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SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14 (a) of the
Securities Exchange Act of 1934
(Amendment No.5)
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Preliminary Proxy Statement [ ]
Confidential, for Use
of the Commission Only (as permitted by Rule 14a-6(e) (2) [ ]
Definitive Proxy Statement [ ]
Definitive Additional Materials [x]
Soliciting Material Pursuant to Rule 14a-11 (c) or Rule 14a-12
YARDVILLE NATIONAL BANCORP
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(Name of Registrant as Specified In Its Charter)
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
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YARDVILLE NATIONAL BANCORP
COMMITTEE TO PRESERVE SHAREHOLDER VALUE
100 Misty Lane
Parsippany Nj 07054
(973) 952-0405
(973) 781-0876 fax
April 27, 2006
Dear Fellow Shareholders:
We have been a long-term investor in Yardville National Bancorp
("Yardville") since August of 2003. We are currently its largest shareholder,
beneficially owning 8.26% of the Company's outstanding common stock. We are
asking for your vote at the 2006 annual meeting of shareholders in order to
elect three highly qualified nominees, Dennis Pollack, Harold Schecter and
Patrick Robinson, to the Board of Directors. We believe that it is time for
shareholders to have representatives in the boardroom who were nominated by
shareholders for the purposes of, and who are committed to, working to address
the following:
(1) Promoting the accountability and credibility of senior management,
(2) Upholding the responsibility to accurately forecast performance and
expectations,
(3) Encouraging and overseeing efforts to maximize shareholder value
MANAGEMENT'S CREDIBILITY AND PERFORMANCE PROJECTIONS
It is easy to project performance and growth, but hard to deliver, as
illustrated by Yardville. In this area, management has little credibility. In
the fourth-quarter 2004 earnings release, Executive Vice President and CFO
Stephen F. Carman projected net income growth of 25% to 30% for 2005. Six months
later, in the Company's second-quarter earning release, his projections did not
waver. Another three months later, Mr. Carman began to backtrack, "We believe
that we can achieve solid earnings growth of 17-20 percent for 2005, although
this is below our earlier earnings guidance of 25 percent." As it turned out,
the Company's net income was up only 13% for 2005, while its EPS was up just
10.5%.
For 2006, Carmen is on record for guidance of 8% to 10% growth in net income and
5% to 8% for EPS. While these goals are more reasonable than the goals from a
year ago, the bank's track record in 2005 makes it difficult to trust these
projections. It didn't get any easier after seeing the first-quarter results,
which put the bank on pace for EPS of $1.84, five cents below last year's
earnings. Yardville refused to address its guidance during the most recent
conference call.
DECREASED EARNINGS PER SHARE
On April 21, 2006, Yardville reported first-quarter 2006 EPS of 46 cents, which
was eight cents below normalized fourth-quarter 2005 EPS* and five cents below
reported EPS from the year-ago quarter. In an interview with SNL Financial, CEO
Patrick M. Ryan stated, "I am not displeased, all factors in, with the number."
He, as well as all shareholders, SHOULD be displeased with Yardville's financial
performance.
Not only were the earnings in the first quarter of 2006 down from previous
quarters, the quality of those earnings was sub par. The loan loss provision
only covered 88% of net charge-offs (NCOs), down from a coverage ratio of 101%
in the previous quarter and 385% in the year-ago quarter. Failing to adequately
cover NCOs pushed the reserves to loans ratio down two basis points from
December 31, 2005 to 1.13%. YANB also benefited from a lower tax rate. In the
first quarter, the rate was 27.68%, versus 29.40% in the fourth quarter and
31.74% in the first quarter a year ago.
UNSETTLING FINANCIAL TRENDS INCLUDING INCREASED EXPENSES
The majority of Yardville's quarterly financial trends are not encouraging. This
bank should perform better as rates rise, yet we are still awaiting improved
performance. Some of the key issues include the following:
o Expenses rising faster than revenue (Efficiency ratio rose to 56.77% from
52.18% in fourth quarter)
o Noninterest-bearing deposits down 9.3% from year-end
o Commercial loans showed negligible growth
o NCOs remain at an elevated level
o Net interest margin fell two basis points from fourth quarter (margin may
have already peaked)
Yardville is mired in mediocrity, with a practice of over promising and sub par
performance. Talking about a "Strategic Plan" is not enough. The Yardville Board
of Directors needs new leadership, including truly independent directors that
will provide more than empty promises. We need action now more than ever.
If you have any questions, or need further assistance, please call Lawrence
Seidman at (973) 952-0405, or our proxy solicitor: D.F. King & Co., Attn:
Richard Grubaugh, 48 Wall Street, New York, New York 10005, at (888) 644-6071 or
(212) 493-6950.
The Committee needs your support to elect three qualified individuals to
the Board. PLEASE VOTE THE WHITE PROXY CARD.
Sincerely,
The Committee to Preserve Shareholder Value
* Assumes the loan loss provision and total noninterest expenses were equal in
the fourth quarter of 2005 and the third quarter of 2005. Reported EPS in the
fourth quarter was 39 cents.
Additional Information:
Yardville National Bancorp Committee to Preserve Shareholder Value has filed a
definitive proxy statement and other documents regarding its nomination of
Dennis Pollack, Harold Schechter and Patrick Robinson (the Committee's Nominees)
to serve as directors of Yardville National Bancorp (YANB) with the U.S.
Securities and Exchange Commission (SEC). The definitive proxy statement and the
related proxy were mailed to shareholders of YANB seeking their support of the
Committee Nominees at YANB's Annual Meeting of Shareholders. Shareholders are
urged to read the definitive proxy statement and any other document related to
the solicitation of proxies by the Committee because they contain important
information about the Committee and related matters. Shareholders may obtain a
free copy of the definitive proxy statement, related proxy statement and other
documents filed by the Committee with the SEC at the SEC's web site at
www.sec.gov. The definitive proxy statement, related proxy and other related SEC
documents filed by the Committee with the SEC may also be obtained free of
charge from the Committee.
The Committee consists of the following who are the participants in the
solicitation from YANB's shareholders of proxies in favor of the Committee
Nominees: 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 and Harold Schechter. Such participants may have
interests in the solicitation, including as a result of holding shares or YANB
common stock. Information regarding the participants and their interests is
contained in the definitive proxy statement that was filed by the Committee with
the SEC in connection with YANB's 2006 Annual Meeting of Shareholders.