Third quarter net income of $5.9 million compared to net income of $7.2 million in the quarter ended September 30, 2022, and $6.6 million in the quarter ended June 30, 2023;

Net income of $19.5 million for the year ended September 30, 2023 compared to $12.2 million for the year ended September 30, 2022;
Net interest margin of 3.81% for the nine months ended September 30, 2023, an increase from the net interest margin of 3.21% for the nine months ended September 30, 2022;
Third quarter efficiency ratio of 66.95%; return on average assets of 1.08%; and return on equity of 12.64%;
Steady performance in credit metrics with nonperforming assets to total loans of 0.47% at September 30, 2023, a decrease of 32.9% from the ratio at December 31, 2022;
Cash dividend of $0.17 per common share payable on November 14, 2023, to holders of record on October 24, 2023.

YORK, Pa., Oct. 26, 2023 (GLOBE NEWSWIRE) -- 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 $5.9 million or $0.61 per diluted common share, for the quarter ended September 30, 2023. This compares to net income of $7.2 million or $0.75 per diluted common share, for the quarter ended September 30, 2022, representing a decrease of $1.2 million or 17.3 percent, and compares to net income of $6.6 million or $0.69 per diluted common share for the second quarter of 2023, representing a decrease of $700,000 or 10.5 percent. For the first nine months of 2023, net income was $19.5 million or $2.03 per diluted share, compared to $12.2 million or $1.27 per diluted share, for the first nine months of 2022, representing an increase of $7.4 million or 60.5 percent.

"Despite the challenging environment, the company continued to generate strong earnings in the third quarter and remains focused on positioning the Corporation for long-term financial performance. During the quarter the Corporation continued to proactively manage the balance sheet, ensured strong liquidity and capital positions, and maintained diligence around expense control," noted Craig L. Kauffman, President and CEO. "Additionally, the Corporation added several seasoned bankers who should contribute meaningfully to the growth plans of the Bank."

REVIEW OF RESULTS

Balance Sheet

Loans

Loans increased $70.8 million from December 31, 2022 to September 30, 2023, an annualized growth rate of 6.0 percent. Nonperforming assets decreased $3.4 million, or 30.2 percent to $8.0 million from December 31, 2022 to September 30, 2023.

Investment Securities

Investment Securities decreased $9.8 million to $335.7 million at September 30, 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 September 30, 2023 was 2.75 percent, compared to 2.36 percent for the three months ended September 30, 2022 and 2.72 percent for the three months ended June 30, 2023. The unrealized loss on the securities portfolio was $56.0 million at September 30, 2023, compared to $47.7 million at September 30, 2022 and $46.6 million at June 30, 2023.

Borrowings

FHLB advances and other short-term borrowings increased $27.5 million to $39.1 million at September 30, 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 decreased $44.2 million or 53.1 percent from $83.3 million at June 30, 2023.

Deposits

Total Deposits decreased $36.8 million, or 1.9 percent from December 31, 2022 to September 30, 2023, ending the period at $1.91 billion. From year-end 2022 to September 30, 2023, noninterest-bearing demand accounts decreased $65.4 million or 14.1 percent, and interest-bearing demand accounts decreased $18.1 million or 6.3 percent. During that same period, savings accounts decreased $19.9 million or 12.4 percent. Offsetting the decreases, money market accounts increased by $5.0 million or 1.0 percent and certificates of deposit increased by $61.6 million or 16.1 percent. As a result of the change in deposit mix, the average cost of interest-bearing deposits increased to 2.31 percent for the quarter ended September 30, 2023, compared to 0.46 percent for the quarter ended September 30, 2022 and 1.94 percent for the quarter ended June 30, 2023. For the nine months ended September 30, 2023, the average cost of interest-bearing deposits increased to 1.90 percent, compared to 0.33 percent for the nine months ended September 30, 2022. During the three months ended September 30, 2023 overall deposit activity continued to stabilize as deposits increased $23.7 million or 1.3 percent from the quarter ended June 30, 2023. We anticipate downward pressure on net interest margin to continue for the remainder of 2023 and into 2024 due to the cost of deposits.

