LAWRENCE SEIDMAN, ESQ.
100 Misty Lane
Parsippany, NJ 07054
(973) 952-0405
(973) 781-0876 fax
March 14, 2006
Via Federal Express
Mr. Michael Pressman, Division of Corporate Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Yardville National Bancorp
PREC 14A filed by Committee to Preserve Shareholder Value
Filed on March 2, 2006
File No. 1-10518
Dear Mr. Pressman:
I am writing in response to your March 10, 2006 comment letter. The
responses are numbered to correspond to the format of your comment letter.
General
Comment:
1. Revise these materials and any future materials, to clearly
characterize each statement or assertion of opinion or belief as
such. Note that a reasonable factual basis must exist for each
such opinion or belief and support for opinions or beliefs should
be self-evident, disclosed in the materials or provided to the
staff on a supplemental basis. Please note, for example:
o You state on page 3 that "the Company violated the agreement."
o On page 4 you make several claims regarding the "bumps in the
road"
Response:
1. (A) The following sentences have been added: " Mr. Seidman's
opinion is based upon the Company's refusal to allow him to
meet with the Board of Directors, or attend any meetings with
investment bankers he recommended to the Company. The Company
also would not provide Mr. Seidman with requested information
so he could respond to certain issues he had raised."
Response
Changed title to: The Company Has Incurred Several Problems
1. (B) The following changes have been made to page 4, paragraph
1: "Mr. Ryan has described several of the Bank's past operational
difficulties as "bumps in the road." The following are situations
which, in Mr. Seidman's opinion, were not beneficial to the
Company. The only incident listed below specifically referred to
by Mr. Ryan as a "bump in the road" was the raising of the $700
million described herein."
Page 4, paragraph 2, "One such bump occurred in 2001..." has been
deleted and changed to "In 2001..."
Page 4, paragraph 3, "The next bump occurred in the fourth..."
has been deleted and changed to "In the fourth..."
Comment:
2. You identify each member of the committee to preserve
shareholder value as a participant in the solicitation. See
Instruction 3(a)(ii) and (iii) to Item 4 of Schedule 14A. Advise
us, with a view toward revised disclosure, why these persons have
not been identified as participants on the cover of Schedule 14A.
Response:
2. The following will appear on the cover of the Schedule 14A:
COMMITTEE TO PRESERVE SHAREHOLDER VALUE
Seidman and Associates, L.L.C.
Seidman Investment Partnership, L.P.
Seidman Investment Partnership II, L.P.
Broad Park Investors, L.L.C.
Federal Holdings, L.L.C.
Pollack Investment Partnership, L.P.
Lawrence Seidman
Dennis Pollack
Patrick Robinson
Harold Schechter
Comment:
3. We understand the reasons why the proxy statement does not
include a time, date, location or record date for the annual
meeting. Advise us whether the participants intend to wait for
the company to provide this required information and before
mailing their proxy statement. If the participants expect to mail
their proxy materials prior to the receipt of this information,
please advise us how they intend to update the disclosure or
disseminate any supplemental proxy materials. We believe that
reliance on Rule 14a-5(c) before the company distributes the
information to security holders would be inappropriate.
Response:
3. The following paragraph from page 2 will be deleted and
included in a supplemental letter to be sent to the
Shareholders after the company mails its proxy material:
"Please refer to the Company's proxy statement for a full
description of management's proposals, the securities
ownership of the Company, the share vote required to ratify
each proposal, information about the Company's Officers and
Directors, including compensation, information about the
ratification of the appointment of KPMG, LLP, as independent
auditors and the date by which Shareholders must submit
proposals for inclusion at the next Annual Meeting."
Comment:
4. Please expand your disclosure to discuss the bylaw prohibiting
Mr. Seidman from being a director in greater detail. Please
explain why the by-law prohibits Mr. Seidman from serving as a
director, why your counsel believes the by-law is
unenforceable and address the timing of any the lawsuits
pertaining to the matter.
Response:
4. The original paragraph has been amended as follows and will
include a footnote on page 1: "On January 25, 2006, the Company's
Board of Directors amended its By-laws and added Article II,
Section 10 to its By-laws, which provided for certain
qualifications of directors. See Form 8-K dated January 25, 2006,
and filed on January 31, 2006.** It is the Company's position
that the By-laws prohibit Mr. Seidman from being a director
because he had a Cease and Desist Order entered against him which
is covered by the amended By-laws. It is Mr. Seidman's counsel's
opinion that the By-law amendment is unenforceable and not
applicable to Mr. Seidman because he nominated himself before the
amended By-laws were approved and because his Cease and Desist
Order is not covered by the amended By-laws. A lawsuit
challenging the By-law has been instituted by way of an Order to
Show Cause in the Superior Court of New Jersey (Chancery
Division) Passaic County. Therefore, Mr. Seidman's ability to be
a nominee will be decided by the Court. Therefore, four (4)
nominees have been nominated and if Mr. Seidman is eligible to be
a director, Schechter's nomination will be withdrawn. If not, Mr.
