Yardville National Bancorp Announces Earnings for First Quarter of 2007

HAMILTON, N.J., April 30  /PRNewswire-FirstCall/ -- Yardville National Bancorp, (NASDAQ:YANB) today reported net income for the first quarter of 2007 of $5.1 million or $0.45 per diluted share. This was a slight decrease of 0.8 and 2.2 percent, respectively, from the $5.2 million or $0.46 per diluted share reported at March 31, 2006.

"As expected, we experienced improvement in the net interest margin this quarter compared to the fourth quarter and the full year of 2006," said YNB Chief Executive Officer Patrick M. Ryan. "This was primarily the result of our fourth quarter 2006 balance sheet restructuring," he explained. "Ongoing pressure on net interest income due to the prolonged inverted yield curve and higher non-interest expenses, partially offset by the benefits of our balance sheet restructuring and a lower provision for loan losses, were the principal reasons for our modestly lower first quarter 2007 results compared to the same period in 2006," Mr. Ryan continued. "In addition, the very competitive banking environment - both for commercial loans and for retail deposits - contributes further to the downward pressure on the margin, a situation being experienced by many financial institutions," he added.

During the first quarter of 2007, YNB continued its focus on attracting lower cost retail deposits by opening new branches in contiguous marketplaces, establishing its brand, and increasing the number of depositors and deposits. After opening five new branches in 2006, YNB began 2007 by opening its third branch in Middlesex County on Route 130 in North Brunswick. The ongoing expansion of YNB's footprint has been coupled with innovative product and brand marketing efforts designed to increase business and consumer deposits in a very competitive market. YNB's total deposits at March 31, 2007 grew to $2.06 billion from $1.97 billion at the same date a year ago.

"Over the last twelve months, deposits generated through our branch network have substantially reduced our reliance on more expensive wholesale funding sources - a key strategic objective of YNB," explained YNB President and Chief Operating Officer F. Kevin Tylus.  "The success of our retail strategy is reflected in an increase of $87.2 million in total deposits at March 31, 2007 from the same date a year ago," he went on. "YNB's relationship-based community banking model, which includes expanding our branches into new markets, is a key component in this strategy," he stated. "We have additional branches planned for the remainder of 2007, and we would expect them to contribute to YNB's value in the future," he concluded.

"Without question, a generally slower loan environment and increased competition related to rates and terms is impacting our loan growth," Mr. Ryan added. "Although total loans at December 31, 2006 held steady from the same date the prior year, we were pleased to see a modest increase in the first quarter of 2007 compared with total loans at year-end 2006," he noted. Total loans at March 31, 2007 reached $2.00 billion compared to $1.99 billion at March 31, 2006. "While our loan growth may continue to be at a slower pace than it has been historically, YNB intends to maintain and enhance our focus on our traditional strengths - commercial and small business lending - as key components in our strategy to weather this extremely competitive environment," Mr. Ryan said.

YNB's CEO also noted that YNB does not do any "sub-prime lending," an area that has received considerable press lately and has contributed to problems for a number of other financial institutions. "That just isn't our market," he said, "and we are not in that business and have no plans to be."

Nonperforming assets decreased to $26.1 million, or 0.98 percent of total assets at March 31, 2007, compared to $29.5 million, or 1.12 percent of total assets at December 31, 2006. Compared with March 31, 2006, nonperforming assets increased $9.9 million, or 61.1 percent. The allowance for loan losses at March 31, 2007 totaled $24.7 million, or 1.24 percent of total loans and covered 95.9 percent of total nonperforming loans, compared with $22.4 million, or 1.13 percent, covering 138.1 percent of total nonperforming loans at March 31, 2006.

"The restructuring of our balance sheet produced improvement in our net interest margin to 3.37 percent for the three months ended March 31, 2007, compared to 3.09 for the prior quarter," noted YNB Chief Financial Officer Stephen F. Carman. "However, the combined effect of the challenging yield curve and ongoing strong competition for commercial loans and retail deposits limited our margin improvement in the first quarter and resulted in slightly lower net interest income than we planned. In addition," he said, "non- interest expenses associated with our retail strategy and legal, audit, and regulatory expenses were higher during the first quarter of 2007, compared to the same quarter last year. We expect these expenses and market challenges to remain with us throughout 2007," Mr. Carman concluded.

All of YNB's capital ratios remain above regulatory requirements. At March 31, 2007, total risk-based capital was 12.3 percent, Tier 1 capital to risk- based assets was 11.2 percent, and Tier 1 capital to average assets was 9.8 percent. On March 28, YNB paid its shareholders a cash dividend of $0.115 per share. The company has paid dividends for the past 53 consecutive quarters.

