EX-99.1 2 d554316dex991.htm EX-99.1 EX-99.1
Metro New York’s
Premier Business Bank
Seizing Tomorrow’s Opportunities
While Maintaining Our Core Fundamentals
June 2013
Exhibit 99.1

1
Safe Harbor Statement
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
This presentation contains various forward-looking statements with respect to earnings, credit quality and other financial and business matters within the meaning
of the Private Securities Litigation Reform Act of 1995. These forward-statements can be identified by words such as “expects,” “anticipates,” “intends,” “believes,”
“estimates,” “predicts” and words of similar import. The Company cautions that these forward-looking statements are subject to numerous assumptions, risks and
uncertainties, and that statements relating to future periods are subject to uncertainty because of the increased likelihood of changes in underlying factors and
assumptions. Actual results could differ materially from forward-looking statements.
Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include, but are not limited to, statements
regarding:  (a) our ability to comply with the formal agreement entered into with the Office of the Comptroller of the Currency (the “OCC”) and any additional
restrictions placed on us as a result of future regulatory exams or changes in regulatory policy implemented by the OCC or other bank regulators; (b) the OCC and
other bank regulators may require us to further modify or change our mix of assets, including our concentration in certain types of loans, or require us to take
further remedial actions; (c) the results of the investigation of A.R. Schmeidler & Co., Inc. by the Securities and Exchange Commission (the “SEC”) and the
Department of Labor (the “DOL”) and the possibility that our management’s attention will be diverted to the SEC and DOL investigations and settlement
discussions and we will incur further costs and legal expenses; (d) the adverse affects on the business of A.R. Schmeidler & Co., Inc. and our trust department
arising from a settlement with the SEC and DOL investigations; (e) our inability to pay quarterly cash dividends to shareholders in light of our earnings, the current
and future economic environment, Federal Reserve Board guidance, our Bank’s capital plan and other regulatory requirements applicable to Hudson Valley or
Hudson Valley Bank; (f) the possibility that we may need to raise additional capital in the future and our ability to raise such capital on terms that are favorable to
us; (g) further increases in our non-performing loans and allowance for loan losses; (h) ineffectiveness in managing our commercial real estate portfolio; (i) lower
than expected future performance of our investment portfolio; (j) a lack of opportunities for growth, plans for expansion (including opening new branches) and
increased or unexpected competition in attracting and retaining customers; (k) continued poor economic conditions generally and in our market area in particular,
which may adversely affect the ability of borrowers to repay their loans and the value of real property or other property held as collateral for such loans; (l) lower
than expected demand for our products and services; (m) possible impairment of our goodwill and other intangible assets; (n) our inability to manage interest rate
risk; (o) increased expense and burdens resulting from the regulatory environment in which we operate and our inability to comply with existing and future
regulatory requirements; (p) our inability to maintain regulatory capital above the minimum levels Hudson Valley Bank has set as its minimum capital levels in its
capital plan provided to the OCC, or such higher capital levels as may be required; (q) proposed legislative and regulatory action may adversely affect us and the
financial services industry; (r) future increased Federal Deposit Insurance Corporation, or FDIC, special assessments or changes to regular assessments; (s)
potential liabilities under federal and state environmental laws.
For a more detailed discussion of these factors, see the Risk Factors discussion in the Company’s most recent Annual Report on Form 10-K, and subsequent
Quarterly Reports on Form 10-Q. The forward-looking statements included in this presentation are made only as of the date hereof and the Company undertakes
no obligation to update or revise any of its forward-looking statements.
Unless otherwise noted, information presented is from Company sources.

2
NOT A TRADITIONAL RETAIL COMMUNITY BANK
•
A
“Community
Business
Bank”
founded
to
focus
on
small
and
middle
market commercial
customers and their principals
•
Focus on targeted niche businesses, entrepreneurs and professional service firms with high
deposit transaction volume throughout the Metro New York area
•
Low-cost, core deposits = foundation of customer relationships
•
We
sell
service,
with
a
strong
commitment
to
acting
as
a
“private
bank”
to
our niche commercial
customers
WE LEND WHERE WE LIVE
•
Providing
prudent,
conservatively
underwritten
loans
in
our
home
market
•
Stable and deep management team has extensive in-market experience and is highly accessible
to customers
•
Unique Metro NYC market allows for competitive positioning with high-touch service and
significant opportunities for growth
A Differentiated Business Model

3
Metro New York Franchise
•
$2.8 billion commercial bank with 28 branches throughout Westchester, Rockland, the Bronx, Manhattan and Brooklyn in New York
•
Largest bank headquartered in Westchester County
•
Historic growth achieved by taking share from larger national bank competitors
•
There are more than 39,000 small and middle market companies with revenues of $1 million or more in this market
Branch Network - County Level
Deposits
Branches
(1)
US $000s
New York State
Westchester
17
1,770,169
$
New York (Manhattan)
4
321,111
      
Bronx
4
194,924
      
Rockland
2
75,508
        
Kings (Brooklyn)
1
11,883
        
(1)  6 Connecticut branches are excluded and will close mid-2013 and 2 New York branches will  consolidate into other branch locations in mid- 2013
Source: SNL Financial; deposit data as of 06/30/2012; branch count and map as of 3/31/2013