Schechter will be the nominee."
-----------
**Article II Section 10(b) of the amended By-laws provides:
Director Qualifications. A person is not qualified to serve as a
director if he or she ....(b) is a person against whom a federal
or state bank regulatory agency has issued a cease and desist
order for conduct involving an unsafe or unsound practice in
conducting the affairs of an insured depository institution,
dishonesty, breach of trust, or money laundering, which order is
final and not subject to appeal...
Comment:
The Company has incurred too many bumps in the Road, page 4.
5. Please provide us with a copy of the peer group analysis
referenced on page 5.
Response:
5. Enclosed please find a two page schedule entitled "Peer Group
Analysis".
Comment:
The Price Received By All New Jersey Banks in the Last Two
Years, page 7
6. Please confirm the Staffs understanding that the chart
includes all New Jersey commercial bank acquisitions during the
years noted or if you have utilized a particular set of
transactions, please revise to explain why you have selected
these transactions in particular.
Response:
6. The chart includes all New Jersey commercial bank acquisitions
during 2004 and 2005 with a market value greater than $25 million
as noted thereon. The following sentence has been added to the
paragraph referencing that the source of ratios is SNL Financial
DataSource on pages 9 and 12: "SNL Financial is a nationally
recognized company which collects, organizes, and distributes
financial data for financial companies."
Comment:
7. Please provide us with copies of the SNL materials from which
you derive your analyses.
Response:
7. Four pages titled Custom Report: M&A Deals from SNL Financial are
being sent you under separate cover.
Comment:
Mr. Seidman's Past History of Promoting the Maximization of
Shareholder Value, Page 10
8. Please expand your disclosure to explain in greater detail why
you believe the actions of
Mr. Seidman resulted in the outcomes discussed and why the
outcomes discussed constitute the "maximization of shareholder
value."
Response:
Changed title to: Mr. Seidman's Past History with Certain
Financial Institutions
8. The following sentence was added in this section: "The
following is Mr. Seidman's history with respect to certain
financial institutions. Shareholders should not imply a
correlation between Mr. Seidman's actions and the actions taken
by the following financial institutions. It must be remembered,
that with respect to the companies where Mr. Seidman, or his
nominees, were on the board, they were a minority on the board.
Where a company was sold after Mr. Seidman filed a Schedule 13D,
and Mr. Seidman had no nominees on the Board, Mr. Seidman could
not exert any influence on the board with respect to any
decisions."
Comment:
Solicitation Expenses, Page 15
9. Please expand your disclosure to explain what effect broker
non-votes will have on the vote. Refer to Item 21(b) of Schedule
14A.
Response:
9. Since this is a contested election for directors, I do not
anticipate there will be any broker non-votes. The broker
non-votes should have no effect on the outcome of the vote.
The following was added on page 2: "Every Shareholder should be
aware that if his shares are held through a bank, brokerage firm,
or other nominee, they will not be able to change their vote at
the Annual Meeting, unless they obtain a legal proxy from the
bank, brokerage firm, or other nominee. Since this is a contested
election for directors, there should not be any broker non-votes.
Broker non-votes occur when a bank or brokerage firm holding
shares on behalf of a shareholder does not receive voting
instructions from the shareholder by a specified date before the
Annual Meeting and the bank or brokerage firm is not permitted to
vote those undirected shares on specified matters under
applicable stock exchange rules. Thus, if you do not give your
broker specific instructions, your shares may not be voted on
those matters and will not be counted in determining the number
of shares necessary for approval.
Comment:
Form of Proxy
10. If you name your substitute nominee on your proxy card, please
revise the card to more clearly identify Mr. Schechter as the
substitute or provide a separate conditional proposal
for the ejection of Mr. Schechter.
Response:
10. Added to proxy card: "Until the issue of Mr. Seidman's
eligibility is determined by the Superior Court of New Jersey,
Chancery Court of Passaic County, if you vote for Mr. Seidman,
and he is not eligible, your vote will be cast for Mr. Schechter.
If Mr. Seidman is eligible, then your vote will be cast for Mr.
Seidman.
Comment:
11. Please revise the proxy card to identify all persons on whose
behalf the solicitation is being made. Refer to Item 4(a)(2) of
Schedule l4A and Rule 14a-4(a)(1) of Regulation 14A
Response:
11. On page 27 the following was added: "THIS PROXY IS SOLICITED IN
OPPOSITION TO THE BOARD OF DIRECTORS OF YARDVILLE NATIONAL
BANCORP BY THE COMMITTEE TO PRESERVE SHAREHOLDER VALUE AND FOR
THE COMMITTEE NOMINEES LISTED BELOW."