Income Statement

The Corporation's net interest income for the three months ended September 30, 2023 was $19.1 million, a decrease of 8.6 percent when compared to $20.9 million for the three months ended September 30, 2022 and a decrease of 4.3 percent when compared to $20.0 million for the three months ended June 30, 2023. The Corporation's tax-equivalent net interest margin ("NIM") was 3.64 percent for the three months ended September 30, 2023, compared to 3.66 percent for the same period in 2022 and 3.81 percent for the quarter ended June 30, 2023. Net interest income for the nine months ended September 30, 2023 was $58.9 million, an increase of 17.0 percent when compared to $50.4 million for the nine months ended September 30, 2022. The Corporation's tax-equivalent NIM was 3.81 percent for the nine months ended September 30, 2023, compared to 3.21 percent for the nine months ended September 30, 2022.

The Corporation's provision for credit losses, which includes provision for credit losses on unfunded commitments in 2023, for the three months ended September 30, 2023 was $251,000 compared to a reversal of provision for loan losses of $567,000 for the three months ended September 30, 2022 and a reversal of provision for credit losses of $77,000 for the quarter ended June 30, 2023. The Corporation's nonperforming assets ratio was 0.47 percent at September 30, 2023, a 32.9 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, the allowance for credit losses increased $2.8 million. The net impact to retained earnings was $2.1 million.

Noninterest income for the three months ended September 30, 2023 was $4.2 million, an increase of $582,000 or 16.1 percent, compared to noninterest income of $3.6 million for the three months ended September 30, 2022 and an increase of $142,000 or 3.5 percent compared to the three months ended June 30, 2023. The increase in the current quarter compared to both periods, was primarily due to higher service charges on deposit accounts and income from bank owned life insurance. Noninterest income for the nine months ended September 30, 2023 was $12.2 million, an increase of $840,000, as compared to noninterest income of $11.4 million for the nine months ended September 30, 2022. Higher trust and investment service fees, service charges on deposits, other income related to interest rate swap fees 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 nine months ended September 30, 2022.

Noninterest expense was $15.9 million for the third quarter 2023, an increase of $574,000 or 3.8 percent, as compared to noninterest expense of $15.3 million for the third quarter 2022 and an increase of $420,000 compared to noninterest expense of $15.5 million for the second quarter of 2023. The increase in both periods was attributed to higher professional and legal fees, higher variable compensation accruals and higher other expense. Noninterest expense was $46.2 million for the nine months ended September 30, 2023, a decrease of $38,000 or 0.08 percent, as compared to noninterest expense of $46.2 million for the nine months ended September 30, 2022. The decrease was attributed to lower professional and legal fees, lower impaired loan carrying costs and lower other expense, offset by higher variable compensation accruals. Professional and legal fees and other expense were higher in the prior year as a result of costs associated with corporate matters. Previously expensed impaired loan carrying costs were recovered in the current year, contributing to the decrease year over year.

Income tax expense for the quarter ended September 30, 2023 was $1.5 million compared to $2.1 million for the same period in 2022 and $1.9 million in the quarter ended June 30, 2023. The effective tax rate for the three month periods ended September 30, 2023, September 30, 2022 and June 30, 2023 was 20.2 percent, 22.3 and 22.7 percent, respectively. Income tax expense for the nine months ended September 30, 2023 was $5.4 million compared to $3.4 million for the nine months ended September 30, 2022. The effective tax rate for the nine months ended September 30, 2023 and September 30, 2022 was 21.8 and 21.7, respectively.