4
Our Mission is Unchanged
OUR METRO NYC SMALL-
AND MID-SIZED COMMERCIAL CUSTOMERS
REMAIN OUR FOUNDATION AND OUR PRIORITY
•
What changes is the number and diversity of products offered to serve them
OBJECTIVE IS TO GAIN COMPETITIVE ADVANTAGE WHILE MAINTAINING
COMPLIANCE
•
More nimble in adapting to new environments, products, and competitors
•
More effectively serve our niche markets with an even broader array of customized
products that meet their needs

5
Summary Financial Highlights
3.66%
66.40%
0.91%
9.18%
8.6%
VS.
PEERS:
(1) 
Excludes income from loan sales.
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.
(Dollars in thousands, except per share amounts)
2012
2012 (1)
2013
Net Interest Income
$31,296
$31,296
$21,246
Non Interest Income
$20,354
$4,419
$4,517
Non Interest Expense
$20,876
$20,876
$19,611
Net Income
$18,013
$8,642
$3,651
Diluted Earnings Per Share
$0.92
$0.44
$0.18
Dividends Per Share
$0.18
$0.18
$0.06
Net Interest Margin
4.75%
4.75%
3.18%
Return on Average Equity
25.51%
12.24%
5.02%
Return on Average Assets
2.53%
1.21%
0.51%
Efficiency Ratio
56.81%
56.81%
74.97%
Tangible Common Equity Ratio
9.6%
9.6%
9.6%
   Average Assets
$2,845,223
$2,845,223
$2,859,443
   Average Net Loans
$1,997,391
$1,997,391
$1,422,132
   Average Deposits
$2,466,159
$2,466,159
$2,493,021
   Average Stockholders' Equity
$282,459
$282,459
$290,950
Three Months  Ended March 31

6
Historical Profitability
RETURN ON AVERAGE ASSETS %
RETURN ON AVERAGE EQUITY %
Income from loan sale
1.02
10.05
1.49
1.30
0.74
0.18
0.70
0.51
-0.08
2007
2008
2009
2010
2011
2012
2013Q1
18.00
14.76
8.74
6.82
5.02
1.75
-0.72
2007
2008
2009
2010
2011
2012
2013Q1

7
Historical Profitability
Income from loan sale
$2.78
Pre-Tax Pre-Provision Diluted Earnings per Share is a Non-GAAP measure.  See Appendix slide 45  for reconciliation
$1.49
$3.64
$3.84
$3.31
$2.58
$2.91
$1.97
$0.31
2007
2008
2009
2010
2011
2012
2013Q1
$2.31
$2.06
$1.24
$0.26
$1.01
($0.11)
$0.18
2007
2008
2009
2010
2011
2012
2013Q1
PRE-TAX PRE-PROVISION DILUTED EARNINGS PER SHARE*
DILUTED EARNINGS PER
SHARE

8
Asset Quality Measures Strengthen Balance Sheet
NONACCRUAL LOANS / TOTAL ASSETS %
LOAN LOSS RESERVE / GROSS LOANS %
LOAN LOSS RESERVE / NONACCRUAL LOANS %
NET CHARGEOFFS / AVERAGE NET LOANS %
Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.

9
Strong Capital Position
TANGIBLE COMMON EQUITY / TANGIBLE ASSETS %
LEVERAGE RATIO %
TIER 1 RISK BASED CAPITAL RATIO %
TOTAL RISK BASED CAPITAL RATIO %
Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.

10
Hudson Valley’s Business Model
•
Commercial bank focused on small and middle market businesses, professional service
firms
and
their
principals
–
they
view
us
as
their
“private
bankers”
•
Niche businesses synergistically compliment each other to form the core of HVB’s
business model
•
Relationship
Focus
--
high
quality
banking
products
and
exceptional
personal
service
Attorneys
Not-For-
Profits
Property
Managers
Real Estate
Developers
Municipal-
ities
Trusts
General
Business
Focus on
Targeted
Niche
Segments

11
Efficiency is Key in High-Touch Business Model
“PRIVATE BANK”
BUSINESS MODEL SUCCEEDS BECAUSE OF:
•
Narrowly targeted niche business approach
–
Institutional
focus
fully
directed
to
targeted
segments
–
no
mass
market
efforts
•
High-touch client-RM relationships
–
Opportunity
and
incentive
structure
attracts
talent
from
some
of
the
best
operators in
the business
–
RMs are successful at attracting and retaining low-cost, stable deposits and profitable
loans
MAINTAINING EFFICIENT OPERATIONS IS KEY TO BALANCING COST OF A SERVICE-
ORIENTED MODEL
•
Small branch network
•
No centralized call center -
RMs & Branches are the first and only point of client contact
•
Non-price sensitive core deposit base limits need for wholesale funding and expensive rate
promotions
•
Referrals and Business Development Board provide low-cost and effective marketing

12
Efficiency is Key in High-Touch Business Model
OPTIMIZING BRANCH NETWORK AND EFFICIENCY
•
Consolidation or divestiture of six Connecticut locations, representing less than three percent
of $2.5 billion in total deposits, with anticipated annual net savings in excess of $2 million by
the middle of 2013
•
Consolidation of the East Harlem and Rockledge, South Yonkers locations into nearby
branches by the middle of 2013
•
Targeted non-interest expense reductions of approximately 5 percent year-over-year

