Codorus Valley Bancorp Addresses Misleading Statements in Driver Management’s Latest Filing
Codorus Valley Bancorp (NASDAQ: CVLY) addresses misleading claims made by Driver Management regarding loans linked to Richard Welkowitz. Prior to Craig Kauffman's arrival in 2018, loans totaling over $11.5 million were refinanced, reducing the bank's exposure to under $8 million by the time of Welkowitz's death in 2019. The statement refutes assertions about Kauffman's relationship with Welkowitz, asserting he was not close and actively denied further credit requests. Codorus Valley emphasizes improvements in credit risk management and ongoing attempts to engage with Driver Management despite its aggressive tactics.
- Loans to Welkowitz reduced by over 25% since 2018, improving risk exposure.
- Implementation of enhanced credit risk management strategies and staff restructuring.
- Engagement efforts with Driver Management despite their negative campaign.
- Continued aggressive campaign by Driver Management could lead to shareholder unrest.
- Potential pressure on stock performance due to ongoing disputes.
YORK, Pa., March 09, 2022 (GLOBE NEWSWIRE) -- Codorus Valley Bancorp, Inc. (“Codorus Valley” or the “Corporation”) (NASDAQ: CVLY), parent company of PeoplesBank, A Codorus Valley Company (“PeoplesBank”), today issued the following statement in response to misleading statements in the latest letters issued by Driver Management Company LLC and its affiliates (collectively, “Driver Management”).
In the latest letters filed today by Driver Management regarding loans underwritten by PeoplesBank for Richard Welkowitz, Driver Management included information that once again insinuated a false narrative. To be clear:
- The loans underwritten for Mr. Welkowitz and his related entities were originated in 2016, 2017 and 2018, prior to the arrival of Craig Kauffman. Before Mr. Kauffman joined PeoplesBank in August 2018, the total exposure to Mr. Welkowitz and his related entities was in excess of
$11,500,000. After Mr. Kauffman’s arrival, these loans were refinanced and paid down in an effort to reduce bank exposure. In fact, at the time of Mr. Welkowitz’s death in December 2019, PeoplesBank’s total exposure to his loans was under$8,000,000 , reduced by over25% . - Driver’s characterization of Mr. Kauffman’s relationship with Mr. Welkowitz prior to joining PeoplesBank, is categorically misleading and wrong. Mr. Kauffman was not close with Mr. Welkowitz and did not join PeoplesBank to continue doing business with him. During his tenure with a prior employer, Mr. Kauffman was in fact responsible for referring the Welkowitz relationship to the company’s special assets group and resolving the company’s loans to Mr. Welkowitz. Moreover, Mr. Kauffman declined numerous requests by Mr. Welkowitz for additional credit while at PeoplesBank.
- PeoplesBank was not the only financial institution that had exposure to loans given to Mr. Welkowitz and his related entities. A total of 19 banks, including regional and leading national and global banks, had nearly
$167 million in loans outstanding to Mr. Welkowitz and his related entities at the time of his death. - Mr. Kauffman has made it a priority over the past several years to improve credit risk management at PeoplesBank, including the restructuring of credit and approval processes, underwriting policy and execution, risk ratings, and the formation of a special assets department of the bank. These efforts included substantial staff additions and staff restructuring.
Despite Driver Management’s pattern of unprofessional behavior and attempts to perpetuate misleading information and unsupported rumors, the Corporation, including its Board of Directors and management team, have repeatedly attempted to engage in meaningful discussions with Driver Management. It is unfortunate Driver Management has decided to proceed with its campaign against our directors in furtherance of its true objective, which is an immediate sale of the Corporation and PeoplesBank.
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. Additional information can be found on PeoplesBank’s website at www.peoplesbanknet.com. Codorus Valley Bancorp, Inc.’s Common Stock is listed on the NASDAQ Global Market under the symbol CVLY.
IMPORTANT ADDITIONAL INFORMATION
The Corporation, its directors and certain of its executive officers are participants in the solicitation of proxies from the Corporation's shareholders in connection with the Corporation’s 2022 Annual Meeting of Shareholders (the “2022 Annual Meeting”). The Corporation intends to file a definitive proxy statement and a BLUE proxy card with the Securities and Exchange Commission (the “SEC”) in connection with any such solicitation of proxies from the Corporation's shareholders. SHAREHOLDERS OF THE CORPORATION ARE STRONGLY ENCOURAGED TO READ SUCH PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. The Corporation's definitive proxy statement for the 2021 annual meeting of shareholders contains information regarding the direct and indirect interests, by security holdings or otherwise, of the Corporation's directors and executive officers in the Corporation's securities. Information regarding subsequent changes to their holdings of the Corporation's securities can be found in the SEC filings on Forms 3, 4, and 5, which are available on the Corporation's website at https://ir.peoplesbanknet.com/ or through the SEC's website at www.sec.gov. Information can also be found in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2021 on file with the SEC. Updated information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the definitive proxy statement and other materials to be filed with the SEC in connection with the 2022 Annual Meeting. Shareholders will be able to obtain the definitive proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Corporation with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge at the Corporation's website at https://ir.peoplesbanknet.com/.
Shareholder Contact
Morrow Sodali
Mike Verrechia/Bill Dooley
(800) 662-5200
CVLY@info.morrowsodali.com
Media Contact
Prosek Partners
Brian Schaffer
bschaffer@prosek.com
Joel Henry
jhenry@prosek.com
FAQ
What is the current status of Codorus Valley Bancorp's loans to Richard Welkowitz?
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