With $2.68 billion in assets as of March 31, 2007, YNB serves individuals and small to mid-sized businesses in the dynamic New York City-Philadelphia corridor through a network of 33 branches in Mercer, Hunterdon, Somerset, Middlesex, Burlington, and Ocean counties in New Jersey and Bucks County in Pennsylvania.  Headquartered in Mercer County, YNB emphasizes commercial lending and offers a broad range of lending, deposit and other financial products and services.

                        Yardville National Bancorp
                     Summary of Financial Information
                               (Unaudited)

  (in thousands, except per share amounts)     Three Months Ended March 31,
                                                 2007              2006
  Stock Information:
  Weighted average shares outstanding:
       Basic                                    11,043            10,884
       Diluted                                  11,417            11,313
  Shares outstanding end of period              11,084            10,954
  Earnings per share:
       Basic                                     $0.46             $0.47
       Diluted                                    0.45              0.46
  Dividends paid per share                       0.115             0.115
  Book value per share                           17.26             16.36
  Tangible book value per share                  17.14             16.21
  Closing price per share                        36.31             36.80
  Closing price to tangible book value          211.84 %          227.02 %
  Key Ratios:
  Return on average assets                        0.78 %            0.71 %
  Return on average stockholders' equity         10.84             11.55
  Net interest margin                             3.28              3.00
  Net interest margin (tax equivalent)(1)         3.37              3.08
  Efficiency ratio                               65.88             58.49
  Equity-to-assets at period end                  7.13              6.03
  Tier 1 leverage ratio (2)                       9.78              8.62
  Asset Quality Data:
  Net loan charge-offs                            $528            $2,661

  Nonperforming assets as a percentage
   of total assets                                0.98              0.55

  Allowance for loan losses at period
   end as a percent of:
           Total loans                            1.24              1.13
           Nonperforming loans                   95.93            138.13

  Nonperforming assets at period end:
       Nonperforming loans                     $25,732           $16,211
       Other real estate                           385                 -
            Total nonperforming assets         $26,117           $16,211

  (1) The net interest margin is equal to net interest income divided by
      average interest earning assets. In order to make pre-tax income and
      resultant yields on tax-exempt investments and loans on a basis
      comparable to those on taxable investments and loans, a tax equivalent
      adjustment is made to interest income. The tax equivalent adjustment
      has been computed using the appropriate Federal income tax rate for
      the period, and has the effect of increasing interest income by
      $555,000 and $601,000 for the three month periods ended March 31, 2007
      and 2006, respectively.
  (2) Tier 1 leverage ratio is Tier 1 capital to adjusted quarterly average
      assets.



               Yardville National Bancorp and Subsidiaries
                    Consolidated Statements of Income
                               (Unaudited)

  (in thousands, except per share amounts)      Three Months Ended March 31,
                                                   2007              2006
  INTEREST INCOME:
  Interest and fees on loans                     $37,136           $35,421
  Interest on deposits with banks                    218               230
  Interest on securities available for sale        5,383             8,962
  Interest on investment securities:
      Taxable                                         20                23
      Exempt from Federal income tax               1,065             1,010
  Interest on Federal funds sold                      77               128
      Total Interest Income                       43,899            45,774
  INTEREST EXPENSE:
  Interest on savings account deposits             7,097             6,147
  Interest on certificates of deposit
   of $100,000 or more                             3,199             2,284
  Interest on other time deposits                  7,847             5,520
  Interest on borrowed funds                       3,711             9,304
  Interest on subordinated debentures              1,391             1,306
       Total Interest Expense                     23,245            24,561
       Net Interest Income                        20,654            21,213
  Less provision for loan losses                     650             2,350
       Net Interest Income After
        Provision for Loan Losses                 20,004            18,863
  NON-INTEREST INCOME:
  Service charges on deposit accounts                617               659
  Securities gains, net                                7                 -
  Income on bank owned life insurance                442               421
  Other non-interest income                          676               581
       Total Non-Interest Income                   1,742             1,661
  NON-INTEREST EXPENSE:
  Salaries and employee benefits                   7,802             7,651
  Occupancy expense, net                           1,786             1,427
  Equipment expense                                  839               796
  Other non-interest expense                       4,328             3,504
       Total Non-Interest Expense                 14,755            13,378
  Income before income tax expense                 6,991             7,146
  Income tax expense                               1,863             1,978
       Net Income                                 $5,128            $5,168
  EARNINGS PER SHARE:
  Basic                                            $0.46             $0.47
  Diluted                                           0.45              0.46
  Weighted average shares outstanding:
  Basic                                           11,043            10,884
  Diluted                                         11,417            11,313