13
How is HVB Different?
HUDSON VALLEY IS ABLE TO COMPETE IN A DENSE MARKET BECAUSE:
•
Will start small and work our way into lead bank position
•
Referral
driven
–
satisfied
customers,
Business
Development
Board
Members
&
centers
of influence
•
“Big
Fish
in
Small
Pond”
treatment
–
exceptional
“above
and
beyond
service”
and
easy
access to decision makers
•
Decision makers who live and operate in the local market
•
Will customize products to meet specific customer needs
•
Provide networking opportunities to help customers grow their businesses
•
Relationship
not
transaction
driven
–
longer
sales
cycle

14
How HVB is Different
NICHE MARKET SEGMENTATION IS UNIQUE
•
We go to market in a very focused way
•
We add value by bringing specialized expertise to targeted customers and segments
“PRIVATE BANK”
APPROACH
•
Service orientation and niche expertise is our focus
•
We
are
our
clients’
private
bankers,
helping
them
meet
all
of
their
financial
needs
as
a
trusted
partner
EXPERIENCE IN DENSE METRO NYC MARKET PRESENTS GROWTH OPPORTUNITIES
•
Opportunities are abundant
•
Small market share gains translate into large profitability gains
•
Our
disciplined
growth
strategy
will
prioritize
opportunities
to
deliver
significant
long-term
shareholder value

15
Branch Network –
Local Service & Execution
•
Low-cost branch infrastructure supports core deposit franchise
•
Branch value grows with age –
deeper penetration into existing relationships and new referrals
increase deposits per branch over time
(1)
6 Connecticut branches excluded will close mid-2013
(2)
2 New York branches will consolidate mid-2013
March 2013 YTD Avg Deposit Balances per Branch
(1)
$0
$20
$40
$60
$80
$100
$120
$140
< 5 Yrs
5-10 Yrs
10-20 Yrs
> 20 Yrs
Age of Branch
$19.3
$52.8
$75.7
$114.2
6 Branches
6 Branches
5 Branches
13 Branches
(2)

16
HVB Funding
Advantage
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar. 31, 2013.
Cost of Deposits
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
HVB
National Peers

17
Historical Success in Outperforming Peers
OPERATING EXPENSE CONTROL HAS SUPPORTED A MID-50% EFFICIENCY RATIO OVER THE PAST FIVE YEARS
•
Reflects an efficient approach to collecting deposits, with minimal branch network
•
Stable, non-price-sensitive deposits support highly competitive deposit funding costs
•
Declining net interest income due to excess cash is primary driver for rising efficiency ratio in 2012
Efficiency Ratio as reported by SNL.
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar. 31, 2013.
Excess cash on
balance sheet
Mid-50% efficiency ratio =
favorable to peers

18
Composition of Client Segments
HVB’S CLIENT RELATIONSHIPS ARE DIVERSIFIED ACROSS OUR NICHE SEGMENTS
AS OF MARCH 31, 2013
SEGMENT
% OF STRATEGIC
CLIENT
RELATIONSHIPS
% OF
TOTAL BANK
DEPOSITS
AVERAGE
DEPOSITS PER
STRATEGIC CLIENT
RELATIONSHIP
(IN THOUSANDS)
% OF STRATEGIC
CLIENT
RELATIONSHIPS
WITH LOANS
Attorney
28%
18%
$753
29%
Not-for-Profit
18%
15%
$929
37%
Property
Managers/Real Estate
Investors
18%
23%
$1,526
58%
Municipalities
2%
7%
$4,233
7%
General Business
34%
25%
$835
49%
TOTAL / AVERAGE
100%
88%
$1,017

19
A Core Deposit Driven Franchise
Mar 31, 2012
HVB
HVB
Peers
(2)
Core Deposits / Total Deposits
(1)
96%
96%
88%
Non Interest Bearing/Total Deps
39%
40%
20%
Deposits / Total Funding
97%
98%
92%
Loans / Deposits Ratio
66%
56%
78%
Cost of Total Deposits
28 bp
20 bp
58 bp
Deposit Metrics
Mar 31, 2013
(1) 
Core Deposits defined as total deposits less time deposits >$100,000.
(2) 
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.

71%
56%
89%
96%
50%
60%
70%
80%
90%
100%
2007
2008
2009
2010
2011
2012
2013
Loan/Dep Ratio
Core/Total Deposits
(2)
(1)
20
A Core Deposit Driven Franchise
DEPOSIT
COMPOSITION
–
Mar
31,
2013
CORE FUNDING
(1) 
Net loans excluding loans held-for-sale.
(2) 
Core Deposits defined as total deposits less time deposits >$100,000.
TOTAL
DEPOSITS
–
$2,464
MILLION
Money
Market,
35%
Demand,
40%
Savings, 5%
Time > $100m,
4%
Time < $100m,
1%
Checking with
Interest, 15%

21
Deposit Growth Drives Long-Term Profitability
67.2%
CORE                 
DEPOSITS
(1)
96.3%
CORE
DEPOSITS
(1)
VS.
87.9% FOR
PEERS
(2)
$0
$500
$1,000
$1,500
$2,000
$2,500
$880
$888
$1,027
$1,125
$1,235
$1,408
$1,626
$1,813
$1,839
$2,173
$2,234
$2,425
$2,520
$2,464
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Dec
Mar
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Demand Deposits
Checking with Interest
Money Market Accounts
Savings Accounts
Time Deposits < $100m
Time Deposits > $100m
Brokered Deposits
(1)
Core deposits defined as total deposits less time deposits > $100,000 and brokered deposits.  December 2006 Includes approximately $127 million of deposits as part of New York National Bank acquisition
(2)
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.