Capital

Shareholders' equity totaled $183.4 million at September 30, 2023, an increase of $6.0 million from $177.3 million at December 31, 2022. The increase was primarily attributable to net income of $19.5 million, partially offset by dividends paid of $4.7 million for the nine months ended September 30, 2023 and the adoption of CECL of $2.1 million. Other changes are related to accumulated other comprehensive loss and issuance of treasury stock.

Book value per share was $19.06 and $18.51 at September 30, 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 $18.82 per share and $23.28 per share, respectively, at September 30, 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 12.53 percent at September 30, 2023, an increase from 12.04 percent at December 31, 2022. At September 30, 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).

(1) 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.

Liquidity Risk Management

The Bank maintains a well-diversified deposit base and has a comparatively low level of uninsured deposits. At September 30, 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 $315.8 million or 19.9 percent.

Although the Bank had not utilized the Federal Reserve's Bank Term Funding Facility as of September 30, 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 October 10, 2023, the Board of Directors of the Corporation declared a regular quarterly cash dividend of $0.17 per share, payable on November 14, 2023 to common shareholders of record at the close of business on October 24, 2023.

Business Lines Update

Consumer Banking efforts in the third quarter of 2023 continued to focus on assisting clients with their financial needs, including an attractive 0% credit card balance transfer offer to help clients manage their finances. We also concluded a successful vehicle financing campaign to help clients manage their vehicle purchases. In addition, mortgage events were held throughout our Financial Center network to help clients with their mortgage-related questions, focusing on educating buyers on their options in the current environment.

The Leader Heights Financial Center was updated and is now the third Connections Center in the York Area. Connections Centers offer the PeoplesBank Vision Board Experience on a large touchscreen, and help facilitate discussions regarding a client's goals and aspirations, focusing on how PeoplesBank can help them achieve their dreams and live confidently. A concierge desk also helps clients become more familiar with our digital capabilities, and casual meeting spaces include booth seating and a comfortable conversation room to foster discussions.

Our Business Banking team continued to help clients through personalized outreach. As part of the outreach to ensure the PeoplesBank team is meeting the needs of local businesses, a variety of promotions focused on specific needs of different business segments were made available. In addition, the Business Banking team participated in several events to help small- and medium-sized businesses navigate topics such as SBA funding and healthcare considerations. An annual Voice of Client Survey was also conducted, the results of which will help the bank continue to focus on the topics and needs of our business clients.

PeoplesBank Wealth Management continued to offer the expertise of its team to clients looking for perspectives on the current economic environment. In addition to sharing economic data and information with its clients, the PeoplesBank Wealth Management team held several Roundtable Discussion Events throughout the quarter.

To thank our local community, PeoplesBank sponsored the York State Fair, offering attendees entrance to the fair for just $1. PeoplesBank also hosted a client-appreciation event at Wellspan Park on August 31, offering clients free tickets to see the York Revolution. Readers of the York Daily Record in turn voted PeoplesBank 2023 Best Bank in York and Hanover.

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. (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 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," "will," "could," "believes," "plans," "expects," "estimates," "intends," "anticipates," "strives to," "seeks," "intends," "anticipates" 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, 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. Actual results could differ materially from those indicated in forward-looking statements due to, among others, the following factors: changes in market interest rates and the persistence of the current 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 the current or future market conditions; changes in deposit flows, the cost of funds, demand for loan products and the demand for financial services; the 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 and 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 current inflationary environment; geographic concentration of the Corporation's business; deterioration of commercial real estate values; the adequacy of loan loss reserves and the Corporation's transition to the Current Expected Credit Loss (CECL) method of reserving for losses in its loan portfolio; deterioration in the credit quality of borrowers; the Company's ability to attract and retain key personnel; 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; uncertainty surrounding the transition from LIBOR to an alternate reference rate: 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; 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 other economic, competitive, governmental and technological factors affecting the Corporation's operations, markets, products, services and fees.

