Executive Summary

Q1 2024 EPS was $0.44 and net income was $4.3M, down 39% year over year and 22% sequentially, driven by net interest margin compression to 3.34% and higher deposit costs .
Loans grew $32.5M (+7.8% annualized) and deposits rose $41.7M (+8.8% annualized), indicating healthy franchise momentum despite margin headwinds .
Nonperforming assets increased to $7.4M and 0.42% of loans and foreclosed real estate, up from 0.23% in Q4 2023, reflecting some credit deterioration that management is proactively managing .
A $0.17 dividend was declared for payment on May 14, 2024; management reiterated expectations for additional 2024 merger-related expenses ahead of the planned Orrstown combination later this year .
S&P Global consensus estimates were unavailable for CVLY; third-party proxies indicate a small miss vs EPS ($0.47) and revenue ($22.30M) expectations, a potential near-term stock reaction catalyst .

What Went Well and What Went Wrong

What Went Well
- Strong balance sheet growth: loans +$32.5M QoQ (+7.8% annualized), deposits +$41.7M QoQ (+8.8% annualized), with time deposits and money market accounts driving deposit growth .
- Capital and liquidity remain solid: Tier 1 leverage ratio 10.80%; 84% of deposits estimated FDIC-insured with an additional 7% fully collateralized .
- CEO emphasized client relationship expansion and merger-driven strategic positioning: “retain and expand client relationships… eager to leverage the momentum… join forces with Orrstown” .
What Went Wrong
- Net interest margin fell to 3.34% (vs 4.00% last year; 3.61% in Q4), pressured by higher deposit costs and curve slope; net interest income declined to $17.6M (–14% YoY; –8% QoQ) .
- Asset quality worsened: nonperforming assets rose to $7.4M and the NPA ratio increased to 0.42% from 0.23% in Q4, as several loans exhibited deterioration .
- Efficiency ratio deteriorated to 73.91% (vs 73.28% in Q4 and 59.05% in Q1 2023) as revenue pressure outpaced cost reductions; noninterest expense was $16.3M .

Financial Results

Note: “Total revenue” is calculated as net interest income + noninterest income.

Metric	Q1 2023	Q4 2023	Q1 2024
Net Interest Income ($USD Millions)	$20.555	$19.166	$17.642
Noninterest Income ($USD Millions)	$3.980	$4.240	$4.176
Total Revenue ($USD Millions)	$24.535	$23.406	$21.818
Net Income ($USD Millions)	$6.992	$5.453	$4.255
Diluted EPS ($USD)	$0.73	$0.57	$0.44
Diluted EPS (Adjusted, ex-merger) ($USD)	$0.73	$0.64	$0.45
Net Interest Margin %	4.00%	3.61%	3.34%
Efficiency Ratio %	59.05%	73.28%	73.91%
ROA % (annualized)	1.29%	1.00%	0.77%
ROE % (annualized)	15.45%	11.69%	8.48%
Loans, Net ($USD Millions, period-end)	$1,626.337	$1,685.102	$1,717.624
Deposits ($USD Millions, period-end)	$1,889.385	$1,873.342	$1,915.063
Nonperforming Assets / Loans + OREO %	0.55%	0.23%	0.42%

Segment breakdown: CVLY operates as a community bank; no segment reporting applicable in the releases .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per Share	Q2 2024	N/A	$0.17 payable May 14, 2024; record May 7, 2024	Maintained quarterly dividend cadence
Net Interest Margin	Near-term outlook	“Downward pressure to continue into early 2024” noted in Q4 release	Ongoing downward pressure due to deposit costs and curve slope	Directional: lowered outlook maintained
Merger-related Expenses	FY 2024	Expect additional expenses following Q4 $0.956M	Expect additional expenses in 2024	Maintained expectation

No quantitative guidance provided for revenue, margins, OpEx, OI&E, tax rate beyond directional commentary .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript was available via our document sources or typical transcript aggregators; themes below reflect press releases and 8-K disclosures.

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Net Interest Margin and Deposit Costs	NIM 3.64%; deposit cost up to 2.31% QoQ; anticipated continued pressure	NIM 3.61%; deposit cost 2.59%; pressure expected into early 2024	NIM 3.34%; deposit cost 2.86%; continued downward pressure	Deteriorating
Liquidity and Insured Deposits	83% FDIC-insured; positive liquidity	83% FDIC-insured; positive liquidity	84% FDIC-insured; additional 7% collateralized	Stable/Improving
Credit Quality	NPA ratio 0.47% (down from YE22)	NPA ratio 0.23% (record low)	NPA ratio 0.42%; NPA +$3.4M from Dec	Deteriorating sequentially
Capital Ratios	CET1 12.53%	CET1 12.81%	CET1 12.85%	Improving
Strategic/Merger	Growth hires; franchise positioning	Merger announced with Orrstown; integration in 2024	Merger progressing; expect 2024 expenses	Ongoing execution

Management Commentary

CEO Craig L. Kauffman: “The PeoplesBank team continued to work through a challenging banking environment… focused on retaining and expanding client relationships… eager to leverage the momentum… when we join forces with Orrstown Financial Services later this year” .
Liquidity positioning: 84% deposits FDIC-insured; additional 7% collateralized; deposit and liquidity position remain positive vs pre-pandemic baseline .
Margin outlook: “As anticipated, the Corporation experienced downward pressure on net interest margin over the past year due to the cost of deposits and the slope of the interest rate curve” .

Q&A Highlights

No Q1 2024 earnings call transcript was found; Q&A highlights unavailable. Management’s public commentary is limited to press release statements and financial schedules .

Estimates Context

S&P Global Wall Street consensus was unavailable for CVLY due to missing mapping in our SPGI dataset; as a result, we could not perform an SPGI-based comparison.
Third-party proxies suggest EPS consensus of $0.47 and revenue consensus of $22.30M; CVLY reported adjusted EPS of $0.45 and total revenue of ~$21.82M, implying a modest miss. Use caution—these are not S&P Global figures .

Metric	Actual	Proxy Consensus	Beat/Miss
Diluted EPS (Adjusted) ($USD)	$0.45	$0.47	Miss
Total Revenue ($USD Millions)	$21.818	$22.30	Miss

Key Takeaways for Investors

Margin pressure is the primary earnings headwind; deposit costs (2.86% avg on interest-bearing) and the curve have compressed NIM to 3.34%—watch for stabilization as rate dynamics evolve .
Franchise health remains solid: sequential loan and deposit growth with strong insured deposit coverage (84% insured; +7% collateralized) supports liquidity and reduces tail risk .
Credit quality ticked down sequentially (NPA ratio to 0.42%); monitor watchlist migration and provision trends given the Q1 increase in nonperforming assets .
Capital remains robust (CET1 12.85%; Tier 1 leverage 10.80%) providing resilience and flexibility during merger integration .
Dividend held at $0.17, signaling confidence in capital/earnings capacity despite near-term margin pressure .
Near-term narrative likely focused on execution of the Orrstown merger and integration costs; additional merger-related expenses expected in 2024 .
With S&P Global estimates unavailable, third-party proxies indicate a modest miss—tight near-term trading skew could hinge on signs of NIM stabilization and credit normalization in subsequent quarters .

CODORUS VALLEY BANCORP INC (CVLY)·Q1 2024 Earnings Summary