22
Strong Net Interest Margin
(1)
Fully tax equivalent basis.
(2)
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.
VS. 3.66%
PEERS
(1,2)
3.24%
4.89%
5.42%
8.57%
0.20%
2.08%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013Q1
Net Interest Margin (FTE)
Yield on Loans
Cost of Deposits
Federal Funds Rate

23
Revenue and Margin Compression
EXCESS CASH POSITION FROM 1Q12 LOAN SALES COMPRESSING NET INTEREST INCOME
•
Disciplined redeployment is underway and will take time
$22.4
$21.2
3.34%
3.24%
$15
$17
$19
$21
$23
$25
$27
$29
$31
$33
Q111
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
0%
1%
2%
3%
4%
5%
6%
Net Interest Income
NIM (FTE)

24
Balance Sheet Positioned for Diversification
Mar 31
($ in Millions)
2010
2011
2012
2013
Cash and Cash Equivalents
356
78
828
792
Securities
460
521
455
484
Real Estate
Commercial
796
691
551
576
Construction
174
110
75
70
Residential
467
515
522
490
Commercial & Industrial
245
219
289
250
Other
33
29
22
18
Lease Financing
16
12
11
11
Total Loans (excl.HFS)
1,732
1,576
1,470
1,415
Deferred Loan Fees
(4)
(4)
(2)
(2)
Allowance for Loan Losses
(39)
(31)
(27)
(26)
Loans, Net (excl. HFS)
1,689
1,541
1,441
1,387
Total Assets
2,669
2,798
2,891
2,829
Deposits
2,234
2,425
2,520
2,464
Borrowings
124
70
51
46
Stockholders' Equity
290
278
291
293
December 31

25
Redeployment Aimed at Balance Sheet Efficiency
Diversifying by simultaneously implementing three approaches
1.Asset purchases –
CURRENT
•
$65
Million
in
Residential
ARMs
purchased
in
1Q12
•
Evaluating others
2.Loan
participations
with
other
institutions
–
NEAR
TERM
•
Building on HVB’s longstanding CRE-participation experience by leveraging other institutions’
expertise and infrastructure for C&I and residential lending
3.Building internal ability to originate, underwrite and service non-CRE credits –
NEAR & LONG TERM
•
Focus is new products for longstanding niche business and industry targets in metro NYC
New
commercial
lending
including
equipment
leases,
lines
of
credit,
term
loans,
ABL,
etc.
Complementary
jumbo
mortgage
and
HELOC
products
for
RMs
to
offer
commercial-account
principals
All while continuing to leverage historic strength in CRE underwriting to capitalize on solid demand  
from quality CRE credits

26
Growth Strategy
ORGANIC GROWTH IS OUR STRENGTH
•
We have been successful in going to market in a very focused way
in the highly competitive
Metro NYC commercial banking market
–
Larger bank M&A in the market provides opportunities to acquire new customers and
new talent with intact books of business
•
Referrals and reputation for service have historically generated
profitable, controlled growth
in customers
•
Always seeking to grow sources of fee revenue
–
A.R. Schmeidler acquisition in 2004 is a good example of investing in a niche business
with strong fee generating capabilities
•
Breadth
and
depth
of
niche
business
markets
in
Metro
NYC
provide
unusually
high
growth
opportunities compared to other areas of the U.S.
•
Opportunistic and targeted M&A could supplement organic growth in the future, particularly
in fee income

27
HVB General Business Average Loan = $541,449
Businesses in Market  > 419,000
> $227 BILLION LENDING OPPORTUNITY
Market Potential Example
AS OF MARCH 31, 2013
SEGMENT
% OF STRATEGIC
CLIENT
RELATIONSHIPS
% OF
TOTAL BANK
DEPOSITS
AVERAGE
DEPOSITS PER
STRATEGIC CLIENT
RELATIONSHIP
(IN THOUSANDS)
% OF STRATEGIC
CLIENT
RELATIONSHIPS
WITH LOANS
Attorney
28%
18%
$753
29%
Not-for-Profit
18%
15%
$929
37%
Property
Managers/Real Estate
Investors
18%
23%
$1,526
58%
Municipalities
2%
7%
$4,233
7%
General Business
34%
25%
$835
49%
TOTAL / AVERAGE
100%
88%
$1,017

28
Focus on Growing Fee Revenue
FEE INCOME A KEY FOCUS
•
While net interest income is the primary source of Hudson Valley’s revenue, we have been
successful in diversifying revenue sources
–
Over
the
last
10
years
we
have
grown
fee
income
from
5%
of
total
revenue
to
more than 14%
–
We see opportunity to gain more asset management and trust revenue
Fee Income excludes realized gains and losses on investment securities and other non-recurring items as defined by SNL.
Peers = Median of US-based, publicly traded commercial banks with assets between $1-$5 billion as of Mar 31, 2013.

