Codorus Valley warns of loan loss after alleged borrower fraud
Codorus Valley Bancorp in York, Pa., warned that alleged customer fraud will cut into its quarterly results.
The $1.8 billion-asset company disclosed in a regulatory filing Monday that the issue is tied to a single, large commercial lending relationship. Codorus Valley said one of the obligators for the loan allegedly committed fraud.
Codorus Valley said its credit exposure to the relationship is $8 million and the potential loan loss is roughly $7.5 million.
Efforts to review the lending relationship were “complicated” because the assets of one of the borrowers are held by an estate “administrated by third parties,” the filing said. Codorus Valley said it is working with the estate’s administrator to preserve and recover assets.
Codorus Valley said it is unable to quantify the amount, if any, that may be recovered. It will record a loan-loss provision to account for the issues with the commercial loan.