UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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.    )

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

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¨	Preliminary Proxy Statement
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x	Definitive Proxy Statement
¨	Definitive Additional Materials
¨	Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Hudson Valley Holding Corp.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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HUDSON VALLEY HOLDING CORP. 21 Scarsdale Road Yonkers, New York 10707

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 10, 2012

We will hold the annual meeting of shareholders of Hudson Valley Holding Corp. a New York corporation (the “Company”), at the Company’s headquarters at 21 Scarsdale Road, Yonkers, New York on Thursday, May 10, 2012 at 10:30 a.m., local time, for the following purposes:

1. To elect eleven directors of the Company.

2. To consider a non-binding advisory vote to approve the compensation of Named Executive Officers.

3. To ratify the appointment of Crowe Horwath LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012.

4. To act on such other matters as may be properly brought before the meeting or any adjournments, postponements or continuations of the meeting.

The Board of Directors unanimously recommends that you vote:

• FOR the election of all of the nominees for director;

• FOR the non-binding approval of the compensation of the Named Executive Officers, and

• FOR the ratification of the appointment of our independent registered public accounting firm.

The Board of Directors has fixed the close of business on March 28, 2012, as the record date for the meeting. Only shareholders of record at the close of business on this date are entitled to notice of, and to vote at, the meeting or any adjournments, postponements or continuations of the meeting.

All shareholders are invited to attend the meeting. Whether or not you expect to attend the meeting, to ensure your representation at the meeting, you are urged to submit your vote by telephone, over the internet, or by signing, dating and completing the enclosed proxy and mailing it promptly in the enclosed return envelope. In the event that you attend the meeting, you may vote in person even if you have returned a proxy.

Your vote is important.

April 11, 2012	By Order of the Board of Directors
	Stephen R. Brown
	Secretary

********************

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIAL FOR THE ANNUAL MEETING TO BE HELD ON MAY 10, 2012: THE COMPANY’S NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS, PROXY STATEMENT AND ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011 ARE AVAILABLE AT: WWW.PROXYDOCS.COM/HVB.

Hudson Valley Holding Corp.

21 Scarsdale Road

Yonkers, New York 10707

PROXY STATEMENT

This proxy statement is furnished to you in connection with the solicitation of proxies by the Board of Directors to be used at the 2012 annual meeting of shareholders of Hudson Valley Holding Corp. (the “Company”). Copies of this proxy statement are being mailed on or about April 11, 2012 to persons who were shareholders of record on March 28, 2012.

The Company, a New York corporation is registered as a bank holding company under the Bank Holding Company Act of 1956. The Company provides financial services through its wholly-owned subsidiary, Hudson Valley Bank, N.A. (“the Bank”), a national banking association, established in 1972. The Company provides investment management services through a wholly-owned subsidiary of the Bank, A.R. Schmeidler & Co., Inc.

Date, Time and Place of Meeting

We will hold the 2012 annual meeting of shareholders on Thursday, May 10, 2012, at 10:30 a.m. local time, at 21 Scarsdale Road, Yonkers, New York, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.

Matters to be Considered at the Meeting

At the meeting, we will ask our shareholders to consider and vote upon:

• the election of eleven directors,

• a non-binding advisory vote to approve the compensation of Named Executive Officers, and

• the ratification of the appointment of Crowe Horwath LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012.

The shareholders will also consider and vote upon such other matters as may properly be brought before the meeting or any adjournment, postponement or continuation thereof.

Vote Required

The presence, in person or by proxy, of the holders of a majority of the shares entitled to vote generally for the election of directors is necessary to constitute a quorum at the meeting. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary power with respect to that item and has not received instructions from the beneficial owner.

A plurality of the votes cast by the shareholders present in person or by proxy and entitled to vote is required to elect directors. With regard to the election of directors, you may vote in favor of, or withhold your vote from, each nominee. A majority of votes cast by the shareholders present in person or by proxy and entitled to vote is required for the non-binding advisory vote to approve the compensation of Named Executive Officers, and for the ratification of the appointment of the independent registered public accounting firm. Abstentions and broker “non-votes” will have no effect on the outcome for any of the proposals.

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Voting of Proxies

Shares of our common stock represented by properly executed proxies received in time for the meeting, unless previously revoked, will be voted at the meeting as specified by the shareholders on the proxies. The Company is also offering our shareholders the opportunity to vote by telephone or through the internet. Those shareholders who hold shares through a nominee should refer to instructions on their “Voting Instruction Form”.

Voting By Internet

A registered shareholder can vote, 24 hours a day, 7 days a week until 3:00 a.m. (EDT) on May 10, 2012 at http://www.rtcoproxy.com/hvb. You will need the 9-digit control number included on your proxy card.

Voting By Telephone

A registered shareholder can vote using a touch-tone telephone 24 hours a day, 7 days a week, until 3:00 a.m. (EDT) on May 10, 2012 by calling 1-866-627-2388. You will need the 9-digit control number included on your proxy card.

The internet and telephone voting procedures are designed to authenticate shareholders’ identities, to allow shareholders to vote their shares and to confirm that their instructions have been properly recorded.

Voting By Mail

To vote your proxy by mail, please sign as instructed on your proxy card, date and mail your proxy card in the envelope provided as soon as possible. Proxies may also be submitted in person at the Company to Wendy Croker, First Vice President, Shareholder Relations, or via facsimile directly to Registrar and Transfer Company at 1-908-272-6835. If a proxy is returned without any voting instructions, the shares represented thereby will be voted in favor of the nominated slate of directors, in favor of the approval of Named Executive Officer compensation, and in favor of the ratification of the appointment of the independent registered public accounting firm, each as recommended by the Board of Directors.

Revocability of Proxies

If you authorize a proxy, you have the power to revoke it at any time before it is voted. You can do so in a number of ways. First, you can send a written notice to our transfer agent, Registrar and Transfer Company (“RTCO”), at the following address stating that you would like to revoke your proxy. Second, you can complete a new proxy card and send it to RTCO at the following address. Third, you can submit a new proxy via the internet or by telephone. You can attend the meeting and vote in person. You can change your vote as many times as you wish prior to the annual meeting and the last vote received chronologically will supersede any prior vote. You should send any written notice or new proxy card to:

Registrar and Transfer Company

Attn: Proxy Dept

10 Commerce Drive

Cranford NJ 07016-3572

You may request a new proxy card by calling RTCO at 1-800-368-5948.

Record Date; Shareholders Entitled to Vote; Quorum

Only shareholders of record at the close of business on March 28, 2012, will be entitled to receive notice of and vote at the meeting. As of the record date 19,529,554 shares of common stock were issued and outstanding. Each share of common stock is entitled to one vote on each matter on which holders of common stock are entitled to vote. A majority of the outstanding shares of common stock entitled to vote must be represented in person or by proxy at the meeting in order for a quorum to be present.

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Solicitation of Proxies

This proxy solicitation is being made by the Board of Directors, the form of which is enclosed, for the meeting. The cost of any solicitation will be borne by the Company. Our officers, directors or regular employees may communicate with shareholders personally or by mail, telephone, email or otherwise for the purpose of soliciting proxies. We and our authorized agents will request brokers or other custodians, nominees and fiduciaries to forward proxy soliciting material to the beneficial owners of shares held of record by these persons and will reimburse their reasonable out-of-pocket expenses in forwarding the material. We are paying Phoenix Advisory Partners a fee of $6,000 plus reasonable out-of-pocket expenses, to assist with the solicitation of proxies.

Proposals of Shareholders and Communication with Shareholders

Shareholders of the Company who intend to present a proposal for action at the 2013 Annual Meeting of Shareholders of the Company and include such proposal in the Company’s proxy statement under Securities and Exchange Commission’s (the “SEC”) shareholder proposal rule (Rule 14a-8) must notify the Company’s management of such intention by notice in accordance with Rule 14a-8, received at the Company’s principal executive offices not later than December 12, 2012.

Shareholders of the Company who intend to present a proposal for action directly at the 2013 Annual Meeting of Shareholders of the Company outside of the Rule 14a-8 process must notify the Company’s management of such intention by notice, received at the Company’s principal executive offices between January 9, 2013 and February 9, 2013. The notice must be in the manner and form required by the Company’s bylaws.

The Board maintains active communication directly with shareholders. Oral and written inquiries from shareholders are responded to by the First Vice President, Shareholder Relations in consultation with the Secretary or other member of management or the Chairman of the Board. Shareholders who wish to communicate directly with the Board of Directors, any member or members of the Board, including non-management directors or independent directors, or our Vice Chairman may do so by writing to the Hudson Valley Holding Corp., c/o Shareholder Relations, 21 Scarsdale Road, Yonkers, NY 10707 or through the Company’s website at www.hudsonvalleybank.com. The Board also meets with and interacts with shareholders on an ad hoc basis.

The Company’s management has initiated an Investor Relations program which includes quarterly conference calls to present the Company’s earnings and answer questions from the investment community. In addition, the President and Chief Executive Officer and the Chief Financial Officer have meetings with investors on an ad hoc basis. They also have plans to participate in certain Investor Relations events during the course of the year and make presentations to the investment community.

The Board and Management believe this combination of existing programs facilitates effective open communication with the Company’s shareholders and the investment community.

We have adopted a service approved by the SEC referred to as “householding”, which is designed to reduce duplicate mailings to you and to save printing and postage cost. This rule allows us to send a single set of certain shareholder documents, including the proxy statement, and annual report, to any household at which multiple shareholders reside, if we believe the shareholders are members of the same family, unless we receive contrary instructions from you. You will continue to receive individual proxy cards for each individual shareholder.

We will deliver promptly upon written or oral request separate copies of shareholder documents to any shareholder at a shared address to which a single set of those documents was delivered. To receive separate documents in the future, you may call or write Registrar and Transfer Company at 10 Commerce

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Drive, Cranford NJ 07016-3572 or 1-800-368-5948. Your continued consent to householding will be presumed unless you notify us that you wish to receive separate documents. We will begin sending separate documents within 30 days after receipt of notice revoking consent. If you own your shares through a bank, broker or other nominee, you can request householding by contacting the nominee.

Other Matters

The Board of Directors knows of no matters that are expected to be presented for consideration at the meeting that are not described herein. However, if other matters properly come before the meeting, it is intended that the persons named in the accompanying proxy will vote thereon in accordance with their best judgment.

PROPOSAL #1: ELECTION OF DIRECTORS

It is the intention of the persons named in the enclosed proxy card to vote the shares represented by such proxy for the election of all of the nominees listed below, unless such proxy specifies otherwise. Certain information regarding each nominee is set forth in the table and text below. The number of shares beneficially owned by each nominee is listed under “Security Ownership of Certain Beneficial Owners and Management”, beginning on page 34.

Nominees for the Board of Directors

All directors of the Company serve for a term of one year, until the next annual meeting of shareholders or until their respective successors have been duly elected and qualified. All of the nominees are currently serving as directors. Presently, the Board of Directors consists of twelve members. Angelo R. Martinelli, a current director of the Company, is not a nominee for re-election at the 2012 Annual Meeting of Shareholders. Therefore, the number of directors will be fixed by the Board at eleven, effective as of the date of the meeting. The following table sets forth the names and ages of the nominees, each nominee’s position with the Company, if any, the principal occupation of each nominee, the period during which each nominee has served as a director of the Company and certain other background information about the nominees based on information obtained from each nominee. In addition, described below is each nominee’s particular experience, qualifications, attributes or skills that have led the Board of Directors to conclude that the person should serve as a director of the Company.