29
HVB Investment Highlights
EFFICIENT AND LOW-COST OPERATOR
•
Longstanding record as an efficient operator
BALANCE SHEET STEWARD
•
Low
deposit
funding
costs
support
a
NIM
that
exceeds
traditional
commercial banks
•
Balance sheet is in transition:
–
Balancing desire to deploy excess liquidity with long-term risk positioning objectives
–
Moving away from commercial real estate focus
–
Diversifying our lending focus to broader in-market C&I opportunities
•
Underwriting and credit quality a key focus
•
Capital ratios in excess of “well capitalized”
and prescribed minimums
FOCUS ON SHAREHOLDER RETURNS
•
Growing returns to shareholders supports the ability to pay a meaningful dividend
•
High insider ownership aligns management’s and board’s interests with shareholders’

30
Key Takeaways
HISTORIC DIFFERENTIATING QUALITIES REMAIN OUR STRENGTH
•
Low-cost core deposit base = source of stable funding for future growth
•
Efficient mindset is in our DNA
•
“Private Bank”
approach wins and retains customers
AN INCREASINGLY NIMBLE AND SOPHISTICATED BANK
•
Ahead
of
the
curve
in
adopting
best
practices
typically
reserved
for $10-$25 billion banks
•
Increased sophistication = heightened competitive edge
•
Developing diversified lending skills as a strategic and tactical focus
USING ENHANCED OPERATIONAL EFFECTIVENESS TO OUR ADVANTAGE
•
Quicker reaction to customers’
needs
•
Quicker reaction to regulatory and market changes
•
Quicker ability to diversify lending sources and maximize capital allocation
–
Results in: Quicker ability to grow shareholder returns

31
HVB Valuation Compared to Peers
* May 31, 2013  and  May 31, 2012
TODAY*
ONE YEAR AGO*
Dividend
Yield
Price /
Book
Price /
Tangible
Book
Dividend
Yield
Price /
Book
Price /
Tangible
Book
HVB
1.3
1.22x
1.33x
4.3
1.13x
1.23x
SNL U.S. Bank $1B-$5B Index
1.8%
1.46x
1.66x
2.0%
1.20x
1.38x
Median of $1B-$5B NY-NJ-CT Banks
2.9%
1.19x
1.44x
3.4%
1.16x
1.23x

32
THANK YOU
THANK YOU
FOR YOUR INTEREST IN
FOR YOUR INTEREST IN
HUDSON VALLEY HOLDING
HUDSON VALLEY HOLDING
CORP.
CORP.
32

33
Ticker: HVB
Ticker: HVB
www.hudsonvalleybank.com
www.hudsonvalleybank.com
33
APPENDIX
APPENDIX
FINANCIAL DETAIL AND NON-GAAP
FINANCIAL DETAIL AND NON-GAAP
RECONCILIATION
RECONCILIATION

34
New York Metro Market Profile
BANK DEPOSITS & COMPETITIVE ENVIRONMENT
•
HVB competes against national, regional and local banks
•
There are 122 banks operating in this New York Metro Market
(1)
•
The
five
county
market
is
deposit
rich
–
more
than
three-quarters
of
a
trillion
dollars
(1)
•
If
this
market
were
a
state,
it
would
rank
3rd
in
deposit
size
–
behind
California
with
$953.5
billion
and well ahead of Texas with $599.0 billion
(1) –
FDIC Summary of Deposits as of  June 30, 2012
Summary of Deposits by State
(1)
Rank
State
Deposits ($ in 000)
1
New York
$            1,065,665,215
2
California
$               953,488,261
HVB's NY Metro Market
$               789,813,635
3
Texas
$               599,030,737
4
Florida
$               423,907,631
5
Illinois
$               393,026,185

35
New York Metro Market Profile
NICHE BUSINESSES
•
Just as this market is deposit rich, it is also rich with HVB’s targeted niche businesses
•
We have leading market share among Westchester attorneys and property managers
•
High growth potential in all other segments and counties, each with HVB market share currently <2%
1 –
Dunn & Bradstreet Market Data based on Primary & Secondary NAICS codes
DATA DEMONSTRATES TREMENDOUS UNTAPPED ORGANIC GROWTH POTENTIAL IN HVB’S CORE NICHE MARKETS
Segment
Manhattan /
NY
Brooklyn
Bronx
Westchester
Rockland
Total
Attorney
9,577
1,875
567
2,395
602
15,016
Not for Profit
7,815
8,713
3,411
3,430
1,434
24,803
Real Estate Investors
4,314
1,285
605
964
236
7,404
Property Managers
5,519
3,385
1,362
2,023
548
12,837
Municipalities
838
433
280
534
200
2,285
Sub-Total
28,063
15,691
6,225
9,346
3,020
62,345
HVB NICHE BUSINESS BY COUNTY
(1)