               Yardville National Bancorp and Subsidiaries
                   Consolidated Statements of Condition
                               (Unaudited)

                                                 March 31,      December 31,
  (in thousands)                             2007        2006         2006
  Assets:
  Cash and due from banks                  $31,007     $38,165     $30,355
  Federal funds sold                        18,130      16,675       3,265
     Cash and Cash Equivalents              49,137      54,840      33,620
  Interest bearing deposits with banks      57,458      18,226      32,358
  Securities available for sale            392,693     722,530     402,641
  Investment securities                     97,149      92,786      96,072
  Loans                                  1,996,851   1,990,285   1,972,881
     Less: Allowance for loan losses       (24,685)    (22,392)    (24,563)
     Loans, net                          1,972,166   1,967,893   1,948,318
  Bank premises and equipment, net          12,243      11,436      12,067
  Other real estate owned                      385           -         385
  Bank owned life insurance                 50,093      46,573      49,651
  Other assets                              45,628      43,892      45,619
           Total Assets                 $2,676,952  $2,958,176  $2,620,731
  Liabilities and Stockholders' Equity:
  Deposits
     Non-interest bearing                 $192,086    $210,646    $197,126
     Interest bearing                    1,868,098   1,762,373   1,806,157
           Total Deposits                2,060,184   1,973,019   2,003,283
  Borrowed funds
     Securities sold under agreements to
      repurchase                            10,000      10,000      10,000
     Federal Home Loan Bank advances       314,000     704,000     324,000
     Subordinated debentures                62,892      62,892      62,892
     Obligation for Employee Stock
      Ownership Plan (ESOP)                  1,547       2,109       1,688
     Other                                     632         695       1,593
           Total Borrowed Funds            389,071     779,696     400,173
  Other liabilities                         36,917      27,065      31,181
     Total Liabilities                  $2,486,172  $2,779,780  $2,434,637
  Stockholders' equity:
     Common stock: no par value            109,096     105,937     108,728
     Surplus                                 2,205       2,205       2,205
     Undivided profits                      89,954      89,807      86,100
     Treasury stock, at cost                (3,160)     (3,160)     (3,160)
     Unallocated ESOP shares                (1,547)     (2,109)     (1,688)
     Accumulated other comprehensive loss   (5,768)    (14,284)     (6,091)
           Total Stockholders' Equity      190,780     178,396     186,094
           Total Liabilities and
            Stockholders' Equity        $2,676,952  $2,958,176  $2,620,731



                            Financial Summary
                    Average Balances, Yields and Costs
                               (Unaudited)

                                                 Three Months Ended
                                                   March 31, 2007
                                                                   Average
                                             Average               Yield /
  (in thousands)                             Balance    Interest    Cost

  INTEREST EARNING ASSETS:
  Interest bearing deposits with banks       $16,943       $218    5.15 %
  Federal funds sold                           5,916         77    5.21
  Securities                                 495,584      6,468    5.22
  Loans (1)                                2,000,722     37,136    7.42
        Total interest earning assets     $2,519,165    $43,899    6.97 %
  NON-INTEREST EARNING ASSETS:
  Cash and due from banks                    $30,784
  Allowance for loan losses                  (24,236)
  Premises and equipment, net                 12,277
  Other assets                                82,510
        Total non-interest earning assets    101,335
  Total assets                            $2,620,500
  INTEREST BEARING LIABILITIES:
  Deposits:
     Savings, money markets, and
      interest bearing demand               $908,637     $7,097    3.12 %
     Certificates of deposit of
      $100,000 or more                       261,455      3,199    4.89
     Other time deposits                     650,059      7,847    4.83
        Total interest bearing deposits    1,820,151     18,143    3.99
  Borrowed funds                             336,888      3,711    4.41
  Subordinated debentures                     62,892      1,391    8.85
        Total interest bearing
         liabilities                      $2,219,931    $23,245    4.19 %
  NON-INTEREST BEARING LIABILITIES:
  Demand deposits                           $190,760
  Other liabilities                           20,523
  Stockholders' equity                       189,286
        Total non-interest bearing
         liabilities and
         stockholders' equity               $400,569
  Total liabilities and stockholders'
   equity                                 $2,620,500

