Yardville National Bancorp Lawrence Seidman questions company's financial results, CEO's ability

By Lisa Kerner

Charlotte, N.C., May 4 - Yardville National Bancorp investor Lawrence B. Seidman took president and chief executive officer Patrick Ryan to task on the company's first-quarter 2007 financial results, which he described as "better than the disastrous fourth-quarter 2006 results," but "a step down from prior periods."

Seidman believes Yardville's overhead costs are too high and the company's efficiency ratio has declined, according to his letter to Ryan included in a schedule 13D filing with the Securities and Exchange Commission.

"To return to an efficiency ratio of 53.89%, Yardville would have to cut approximately $2.3 million in quarterly expenses, assuming no change in revenue. Given that Yardville has opened several branches in the last two years, and has additional expansion plans, how are these types of savings going to be achieved? Are any of the new branches profitable yet? Do you even know? In any case, it appears that you are either unable, or unwilling, to take the steps necessary to properly align expenses with revenue."

Seidman noted that he and his analyst were blocked from asking questions following the company's May 1 earnings conference after the session was abruptly ended.

"I find it outrageous that you would take such actions against any shareholder, let alone its largest shareholder. What is Yardville afraid of? I called your office twice and left two messages to discuss this matter, but I did not receive the courtesy of a return phone call," the letter stated.

Seidman's attorney, Peter Bray, sent a similar letter to the company's counsel, Daniel J. O'Donnell, noting that the investor was also blocked from asking questions during the third-quarter 2006 earnings call. Seidman was not blocked at the fourth-quarter 2006 call.

"Please advise me whether Mr. Seidman and his analyst will be permitted to ask questions during Yardville's future earning conference calls, just like every other shareholder," stated Bray's attorney's letter, which was also included in the SEC filing.

Seidman said he is prepared to take legal action to protect his rights as a shareholder.

The investor has long been critical of Yardville's management, most recently requesting Ryan to publicly disclose, through an 8-K filing, the contents of a Jan. 27, 2006 supervisory letter to Yardville from the Federal Reserve Bank of Philadelphia.

Seidman has contacted Yardville to nominate board members, to insist that the annual meeting be held on July 12 and to request lists of other Yardville shareholders.

The investor owns 1,026,773 shares, or 9.2%, of the company's outstanding common stock.

Yardville National Bancorp, based in Hamilton, N.J., operates as the bank holding company for the Yardville National Bank.

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