36
New York Metro Market Profile
DEMOGRAPHICS
•
Along with being rich in deposits and HVB’s niche businesses, the market also has very favorable
demographics
(1)
2010 US Census Quick Facts by State|County
Consumer Demographics (1)
Manhattan /
NY
Brooklyn
Bronx
Westchester
Rockland
Total
Population
1,585,873
2,504,700
1,385,108
949,113
311,687
19,378,102
Housing Units (2)
847,090
1,000,293
511,896
370,821
104,057
8,108,103
Home ownership rate
22.8%
30.3%
20.7%
62.7%
71.0%
55.2%
Persons per household, 2006-
2010   
2.09
2.68
2.79
2.64
3.02
2.59
Median household income 2006-
2010   
$64,971
$43,567
$34,264
$79,619
$82,534
$55,603
Median Income Per Capita
$59,149
$23,605
$17,575
$47,814
$34,304
$30,948
Unemployment Rate (3)
8.5%
9.2%
11.6%
6.8%
6.4%
8.1%
Business Demographics (4)
Revenues: < $1 million
146,423
91,224
31,931
57,425
17,767
344,770
Revenues: $1 million - $5 million
13,926
4,242
1,444
3,276
951
23,839
Revenue: > $5 million
6,833
1,147
482
1,267
276
10,005
Revenue: Not reported
19,101
9,306
4,588
5,730
1,718
40,443
Total Business Entities
186,283
105,919
38,445
67,698
20,712
419,057
(3)
County
unemployment
rates
as
of
March,
2013
Bureau
of
Labor
Statistics
(4)
Hoovers|D&B
(2)
A
housing
unit
is
defined
as
a
house,
an
apartment,
a
mobile
home,
a
group
of
rooms,
or
a
single
room
that
is
occupied

37
HVB’s Position in the Market
DEPOSIT SHARE
•
Except for Westchester and the Bronx, HVB’s market share in each county is less than 1%
•
HVB
ranks
25
out
of
122
institutions
with
$2.37
billion
in
deposits
and
0.29%
market
share
(1)
•
HVB is a small market share play in a very large market
HVB Deposits by County
County
HVB Branches
HVB Deposits
(1)
($ in 000)
HVB Market
Share
Total
Market
Deposits
(1)
($ in 000)
Westchester
18
$  1,770,169
3.55%
$     49,881,254
Manhattan
5
$     321,111
0.05%
$   682,797,129
Bronx
4
$     194,924
1.84%
$     10,582,328
Rockland
2
$       75,508
0.85%
$       8,906,783
Brooklyn
1
$       11,883
0.03%
$     37,646,141
Total NY Metro
30
$  2,373,595
0.30%
$   789,813,635
(1) –
FDIC Summary of Deposits as of 6/30/12

38
Quarterly Loan Balances
(1) 
Total is gross of unearned income.
Dollars in Millions
2Q 2011
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
REAL ESTATE
C&D - RESIDENTIAL
63
62
53
51
53
48
34
27
C&D - NON RESIDENTIAL
85
83
57
56
43
43
41
43
OWNER OCCUPIED CRE
324
318
244
256
229
195
181
177
NON-OWNER OCCUPIED CRE
521
500
447
449
405
389
369
399
MULTIFAMILY LOANS
365
507
228
225
213
209
196
195
1-4 FAMILY MORTGAGE
191
187
175
232
237
214
216
189
HOME EQUITY
116
118
113
111
109
109
110
106
COMMERCIAL & INDUSTRIAL
228
222
219
222
231
266
289
250
CONSUMER
27
28
27
27
19
20
19
17
LEASE FINANCING
13
13
12
15
14
14
14
11
OTHER
2
2
0
1
3
3
3
1
TOTAL (1)
$1,935
$2,040
$1,575
$1,645
$1,557
$1,510
$1,472
$1,415
Period Ending

39
Strength in Diversified Commercial Lending
80%
LOAN
COMPOSITION
–
Mar
31,
2013
Loan Balances
In Millions
2012
2013
REAL ESTATE
C&D - RESIDENTIAL
$51
$27
C&D - NON RESIDENTIAL
56
43
OWNER OCCUPIED CRE
256
177
NON-OWNER OCCUPIED CRE
449
399
MULTIFAMILY LOANS
225
195
1-4 FAMILY MORTGAGE
232
189
HOME EQUITY
111
106
COMMERCIAL & INDUSTRIAL
222
250
CONSUMER
27
17
LEASE FINANCING
15
11
OTHER
1
1
TOTAL (1)
$1,645
$1,415
March 31
(1)
Total is gross of unearned income.

40
Composition of Commercial Loans
BALANCE OUTSTANDING AT MAR 31, 2013 (IN MILLIONS)
SEGMENT
C&I
INVESTOR-
OWNED CRE
OWNER-
OCCUPIED
CRE
TOTAL C&I +
CRE
Attorney
$12
$3
$4
$19
Municipalities
2
3
0
5
Not For Profit
108
9
72
189
General Business
81
133
80
294
Property Managers & Real Estate
Investors
47
251
21
319
TOTAL
$250
$399
$177
$826
Table excludes Construction & Development loans.

41
Loan Portfolio Granularity
LOAN AMOUNT TIER
% OF DOLLARS
OUTSTANDING BY
SIZE OF LOAN
% OF LOANS
OUTSTANDING BY
NUMBER OF LOANS
< $250,000
6.36%
63.51%
$250,000 to <$1 million
21.14%
21.31%
$1 million to < $5 million
53.19%
13.76%
$5 million and greater
19.31%
1.43%
Total
100.00%
100.00%
MARCH 31, 2013
Table excludes Residential loans.