Name	Age	Position with the Company and Principal Occupation; Other Directorships	Director of the Company Since	Independent
William E. Griffin	79	Mr. Griffin is an attorney and is a shareholder and President of Griffin, Coogan, Blose & Sulzer, P.C., a law firm located in Bronxville, New York. Mr. Griffin has served as Chairman of the Board since 1990. Mr. Griffin, one of the original founders of the Bank, is a valuable member of the Board of Directors because of his in-depth knowledge in general banking, real estate lending, corporate governance and regulatory matters. His legal training and experience are helpful to the Board in reviewing the Company’s legal documentation or when legal matters arise.	1981	No

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James J. Landy	57	President and Chief Executive Officer of the Company since January 2001. Previously, Mr. Landy served as Executive Vice President of the Bank and in various other executive capacities with the Bank. He has been employed by the Bank since 1977. Mr. Landy is a director of Sacred Heart Housing Corp., a senior citizen housing company in Yonkers, New York, the Chairman of St. Joseph’s Medical Center, a health care facility in Yonkers, New York and a director and Treasurer of the New York Bankers Association, as well as Chairman of the Board of the Friendly Sons of St. Patrick in Westchester County, a fraternal and charitable organization. His commercial banking background for over thirty years in conjunction with his leadership ability makes him a valuable member of the Board of Directors. As the President and Chief Executive Officer of the Company, he brings to the Board an intimate understanding of the Company’s business and organization and the community we serve. He provides the Board with insights and information regarding the operations of the Company, which assists the Board of Directors in providing adequate levels of management oversight.	2000	No
Stephen R. Brown	56	Senior Executive Vice President, Chief Financial Officer of the Company since January 2001, Treasurer of the Company since July 2004 and Secretary since May 2010. Previously, Mr. Brown served in various other executive capacities with the Company and the Bank. He has been employed by the Bank since 1993. Prior to joining the Bank, Mr. Brown held executive management positions with companies in the manufacturing, distribution, transportation and financial services industries with both public and private companies. He is a Certified Public Accountant. Mr. Brown brings over thirty years of general business, managerial and commercial banking experience as well as financial expertise to the Board of Directors. His current position with the Company, along with his prior professional experience outside of the Company, provides the Board of Directors with unique insights as to the Company’s operations, policies, implementation of strategic plans and SEC and public company issues.	2000	No
John P. Cahill	53	Counsel at Chadbourne & Parke LLP, a law firm based in New York, New York, since March 2007. Mr. Cahill is also Co-Founder and Principal of the Pataki-Cahill Group LLC, based in New York, New York, a strategic consulting firm	2011	Yes

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		established in 2007 focusing on the economic and policy implication of domestic energy needs. From 1995 to 2006, Mr. Cahill served in various capacities in the administration of the Governor of New York George E. Pataki, including Chief of Staff to the Governor, Commissioner of the New York Department of Environmental Conservation and as Chairman of the Environmental Facilities Corporation. He is a member of the Board of Directors of TBS International, an international shipping company based in Ireland, a trustee for the National September 11 Memorial Museum and serves on the board of various civic and non-profit organizations. Mr. Cahill’s extensive experience as an attorney in government and in business together with his affiliations and active involvement in various organizations within the Company’s marketplace makes him a valuable member of the Board of Directors.
Mary-Jane Foster	61	Vice President, University Relations, of University of Bridgeport, located in Bridgeport, Connecticut, since May 2009. Ms. Foster is also a co-owner and Chief Executive Officer of Westchester Baseball, LLC, an investor group located in Yonkers, New York since 1999. She was a principal of Black Rock Investors, LLC, a development and investment firm, located in Bridgeport, Connecticut, from 1995 to 2009. Ms. Foster was also the Co-founder, Owner and Chief Executive Officer of Bridgeport Bluefish Professional Baseball Club based in Bridgeport, Connecticut from December 2005 to October 2008. Ms. Foster’s knowledge of the business landscape in Connecticut, together with her business and personal affiliations as well as her active involvement in investing and development in Connecticut makes her a valuable member of the Board of Directors, particularly as the Company continues to expand into key markets in Connecticut.	2008	Yes
Gregory F. Holcombe	50	Vice President, BMW Machinery Co., Inc., an investment holding company, since 1994. From 2000 to January 2006, Mr. Holcombe also served as Vice President of Supply Chain Management of Precision Valve Corporation, a maker of aerosol spray valves based in Yonkers, New York. Mr. Holcombe has developed a deep understanding of the key markets we serve which, together with his extensive business experience and management expertise, makes him a valuable member of the Board of Directors.	1999	Yes

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Adam W. Ifshin	46	President and Chief Executive Officer of DLC Management Corp., a company property management firm specializing in owning and operating retail shopping centers, located in Tarrytown, New York, since 1991. In addition, Mr. Ifshin is President of Delphi Commercial Properties, Inc., a specialty real estate brokerage firm, President of First Man Investment Securities Corp., a placement agent for real estate investments and a co-founder of DLC UrbanCore, a joint venture created to promote development of retail real estate in under-served, infill and multi-ethnic markets nationwide. Mr. Ifshin’s extensive real estate and financial markets experience, together with his vast knowledge of the New York metropolitan marketplace, makes him a valuable member of the Board of Directors.	2008	Yes
Michael P. Maloney	50	Executive Vice President, Chief Banking Officer of the Bank since October 2005. From January 2001 to October 2005, Mr. Maloney served as Executive Vice President, Strategic Relationships and Sales of the Bank. He has been employed by the Bank since 1993. Mr. Maloney brings to the Board of Directors a deep understanding of the Company’s customers, people and products that he acquired over fifteen years of service with the Company. In addition Mr. Maloney has a law degree. During the years he has spent with the Bank, he has gained extensive knowledge of the Company’s business, history, organization and executive management which, together with the relationships that he has developed, enhances his contributions to the Board of Directors.	2006	No
John A. Pratt Jr.	81	Vice Chairman of the Board of the Company since December 2009. Mr. Pratt is a consultant to the Bank since 1996, advising the Bank on business development and retention. Previously, Mr. Pratt was the President and Chief Executive Officer of the Company, retiring in 1995. Mr. Pratt possesses a deep understanding of the Company’s customers, people and products that he acquired over thirty five years of service with the Company. His business acumen, coupled with his extensive management and leadership experience with the Company, positions him well to serve on the Board of Directors.	1983	Yes
Cecile D. Singer	82	Principal in Cecile D. Singer Consulting, a consulting firm located in Yonkers, New York, specializing in government relations since 1995. Ms. Singer currently serves as the Chairperson of the audit committees of Yonkers Industrial	1994	Yes

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		Development Corporation and Westchester Community College Foundation. In addition, Ms. Singer is the founder and President of Women’s Enterprise Development Center, the SBA’s center for women’s business in the Lower Hudson Valley, a non-profit organization which provides training programs and support services to both start-up and established women businesses. Ms. Singer is also the Treasurer of Riverside Corporation and a Board member of Yonkers Economic Development Corporation. A former New York State Assemblywoman, Mrs. Singer served on various committees including the senate Legal Committee, the Committee on Corporation Authorities and Commission and as a member of the Corporations Committee. Ms. Singer has developed strong ties to the communities in Westchester County, which remains the Company’s primary market. With her wide range of professional experience and knowledge, Ms. Singer brings a variety of business experience in corporate governance, auditing, and management to the Board of Directors.
Craig S. Thompson	58	President and principal shareholder of Thompson Pension Employee Plans, Inc., a company located in New York City and specializing in pension administration and investment and insurance sales for over twenty years. Through his business, Mr. Thompson has developed extensive knowledge of pension plans and related businesses, which provides the Board of Directors with unique insights regarding the development of potential customer relationships and opportunities for the Company. In addition to Mr. Thompson’s business experience he has a law degree. This unique combination of experience provides the Board of Directors with a valuable perspective on legal and business management matters.	1988	Yes

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH

NOMINEE FOR THE BOARD OF DIRECTORS

Executive Officers

Certain information with respect to executive officers of the Company and of the Bank is set forth below. All executive officers are elected by the Board of Directors and serve at the pleasure of the Board of Directors. Messrs. Griffin, Landy and Brown serve as executive officers of both the Company and the Bank, while the other individuals named below are executive officers of the Bank only. Biographical information concerning executive officers who are also members of the Board of Directors is given under the caption “Nominees for the Board of Directors” beginning on page 4.

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Name	Age	Position
William E. Griffin	79	Chairman of the Board and Director
James J. Landy	57	President, Chief Executive Officer and Director
Stephen R. Brown	56	Senior Executive Vice President, Chief Financial Officer, Secretary, Treasurer and Director
Michael J. Gilfeather	54	Executive Vice President, Chief Administrative Officer of the Bank since June 2011. From July 2005 to May 2011, Mr. Gilfeather served as Executive Vice President, Branch Banking of the Bank. He has been employed by the Bank since 2005.
Michael P. Maloney	50	Executive Vice President, Chief Banking Officer of the Bank and Director.
Vincent T. Palaia	65	Executive Vice President, Chief Lending Officer and Director of the Bank since August 2011. Mr. Palaia served as Executive Vice President and Chief Lending Officer of the Bank since 1997. He has been employed by the Bank since 1988.
Frank J. Skuthan	58	Executive Vice President, Chief Operating Officer of the Bank since November 2007. Until May 2011 Mr. Skuthan also served as Marketing Director of the Bank. From August 2000 to November 2007, Mr. Skuthan served as Executive Vice President and Marketing Director of the Bank. He has been employed by the Bank since 2000.
Paul S. Ulrich	60	Executive Vice President and Chief Credit Officer of the Bank since September 2010. From July 2007 to September 2010, Mr. Ulrich was Senior Vice President, Senior Credit Officer of First Tennessee Bank, a financial institution based in Memphis, Tennessee. From October 2004 to July 2007, Mr. Ulrich served as Senior Vice President, Senior Credit Officer National Corporate Real Estate for Washington Mutual, a financial institution based in Seattle, Washington.

The Board of Directors and Committees of the Board

Corporate Governance

Under the New York Stock Exchange (“NYSE”) independence standards, the Board of Directors has affirmatively determined that Ms. Foster, Ms. Singer and Messrs. Cahill, Holcombe, Ifshin, Pratt and Thompson meet the standards of independence for board members. In addition to the transactions disclosed under “Transactions with Related Persons” on page 32, the Board of Directors considered the banking relationship that exists between the Bank and Ms. Foster, Ms. Singer and Messrs. Cahill, Ifshin, Holcombe, Pratt and Thompson in determining each director’s independence. Since these banking products and services are provided in the normal course of business and are available on the same basis as to customers in general, the Board of Directors concluded that these relationships do not affect the directors’ independence. The Board of Directors also concluded that those transactions disclosed under “Transactions with Related Persons” on page 32 do not affect the directors’ independence.

The Company’s Board of Directors convened 12 times in 2011. The Company’s Committees of the Board of Directors include the Audit Committee, the Compensation and Organization Committee and

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the Nominating Committee. Other policy decisions for the Company and its subsidiaries continue to often be made by the full Board of Directors of the Company or the Bank, or by a standing committee of the Board of Directors of the Bank. Other than Michael P. Maloney no other director attended fewer than 75 percent of the meetings of the Board and the Committees of the Board on which he or she has served.