  Interest rate spread (2)                                         2.78 %

  Net interest income and margin (3)                    $20,654    3.28 %

  Net interest income and margin (tax
   equivalent basis)(4)                                 $21,209    3.37 %


                                                   Three Months Ended
                                                     March 31, 2006
                                                                  Average
                                             Average               Yield /
  (in thousands)                             Balance    Interest    Cost

  INTEREST EARNING ASSETS:
  Interest bearing deposits with banks       $19,747       $230    4.66 %
  Federal funds sold                          11,674        128    4.39
  Securities                                 825,547      9,995    4.84
  Loans (1)                                1,975,212     35,421    7.17
        Total interest earning assets     $2,832,180    $45,774    6.46 %
  NON-INTEREST EARNING ASSETS:
  Cash and due from banks                    $36,033
  Allowance for loan losses                  (23,202)
  Premises and equipment, net                 11,715
  Other assets                                71,078
        Total non-interest earning assets     95,624
  Total assets                            $2,927,804
  INTEREST BEARING LIABILITIES:
  Deposits:
     Savings, money markets, and
      interest bearing demand               $956,632     $6,147    2.57 %
     Certificates of deposit of
      $100,000 or more                       237,477      2,284    3.85
     Other time deposits                     553,489      5,520    3.99
        Total interest bearing deposits    1,747,598     13,951    3.19
  Borrowed funds                             717,677      9,304    5.19
  Subordinated debentures                     62,892      1,306    8.31
        Total interest bearing
         liabilities                      $2,528,167    $24,561    3.89 %
  NON-INTEREST BEARING LIABILITIES:
  Demand deposits                           $210,775
  Other liabilities                            9,880
  Stockholders' equity                       178,982
        Total non-interest bearing
         liabilities and stockholders'
          equity                            $399,637
  Total liabilities and stockholders'
   equity                                 $2,927,804

  Interest rate spread (2)                                         2.57 %

  Net interest income and margin (3)                    $21,213    3.00 %

  Net interest income and margin (tax
   equivalent basis)(4)                                 $21,814    3.08 %

  (1) Loan origination fees are considered an adjustment to interest income.
      For the purpose of calculating loan yields, average loan balances
      include nonaccrual balances with no related interest income.

  (2) The interest rate spread is the difference between the average yield
      on interest earning assets and average rate paid on interest bearing
      liabilities.

  (3) The net interest margin is equal to net interest income divided by
      average interest earning assets.

  (4) In order to make pre-tax income and resultant yields on tax-exempt
      investments and loans on a basis comparable to those on taxable
      investments and loans, a tax equivalent adjustment is made to interest
      income. The tax equivalent adjustment has been computed using the
      appropriate Federal income tax rate for the period and has the effect
      of increasing interest income by $555,000 and $601,000 for the three
      month periods ended March 31, 2007 and 2006, respectively.



                            Financial Summary
                    Average Balances, Yields and Costs
                               (Unaudited)

                                              Three Months Ended
                                                March 31, 2007
                                                                  Average
                                            Average                Yield /
  (in thousands)                            Balance     Interest    Cost

  INTEREST EARNING ASSETS:
  Interest bearing deposits with banks       $16,943       $218    5.15 %
  Federal funds sold                           5,916         77    5.21
  Securities                                 495,584      6,468    5.22
  Loans (1)                                2,000,722     37,136    7.42
        Total interest earning assets     $2,519,165    $43,899    6.97 %
  NON-INTEREST EARNING ASSETS:
  Cash and due from banks                    $30,784
  Allowance for loan losses                  (24,236)
  Premises and equipment, net                 12,277
  Other assets                                82,510
        Total non-interest earning assets    101,335
  Total assets                            $2,620,500
  INTEREST BEARING LIABILITIES:
  Deposits:
     Savings, money markets, and
      interest bearing demand               $908,637     $7,097    3.12 %
     Certificates of deposit of
      $100,000 or more                       261,455      3,199    4.89
     Other time deposits                     650,059      7,847    4.83
        Total interest bearing deposits    1,820,151     18,143    3.99
  Borrowed funds                             336,888      3,711    4.41
  Subordinated debentures                     62,892      1,391    8.85
        Total interest bearing
         liabilities                      $2,219,931    $23,245    4.19 %
  NON-INTEREST BEARING LIABILITIES:
  Demand deposits                           $190,760
  Other liabilities                           20,523
  Stockholders' equity                       189,286
        Total non-interest bearing
         liabilities and
         stockholders' equity               $400,569
  Total liabilities and stockholders'
   equity                                 $2,620,500