42
Portfolio Granularity –
Risk Ratings
*Total of non-homogeneous loans
individually classified as to credit
risk as of the most recent analysis
performed..
% of “Pass”
Rated Loans
Portfolio Risk
Ratings at
Mar 31, 2013
Total
(in millions)*
Commercial Real Estate:
Owner occupied
$177
74.2%
3.8%
22.0%
Non owner occupied
399
97.2%
0.9%
2.0%
Construction:
Commercial
43
76.4%
12.4%
11.2%
Residential
27
88.7%
3.3%
8.1%
Residential:
Multifamily
195
97.8%
1.4%
0.8%
1-4 family
78
72.5%
0.6%
26.9%
Home equity
0.5
7.2%
0.0%
92.8%
Commercial & Industrial
250
93.2%
0.9%
5.9%
Lease Financing & Other
26
98.5%
0.0%
1.5%
Total Loans
$1,196
90.5%
1.8%
7.7%
Pass
Special
Mention
Sub-
standard
85.1%
88.8%
89.5%
90.1%
89.7%
89.2%
90.5%
80%
82%
84%
86%
88%
90%
92%
Q3'11
Q4'11
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13

43
Portfolio Granularity –
Delinquencies
Note: Balances exclude Loans Held For Sale
3/31/2013
12/31/2012
9/30/2012
3/31/2013
12/31/2012
9/30/2012
31-89 days Past
Due incl. NAL
1.40%
0.96%
0.54%
0.70%
0.49%
0.28%
90+ days Past
Due incl. NAL
1.81%
1.74%
1.63%
0.91%
0.88%
0.84%
Total Past Due
incl. NAL
3.21%
2.70%
2.17%
1.61%
1.37%
1.12%
Total Nonaccrual
Loans (NAL)
2.27%
2.37%
2.81%
1.14%
1.20%
1.44%
% OF TOTAL ASSETS
% OF TOTAL LOANS

44
Quarterly Summary Financial Highlights
(a) 
Excludes income from loan sales.
 Dollars in thousands, except per share amounts
Q2 2011
Q3 2011
Q4 2011
Q1 2012 (a)
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Net Interest Income
$29,614
$30,038
$30,739
$31,296
$31,296
$25,508
$24,115
$22,410
$21,246
Non Interest Income
$3,831
$5,714
$4,136
$4,419
$20,354
$4,789
$4,353
$4,346
$4,517
Non Interest Expense
$20,648
$20,090
$18,967
$20,876
$20,876
$21,034
$20,035
$20,593
$19,611
Net Income (Loss)
$7,432
$8,508
($22,901)
$8,656
$18,013
$4,961
$3,134
$3,073
$3,651
Net Interest Margin
4.55%
4.47%
4.60%
4.75%
4.75%
3.93%
3.60%
3.28%
3.18%
Diluted Earnings (Loss) Per Share
$0.38
$0.43
($1.17)
$0.44
$0.92
$0.25
$0.16
$0.16
$0.18
Dividends Per Share
$0.14
$0.18
$0.18
$0.18
$0.18
$0.18
$0.18
$0.18
$0.06
Return on Average Equity
10.13%
11.33%
-30.07%
12.20%
25.51%
6.72%
4.32%
4.18%
5.02%
Return on Average Assets
1.06%
1.18%
-3.19%
1.21%
2.53%
0.71%
0.44%
0.43%
0.51%
Efficiency Ratio
58.81%
56.67%
52.79%
56.81%
56.81%
68.06%
69.33%
75.73%
74.97%
Tangible Common Equity Ratio
9.7%
9.6%
9.1%
9.6%
9.6%
9.6%
9.2%
9.3%
9.6%
   Average Assets
$2,791,988
$2,872,159
$2,867,304
$2,845,223
$2,845,223
$2,795,090
$2,874,634
$2,883,086
$2,859,443
   Average Net Loans
$1,840,076
$1,928,888
$2,028,587
$1,997,391
$1,997,391
$1,577,190
$1,505,942
$1,467,153
$1,422,132
   Average Deposits
$2,383,267
$2,468,359
$2,463,056
$2,466,159
$2,466,159
$2,408,726
$2,489,378
$2,514,818
$2,493,021
   Average Stockholders' Equity
$293,390
$300,338
$304,624
$282,459
$282,459
$295,378
$290,189
$293,886
$290,950
Earnings