The Company’s Board of Directors has adopted a code of ethics for all directors, officers and employees in accordance with SEC and NYSE listing rules. This code of ethics can be found on the Company’s website at www.hudsonvalleybank.com. The Company intends to disclose amendments to, and waivers from, its code of ethics, if any, on the Company’s website at www.hudsonvalleybank.com.

The Company encourages Board members to attend any Meeting of Shareholders. All Board members were in attendance at the most recent Annual Meeting of Shareholders held May 12, 2011.

Non-management directors meet in regular executive sessions established by the Board. In addition, independent directors meet in executive session at least once a year. Mr. John A. Pratt, the Vice Chairman of the Board of Directors serves as the presiding director at these meetings.

The Nominating Committee establishes the criteria for membership on the Company’s Board of Directors and identifies, evaluates and recommends qualified individuals whose experience and other qualifications will enhance the goals of the Company, for either appointment to the Board or to stand for election at a meeting of the shareholders. The Committee will look to its members, and to other directors for recommendations for new directors when the Committee deems such action necessary or advisable. The Committee may also retain a search firm and will consider individuals recommended by shareholders. The Committee convened two times in 2011. Ms. Singer, Messrs. Pratt and Thompson serve as members of the Nominating Committee. Mr. Pratt also serves as the Committee Chairman. The Nominating Committee charter adopted by the Board of Directors can be found on the Company’s website at www.hudsonvalleybank.com. As further discussed in this section, Ms. Foster, Ms. Singer and Messrs. Cahill, Holcombe, Ifshin, Pratt and Thompson meet the standards of independence under NYSE rules.

Our Corporate Governance Guidelines (the “Guidelines”), as developed and recommended by the Nominating Committee, set forth our director qualifications standards. The Guidelines provide that when assessing directors the Nominating Committee will consider, among other things, their integrity, independence, diversity of experience, community service, their ability to exercise sound judgment, and the ability to make the time commitment necessary to be an effective member of the Board of Directors. The Guidelines also provide that as a general rule, it is the desire of the Board of Directors that directors live and/or work in the communities served by the Bank. The Guidelines further require that directors be experienced in business, financially literate and respected members of their communities, and they are expected to assist the Company in developing new business. The Nominating Committee considers the same qualifications and any additional requirements under our bylaws when assessing potential director nominees. Moreover, directors must have high ethical and moral standards and sound personal finances. Should a director become involved in conduct which is detrimental to the Company’s reputation, he or she should resign from the Board of Directors. Such conduct includes, among other acts, personal bankruptcy, federal or state indictments, convictions of a crime, professional misconduct or unethical practices. In addition, the Guidelines provide that directors should meet both of the following stock ownership requirements: (a) directors must beneficially own a minimum of $25,000 (market value) of the Company’s stock, and (b) after 180 days of joining the Board of Directors, directors must beneficially own a minimum of $100,000 (market value) of the Company’s stock. All current directors have met this requirement. Upon the recommendation of the Nominating Committee the Company’s Board of Directors has adopted Corporate Governance Guidelines which can be found on the Company’s website at www.hudsonvalleybank.com.

Diversity is one of the factors that the Nominating Committee considers in identifying qualified individuals for directors. In selecting qualified individuals the Nominating Committee considers, among other factors, that the Board represents a diverse grouping of unique qualifications of specific value to the Company. Our directors are persons who we believe have demonstrated leadership skills and have experience and judgment in areas that are relevant to our business. We believe that their ability to challenge

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and stimulate management and their dedication to the affairs of the Company collectively serve the interests of the Company and its shareholders. The Nominating Committee has not adopted a formal diversity policy with regard to the selection of qualified individuals for directors.

Shareholders may propose qualified individuals for consideration by the Company’s Board of Directors by submitting same, in writing, to the Chairman of the Nominating Committee, Hudson Valley Holding Corp., 21 Scarsdale Road, Yonkers, New York 10707. Also see “Proposals of Shareholders and Communication with Shareholders” on page 3.

The Compensation and Organization Committee is charged with the responsibility for: the annual review and approval of all forms of compensation for the Chairman, Named Executive Officers and other key executives of the Company and its subsidiaries, including but not limited to salary, benefits, bonuses and equity-based compensation; the review and approval of all equity compensation plans and amendments, including recommendation to the Board to approve such plans, and submit them to shareholders for approval as it deems appropriate or required; the review and recommendation to the Board regarding the compensation polices for all employees of the Company, the annual management incentive plans and other bonus plans proposed by management, as well as the general compensation goals and guidelines for the Company’s employees and the criteria by which bonuses for the Company’s employees are determined; the review and recommendation to the Board regarding the Company’s employment and severance policies; and review and approval of all employment agreements for executive officers and any amendments thereto. The Compensation and Organization Committee also reviews and approves all forms of compensation to the Company’s non-employee directors. The Committee convened six times in 2011. Ms. Singer and Messrs. Cahill, Holcombe, Ifshin and Thompson, served on this Committee. The Board of Directors has determined that each of these directors meets the NYSE standards of independence. The Compensation and Organization Committee charter adopted by the Board of Directors can be found on the Company’s website at www.hudsonvalleybank.com.

The Compensation and Organization Committee oversees the Company’s compensation programs. Our compensation programs include programs designed specifically for our executive officers. The Committee evaluates the performance of executive officers and makes all final compensation decisions for executive officers. The Committee utilizes independent, qualified consultants to provide research, analysis and recommendations to the Committee regarding executive officers compensation. The consultants assist the Committee in designing compensation plans, analyzing industry survey and comparative data, setting performance goals and determining the mix (salary, non-equity incentive award, equity incentives) and total amount of compensation. See “Executive Compensation – Compensation Discussion and Analysis” beginning on page 13 of this Proxy Statement for more information regarding the Committee’s role in determining executive compensation.

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities as to the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public account firm qualifications and independence and the performance of the Company’s internal audit function and independent auditors. The Committee also has responsibility for reviewing compliance with the Company’s business ethics and conflict of interest policies. The Audit Committee has the responsibility for and authority to select and terminate the Company’s independent registered public accounting firm and approve their fees and expenses. The Audit Committee operates under a written charter adopted by the Board of Directors which can be found on the Company’s website at www.hudsonvalleybank.com. The Committee convened six times in 2011. Audit Committee members were Ms. Foster, Ms. Singer, Messrs. Ifshin and Thompson. The Board of Directors has determined that each of these directors meets the NYSE and SEC standards of independence for Audit Committee members.

Under the requirements of the NYSE rules, which the Audit Committee meets, all Audit Committee members must be financially literate and one member must have accounting or related financial management expertise. NYSE rules do not require that the Audit Committee have a “financial expert” as defined in the SEC rules. The Board of Directors does not believe that any one member of the Audit Committee meets the qualifications to be designated a financial expert. However, the Board believes that

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the Audit Committee members collectively, based upon their experience on the Company’s Board as well as other relevant experience, possess significant and necessary understanding of the Company’s financial reporting and related systems of control and are therefore effective in fulfilling their responsibilities.

Board Leadership Structure and Role in Risk Oversight

Although our bylaws do not specifically separate the Chairman from the position of Chief Executive Officer (“CEO”), William E. Griffin has been the Chairman of the Board since 1990. James J. Landy currently serves as our CEO.

We believe it is the CEO’s responsibility to run the Company and the Chairman’s responsibility to oversee the Board of Directors. As directors continue to have more oversight responsibilities than ever before, we believe it is beneficial to have a Chairman whose sole job is leading the Board.

Pursuant to the Company’s bylaws, the Chairman, shall:

• supervise the carrying out of the policies adopted or approved by the Board;

• have general powers, as well as the specific powers conferred by the Company’s bylaws; and

• have and may exercise such further powers and duties as from time to time may be conferred upon or assigned by the Board of Directors.

We believe our CEO and our Chairman have an excellent working relationship that has allowed Mr. Landy to focus on the challenges that the Company is facing in the current business environment. By clearly delineating the role of the Chairman position in our bylaws, we ensure there is no duplication of effort between the CEO and the Chairman. We believe this provides strong leadership for our Board, while also positioning our CEO as the leader of the Company in the eyes of our customers, employees and other stakeholders.

Our Board has seven independent members. We have three Board committees comprised solely of independent directors, each with a different independent director serving as chair of the committee. We believe that the number of independent, experienced directors that make up our Board, along with the oversight of the Board by the non-executive Chairman, benefits our Company and our shareholders.

Our Audit Committee is primarily responsible for overseeing the Company’s risk management processes on behalf of the full Board. The Audit Committee receives reports from management at least quarterly regarding the Company’s assessment of risks. In addition, the Audit Committee reports regularly to the full Board of Directors, which also considers the Company’s risk profile. The Audit Committee and the full Board of Directors focus on the most significant risks facing the Company and the Company’s general risk management strategy, and also ensure that risks undertaken by the Company are consistent with this strategy. While the Board oversees the Company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our Company and that our board leadership structure supports this approach.

Our Board determines the best board leadership structure for our Company. As part of our annual Board self-evaluation process, we evaluate our leadership structure to ensure that the Board continues to believe that it provides the optimal structure for our Company and shareholders. We recognize that different board leadership structures may be appropriate for companies in different situations. We believe our current leadership structure, with Mr. Landy serving as CEO and Mr. Griffin serving as Chairman of the Board, is the optimal structure for our Company at this time.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION & ANALYSIS

Oversight of Executive Compensation Program

The Compensation and Organization Committee of our Board of Directors (the “Compensation Committee”) oversees our compensation programs. Our compensation programs include programs designed specifically for our executive officers, including executive officers named in the Summary Compensation Table on page 19 (the “Named Executive Officers”).

The Board of Directors established the Compensation Committee to, among other things, establish, review and approve the compensation levels of Named Executive Officers, evaluate the performance of Named Executive Officers and certain other officers and related matters for the Company. The objectives and the goals of the Company’s compensation program are to attract, retain, motivate and reward executives capable of leading the Company in achieving its business objectives and annual goals. The Company’s program is intended to measure and reward past performance of the Named Executive Officers and align their long-term interests with those of our shareholders.

The new compensation program for our Named Executive Officers and other senior officers, referred to as the “2011 Senior Officer Incentive Program” (the “2011 Incentive Program”), designed by the Compensation Committee during 2010 with the assistance of Pearl, Meyer and Partners (“PM&P”), in effect for calendar year 2011 provides for incentive awards based on calendar year performance and in line with specific business goals and objectives set for 2011. This 2011 Incentive Program was designed to achieve the objectives described in the section “Objectives of Hudson Valley Holding Corp.’s Compensation Programs” below.

Objectives of Hudson Valley Holding Corp.’s Compensation Programs

Our executive compensation objectives are to:

• Closely align executives’ interests with the long-term interests of shareholders;

• Provide market competitive compensation in order to attract and retain highly qualified executives that can lead the Company in achieving its business goals;

• Recognize and differentiate individual and team performance;

• Motivate and reward superior performance;

• Balance rewards for short-term and long-term results to ensure sustainable performance over time;

• Encourage exceptional business performance without encouraging excessive risk taking;

• Align incentives with Hudson Valley’s profitability, and

• Create a meaningful ownership stake among key employees.