For a discussion of certain risks and uncertainties that could affect the Corporation, please refer to the "Risk Factors" section of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2022, and in its current and periodic reports that are, or will be, filed with the Securities and Exchange Commission (the "SEC") and available on the SEC's website at www.sec.gov or in the Investor Relations section of the Corporation's website at www.peoplesbanknet.com. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements to reflect new information, events occurring after the date of this press release or other circumstances.

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.

Questions or comments concerning this Press Release should be directed to:

Codorus Valley Bancorp, Inc.

Craig L. Kauffman

President and CEO

717-747-1501

ckauffman@peoplesbanknet.com

Larry D. Pickett

Chief Financial Officer

717-747-1502

lpickett@peoplesbanknet.com

CODORUS VALLEY BANCORP, INC.
Consolidated Balance Sheets (Unaudited)

		September 30,			December 31,			September 30,
(Dollars in thousands, except share and per share data)		2023			2022			2022

Assets
Interest bearing deposits with banks	$	28,858		$	99,777		$	201,024
Cash and due from banks		22,449			20,662			21,772
Total cash and cash equivalents		51,307			120,439			222,796
Securities, available-for-sale, at fair value (amortized cost $391,694, net of
allowance for credit losses of $0)		335,656			345,457			343,253
Restricted investment in bank stocks, at cost		2,152			955			955
Loans held for sale		1,103			154			863
Loans (net of deferred fees of $3,718 - 2023 and $3,813 - 2022)		1,704,380			1,632,857			1,599,033
Less-allowance for credit losses (1)		(21,449	)		(20,736	)		(22,232	)
Net loans		1,682,931			1,612,121			1,576,801
Premises and equipment, net		19,562			21,136			21,094
Operating leases right-of-use assets		2,618			3,072			3,242
Goodwill		2,301			2,301			2,301
Other assets		92,962			89,417			87,100
Total assets	$	2,190,592		$	2,195,052		$	2,258,405
Liabilities
Deposits
Noninterest bearing	$	398,486		$	463,853		$	486,946
Interest bearing		1,507,892			1,479,366			1,527,061
Total deposits		1,906,378			1,943,219			2,014,007
Short-term borrowings		39,099			11,605			13,251
Long-term debt and junior subordinated debt		11,528			11,550			11,557
Subordinated notes - face amount $31,000 (less discount and debt
issuance cost of $175 at September 30, 2023 and $236 at December 31, 2022)		30,825			30,764			30,744
Operating leases liabilities		2,726			3,204			3,381
Allowance for credit losses on off-balance sheet credit exposures		2,212			0			0
Other liabilities		14,461			17,410			17,126
Total liabilities		2,007,229			2,017,752			2,090,066
Shareholders' equity
Preferred stock, par value $2.50 per share;
1,000,000 shares authorized; no shares issued or outstanding		0			0			0
Common stock, par value $2.50 per share; 30,000,000 shares authorized;
shares issued: 9,883,660 at September 30, 2023 and December 31, 2022;
and shares outstanding: 9,618,854 at September 30, 2023 and 9,581,230 at December 31, 2022		24,709			24,709			24,709
Additional paid-in capital		142,525			141,896			141,929
Retained earnings		64,816			52,146			45,648
Accumulated other comprehensive loss		(42,869	)		(34,764	)		(36,499	)
Treasury stock shares outstanding, at cost: 264,806 shares at September 30, 2023
and 302,430 at December 31, 2022		(5,818	)		(6,687	)		(7,448	)
Total shareholders' equity		183,363			177,300			168,339
Total liabilities and shareholders' equity	$	2,190,592		$	2,195,052		$	2,258,405

