Committee to Preserve Shareholder Value has acquired about 8 percent of the company’s stock
By: Lauren Otis
WEST WINDSOR Yardville National Bancorp shareholders voted to re-elect three directors to the bank’s board who were supported by management, rather than three challengers put forward by an investor.
The proxy battle swelled attendees to Hamilton-based YNB’s annual meeting of shareholders, held on May 3 on the campus of Mercer County Community College, and resulted in several sharp exchanges between YNB management and investor Lawrence Seidman, as well as the three board nominees Mr. Seidman was pushing: Dennis Pollack, Harold Schecter and Patrick Robinson.
The preliminary tally of shareholder votes indicated that the YNB board slate Samuel D. Marrazzo, Louis R. Matlack, and George D. Muller were all re-elected to three-year terms. The results are still awaiting independent verification.
"It appears that the company’s slate of nominees has received a plurality," said Jay Destribats, YNB chairman of the board. Mr. Destribats told the largely full auditorium. "I think this may be the largest crowd we’ve had in recent years."
Patrick M. Ryan, YNB’s chief executive officer, spoke of the strong growth at the 81-year-old bank, specifically its upward trajectory since going public 11 years ago (the bank is traded on the Nasdaq exchange, symbol YANB). Mr. Ryan cited growth in total YNB assets to nearly $3 billion, growth in deposits to nearly $2 billion, a stock price that was higher than at the 2005 annual meeting, and a record of being a growth company while also paying consistent dividends, as signs of the company’s strength and potential.
Kevin Tylus, YNB president and chief operating officer, noted that YNB "is on the right track in compliance" with a supervisory agreement the bank entered into with federal bank regulators at the Office of the Comptroller of the Currency. Following an OCC examination, the 2005 agreement requires YNB to maintain specified capital levels, obtain OCC approval of dividend payments, and strengthen its board and management oversight, and internal audit controls.
"We have a constructive, cooperative relationship with the OCC and they have not constrained our business," Mr. Tylus said.
During the period reserved for questions, Mr. Seidman stood up and stated that many of YNB’s growth figures turned out to be "less than projected" by management. He also cited YNB’s recent earnings downturn, in which the company reported a drop in earnings per share to 46 cents for the first quarter of 2006, down from 51 cents a share a year earlier.
Mr. Pollock in turn questioned the solidity of YNB’s operations if they were "one of only three percent (of banks under OCC regulatory oversight) that was forced to enter into a supervisory agreement."
Mr. Ryan responded that the OCC had indicated to him "Pat, because of your growth rates we want to see heightened internal procedures put into place."
Since August 2003, Mr. Seidman’s group, operating under the name "Committee to Preserve Shareholder Value," has acquired approximately 8.3 percent of YNB stock, according to Securities and Exchange Commission filings. Mr. Seidman, a former SEC lawyer turned investor, has a long history of buying stakes in small and sleepy bank and thrift institutions, then seeking a presence on their boards and ultimately pushing for the sale of the company, gaining a tidy profit for his investment companies. The practice has earned Mr. Seidman a reputation as a corporate raider.
Asked whether YNB would consider making room on its board for one new member from Mr. Seidman’s slate, YNB Chairman Jay Destribats responded, "I don’t think we have any immediate plans to add additional directors.
"One of the tests in my mind (for any prospective director) would be, would you buy into the plans of Yardville National Bank," Mr. Destribats said. "If you were to say, ‘Sell the bank,’" he said, that would not be adhering to the bank’s plan.
"We’ll communicate with Mr. Seidman," Mr. Destribats said. "We are always open to advice that is in the best interest of shareholders."