We have historically compensated Named Executive Officers through a combination of base salary, non-equity incentive awards, equity participation awards, retirement plans and other personal benefits designed to be competitive with comparable employers.

The 2011 Incentive Program, which is an executive performance-based incentive program, includes an annual cash award and an equity grant with longer term vesting and was designed to reward the achievement of specific annual, short-term and long-term goals by the Company. Although participants are eligible to receive both components, awards will be determined based on an assessment of a combination of the Company, department and individual performance and all awards are subject to the discretion of the Compensation Committee.

In order for Named Executive Officers to have received awards under the 2011 Incentive Program, the Company had to achieve a predetermined threshold level of earnings. The Compensation Committee had the authority to make awards outside the Program on a discretionary basis, as may be required to reward certain, select high performing employees. As discussed in more detail below, because the Company did

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not achieve the earnings threshold, no awards were made to the Named Executive Officers under the 2011 Incentive Program. The Compensation Committee elected not to make discretionary awards to our Named Executive Officers in 2011.

The 2011 Incentive Program also includes stock ownership guidelines to support the Company’s belief that every participant should be an equity holder in the Company to demonstrate commitment and alignment with shareholder interests. In this regard both the CEO and Chief Financial Officer (the “CFO”) are required to own a minimum of 2.5 times their annual salary in shares of the Company, while other Named Executive Officers are required to own one times the value of their respective annual salary in Company stock.

Under the 2011 Incentive Program, annual performance criteria were developed to determine achievement of goals by the Named Executive Officers. These performance-based criteria include financial and non-financial metrics. Examples of performance-based criteria include annual net income targets, regulatory compliance and performance relative to peers. However, none of these criteria were considered in 2011 because the Company did not meet the 2011 earnings threshold.

The Compensation Committee believes that this new incentive-based compensation program is designed to reward performance over the short-term and long-term utilizing specific performance metrics to determine achievement of performance by the Named Executive Officers.

Compensation Consultant

In 2005, the Compensation Committee engaged PM&P, a third party compensation consultant, to provide research, analysis and recommendations to the Compensation Committee regarding Named Executive Officers’ and other officers’ compensation for 2005 and beyond. In 2010, PM&P performed a comprehensive review of the Company’s compensation programs. The Compensation Committee utilized the latest review to develop the compensation program effective for 2011. The Company did not utilize the services of PM&P for any other purposes in 2005 and 2010. The Company did not utilize the services of PM&P in 2011.

The Compensation Committee intends the compensation program to accomplish the objectives discussed under the section “Objectives of Hudson Valley Holding Corp.’s Compensation Programs” above. The Compensation Committee believes that given the recent changes in banking regulations, the effect of the economic recession on the economy in general and the banking industry in particular, the resulting suspension in early 2009 by the Company of all incentive compensation programs, as well as requirements from the SEC, a complete review of the Company’s compensation programs during 2010 was appropriate. A focus of the new compensation programs is on incentive compensation, and to ensure that our compensation programs do not encourage excessive risk taking.

2011 Advisory Vote on Executive Compensation

At the 2011 Annual Meeting of Shareholders, shareholders were provided the opportunity to cast an advisory vote on the compensation of the Named Executive Officers and approximately 98.9% of the votes cast on such proposal were voted in favor to approve such compensation. The Compensation Committee has reflected on the outcome of this “say-on-pay” vote when determining subsequent compensation polices and decisions and acknowledged the vote as indicative of shareholder support for the Company’s executive compensation program. The Compensation Committee intends to review the outcome of the 2012 advisory vote and future advisory votes on the compensation of the Named Executive Officers as one of the relevant factors in structuring the Company’s executive compensation program.

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Review of Named Executive Officer Performance

Each year the Compensation Committee reviews each compensation element of the Named Executive Officers. In each case, the Compensation Committee takes into account the scope of responsibilities and experience of the particular officer, and balance them against competitive salary levels. Members of the Compensation Committee have the opportunity to interact with the Named Executive Officers at various times during the year, which allows the Compensation Committee to form its own assessment of each individual’s performance. This interaction is further supplemented by input from the Board which also regularly interacts with the Named Executive Officers.

Each year the CEO presents to the Compensation Committee his evaluation of each Named Executive Officer, which includes a review of contribution and performance over the past year, strengths, weaknesses, development plans and succession potential. Following this presentation, and a review of the achievement of individual and Company performance, the Compensation Committee makes its own assessments and determines the compensation for each Named Executive Officer.

Similarly, the Compensation Committee reviews the performance of the CEO relative to achievement of individual and Company performance. Following such review the Compensation Committee makes its own assessment and determines the compensation for the CEO. The CEO does not participate in the Compensation Committee’s deliberations regarding his own compensation.

Base Salaries

The Compensation Committee utilized a 2007 review of the Company’s compensation programs by PM&P to establish base salaries of each Named Executive Officer for 2007 and 2008. This review included PM&P providing comparative market data on compensation practices and programs based on an analysis of banking and general industry surveys. The Compensation Committee also considered the Company’s performance as measured by achievement of performance-based metrics by each Named Executive Officer.

In 2011, the Compensation Committee increased Mr. Landy’s salary 6.2% over his 2010 salary and the other Named Executive Officers’ salaries were increased an average of 4.0% over 2010 levels. The salary increases reflected the Compensation Committee’s determination of the Named Executive Officers’ performance after considering the experience, skills and efforts needed to lead the Company during these difficult economic times. The increase in salary for Mr. Landy is in recognition of his skill in leading the Company and his overall responsibility for the Company’s direction.

The 2011 salary increases also reflect that each Named Executive Officer’s salary had not increased since 2009. The difference between the 2010 and 2009 salary for each Named Executive Officer, as shown in the Summary Compensation Table on page 19, results from the 5% reduction in the 2009 salary being restored to each Named Executive Officer in 2010 and reported as Bonus. This results in the appearance of an increase in salary during 2010 for each Named Executive Officer when, in fact, there was no increase.

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Annual Incentive Plan Cash and Equity Compensation

The 2011 Incentive Program required dual trigger analysis of performance in determining incentive awards. First, the Company must achieve a minimum of level of net income for funding of the Program to occur. Second, each Named Executive Officer must achieve certain performance metrics. The performance metrics for 2011 for each Named Executive Officer were:

Performance Metrics and its Weighting (%)
Named Executive Officer	Net Income		Regulatory Compliance		Performance to Peers		Business Development Goals
James J. Landy		50		25		25		—
Stephen R. Brown		50		25		25		—
Michael P. Maloney		50		25		—		25
Vincent T. Palaia		50		25		—		25
Frank J. Skuthan		50		25		25		—

The annual cash incentive award component of the 2011 Incentive Program is intended to promote and reward the achievement of annual performance objectives and to link compensation to annual performance goals and results, which the Compensation Committee believes aligns the interests of participants, including the Named Executive Officers, with shareholders.

Target annual incentive awards under the 2011 Incentive Program were established by the Compensation Committee as a percentage of each Named Executive Officer’s base salary as follows: Mr. Landy 105%, Mr. Brown 90%, Mr. Maloney 75%, Mr. Palaia 75% and Mr. Skuthan 75%. Maximum incentive opportunities for 2011 were 150% of target awards. When establishing the level of potential award opportunity for each Named Executive Officer, the Compensation Committee considers the individual level of responsibility, including the ability to impact the Company’s financial, strategic and operational objectives, as well as internal comparability, retention goals and competitive considerations.

The Compensation Committee approved the goals for 2011 following its assessment of the appropriateness of the goals that were proposed by the CEO and the management team. The goals were developed to reflect the Company’s overall annual and long-term business goals, as reviewed and discussed by the management team with the Board.

The 2011 Incentive Program threshold net income for 2011 was $24.9 million. The Company’s net loss of $(2.1) for 2011, did not exceed the minimum threshold. As a result, the other performance metrics were not considered and no incentive compensation awards were paid to or earned by Named Executive Officers for 2011.

Tax Implications of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) places a limit of $1,000,000 on the amount of compensation that may be deducted by the Company in any year with respect to the CEO and certain other highly compensated executive officers unless the compensation qualifies as performance-based compensation as described in Section 162(m) and the related regulations. We have structured certain compensation paid to Named Executive Officers in a manner intended to qualify for deductibility under Section 162(m), including (i) certain amounts paid as incentive compensation, and (ii) certain compensation expense related to options granted pursuant to the Company’s 2002 Stock Option Plan (the “2002 Plan”).

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Although we have generally attempted to structure executive compensation in a manner intended to preserve deductibility under Section 162(m), we also believe that there may be circumstances where our interests are best served by maintaining flexibility in the way compensation is provided, even if it may result in the non-deductibility of certain compensation under the Code.

Retirement, Health and Welfare Benefits

We offer a variety of health and welfare programs to all eligible employees. The Named Executive Officers generally are eligible for the same benefit programs on the same basis as the rest of the eligible employees. The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, pharmaceutical, dental, life insurance and accidental death and disability. The Company provides full time employees, regularly scheduled to work 30 or more hours per week, short-term disability, long-term disability and life insurance. All employees, including Named Executive Officers, contribute to the cost of these plans. We offer a qualified 401(k) savings and profit sharing retirement plan. All Company employees, including Named Executive Officers, are generally eligible for this plan. The Compensation Committee determines the contribution to the profit sharing plan and the 401(k) matching contribution annually as reflected in the All Other Compensation Table on page 20.

Supplemental Employee Retirement Plan

The Company provides supplemental retirement benefits to Named Executive Officers and certain other officers. These benefits are provided through both the 1995 Supplemental Retirement Plan and the 1997 Supplemental Retirement Plan (collectively the “SERP”). These plans are not qualified for tax purposes and are available only to certain officers. Benefits under these plans are unfunded. The SERP entitles participating officers to receive supplemental retirement benefits for a period of 15 years payable on a monthly basis. The Company believes providing this benefit is important to remain competitive with companies within the industry, to provide a competitive level of retirement income, and to help assure orderly management succession by encouraging continued employment.

Pursuant to the 1995 Supplemental Retirement Plan, supplemental benefits equal 75% of the officer’s highest base salary in any of the last three years of employment, less any retirement plan benefits provided to him by the Company. Pursuant to the 1997 Supplemental Retirement Plan, supplemental benefits equal 65% of the average of the highest five years’ annual base salary paid to the officer during his last 10 years of employment, reduced by (1) the value of his qualified plan account as of the date of retirement; (2) the value of his 401(k) matching benefit as of the date of retirement; (3) 50% of his primary social security benefit; and (4) the value of any other retirement type benefits provided to him by the Company. Messrs. Landy, Brown and Maloney have a $400,000 salary cap for determination of their benefits under the SERP.

Of the Named Executive Officers, Messrs. Landy and Palaia are participants in the 1995 Supplemental Retirement Plan, Messrs. Brown, Maloney and Skuthan are participants in the 1997 Supplemental Retirement Plan.

Personal Benefits

Each Named Executive Officer is provided certain additional benefits which includes the use of a company-owned automobile. The automobile facilitates Named Executive Officers’ travel between our offices, to business meetings with customers and vendors. Named Executive Officers may use the automobile for personal transportation. Personal use of the automobile results in taxable income to the Named Executive Officer, and we include this in the amounts of income we report to the Named Executive Officers and the Internal Revenue Service. We also support and encourage certain Named Executive Officers to hold a membership in one local country club for which we pay dues and other business related expenses. We find that the club membership is an effective means of obtaining business as it allows Named Executive Officers to interact with present and prospective customers in a relaxed, informal environment. We require that any personal use of the country club facilities be paid directly by the Named Executive Officers. Because the club memberships are used at our expense only for business entertainment, we do not include them as benefits in the Summary Compensation Table on page 19.