(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									Nine months ended
		September 30,		June 30,			September 30,			September 30,
(dollars in thousands, except per share data)		2023		2023			2022			2023			2022
Interest income
Loans, including fees	$	26,000	$	24,803		$	18,994		$	73,837		$	51,463
Investment securities:
Taxable		2,562		2,492			2,069			7,511			5,081
Tax-exempt		106		99			113			306			317
Dividends		44		51			11			112			30
Other		361		545			1,486			1,590			2,362
Total interest income		29,073		27,990			22,673			83,356			59,253
Interest expense
Deposits		8,740		7,077			1,807			20,954			3,879
Federal funds purchased and other short-term borrowings		377		437			13			852			35
Long-term debt and junior subordinated debt		215		208			133			617			441
Subordinated notes		369		369			369			1,107			1,107
Total interest expense		9,701		8,091			2,322			23,530			5,462
Net interest income		19,372		19,899			20,351			59,826			53,791
Provision for (recovery of) credit losses - loans (1)		128		(31	)		(567	)		589			3,434
Provision for (recovery of) credit losses - unfunded commitments (1)		123		(46	)		0			323			0
Net interest income after provision for (recovery of) provision credit losses		19,121		19,976			20,918			58,914			50,357
Noninterest income
Trust and investment services fees		1,293		1,275			1,141			3,770			3,440
Income from mutual fund, annuity and insurance sales		315		323			283			1,007			958
Service charges on deposit accounts		1,598		1,541			1,395			4,624			4,045
Income from bank owned life insurance		396		329			322			1,047			941
Other income		549		587			528			1,998			1,479
Gain (loss) on sale of loans held for sale		42		(4	)		42			48			621
(Loss) gain on sale of assets held for sale		0		0			(100	)		118			(100	)
Loss on sales of securities		0		0			0			(388	)		0
Total noninterest income		4,193		4,051			3,611			12,224			11,384
Noninterest expense
Personnel		9,412		9,489			9,243			27,943			26,124
Occupancy of premises, net		853		880			943			2,711			2,844
Furniture and equipment		798		878			852			2,514			2,551
Professional and legal		549		379			367			1,395			2,281
Marketing		347		387			507			1,010			1,340
FDIC insurance		245		244			190			739			617
Debit card processing		546		432			455			1,456			1,222
Charitable donations		62		899			56			993			971
External data processing		974		1,043			981			3,027			2,820
Impaired loan carrying costs (recovery)		107		(238	)		217			(229	)		512
Other		2,003		1,083			1,511			4,624			4,939
Total noninterest expense		15,896		15,476			15,322			46,183			46,221
Income before income taxes		7,418		8,551			9,207			24,955			15,520
Provision for income taxes		1,501		1,940			2,053			5,435			3,360
Net income	$	5,917	$	6,611		$	7,154		$	19,520		$	12,160
Net income per share, basic		0.62		0.69			0.75			2.03			1.28
Net income per share, diluted		0.61		0.69			0.75			2.03			1.27

(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			2022			2022		September 30,
		3rd Qtr			2nd Qtr			1st Qtr			4th Qtr				3rd Qtr			2023		2022
Earnings and Per Share Data (1)
(in thousands, except per share data)
	Net income	$	5,917		$	6,611		$	6,992		$	7,932		$	7,154		$	19,520	$	12,160
	Basic earnings per share	$	0.62		$	0.69		$	0.73		$	0.83		$	0.75		$	2.03	$	1.28
	Diluted earnings per share	$	0.61		$	0.69		$	0.73		$	0.83		$	0.75		$	2.03	$	1.27
	Cash dividends paid per share	$	0.17		$	0.16		$	0.16		$	0.15		$	0.15		$	0.49	$	0.45
	Book value per share	$	19.06		$	19.34		$	19.28		$	18.51		$	17.63		$	19.06	$	17.63
	Tangible book value per share (2)	$	18.82		$	19.10		$	19.04		$	18.27		$	17.39		$	18.82	$	17.39
	Tangible book value per share without AOCI (8)	$	23.28		$	22.81		$	22.26		$	21.90		$	21.21		$	23.28	$	21.21
	Average shares outstanding		9,616			9,600			9,585			9,566			9,545			9,601		9,521
	Average diluted shares outstanding		9,631			9,610			9,612			9,589			9,568			9,618		9,550

