Creating Long-term Shareholder Value
November 8, 2005
Investor
Presentation
Agenda
Introduction
YNB at a glance
Strategic overview
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
2
Forward Looking Statements
Statements made in this presentation may contain forward-
looking statements concerning the financial condition, results of
operations and business of Yardville National Bancorp. We
caution that such statements are subject to a number of
uncertainties and actual results could differ materially and
therefore you should not place undue reliance on any forward-
looking statements we make. We may not update any forward-
looking statements we make today for future events or
developments. Information about risks and uncertainties are
described in our SEC filings, which are available on our Website
or from our Investor Relations Department.
3
YNB at a glance – qualitative metrics
80-year operating history
NASDAQ listed: YANB
Largest community bank in attractive central NJ
markets
Retail deposit gathering strength
25 branches in 6 counties (and growing)
Commercial lending expertise
Ranked 115th largest C&I lender in the US
Senior management with over 100 years of financial
services experience
Success in attracting new, high-quality talent
4
YNB at a glance – financial metrics
Total shareholder return since 6/95: 518%
Market capitalization: $370 million
Total assets (9/30/05): $3.0 billion
LTM EPS: $1.93
Price/LTM EPS: 18.8x
Price/Book value: 2.28x
LTM ROAA: 0.75%
LTM ROAE: 13.1%
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Strategic Overview
Strategic operating principles
Focus on the core; limited and tactical
product/business diversification
Maximize each customer relationship
Improve operating efficiency
Rebalance the employee “scales” toward revenue
generating positions
Continuously drive efficiency to make back-office operations
best in class
Capital update
Reviewing options to meet new OCC capital
requirements
6
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
7
Over the past ten years, YNB has enjoyed
over 20% annual asset growth…
8
…and over 20% net income growth
9
Most importantly, EPS has grown 9%
annually over the last ten years
Note: 2005E based on analysts’ consensus estimates for full year 2005.
10
YNB’s long-term stakeholders have been
rewarded
Initial investment
Increase in value
Ending account balance
$10,000
$51,839
$61,839
Note: Total shareholder return includes stock price appreciation and dividend payments. 518% total return
translates to 20% average annual growth. Data from June 1995 through Sept. 2005.
11
Summary Year to Date Financial Results
12
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
13
New Jersey
Philadelphia
New York City
Existing branch locations
Corporate headquarters
and branch
Regional headquarters
and branch
Planned branch locations
YNB is strategically located in the New York
City / Philadelphia corridor
45 miles
65 miles
14
YNB markets have very favorable
demographics
Median household income over $70,000
70% higher than the national average
Population density: 5 million people
12 times denser than national average
Market deposits average $58 million per branch
Exceeds the national average
$76 billion deposit opportunity
With significant opportunity for community bank penetration
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Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
16
YNB creates long-term value by focusing on
its core strengths
Traditional Core
Banking Business
17
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Commercial lending
Retail deposits
Challenges
Conclusion
18
YNB has a unique ability to generate quality
commercial loan assets
19
YNB’s emphasis on commercial lending leads
to higher overall loan yields
Notes: Source is SNL Financial.
20
Even with higher yields, YNB has been able
to keep NPA’s in line
Notes: Source is SNL Financial: US banks $1-10B in assets as of 9/30/05.
21
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Commercial lending
Retail deposits
Challenges
Conclusion
22
Expanding YNB’s retail franchise is a primary
goal
1.
Expanding the retail footprint
2.
New brand image campaign
“Banking on a more personal level”
3.
Introduction of new products and services
“Simply Better” suite of products
Improved Internet banking capabilities
Longer branch hours
23
1990: 4 branches in Hamilton, NJ
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2005: 25 branches in 6 counties
25
Future: 14 additional Board approved
locations
26
A brand image campaign has been a critical
component of the retail effort
27
Core deposit growth has been strong
28
Average “same store” growth has been
excellent at all but 3 branches…
Average YNB
branch has
added $10
million in
deposits per
year
Notes: Growth in reported deposits from 6/30/2000 to 6/30/2004.
Source: SNL Financial and FDIC.
29
Overall, the deposit growth has come from
both share gains and market growth
Notes: Growth in reported deposits from 6/30/2000 to 6/30/2004. Market defined as 1 mile radius from branch location.
Source: SNL Financial and FDIC.
30
YNB is reducing its reliance on expensive
wholesale and CD funding
31
Which is driving down the difference in
deposit cost with the competition
Notes: National average based on banks $1-10 billion in assets. Source: SNL Financial.
32
YNB has great customer loyalty compared to
other banks and other industries
Notes: Net promoter data was available on a limited universe of banking institutions. Data from 2003.
Sources: Research from Frederick F. Reichheld and Satmetrix Systems; data from 2005 YNB Net Promoter Survey.
33
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
34
The operating environment has gotten
tougher
35
Agenda
Introduction
Why invest in YNB?
Growth company generating superior shareholder returns
Expanding in excellent markets
Demand for relationship-based business model
Challenges
Conclusion
36
The YNB long-term value proposition is
simple and compelling
1.
A long-term growth story
Have done it for the past 10 years
Footprint and customer expansion will continue for many years
2.
Expanding presence in highly attractive central NJ
markets
Strongest community banking franchise in central NJ
3.
A superior business model
Focus on core strengths
Commercial lending
Retail deposit gathering
Decentralized, local operating model
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Appendix
Detailed Financial Results
Detailed Demographic Information
38