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Severance Plan

The Company has no severance plan in place for any of its Named Executive Officers.

Employment Agreements and Arrangements

The Company has no employment agreements or employment arrangements in place for any of its Named Executive Officers.

Change in Control Agreements

We have no Change in Control Agreements with any of the Named Executive Officers. The SERP, provided to Named Executive Officers and certain other officers, provides for the acceleration of a participant’s age under the SERP should a change in control of the Company occur. This provision is intended to help the Company retain key employees by providing such individuals greater assurance regarding their retirement benefits and to align the interests of shareholders and management.

Compensation of Named Executive Officers

Set forth below is information regarding compensation earned by or paid or awarded to our Named Executive Officers during the year ended December 31, 2011: (i) James J. Landy, President and Chief Executive Officer of the Company; (ii) Stephen R. Brown, Senior Executive Vice President, Chief Financial Officer, Secretary and Treasurer of the Company; (iii) Michael P. Maloney, Executive Vice President, Chief Banking Officer of the Bank; (iv) Vincent T. Palaia, Executive Vice President, Chief Lending Officer of the Bank; and (v) Frank J. Skuthan, Executive Vice President, Chief Operating Officer of the Bank.

During 2011, the Named Executive Officers’ compensation consisted of a base salary, and additional personal benefits as described for each Named Executive Officer in the Summary Compensation Table on page 19. During 2009, the Named Executive Officers’ compensation consisted of a base salary which was reduced by 5% from the prior year. The 5% reduction in 2009 salary was restored to all Named Executive Officers in 2010. This restoration is shown in the 2010 bonus column in the table. There were no incentive compensation programs in place for 2009 and 2010, and therefore, no cash or equity compensation was paid to or earned by Named Executive Officers for 2009 or 2010. No incentive compensation was paid to or earned by the Named Executive Officers for 2011 as the Company did not achieve its minimum net income threshold for awards under the 2011 Incentive Program.

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EXECUTIVE COMPENSATION - SUMMARY COMPENSATION TABLE

The following table sets forth the compensation for each of the Named Executive Officers for fiscal 2011, 2010 and 2009, including the dollar value of the executive’s: (i) annual base salary; (ii) earned non-equity incentive award; (iii) the grant date value, in accordance with FASB ASC Topic 718 for options, if any, granted in those years; (iv) the aggregate change in the present value of the accumulated benefit under the non-qualified supplemental retirement plan during the year; (v) all other compensation for the year; and (vi) the dollar value of total compensation for the year.

Summary Compensation Table

Name and Principal Position	Year		Salary ($)		Bonus ($)			Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)			All Other Compensation ($)4		Total ($)
James J. Landy President and Chief Executive Officer		2011		420,640		0			0		0		348,638	2		22,273		791,551
		2010		396,000		51,296	1		0		0		189,260	2		9,079		645,636
		2009		379,913		0			0		0		233,351	2		16,468		629,732
Stephen R. Brown Senior Executive Vice President, CFO, Secretary & Treasurer		2011		394,150		0			0		0		285,351	3		21,909		701,410
		2010		377,000		50,515	1		0		0		176,779	3		7,961		612,256
		2009		361,684		0			0		0		187,331	3		15,232		564,247
Michael P. Maloney Executive Vice President, Chief Banking Officer of the Bank		2011		295,018		0			0		0		92,197	3		20,551		407,766
		2010		286,825		36,803	1		0		0		65,837	3		9,138		398,604
		2009		275,173		0			0		0		51,022	3		16,903		343,098
Vincent T. Palaia Executive Vice President, Chief Lending Officer of the Bank		2011		292,300		0			0		0		467,239	2		20,653		780,192
		2010		276,300		36,370	1		0		0		252,139	2		7,454		572,264
		2009		265,075		0			0		0		149,912	2		14,400		429,387
Frank J. Skuthan Executive Vice President, Chief Operating Officer of the Bank		2011		272,500		0			0		0		175,507	3		22,921		470,928
		2010		265,000		30,905	1		0		0		98,983	3		9,405		404,294
		2009		254,234		0			0		0		74,426	3		18,253		346,914

¹  The Compensation and Organization Committee awarded limited discretionary cash bonuses to Named Executive Officers for 2010 in recognition of their efforts during a challenging economic and business year. The Company did not have a non-equity incentive compensation plan in place in 2010. Further, the 5% reduction in 2009 salary, restored to each Named Executive Officer in 2010 is included as a bonus. These amounts are as follows:

Bonus
Name	Discretionary Bonus ($)		Salary Restoration ($)		Total Bonus ($)
James J. Landy		35,000		16,296		51,296
Stephen R. Brown		35,000		15,515		50,515
Michael P. Maloney		25,000		11,803		36,803
Vincent T. Palaia		25,000		11,370		36,370
Frank J. Skuthan		20,000		10,905		30,905

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²  The amount shown represents the increase in the actuarial value during the year of the supplemental pension benefit under the Company’s 1995 Supplemental Retirement Plan.

³  The amount shown represents the increase in the actuarial value during the year of the supplemental pension benefit under the Company’s 1997 Supplemental Retirement Plan.

⁴  The following table shows the specific amounts included in the All Other Compensation column for fiscal 2011.

All Other Compensation
			Employer Contribution/Match
Name	Year		Profit- Sharing Plan ($)		401(k) Plan ($)		Group  Life Insurance Premiums ($)		Personal Use of Company Provided Automobile ($)
James J. Landy		2011		12,250		2,450		2,445		5,128
Stephen R. Brown		2011		12,250		2,450		2,241		4,968
Michael P. Maloney		2011		12,250		2,450		1,513		4,338
Vincent T. Palaia		2011		12,250		2,450		2,797		3,156
Frank J. Skuthan		2011		12,250		2,450		1,848		6,373

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GRANTS OF PLAN-BASED AWARDS IN FISCAL 2011

The following table sets forth information regarding the potential range of annual incentive awards, both equity and non-equity based, that could have been earned for performance during 2011. As discussed above, under the 2011 Incentive Program, annual performance criteria were developed to determine achievement of goals by the Named Executive Officers. These performance-based criteria include financial and non-financial metrics. Examples of performance-based criteria include annual net income targets, regulatory compliance and performance relative to peers. However, none of these criteria were considered in 2011 because the Company did not achieve the 2011 earnings threshold.

	Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards1						Estimated Future Payouts Under Equity Incentive Plan Awards1						Grant Date Fair Value of Award ($)
Name			Threshold ($)		Target ($)		Maximum ($)		Threshold #		Target #		Maximum #
James J. Landy		1/24/2011		108,900		217,800		326,700		4,267		8,534		12,802		198,000
Stephen R. Brown		1/24/2011		94,250		188,500		282,750		3,250		6,500		9,750		150,800
Michael P. Maloney		1/24/2011		57,365		114,730		172,095		2,164		4,327		6,491		100,389
Vincent T. Palaia		1/24/2011		55,260		110,520		165,780		2,084		4,168		6,252		96,705
Frank J. Skuthan		1/24/2011		54,500		109,000		163,500		2,055		4,111		6,166		95,375

¹  The amounts reported in these columns show the potential threshold, target and maximum awards that could have been achieved for the 2011 performance year under the 2011 Incentive Program. No incentive awards were paid to or earned by Named Executive Officers in 2011.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth information on outstanding stock options held by the Named Executive Officers at December 31, 2011, including the number of shares underlying both exercisable and unexercisable portions of each stock option as well as the exercise price and the expiration date of each outstanding option.

Outstanding Equity Awards at December 31, 2011 Year-End Table

	Option Awards1
Name	Number of securities underlying unexercised options (#) exercisable			Number of securities underlying unexercised options (#) unexercisable			Option exercise price ($)2		Option expiration date
James J. Landy		3,896	3		0		$	18.737		1/1/2015
		17,710	5		0		$	23.715		2/7/2016
		11,269	7		0		$	35.251		12/6/2012
Stephen R. Brown		3,777	3		0		$	18.747		1/1/2015
		6,868	5		0		$	23.727		2/7/2016
		8,690	7		0		$	35.264		12/6/2012
Michael P. Maloney		2,644	3		0		$	18.768		1/1/2015
		2,332	5		0		$	23.773		2/7/2016
		15,774	7		0		$	35.257		12/6/2012
Vincent T. Palaia		7,778			0		$	15.485		1/1/2013
		7,051			0		$	16.965		1/1/2014
		6,413	3		0		$	18.782		1/1/2015
		5,830	5		0		$	23.773		2/7/2016
		3,960	7		0		$	35.325		12/6/2012
Frank J. Skuthan		6,110			0		$	15.531		1/1/2013
		4,801			0		$	16.988		1/1/2014
		3,679	4		0		$	18.850		1/1/2015
		5,830	6		0		$	23.773		2/7/2016
		3,168	8		792	8	$	35.325		12/6/2012

¹  The number of shares underlying the options were adjusted to reflect 10% stock dividends in December 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 as applicable

²  The option grant price has been adjusted to reflect the allocation of 10% stock dividends.

These stock option awards either vested or will vest in 20% increments as shown in the table below:

Footnote #	1st Vesting Date		2nd Vesting Date		3rd Vesting Date		4th Vesting Date		5th Vesting Date
3		1/1/2005		1/1/2006		1/1/2007		1/1/2008		1/1/2009
4		1/1/2006		1/1/2007		1/1/2008		1/1/2009		1/1/2010
5		2/7/2006		2/7/2007		2/7/2008		2/7/2009		2/7/2010
6		2/7/2007		2/7/2008		2/7/2009		2/7/2010		2/7/2011
7		12/6/2007		12/6/2008		12/6/2009		12/6/2010		12/6/2011
8		12/6/2008		12/6/2009		12/6/2010		12/6/2011		12/6/2012

- 22 -

OPTION EXERCISES AND STOCK VESTED IN FISCAL 2011

	Option Awards
Name	Number of Shares Acquired on Exercise		Value Realized on Exercise1
James J. Landy		0	$	0
Stephen R. Brown		0		0
Michael P. Maloney		0		0
Vincent T. Palaia		10,887		98,960
Frank J. Skuthan		11,394		115,200

¹ The value realized represents the difference between the fair market price of underlying securities on the day of exercise and the exercise price of the options.

PENSION BENEFITS

The Company makes available to its Named Executive Officers a qualified 401(k) and profit sharing retirement plan, which is available to all employees on the same terms and conditions.

The Company provides supplemental retirement benefits to certain Named Executive Officers and other officers. These benefits are provided through both the 1995 Supplemental Retirement Plan and the 1997 Supplemental Retirement Plan (collectively the “SERP”). These plans are not qualified for tax purposes and are available only to certain officers. Benefits under these plans are unfunded. The SERP entitles participating officers to receive supplemental retirement benefits for a period of 15 years payable on a monthly basis.

Of the Named Executive Officers, Messrs. Landy and Palaia are participants in the 1995 Supplemental Retirement Plan, Messrs. Brown, Maloney and Skuthan are participants in the 1997 Supplemental Retirement Plan.