Performance Ratios (%)
	Return on average assets (3)		1.08			1.22			1.29			1.43			1.25			1.20		0.69
	Return on average equity (3)		12.64			14.17			15.45			18.50			15.93			14.07		8.78
	Net interest margin (4)		3.64			3.81			4.00			3.98			3.66			3.81		3.21
	Efficiency ratio (5)		66.95			64.19			59.05			60.87			63.51			63.32		70.44
	Net overhead ratio (3)(6)		2.14			2.10			1.93			2.13			2.04			2.06		1.99

Asset Quality Ratios (%)
	Net loan charge-offs to average loans (3)		-0.15			0.20			0.15			0.24			0.02			0.06		0.34
	Allowance for credit losses to total loans (7)		1.26			1.23			1.31			1.27			1.39			1.26		1.39
	Nonperforming assets to total loans
	and foreclosed real estate		0.47			0.70			0.55			0.70			0.99			0.47		0.99

Capital Ratios (%)
	Average equity to average assets		8.55			8.58			8.38			7.75			7.84			8.50		7.90
	Tier 1 leverage capital ratio		10.50			10.38			10.20			9.77			9.18			10.50		9.18
	Common equity Tier 1 capital ratio		12.52			12.37			12.19			12.04			11.80			12.53		11.80
	Tier 1 risk-based capital ratio		13.08			12.94			12.76			12.61			12.38			13.09		12.38
	Total risk-based capital ratio		16.01			15.85			15.75			15.57			15.42			16.02		15.42

(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)

	(in thousands, except per share data)		2023			2023			2023			2022			2022
		3rd Qtr			2nd Qtr			1st Qtr			4th Qtr			3rd Qtr
	Total Shareholders' Equity	$	183,363		$	185,869		$	184,946		$	177,300		$	168,339
	Less: Goodwill and Other Intangible Assets		(2,302	)		(2,302	)		(2,303	)		(2,303	)		(2,303	)
	Tangible Shareholders' Equity	$	181,061		$	183,567		$	182,643		$	174,997		$	166,036
	Less: Accumulated Other Comprehensive Income		(42,869	)		(35,650	)		(30,941	)		(34,764	)		(36,499	)
	Tangible Shareholders' Equity without AOCI	$	223,930		$	219,217		$	213,584		$	209,761		$	202,535

	Common Shares Outstanding		9,619			9,611			9,594			9,581			9,548
	Book Value Per Share	$	19.06		$	19.34		$	19.28		$	18.51		$	17.63
	Effect of Intangible Assets		(0.24	)		(0.24	)		(0.24	)		(0.24	)		(0.24	)
	Tangible Book Value Per Share	$	18.82		$	19.10		$	19.04		$	18.27		$	17.39

	Book Value Per Share	$	19.06		$	19.34		$	19.28		$	18.51		$	17.63
	Effect of Intangible Assets and AOCI		4.22			3.47			2.98			3.39			3.58
	Tangible Book Value Per Share without AOCI	$	23.28		$	22.81		$	22.26		$	21.90		$	21.21

