Yardville shareholder says board needs infusion of new ideas; questions company earnings, operations

By Jennifer Lanning Drey

Portland, Ore., Feb. 5 - Yardville National Bancorp's board of directors is long overdue for new members with fresh ideas, Yardville shareholder Dennis Pollack said in a statement made to Prospect News on Monday.

"I just think there needs to be an infusion of new thoughts and ideas on that board," Pollack said.

As part of a group of investors that collectively owns roughly 993,000 shares, or 8.99% of Yardville stock, Pollack sent a letter to the Yardville board of directors on Feb. 2 nominating himself and shareholders Patrick A. Robinson and Neal Axelrod to positions he believes will be open for election at the company's 2007 annual meeting.

Constant missed earnings guidance, a prolonged supervisory agreement with the Office of the Comptroller for the Currency of the United States and deteriorating credit quality are among reasons the investors believe Yardville's board needs new direction, Pollack said.

In addition, he said the board breached its fiduciary responsibility by reducing itself to 13 members from 15 members and that in three years, the company's earnings have "gone nowhere."

Yardville reported fourth-quarter net income of approximately $4.2 million, or $0.36 per diluted share, excluding the impact of one-time charges associated with restructuring.

"The board needs to understand that they have a responsibility to all shareholders," Pollack said.

Yardville executives and legal council did not respond to requests for comment made Monday.

However, during Yardville's fourth-quarter earnings conference call held Jan. 30, company executives responded to similar accusations made by investor Larry Seidman of Seidman & Associates, LLC during the question-and-answer session of the call. Seidman is also part of the shareholder group promoting the board changes.

With regard to the supervisory agreement, under which Yardville has operated since September 2005, company chief operating officer F. Kevin Tylus said the bank has received indications of positive progress from the Office of the Comptroller for the Currency, although the bank does not know when it will be able to come out of the agreement.

During the same call, Yardville chief executive officer Patrick M. Ryan said an appeal related to litigation on whether the board breached its fiduciary responsibility by reducing its size is still pending.

Pollack's letter to the board seeks a response by Tuesday, and the investor group plans to lobby other shareholders in its call for new board members.

"I don't know why [Yardville] is reluctant to add people to the board to make it more progressive," Pollack said.

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

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