Very truly yours,
By: /s/ Lawrence B. Seidman
--------------------------------
Lawrence B. Seidman
Peer Group Analysis
TOTAL
ASSETS ROAA ROATE
MSTRCTQTR LTM LTM
COMPANY NAME TICKER ($000) (%) (%)
--------------------------------------- ------ --------- ---- -----
1st Source Corporation SRCE 3,511,277 1.00 11.41
BancFirst Corporation BANF 3,223,030 1.39 17.13
Bank of the Ozarks, Inc. OZRK 2,134,882 1.65 24.23
Banner Corporation BANR 3,040,555 0.41 NA
Capital City Bank Group, Inc. CCBG 2,622,110 1.22 18.10
Capitol Bancorp Ltd. CBC 3,475,721 1.08 NA
Centennial Bank Holdings, Inc. CBHI 2,540,169 NA NA
Chemical Financial Corporation CHFC 3,749,316 1.40 12.82
City Holding Company CHCO 2,502,597 2.09 22.51
Columbia Banking System, Inc. COLB 2,377,322 1.29 16.54
Community Banks, Inc. CMTY 3,332,430 0.96 12.12
Community Trust Bancorp, Inc. CTBI 2,849,213 1.22 19.31
EuroBancshares, Inc. EUBK 2,391,283 0.74 10.00
Farmers & Merchants Bank of Long Beach FMBL 3,060,776 1.75 9.10
Financial Institutions, Inc. FISI 2,022,392 0.10 NA
First Busey Corporation BUSE 2,263,422 1.28 26.26
First Community Bancorp FCBP 3,226,411 1.68 37.32
First Financial Bancorp FFBC 3,690,808 1.00 NA
First Financial Bankshares, Inc. FFIN 2,733,827 1.80 20.37
First Financial Corporation THFF 2,136,918 1.07 8.98
First Merchants Corporation FRME 3,237,079 0.95 18.38
First National Bank Alaska FBAK 2,230,039 1.62 8.15
First Oak Brook Bancshares, Inc. FOBB 2,229,292 0.78 12.46
First State Bancorporation FSNM 2,157,571 1.08 19.73
Frontier Financial Corporation FTBK 2,637,005 2.09 19.20
Glacier Bancorp, Inc. GBCI 3,706,344 1.52 23.78
Great Southern Bancorp, Inc. GSBC 2,081,155 1.14 NA
Hanmi Financial Corporation HAFC 3,414,252 1.79 30.25
Harleysville National Corporation HNBC 3,117,359 1.28 16.28
Heartland Financial USA, Inc. HTLF 2,818,332 0.84 16.79
Hudson Valley Holding Corp. HUVL 2,058,116 1.60 NA
IBERIABANK Corporation IBKC 2,850,284 0.81 13.86
Independent Bank Corp. INDB 3,041,685 1.11 20.56
Independent Bank Corporation IBCP 3,355,848 1.45 27.24
Integra Bank Corporation IBNK 2,708,142 0.99 17.07
ITLA Capital Corporation ITLA 3,051,196 0.89 12.32
Lakeland Bancorp, Incorporated LBAI 2,206,033 0.94 21.51
Main Street Banks, Inc. MSBK 2,350,516 1.24 16.06
Mechanics Bank MCHB 2,644,850 0.98 10.70
Mid-State Bancshares MDST 2,391,499 1.58 17.29
Midwest Banc Holdings, Inc. MBHI 2,307,608 0.26 3.80
Old Second Bancorp, Inc. OSBC 2,367,830 1.24 19.63
PrivateBancorp, Inc. PVTB 3,494,210 1.12 20.89
Prosperity Bancshares, Inc. PRSP 3,585,983 1.42 32.53
Renasant Corporation RNST 2,398,173 1.03 18.27
Peer Group Analysis
Republic Bancorp, Inc. RBCAA 2,735,556 1.33 16.56
S&T Bancorp, Inc. STBA 3,194,979 1.90 NA
Sandy Spring Bancorp, Inc. SASR 2,459,616 1.41 18.55
Seacoast Banking Corporation of Florida SBCF 2,132,174 1.07 18.20
Simmons First National Corporation SFNC 2,523,768 1.08 15.80
Southwest Bancorp, Inc. OKSB 2,099,639 1.01 13.80
Sterling Bancorp STL 2,056,042 1.24 18.67
Sterling Bancshares, Inc. SBIB 3,726,859 1.02 14.40
Sterling Financial Corporation SLFI 2,965,737 1.39 20.67
Sun Bancorp, Inc. SNBC 3,102,489 0.63 14.79
Taylor Capital Group, Inc. TAYC 3,280,672 1.05 19.96
Texas Capital Bancshares, Inc. TCBI 3,042,235 0.97 13.68
Tompkins Trustco, Inc. TMP 2,106,870 1.36 17.41
U.S.B. Holding Co., Inc. UBH 2,758,226 1.19 18.09
Unizan Financial Corporation UNIZ 2,459,931 0.74 9.65
W.T.B. Financial Corporation WTBFB 2,981,162 1.33 14.79
Washington Trust Bancorp, Inc. WASH 2,402,003 0.98 19.60
Western Alliance Bancorporation WAL 2,857,271 1.13 14.85
Yardville National Bancorp YANB 2,956,731 0.72 12.78
Average: 2,765,240 1.19 17.50
Median: 2,733,827 1.14 17.29