
Information" is incorporated by reference in response to this item.
As of February 27, 1996, the Registrant had approximately one thousand,
twenty-one (1,021) stockholders of record.
Related stockholder information appearing in the 1995 Annual Report to
Stockholders at Exhibit 13 under the caption "Stockholders' Equity" included in
the Management's Discussion of Consolidated Financial Condition and Results of
Operations is incorporated by reference in response to this item.
9
Item 6: Selected Financial Data
Information appearing in the 1995 Annual Report to Stockholders at Exhibit 13
under the caption "Selected Financial Data" is incorporated by reference in
response to this item.
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The Management Discussion and Analysis of Consolidated Financial Condition and
Results of Operations appearing in the 1995 Annual Report to Stockholders at
Exhibit 13 is incorporated by reference in response to this item.
Item 8: Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements and Notes thereto appearing
in the 1995 Annual Report to Stockholders at Exhibit 13 is incorporated by
reference in response to this item.
The Registrant does not meet both of the tests under Item 302(a)(5) of
Regulation S-K, and therefore, is not required to provide supplementary
financial data.
Item 9: Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10: Directors and Executive Officers of the Registrant
Information appearing in the Proxy Statement at Exhibit 99 under the caption
"Information as to Nominees, Directors and Executive Officers" related to the
Annual Meeting of Stockholders to be held May 21, 1996 is incorporated by
reference in response to this item.
Item 11: Executive Compensation
Information appearing in the Proxy Statement at Exhibit 99 under the caption
"Executive Compensation" related to the Annual Meeting of Stockholders to be
held May 21, 1996 is incorporated by reference in response to this item.
Item 12: Security Ownership of Certain Beneficial Owners and Management
Information appearing in the Proxy Statement at Exhibit 99 under the caption
"Principal Beneficial Owners of the Corporation's Stock" related to the Annual
Meeting of Stockholders to be held May 21, 1996 is incorporated by reference in
response to this item.
10
Item 13: Certain Relationships and Related Transactions
Information appearing in the Proxy Statement at Exhibit 99 under the caption
"Certain Transactions" related to the Annual Meeting of Stockholders to be held
May 21, 1996 is incorporated by reference in response to this item.
PART IV
Item 14: Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(A) 1. The Annual Report to Stockholders of the Registrant for the fiscal
year ended December 31, 1995.
2. All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
3. Exhibits filed as part of 10-K pursuant to Item 601 of
Regulation S-K.
Exhibit
Number Description of Exhibit
3(i) Articles of Incorporation, as amended, of the Registrant
were filed at Exhibit 3(i) to Form 8-K dated March 25, 1996
and are hereby incorporated by reference.
3(ii) Amended By-laws of the Registrant were filed at Exhibit
3(ii) to Form 8-K dated March 25, 1996 and are hereby
incorporated by reference.
13 Annual Report to Stockholders for fiscal year ended December
31, 1995 (incorporated by reference to Parts I-IV of the
Form 10-K)
21 Subsidiaries of the Registrant
23 Consent of Independent Auditors
24 Power of Attorney
99 Proxy Statement for, Notice of, and Form of Proxy
for, the Annual Meeting of Stockholders of the
Registrant to be held May 21, 1996 as filed.
(incorporated by reference to Parts I-IV of the Form
10-K)
11
(B) Reports on Form 8-K.
There were no reports on Form 8-K for the quarter ended December 31,
1995.
(C) List of exhibits required by item 601 of Regulation S-K
Exhibit
Number Description of Exhibit
3(i) Articles of Incorporation, as amended, of the Registrant
were filed at Exhibit 3(i) to Form 8-K dated March 25, 1996
and are hereby incorporated by reference.
3(ii) Amended By-laws of the Registrant were filed at Exhibit
3(ii) to Form 8-K dated March 25, 1996 and are hereby
incorporated by reference.
13 Annual Report to Stockholders for fiscal year ended December
31, 1995.
21 List of subsidiaries of the Registrant.
23 Consent of Independent Auditors
24 Power of Attorney
99 Proxy Statement for, Notice of, and Form of Proxy for, the
Annual Meeting of Stockholders to be held May 21, 1996.
12
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Codorus Valley Bancorp, Inc.
(Registrant)
By /s/ Larry J. Miller Date: March 26, 1996
Larry J. Miller, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature and Capacity
/s/ George A. Trout, D.D.S Chairman of the Board of 3/26/96
George A. Trout, D.D.S. Directors and Director
/s/ Larry J. Miller President, Chief Executive 3/26/96
Larry J. Miller, President Officer and Director
(Principal Executive Officer)
/s/ Barry A. Keller Vice Chairman of the Board of 3/26/96
Barry A. Keller Directors and Director
/s/ Dallas S. Smith Secretary and Director 3/26/96
Dallas S. Smith
/s/ M. Carol Druck Assistant Secretary, 3/26/96
M. Carol Druck Assistant Treasurer and Director
/s/ MacGregor S. Jones Assistant Secretary and 3/26/96
MacGregor S. Jones Director
/s/ Rodney L. Krebs Treasurer and Director 3/26/96
Rodney L. Krebs
/s/ Donald H. Warner Vice President and Director 3/26/96
Donald H. Warner
/s/ D. Reed Anderson, Esq. Director 3/26/96
D. Reed Anderson, Esq.
/s/ Jann A. Weaver Assistant Treasurer and 3/26/96
Jann A. Weaver Assistant Secretary
(Principal Financial and
Principal Accounting Officer)
13