45
Non-GAAP Reconciliation
(a)  Year  Ended Dec 31,2012
(b)   The loan sale in the first quarter of 2012 resulted in a gross gain of $15,935. Related income taxes totaled $6,578.
Excluding
Loan Sale
in thousands except share and per share
numbers
2007
2008
2009
2010
2011
2012(a)
2012(a,b)
2013
Net Income as reported
34,483
$     
30,877
$     
19,012
$     
5,113
$       
(2,137)
$     
29,181
$     
19,824
$     
3,651
$       
Income attributable to participating
shares as reported
-
-
-
-
-
(125)
(85)
(43)
Net Income attributable to common shares
as reported
34,483
$     
30,877
$     
19,012
$     
5,113
$       
(2,137)
$     
29,055
$     
19,739
$     
3,608
$       
Net Income as reported
34,483
$     
30,877
$     
19,012
$     
5,113
$       
(2,137)
$     
29,181
$     
19,824
$     
3,651
$       
Exclude:
Income Tax (1)
18,259
15,646
7,310
(1,406)
(5,413)
16,945
10,367
1,730
Provision for Loan Loss (2)
1,470
11,025
24,306
46,527
64,154
8,507
8,507
772
Income attributable to participating
shares (3)
-
-
-
-
-
(234)
(165)
(72)
Pre-tax, Pre-provision Earnings
54,212
$     
57,548
$     
50,628
$     
50,234
$     
56,605
$     
54,398
$     
38,533
$     
6,081
$       
Weighted Average Diluted common
shares
14,906,752
14,973,866
15,307,674
19,455,971
19,462,055
19,545,037
19,545,037
19,563,083
Diluted Earnings per Share as reported
2.31
$         
2.06
$         
1.24
$         
0.26
$         
(0.11)
$       
1.49
$         
1.01
$         
0.18
$         
Effects of (1) and (2) above
1.32
$         
1.78
2.07
2.32
3.02
1.30
0.96
0.13
Pre-Tax, Pre-Provision Diluted Earnings
per Common Share
3.64
$         
3.84
$         
3.31
$         
2.58
$         
2.91
$         
2.78
$         
1.97
$         
0.31
$         
Tangible Equity Ratio:
Total Stockholders' Equity:
As reported
203,687
$   
207,500
$   
293,678
$   
289,917
$   
277,562
$   
290,971
$   
290,971
$   
292,895
$   
Less: Goodwill and other intangible
assets
20,296
25,040
27,118
26,296
25,493
24,745
24,745
24,697
Tangible stockholders' equity
183,391
$   
182,460
$   
266,560
$   
263,621
$   
252,069
$   
266,226
$   
266,226
$   
268,198
$   
Total Assets:
As reported
2,330,748
$
2,540,890
$
2,665,556
$
2,669,033
$
2,797,670
$
2,891,246
$
2,891,246
$
2,828,809
$
Less: Goodwill and other intangible
assets
20,296
25,040
27,118
26,296
25,493
24,745
24,745
24,697
Tangible assets
2,310,452
$
2,515,850
$
2,638,438
$
2,642,737
$
2,772,177
$
2,866,501
$
2,866,501
$
2,804,112
$
Tangible equity ratio
7.9%
7.3%
10.1%
10.0%
9.1%
9.3%
9.3%
9.6%

46
Investment Philosophy and Focus
INVESTMENT PHILOSOPHY:
•
For equity, buy the most assets and cash flow for the fewest dollars
in the key beneficiaries of secular growth trends
•
For fixed income, preservation of principal is primary consideration
with income secondary
PORTFOLIO FOCUS:
•
Preservation of principal
•
Capital appreciation
•
Protection of purchasing power

47
Firm Overview
•
Long-only absolute-return managers using a distinct Graham
& Dodd stock selection approach with a macro view that seeks
to identify global capital flows
•
Independent investment management firm established in
1971, acquired by Hudson Valley Bank in 2004
•
$1.3 billion in assets under administration*
•
Team of 21 professionals including investment and client
service teams
•
Client Asset Mix
–
Institutional 44%
–
High-Net-Worth
56%
OUR PRIMARY OBJECTIVE IS TO INCREASE THE PURCHASING POWER OF OUR
CLIENTS’
PORTFOLIOS
ASSETS UNDER MANAGEMENT
(03/31/2013)
$1.3 Billion
Cash
8%
Equity
73%
Fixed
19%
*Includes assets under management & advisement

48
Asset Growth
596
809
1,043
1,398
1,031
1,369
1,289
1,123
1,173
261.5
188.7
149.7
1,590
17.9
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Assets Under Management
Assets Under Advisement

49
Year
12/31/99
Inception
Asset Class
To Date
To Date
To Date
Multicap
8.32
134.72
679.17 (1/21/93)
Balanced
7.48
126.14
497.54 (12/31/92)
     Equities
12.02
104.40
562.98
     Fixed Income
0.36
110.25
245.68
Index
S & P 500 w/div
10.73
36.58
434.31
Russell 3000 w/div
11.07
49.66
448.03
Barclays US Treas Intermediate
0.04
92.05
92.05
Merrill Lynch Corp Bds 1-10 Yrs
0.59
133.05
266.03
Performance data is net of management fees and net of transaction costs.
* These performance figures are supplemental information to the GIPS Compliant presentation.
MULTICAP & BALANCED PERFORMANCE
MARCH 31, 2013

50
EXPAND DISTRIBUTION
•
HVB
–
Trust
–
New York Metro Market
•
Third Party Programs
•
Family Offices and Ultra High Net Worth
•
Foundations and Endowments
STRATEGIC AND HIGHLY SELECTIVE ACQUISITIONS
•
People
•
Firms
Strategy for Growth

THANK YOU FOR YOUR INTEREST IN
THANK YOU FOR YOUR INTEREST IN
HUDSON VALLEY HOLDING CORP.
HUDSON VALLEY HOLDING CORP.
Ticker: HVB
Ticker: HVB
www.hudsonvalleybank.com
www.hudsonvalleybank.com
June 2013
June 2013