Pursuant to the 1995 Supplemental Retirement Plan, supplemental benefits equal 75% of the Named Executive Officer’s highest base salary in any of the last three years of employment, less any retirement plan benefits provided to him by the Company. Pursuant to the 1997 Supplemental Retirement Plan, supplemental benefits equal 65% of the average of the highest five years’ annual salary paid to the Named Executive Officer during his last 10 years of employment, reduced by (1) the value of his qualified plan account as of the date of retirement; (2) the value of his 401(k) matching benefit as of the date of retirement; (3) 50% of his primary social security benefit; and (4) the value of any other retirement type benefits provided to him by the Company. Messrs. Landy, Brown and Maloney have a $400,000 salary cap for determination of their benefits under the SERP.

Pursuant to the SERP, the participants receive supplemental retirement benefits determined as described above. Under the SERP the normal retirement date is defined as follows: for Messrs. Landy, Brown and Maloney, anytime between the attainment of age 60 and age 70 with a minimum of 20 years service; for Messrs. Palaia and Skuthan, anytime between the attainment of age 65 and age 70. Of the Named Executive Officers, only Mr. Palaia is currently eligible for normal retirement. No benefits vest to the participant prior to the normal retirement date except at death or disability as defined in the SERP. Certain benefits may be received based upon a change in control as described in “Disclosure Regarding Termination and Change in Control Provisions – Potential Payments upon Termination or Change in Control” on page 24. The SERP does not provide for early retirement nor for the crediting of extra years of service. The Company believes providing this benefit is important to remain competitive with companies within the industry, to provide a competitive level of retirement income, and to help assure orderly management succession by encouraging continued employment.

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PENSION BENEFITS IN FISCAL 2011 TABLE

Name	Plan Name	Number of Years Credited Service1		Present Value of Accumulated Benefit2
James J. Landy	1995 Supplemental Retirement Plan		33	$	1,668,668
Stephen R. Brown	1997 Supplemental Retirement Plan		18		1,027,333
Michael P. Maloney	1997 Supplemental Retirement Plan		18		264.014
Vincent T. Palaia	1995 Supplemental Retirement Plan		23		2,110,042
Frank J. Skuthan	1997 Supplemental Retirement Plan		11		621,071

¹  Under the terms of the 1995 and 1997 Supplemental Retirement Plans, a participant must have 10 years credited service for pension benefit eligibility.

² The amount shown represents the actuarial accumulated pension benefit using the same assumptions used for financial reporting purposes in our 2011 Annual Report on Form 10-K. Retirement age is assumed to be the normal retirement date as defined in each plan. A complete description of the 1995 and 1997 Supplemental Retirement Plans is included in Note 13 of the Notes to the Consolidated Financial Statements in the Company’s 2011 Annual Report on Form 10-K.

DISCLOSURE REGARDING TERMINATION AND

CHANGE IN CONTROL PROVISIONS

Potential Payments upon Termination or Change in Control

The Company has not established any change in control, severance or employment agreements with Named Executive Officers pursuant to which the Named Executive Officers would be paid benefits following a change in control. Under the SERP, the participant’s age is accelerated upon a change in control including a merger, consolidation or sale of substantially all the Company’s assets. Following a change of control, each participant, with at least 10 years of service, for purposes of the SERP will be deemed to be the greater of age 60 or the participant’s actual age. Should the participant be terminated without cause subsequent to such transaction, Messrs. Landy, Brown and Maloney will be entitled to receive the full retirement benefit, Messrs. Palaia and Skuthan will be entitled to receive a percentage of the retirement benefit as follows:

Age at Termination	Number of Years Service	Non Forfeiture Benefit
60	10 or more		50	%
61	11 or more		60	%
62	12 or more		70	%
63	13 or more		80	%
64	14 or more		90	%
65	15 or more		100	%

- 24 -

Should a change in control have occurred as of December 31, 2011 and the Named Executive Officers been terminated without cause as of that date, the Named Executive Officers would have been entitled to benefits under the SERP as follows:

	As at December 31, 2011
Name	Age deemed under the SERP		Number of Years Service		Present Value of Benefit 1
James J. Landy		60		33	$	2,950,000
Stephen R. Brown		60		18		2,241,000
Michael P. Maloney		60		18		1,605,000
Vincent T. Palaia		63		23		2,177,000
Frank J. Skuthan		60		11		753,000

¹  The amount shown represents the present value of benefits paid monthly for 15 years as determined under the SERP resulting from an assumed change in control as of December 31, 2011.

Upon a change in control in which the Company is not the surviving entity, all unexercised options under the 2002 Plan would be canceled as of the effective date of the reorganization; provided, however, that the Compensation Committee shall give to an optionee, or the holder of the option(s) granted under the 2002 Plan, at least 15 days written notice of the reorganization and during this period the optionee, or the holder of the option(s), shall have the right to exercise the unexercised option(s) under the 2002 Plan without regard to employment or directorship tenure requirements or installment exercise limitations, if any.

Termination of Employment Due to Death or Disability

The Named Executive Officers (or their designated beneficiaries), who are participants in the SERP, are entitled to certain benefits upon death or disability (as defined in the SERP). These benefits entitle the Named Executive Officer or their designated beneficiary to the same retirement benefits under the SERP to which the participant would be entitled at the normal retirement date.

Compensation Committee Report

The Compensation and Organization Committee (“Committee”) of the Board of Directors has reviewed and discussed with the Company’s management the Compensation Discussion and Analysis that is required by the SEC rules to be included in this Proxy Statement. Based on that review and those discussions, the Committee has recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis beginning on page 13 be included in this Proxy Statement.

Cecile D. Singer, Chairperson

John P. Cahill

Gregory F. Holcombe

Adam W. Ifshin

Craig S. Thompson

Compensation Committee Interlocks and Insider Participation

Ms. Singer and Messrs. Cahill, Holcombe, Ifshin and Thompson, all of whom are independent directors served on the Compensation and Organization Committee. Messrs. Ifshin and Thompson are shareholders and officers of firms that have performed services for the Company. The Bank has made loans to Ms. Singer and Messrs. Holcombe, Ifshin and Thompson. See “Certain Other Related Party Transactions,” which begins on page 32. No executive officer of the Company has served as a director or a member of a compensation committee of another company of which any member of the Committee is an executive officer.

- 25 -

DIRECTOR COMPENSATION

The Company uses a combination of cash and stock-based incentive compensation to attract and retain qualified individuals to serve on the Board. In setting director compensation, the Company considers the significant amount of time that Directors expend in fulfilling their duties to the Company, the business which they refer, as well as the skill-level required by the Company of members of the Board. Employee directors Messrs. Landy, Brown and Maloney do not receive Directors fees. The Compensation Committee reviews and approves all forms of compensation to the Company’s non-employee directors, including the Chairman of the Board.

Cash Compensation Paid to Board Members

Members of the Board who are not employees of the Company are entitled to receive an annual cash retainer of $25,000 for Board membership. The Chairman of the Board receives an additional Chairman’s Fee of $85,300 as well as a Company provided car and club memberships. The Audit Committee Chairman and the Compensation Committee Chairman receive an additional $10,000. The Director liaison with the Business Development Board – New York (Mr. Martinelli) and Connecticut (Ms. Foster) each receive an additional retainer of $7,500. Directors receive attendance fees for each meeting attended, in addition to their Company retainer fee. Per meeting attendance fees are as follows:

The Company and the Bank Board	$500
A.R. Schmeidler & Co., Inc.	800
Audit Committee and Compensation and Organization Committee	800
All other Committees	400

These retainer and attendance fees were approved by the Board and made effective January 1, 2011. Non-employee directors may elect to receive up to 50% of their retainer fees in the Company’s common stock. The Company permits directors to defer all or any portion of their retainer fees.

Stock Option Program

Non-employee options are granted at the fair market price of the stock on the date of grant. Options received by non-employee directors vest immediately upon the option grant. Option awards take into consideration the Boards and Committees on which each member of the Company’s Board serves and their contribution to the business.

No grants were made to non-employee directors in 2011 based upon the Company’s financial results.

Directors’ Retirement Plan

Directors who are not full-time employees of the Company or its subsidiaries participate in the Directors’ Retirement Plan. This plan is designed to benefit all non-employee directors who serve two or more years as a director. Benefits are paid upon a director’s retirement or resignation. The amount to be paid shall be the highest Basic Fee (as defined) paid to the director in any one of the three prior years to the directors’ retirement. Benefits are payable for a period of up to 10 years after resignation or retirement, depending on the number of years of service as a director. Benefits under the plan are not funded.

- 26 -

The following vesting schedule determines the annual benefit to directors:

	Percentage of Director’s Fees Payable at Retirement Age
Number of Years as a Director
Less than 2 years		0	%
2 years but less than 3		5.0	%
3 years but less than 4		10.0	%
4 years but less than 5		17.5	%
5 years but less than 6		25.0	%
6 years but less than 7		32.5	%
7 years but less than 8		40.0	%
8 years but less than 9		47.5	%
9 years but less than 10		55.0	%
10 years but less than 11		62.5	%
11 years but less than 12		70.0	%
12 years but less than 13		77.5	%
13 years but less than 14		85.0	%
14 years but less than 15		92.5	%
15 years or more		100	%

Effective December 31, 2008, the Board of Directors suspended the Director’s Retirement Plan. Benefits under the Plan were determined as though the non-employee director had retired or resigned from the Board of Directors at December 31, 2008. Based upon this change to the Plan, annual benefits to each of the non-employee directors upon their retirement or resignation from the Board of Directors under the Directors’ Retirement Plan are: $145,000 to Mr. Griffin, $39,000 to Mr. Holcombe, $77,000 to Mr. Martinelli, $55,000 to Mr. Pratt, $65,000 to Ms. Singer and $74,000 to Mr. Thompson. Ms. Foster and Messrs. Cahill and Ifshin had less that two years service as directors at December 31, 2008, and therefore are not entitled to receive annual benefits.

Other

We support and encourage our Chairman of the Board to hold a membership in local country clubs for which we partially pay dues and other business related expenses. We find that club membership is an effective means of obtaining business as it allows our Chairman to interact with present and prospective customers in a relaxed, informal environment. We require that any personal use of the country club facilities be paid directly by the Chairman. Because the club memberships are used at our expense only for business entertainment, we do not include them as All Other Compensation in the Director Compensation Table on page 28.

Mr. Pratt serves as a consultant to the Bank on matters relating to business development and retention. The consulting contract calls for Mr. Pratt to make between 30 and 40 calls per month to the Bank’s high income producing customers or to customers who have the potential to attain this status. For consulting services rendered in 2011, Mr. Pratt received a consulting fee of $85,000. In connection with these consulting services we also provide Mr. Pratt with an automobile which is reflected as All Other Compensation in the Directors Compensation Table on page 28.

- 27 -

Fiscal 2011 Director Compensation Table

The following table discloses the cash, equity awards and other compensation earned, paid or awarded, as the case may be, to each of the Company’s non-employee directors during the fiscal year ended December 31, 2011. Messrs. Landy, Brown and Maloney received no separate compensation for their service as directors and are not included in this table. The compensation received by these individuals as executives of the Company is shown in the Summary Compensation Table on page 19.