	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
	September 30, 2023							June 30, 2023							September 30, 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	$	26,772	$	361		5.35	%	$	43,006	$	545		5.08	%	$	260,302	$	1,486		2.26	%
Investment securities:
Taxable		371,603		2,606		2.78			370,345		2,543		2.75			347,656		2,080		2.37
Tax-exempt		22,523		128		2.25			22,581		121		2.15			26,414		142		2.13
Total investment securities		394,126		2,734		2.75			392,926		2,664		2.72			374,070		2,222		2.36
Loans:
Taxable (1)		1,677,117		25,829		6.11			1,644,775		24,630		6.01			1,556,060		18,817		4.80
Tax-exempt		21,721		213		3.89			22,292		214		3.85			23,057		222		3.82
Total loans		1,698,838		26,042		6.08			1,667,067		24,844		5.98			1,579,117		19,039		4.78
Total earning assets		2,119,736		29,137		5.45			2,102,999		28,053		5.35			2,213,489		22,747		4.08
Other assets (2)		71,008							72,796							78,942
Total assets	$	2,190,744						$	2,175,795						$	2,292,431
Liabilities and Shareholders' Equity
Deposits:
Interest bearing demand	$	917,983		5,542		2.40	%	$	899,474		4,612		2.06	%	$	982,174		1,238		0.50	%
Savings		146,038		11		0.03			151,143		12		0.03			166,275		13		0.03
Time		435,439		3,187		2.90			411,309		2,453		2.39			402,576		556		0.55
Total interest bearing deposits		1,499,460		8,740		2.31			1,461,926		7,077		1.94			1,551,025		1,807		0.46
Short-term borrowings		38,726		377		3.86			44,139		437		3.97			13,255		13		0.39
Long-term debt and junior subordinated debt		14,356		215		5.94			14,520		208		5.75			15,047		133		3.51
Subordinated notes		30,818		369		4.75			30,798		369		4.81			30,737		369		4.76
Total interest bearing liabilities		1,583,360		9,701		2.43			1,551,383		8,091		2.09			1,610,064		2,322		0.57
Noninterest bearing deposits		401,734							418,504							489,589
Other liabilities		18,439							19,277							12,992
Shareholders' equity		187,211							186,631							179,786
Total liabilities and shareholders' equity	$	2,190,744						$	2,175,795						$	2,292,431
Net interest income (tax equivalent basis)			$	19,436						$	19,962						$	20,425
Net interest margin (3)						3.64	%						3.81	%						3.66	%
Tax equivalent adjustment				(64	)						(63	)						(74	)
Net interest income			$	19,372						$	19,899						$	20,351

(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)


	Nine Months Ended
	September 30, 2023							September 30, 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	$	43,232	$	1,590		4.92	%	$	357,588	$	2,362		0.88	%
Investment securities:
Taxable		370,376		7,623		2.75			308,214		5,111		2.22
Tax-exempt		22,877		374		2.19			25,526		398		2.08
Total investment securities		393,253		7,997		2.72			333,740		5,509		2.21
Loans:
Taxable (1)		1,645,243		73,319		5.96			1,543,502		51,059		4.42
Tax-exempt		22,200		644		3.88			16,640		509		4.09
Total loans		1,667,443		73,963		5.93			1,560,142		51,568		4.42
Total earning assets		2,103,928		83,550		5.31			2,251,470		59,439		3.53
Other assets (2)		71,693							84,516
Total assets	$	2,175,621						$	2,335,986
Liabilities and Shareholders' Equity
Deposits:
Interest bearing demand	$	906,847		13,615		2.01	%	$	986,805	$	1,999		0.27	%
Savings		152,363		35		0.03			162,538		37		0.03
Time		413,646		7,304		2.36			425,490		1,843		0.58
Total interest bearing deposits		1,472,856		20,954		1.90			1,574,833		3,879		0.33
Short-term borrowings		32,014		852		3.56			11,780		35		0.40
Long-term debt		14,521		617		5.68			20,049		441		2.94
Subordinated debentures		30,798		1,107		4.81			30,717		1,107		4.82
Total interest bearing liabilities		1,550,189		23,530		2.03			1,637,379		5,462		0.45
Noninterest bearing deposits		421,397							501,243
Other liabilities		19,064							12,766
Shareholders' equity		184,971							184,598
Total liabilities and shareholders' equity	$	2,175,621						$	2,335,986
Net interest income (tax equivalent basis)			$	60,020						$	53,977
Net interest margin (3)						3.81	%						3.21	%
Tax equivalent adjustment				(194	)						(186	)
Net interest income			$	59,826						$	53,791

(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.

Codorus Valley Bancorp, Inc. Reports Third Quarter 2023 Earnings