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Codorus Valley Bancorp exits Treasury program

By - Last modified: September 30, 2011 at 11:52 AM

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Codorus Valley Bancorp Inc., the parent company of PeoplesBank, has repurchased the warrants it sold the U.S. Treasury.

Codorus Valley paid $526,604 on Wednesday to redeem the warrants, which entitled the Treasury to purchase 263,859 shares of Codorus Valley stock, according to a regulatory filing.

The warrants were part of the Treasury's Capital Purchase Program or CPP, which was part of the government's efforts to stabilize the financial system after the 2008 crisis. The Treasury invested $16.5 million in Codorus Valley in January 2009 in return for 16,500 preferred shares and the warrants.

The York County bank redeemed the shares on Aug. 18, using proceeds from another Treasury program, the Small Business Lending Fund, Treasury records show. The Treasury announced Aug. 31 Codorus Valley was receiving $25 million from the fund.

Centric Bank and York Traditions Bank also received lending fund money and used it to exit the CPP. The sole midstate bank with CPP funds outstanding is Mid Penn, which received $10 million in December 2008.

Mid Penn disclosed in a Sept. 20 regulatory filing that it withdrew its application for lending fund money after learning it would not be approved. Mid Penn had hoped to use the money to repay the CPP, but will pursue other avenues, the filing said. Treasury did not say why it rejected Mid Penn's application, the filing said.

Community First Fund, the Lancaster-based nonprofit lender, this week received $862,000 in what the Treasury is calling the seventh and final wave of lending fund allocations. Lebanon County's Jonestown Bank & Trust, which had not received CPP money, received $4 million from the lending fund in August.

Nationwide, 332 banks received $4 billion, the Treasury said.

PeoplesBank has more than a dozen branches, all in the midstate. Its shares trade on the Nasdaq under the ticker symbol CVLY.

Write to the Editorial Department at editorial@cpbj.com

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