	Fees Earned or Paid In Cash		Option1 Awards			Change in 5 Pension Value and Nonqualified Deferred Compensation Earnings		All Other Compensation			Total
Name	($)		($)			($)		($)			($)
William E. Griffin		160,800		0	2		51,726		7,735	6		220,261
John P. Cahill		36,033		0	2		0		0			36,033
Mary-Jane Foster		44,500		0	2		0		0			44,500
Gregory F. Holcombe		67,800		0	3		3,226		0			71,026
Adam W. Ifshin		45,200		0	2		0		0			45,200
Angelo R. Martinelli		72,450		0	4		0		0			72,450
John A. Pratt Jr.		61,600		0	2		0		87,140	7		148,740
Cecile D. Singer		77,200		0	2		0		0			77,200
Craig S. Thompson		79,600		0	2		19,291		0			98,891

¹  Amounts shown reflect the aggregate grant date fair value as determined in accordance with FASB ASC Topic 718

²  This director did not have any exercisable or unexercisable options outstanding at December 31, 2011.

³  Mr. Holcombe had 15,233 options outstanding at December 31, 2011, all of which were exercisable.

⁴  Mr. Martinelli had 15,233 options outstanding at December 31, 2011, all of which were exercisable.

⁵  Effective December 31, 2008, the Board of Directors suspended the Directors Retirement Plan. This suspension resulted in a reduction of the projected accumulated pension value. Despite the suspension of the Directors Retirement Plan and the freezing of benefits, the table reflects an increase in Pension Value due to the method of accounting for the accumulated benefit obligation.

⁶  Other Compensation for Mr. Griffin includes: $7,735 for personal use of a Company provided automobile.

⁷  Other Compensation for Mr. Pratt includes $85,000 for his services as consultant relating to business development and retention and $2,140 for personal of a Company provided automobile.

- 28 -

PROPOSAL #2: NON-BINDING ADVISORY VOTE ON EXECUTIVE COMPENSATION

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010 (the “Dodd-Frank Act”) and Section 14A of the Securities and Exchange Act, the Company’s shareholders are entitled to vote at the Annual Meeting to approve the compensation of our Named Executive Officers, as disclosed in this proxy statement. This proposal is commonly referred to as a “Say-on-Pay” proposal. Pursuant to the Dodd-Frank Act, the shareholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or the Board of Directors.

Consistent with the recommendation of the Board of Directors and the preference of our shareholders as reflected in the non-binding advisory vote on the frequency of future “Say-on-Pay” votes held at the 2011 Annual Meeting of Shareholders, the Company will hold an annual “Say-on-Pay” vote.

The Company’s goal for its executive compensation program is to reward executives who provide leadership for and contribute to our financial success. The Company seeks to accomplish this goal in a way that is aligned with the long-term interests of the Company’s shareholders. The Company believes that its executive compensation program satisfies this goal.

The Compensation Discussion and Analysis beginning on page 13 of this Proxy Statement, describes the Company’s executive compensation program and the decisions made by the Compensation and Organization Committee in 2011 and early 2012 in detail.

The Company requests shareholder approval of the following resolution:

“RESOLVED, that the compensation of the Company’s Named Executive Officers as disclosed pursuant to the SEC’s compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, and the compensation tables and narrative discussion) is hereby APPROVED.”

As an advisory vote, this proposal is not binding upon the Board of Directors or the Company. However, the Compensation and Organization Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders in their vote on this proposal, and will consider the outcome of the vote when making future compensation decisions for Named Executive Officers.

Vote Required and Board of Directors’ Recommendation

The consideration of an advisory vote to approve the compensation of Named Executive Officers requires the favorable vote of a majority of the votes cast. Abstentions and broker non-votes, if any, will have no effect on determining whether the proposal has received the requisite number of affirmative votes.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE

NON-BINDING APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE

OFFICERS AS DETERMINED BY THE COMPENSATION AND ORGANIZATION

COMMITTEE.

- 29 -

Audit Committee Report

In accordance with its written charter adopted by the Board of Directors, the Audit Committee (the “Committee”), which consists entirely of independent directors, assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company.

In discharging its oversight responsibility as to the audit process, the Committee has received from our independent registered public accounting firm the written disclosures and letter required by the applicable requirements of the Public Company Account Oversight Board, regarding the independent accountant’s communications with the Committee concerning independence and has discussed with the independent accountant the independent accountant’s independence. The Committee discussed with the independent registered public accounting firm any relationships that may impact their objectivity and independence, including fees for non-audit services, and satisfied itself as to the firm’s independence.

Pursuant to Section 404 of the Sarbanes-Oxley Act, management is required to prepare as part of the Company’s 2011 Annual Report on Form 10-K a report by management on its assessment of the Company’s internal control over financial reporting, including management’s assessment of the effectiveness of such internal control. Crowe Horwath LLP (“Crowe”) has issued an audit report relative to internal control over financial reporting. During the course of fiscal 2011, management regularly discussed the internal control review and assessment process with the Audit Committee, including the framework used to evaluate the effectiveness of such internal controls, and at regular intervals updated the Audit Committee on the status of this process and actions taken by management to respond to issues identified during this process. The Audit Committee also discussed this process with Crowe. Management’s assessment report and the auditors’ audit report are included as part of the Company’s 2011 Annual Report on Form 10-K.

The Committee discussed and reviewed with the independent registered public accounting firm all communications required by generally accepted auditing standards, including those described in Statement on Auditing Standards No. 61, as amended, “Communications with Audit Committees” and, with and without management present, discussed and reviewed the independent auditors’ audit of the financial statements. The Committee also discussed the results of the internal audit examinations.

The Committee reviewed and discussed the audited financial statements of the Company as of and for the year ended December 31, 2011, with management and the independent registered public accounting firm. Management has the responsibility for the preparation of the Company’s financial statements and the independent registered public accounting firm has responsibility for the audit of those statements.

Based on the above-mentioned review and discussions with management and the independent registered public accounting firm, the Committee recommended to the Board of Directors that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the year ended December 31, 2011, for filing with the SEC. The Committee has reappointed Crowe as the Company’s independent registered public accounting firm for the year ending December 31, 2012. In making its determination, the Committee considered qualifications, price and quality of service.

Craig S. Thompson, Chairman

Mary-Jane Foster

Adam W. Ifshin

Cecile D. Singer

- 30 -

PROPOSAL # 3: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

Crowe Horwath LLP (“Crowe”) audited our financial statements for the years ended December 31, 2010 and December 31, 2011. The Company’s board of directors has unanimously recommended that Crowe be appointed our independent registered public accounting firm for the year ended December 31, 2012. Representatives of Crowe, the Company’s independent registered public accounting firm, are expected to attend the 2012 annual meeting of shareholders, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Independent Registered Public Accounting Firm Fees

Set forth below is a summary of the fees paid for the years ended December 31, 2011 and December 31, 2010 to the Company’s independent registered public accounting firm:

	2011		2010
Audit Fees	$	238,500	$	220,500
Audit-related fees1		150,000		132,000
Tax fees2		63,452		53,750
All other fees3		7,500		110,632
Total	$	459,452	$	516,882
1 Audit of internal controls over financial reporting and other related matters
2 Tax fees
	2011		2010
Tax return preparation and review	$	61,952	$	53,750
Tax consulting – tax research		1,500		—
	$	63,452	$	53,750
3 All other fees
	2011		2010
The Company paid fees relating to the implementation of captive insurance company in 2010, and its renewal in 2011.	$	7,500	$	110,632

Pre-Approval Policies

In accordance with the procedures set forth in its charter, the Audit Committee approves in advance all audit services and permitted non-audit services (including the fees and terms of those services) to be performed for the Company by its independent registered public accounting firm. All services must be submitted to the Committee for approval in writing, generally in the form of an engagement letter, which outlines the services to be performed and the associated fees. All of the fees and services described above were pre-approved by the Audit Committee.

Vote Required and Board of Directors’ Recommendation

Ratification of the appointment of Crowe requires the favorable vote of a majority of the votes cast. Abstentions and broker non-votes, if any, will have no effect on determining whether the proposal has received the requisite number of affirmative votes.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”

RATIFICATION OF THE APPOINTMENT OF CROWE AS THE COMPANY’S INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM FOR 2012.

- 31 -

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers, directors and persons beneficially owning more than 10% of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC, and to furnish to the Company copies of such reports. Based solely on the review of copies of the forms received, the Company believes that, during the last fiscal year, all filing requirements under Section 16(a) applicable to its officers, directors and 10% shareholders were timely, except for the inadvertent late filing of a Form 4 for John A. Pratt reflecting the purchase of stock by a relative living with Mr. Pratt on March 16, 2011.

TRANSACTIONS WITH RELATED PERSONS

Loans to Officers, Directors and 5% Shareholders

The Bank makes loans to the Company’s executive officers, directors and 5% Shareholders, and immediate family members or businesses with which they are associated, in the ordinary course of business. Such loans are made on the same terms and conditions, including interest rate and collateral, as those prevailing at the same time for comparable transactions with other persons not related to the lender. None of the loans involves more than the normal risk of collectability or presents other unfavorable features. The aggregate amount outstanding for all such loans was $43,837,870 in 2011. (This aggregate amount reflects the full amount outstanding, portions of which are participated to other banks).

Certain Other Related Party Transactions

Mr. Griffin, Chairman of the Board of the Company, is a shareholder of the law firm of Griffin, Coogan Blose & Sulzer, P.C., which serves as the Company’s general counsel. Griffin, Coogan, Blose & Sulzer, P.C. received fees approximating $1,538,000 in 2011 for legal services performed on behalf of the Company and its subsidiaries. Of this amount $434,000 was paid directly by the Company.

Mr. Thompson, a director of the Company, is the President and principal shareholder of Thompson Pension Employee Plans, Inc., which has written life insurance policies supporting the Company’s obligations under the supplemental retirement plans for executive officers. The total annual premiums approximated $319,650 in 2011. The commissions earned by Thompson Pension Employee Plans, Inc. on these policies were de minimus due to the age of the policies and the commission structure.

Mr. Ifshin, a director of the Company, is President and CEO of DLC Management Corp. which received rent payments approximating $113,260 for the rental of office space by subsidiaries of the Company.

- 32 -

Policies Regarding Transactions with Related Persons

The Board of Directors has established and annually approves a written policy governing transactions with related persons. The Company, in the normal course of business, retains the services of various product and service providers. It is our policy to purchase appropriate and necessary products and services at competitive prices and with service quality appropriate to meet our needs. We desire to do business, whenever possible, with those individuals and businesses that are customers of ours, including related persons, provided that such business transactions are concluded on an arms’ length basis and comply with applicable law regarding such transactions.

In selecting a service or product provider, the Company considers various criteria, including:

• whether the provider is a customer of the Company,

• whether the provider has previously supplied the Company with goods or services,

• the provider’s knowledge of the Company and our needs specific to the product or service to be rendered,

• the provider’s qualifications, reputation and capability, and

• the total cost of the product or service to be provided.

The Company expects that products or services provided by related persons will be of at least the same quality and competitively priced with those available from non-related persons, including consideration of the items listed above. The Company takes reasonable and appropriate steps to evaluate the pricing, quality and capability of product and service providers, including related persons.