  Interest rate spread (2)                                         2.78 %

  Net interest income and margin (3)                    $20,654    3.28 %

  Net interest income and margin (tax
   equivalent basis)(4)                                 $21,209    3.37 %


                                                  Three Months Ended
                                                   December 31, 2006
                                                                   Average
                                             Average               Yield /
  (in thousands)                             Balance     Interest   Cost

  INTEREST EARNING ASSETS:
  Interest bearing deposits with banks       $55,187       $734    5.32 %
  Federal funds sold                          23,694        314    5.30
  Securities                                 701,895      8,740    4.98
  Loans (1)                                1,974,176     37,400    7.58
        Total interest earning assets     $2,754,952    $47,188    6.85 %
  NON-INTEREST EARNING ASSETS:
  Cash and due from banks                    $31,033
  Allowance for loan losses                  (22,583)
  Premises and equipment, net                 12,014
  Other assets                                77,006
        Total non-interest earning assets     97,470
  Total assets                            $2,852,422
  INTEREST BEARING LIABILITIES:
  Deposits:
     Savings, money markets, and
      interest bearing demand               $938,862     $7,279    3.10 %
     Certificates of deposit of
      $100,000 or more                       249,603      3,036    4.87
     Other time deposits                     624,521      7,487    4.80
        Total interest bearing deposits    1,812,986     17,802    3.93
  Borrowed funds                             563,521      7,244    5.14
  Subordinated debentures                     62,892      1,414    8.99
        Total interest bearing
         liabilities                      $2,439,399    $26,460    4.34 %
  NON-INTEREST BEARING LIABILITIES:
  Demand deposits                           $204,416
  Other liabilities                           17,019
  Stockholders' equity                       191,588
        Total non-interest bearing
         liabilities and
         stockholders' equity               $413,023
  Total liabilities and stockholders'
   equity                                 $2,852,422

  Interest rate spread (2)                                         2.51 %

  Net interest income and margin (3)                    $20,728    3.01 %

  Net interest income and margin (tax
   equivalent basis)(4)                                 $21,268    3.09 %

  (1) Loan origination fees are considered an adjustment to interest income.
      For the purpose of calculating loan yields, average loan balances
      include nonaccrual balances with no related interest income.

  (2) The interest rate spread is the difference between the average yield
      on interest earning assets and average rate paid on interest  bearing
      liabilities.

  (3) The net interest margin is equal to net interest income divided by
      average interest earning assets.

  (4) In order to make pre-tax income and resultant yields on tax-exempt
      investments and loans on a basis comparable to those on taxable
      investments and loans, a tax equivalent adjustment is made to interest
      income. The tax equivalent adjustment has been computed using the
      appropriate Federal income tax rate for the period and has the effect
      of increasing interest income by $555,000 and $540,000 for the three
      month periods ended March 31, 2007 and December 31, 2006,
      respectively.



  Note regarding forward-looking statements


This press release and other statements made from time to time by our management contain express and implied statements relating to our future financial condition, results of operations, plans, objectives, performance, and business, which are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These may include statements that relate to, among other things, profitability, liquidity, adequacy of the allowance for loan losses, plans for growth, interest rate sensitivity, market risk, regulatory compliance, and financial and other goals.  Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. Actual results may differ materially from those expected or implied as a result of certain risks and uncertainties, including, but not limited to: adverse changes in our loan quality and the resulting credit risk-related losses and expenses; levels of our loan origination volume; the results of our efforts to implement our retail strategy and attract core deposits; compliance with laws and regulatory requirements, including our formal agreement with the Office of the Comptroller of the Currency, and compliance with NASDAQ standards; interest rate changes and other economic conditions; proxy contests and litigation; continued relationships with major customers; competition in product offerings and product pricing; adverse changes in the economy that could increase credit-related losses and expenses; adverse changes in the market price of our common stock; and other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission, as well as other risks and uncertainties detailed from time to time in statements made by our management. The Company assumes no obligation to update or supplement forward- looking statements except as may be required by applicable law or regulation.

  For further information, contact:
  Stephen F. Carman, CFO
  [phone] or 
  Patrick M. Ryan,  CEO
  [phone]
  or consult Investor Relations on YNB's website: http://www.ynb.com/

DATASOURCE: Yardville National Bancorp



CONTACT:  Stephen F. Carman, CFO, [phone] or , or

Patrick M. Ryan, CEO, [phone] or consult Investor Relations on YNB's

website: http://www.ynb.com/   



Web site:  http://www.ynb.com/

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