- 33 -

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the “beneficial ownership” (as that term is defined in the rules of the SEC) of the common stock as of March 31, 2012, by (a) each Named Executive Officer and member of the Board of Directors, (b) persons known to be a beneficial owner of more than five percent of the common stock and (c) all executive officers and members of the Board of Directors as a group. Persons who hold options that are exercisable within 60 days of March 31, 2012 are deemed to own, beneficially, the shares of common stock that may be acquired on the exercise of such options. Such shares are deemed outstanding for purposes of computing the number of shares owned by the person holding the option, but not for any other purpose.

Name	Address	Amount and Nature of Beneficial Ownership			Percent of Outstanding Shares of Common Stock
Gregory F. Holcombe1	35 E. Grassy Sprain Road, Yonkers, NY 10710		2,038,147	(1)		10.4	%
Marie A. Holcombe1	35 E. Grassy Sprain Road, Yonkers, NY 10710		2,038,147	(1)		10.4
James J. Veneruso2	35 E. Grassy Sprain Road, Yonkers, NY 10710		1,086,374	(2)		5.6
William E. Griffin			588,849	(3)		3.0
Stephen R. Brown			118,265	(4)		*
John P. Cahill			5,720			*
Mary-Jane Foster			4,787			*
Adam W. Ifshin			54,519			*
James J. Landy			256,359	(5)		1.3
Michael P. Maloney			26,635	(6)		*
Angelo R. Martinelli			407,091	(7)		2.1
John A. Pratt Jr.			151,802	(8)		*
Cecile D. Singer			127,394	(9)		*
Craig S. Thompson			218,804	(10)		1.1
Vincent T. Palaia			174,037	(11)		*
Frank J. Skuthan			44,997	(12)		*
All directors and executive officers as a group (18 persons).			4,289,667	(13)		21.7	%

* Less than 1% of the outstanding shares of common stock.

¹  Gregory F. Holcombe and his wife, Marie A. Holcombe (the daughter of Josephine Abplanalp) have shared voting and dispositive power over 2,022,914 shares which includes (i) 699,563 shares owned by BMW Machinery Co., Inc. (of which Mrs. Holcombe is the principal shareholder and Mr. Holcombe is an officer); (ii) 572,000 owned by Eldred Preserve, LLC (a New York limited liability company for which Mrs. Holcombe and James J. Veneruso serve as co-managers); (iii) 411,712 shares held by The Josephine Abplanalp Revocable Living Trust (for which Mrs. Holcombe, James J. Veneruso and Josephine Abplanalp serve as a co-trustee); (iv) 131,807 shares held in trusts for the benefit of the children of Mr. and Mrs. Holcombe (for which Mrs. Holcombe and James J. Veneruso serve as co-trustee); and (v) 7,533 shares held by the Heidi Foundation Inc. (of which Mr. and Mrs. Holcombe are directors); (vi) 4,940 shares held in trusts for the benefit of the children of Mr. and Mrs. Holcombe for which James J. Veneruso is the trustee; (vii) 1,503 shares held by an Irrevocable Insurance Trust for which James J. Veneruso is the trustee; (viii) 1,586 shares held by the Holcombe Family Trust for which James J. Veneruso is the trustee; (ix) 3,444 shares for which Mr. Holcombe is custodian for their children; (x) 141,673 shares held by Mr. & Mrs. Holcombe as joint tenants; (xi) 46,953 shares held by Mrs. Holcombe; (xii) 300 shares held by Mr. Holcombe and (xiii) 15,233 shares which may be acquired Mr. Holcombe upon the exercise of options, and 8,342 of these shares are pledged as collateral.

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²  Mr. Veneruso holds shared voting and dispositive power over the following shares: (i) 572,000 shares held by Eldred Preserve, LLC (a New York limited liability company for which Marie A. Holcombe and Mr. Veneruso serve as co-managers); (ii) 131,807 shares held shares held in trusts for the benefit of the children of Gregory F. Holcombe and Marie A. Holcombe (for which Marie A. Holcombe and Mr. Veneruso serve as co-trustee); (iii) 4,940 shares held in irrevocable trusts for the benefit of the daughters of Gregory F. Holcombe and Marie A. Holcombe for which Mr. Veneruso is the trustee; (iv) 1,503 shares held by an Irrevocable Insurance Trust for which Mr. Veneruso is the trustee; (v) 1,586 shares held in the 2004 Holcombe Family Irrevocable Trust for which Mr. Veneruso is the trustee; and (vi) 12,951 held jointly with his spouse. The number of shares reported above also includes 161 shares held by Mr. Veneruso’s son as to which he disclaims beneficial ownership. In addition, Mr. Veneruso holds sole voting and dispositive power over (i) 8,941 shares directly held by him; (ii) 18,143 shares in an IRA; and (iii) 334,342 shares held by the Josephine Abplanalp Irrevocable Retained Annuity Trust (the holdings of which are deemed indirectly beneficially owned by Mr. Veneruso, who is the sole trustee).

³  Includes 16,500 shares pledged as collateral.

⁴  Includes 19,335 shares which may be acquired upon the exercise of options; and 22,803 shares pledged as collateral

⁵  Includes 32,875 shares which may be acquired upon the exercise of options; and 90,213 shares pledged as collateral.

⁶  Includes 20,750 shares which may be acquired upon the exercise of options, and 5,000 shares pledged as collateral.

⁷  Includes 15,233 shares which may be acquired upon the exercise of options, and 182,703 shares are pledged as collateral.

⁸  Includes 22,538 shares held by the family of Mr. Pratt’s adult son, as to which Mr. Pratt disclaims beneficial ownership.

⁹  Includes 61,395 shares pledged as collateral.

¹⁰  Includes 142,275 shares pledged as collateral.

¹¹  Includes 31,032 shares which may be acquired upon the exercise of options, and 18,890 shares pledged as collateral.

¹²  Includes 23,588 shares which may be acquired upon the exercise of options, and 21,409 shares pledged as collateral.

¹³  Includes 209,982 shares which may be acquired upon the exercise of options.

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OTHER MATTERS

The Board of Directors is not aware of any other matters that may come before the annual meeting. However, in the event such other matters come before the meeting, it is the intention of the persons named in the proxy to vote on any such matters in accordance with the recommendation of the Board of Directors.

Shareholders are urged to vote their shares by telephone 1-866-627-2388 inside the United States, through the internet http://www.rtcoproxy.com/hvb or sign the enclosed proxy and return it in the envelope provided. The proxy is solicited on behalf of the Board of Directors.

By Order of the Board of Directors

Stephen R. Brown

Secretary

Yonkers, New York

April 11, 2012

A copy of the Company’s Annual Report on Form 10-K (including the financial statements and the financial statement schedules without exhibits) for the year ended December 31, 2011 filed with the SEC has been furnished to shareholders with this Proxy Statement. Additional copies are available upon written request addressed to Wendy Croker, First Vice President, Shareholder Relations, Hudson Valley Holding Corp., 21 Scarsdale Road, Yonkers, New York 10707. The Company’s Annual Report on Form 10-K (without exhibits) is also available on the Company’s website at www.hudsonvalleybank.com. Upon written request to the Company, at the address above, the exhibits set forth on the exhibit index of the Company’s Annual Report on Form 10-K will be made available at reasonable charge (which will be limited to our reasonable expenses in furnishing such exhibits).

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REVOCABLE PROXY

Hudson Valley Holding Corp.

ANNUAL MEETING OF SHAREHOLDERS

May 10, 2012

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The shareholder of record hereby appoints Cecile D. Singer and Craig S. Thompson, and any one of them, with full power of substitution, as Proxies for the shareholder, to attend the Annual Meeting of the Shareholders of Hudson Valley Holding Corp. (the “Company”), to be held at the Company’s headquarters at 21 Scarsdale Road, Yonkers, New York on Thursday, May 10, 2012 at 10:30 AM, local time, and any adjournments thereof, and to vote all shares of the common stock of the Company that the shareholder is entitled to vote upon each of the matters referred to in this Proxy and, at their discretion, upon such other matters as may properly come before this meeting.

This Proxy, when properly executed, will be voted in the manner directed herein by the shareholder of record. If no direction is made, this Proxy will be voted FOR all Proposals.

PLEASE COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED

POSTAGE-PAID ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA

THE INTERNET OR BY TELEPHONE.

(Continued, and to be marked, dated and signed, on the other side)

ê                     FOLD AND DETACH HERE                     ê

HUDSON VALLEY HOLDING CORP. — ANNUAL MEETING, MAY 10, 2012

YOUR VOTE IS IMPORTANT!

Annual Meeting Materials are available on-line at:

www.proxydocs.com/hvb

You can vote in one of three ways:

1. Call toll free 1-866-627-2388 on a Touch-Tone Phone. There is NO CHARGE to you for this call.

or

2. Via the Internet at http://www.rtcoproxy.com/hvb and follow the instructions.

or

3. Mark, sign and date your proxy card and return it promptly in the enclosed envelope.

PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS

6948

z

REVOCABLE PROXY

{

x

PLEASE MARK VOTES AS IN THIS EXAMPLE

HUDSON VALLEY HOLDING CORP.

Annual Meeting of Shareholders MAY 10, 2012

For

With- hold

For All Except

For

Against

Abstain

1. The election as directors of all nominees listed (except as marked to the contrary below):

¨

¨

¨

2.   Non-binding advisory vote to approve the compensation of named executive officers

¨

¨

¨

3.   Ratify appointment of Crowe Horwath LLP as Company’s independent registered public accounting firm for fiscal year ending December 31, 2012

For

Against

Abstain

(01) William E. Griffin

(02) James J. Landy

(03) Stephen R. Brown

¨

¨

¨

(04) John P. Cahill

(05) Mary-Jane Foster

(06) Gregory F. Holcombe

(07) Adam W. Ifshin

(08) Michael P. Maloney

(09) John A. Pratt Jr.

(10) Cecile D. Singer

(11) Craig S. Thompson

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE LISTED PROPOSALS.

INSTRUCTION: To withhold authority to vote for any nominee(s), mark “For All Except” and write that nominee(s’) name(s) or number(s) in the space provided below.

Mark here for address change and note change

¨

Please be sure to date and sign this proxy card in the box below.

Date

Sign above                                          Co-holder (if any) sign above

___

Note: Please sign exactly as your name appears on this Proxy. If signing for estates, trusts, corporations or partnerships, title or capacity should be stated. If shares are held jointly, each holder should sign.

x IF YOU WISH TO PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR INTERNET, PLEASE READ THE INSTRUCTIONS BELOW y

FOLD AND DETACH HERE IF YOU ARE VOTING BY MAIL

éé

PROXY VOTING INSTRUCTIONS

Shareholders of record have three ways to vote:

1.  By Mail; or

2.  By Telephone (using a Touch-Tone Phone); or

3.  By Internet.

A telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned this proxy. Please note telephone and Internet votes must be cast prior to 3 a.m., May 10, 2012. It is not necessary to return this proxy if you vote by telephone or Internet.

Vote by Telephone	Vote by Internet
Call Toll-Free on a Touch-Tone Phone anytime prior to	anytime prior to
3 a.m., May 10, 2012	3 a.m., May 10, 2012 go to
1-866-627-2388	http://www.rtcoproxy.com/hvb

Please note that the last vote received, whether by telephone, Internet or by mail, will be the vote counted.

ON-LINE ANNUAL MEETING MATERIALS: www.proxydocs.com/hvb

Your vote is important!