8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 20, 2004

YARDVILLE NATIONAL BANCORP

(Exact name of issuer as specified in charter)

NEW JERSEY	0-26086	22-2670267
(State or Other Jurisdiction of Incorporation or Organization)	(Commission file number)	(I.R.S. Employer Identification Number)

2465 KUSER ROAD
HAMILTON, NEW JERSEY 08690
(Address of principal executive offices)

(609) 585-5100
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

YARDVILLE NATIONAL BANCORP PRESS RELEASE

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

Exhibit No.	Description
99.1	Yardville National Bancorp Press Release dated July 20, 2004

Item 12. Results of Operations and Financial Condition.

     On July 20, 2004, Yardville National Bancorp issued a press release reporting its financial results for the second quarter ended June 30, 2004. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

     The information in this report shall not be treated as “filed” for purposes of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Signatures

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	Yardville National Bancorp
Date: July 22, 2004	By:	Stephen F. Carman
		Stephen F. Carman
		Vice President and Treasurer

Index to Exhibits

Exhibit No.	Description
99.1	Yardville National Bancorp Press Release dated July 20, 2004

EX-99.1

Exhibit 99.1

For Release:          IMMEDIATELY

Contact:	Patrick M. Ryan, President & CEO	(609) 631-6177
	Stephen F. Carman, VP / Treasurer	(609) 631-6222
	Leonardo G. Zangani / Financial PR	(908) 788-9660

YNB REPORTS RECORD SECOND QUARTER EARNINGS

Hamilton, N.J. – July 20, 2004- Yardville National Bancorp (NASDAQ:YANB), today announced double digit percentage increases in most performance indicators, led by a 24.2 percent increase in its second quarter 2004 net income over the same period in 2003. For the quarter ended June 30, 2004, YNB’s net income was $4.5 million compared with $3.6 million earned in the second quarter of last year. Earnings per share also increased to $0.41 per diluted share, up 20.6 percent over the $0.34 per diluted share reported in the second quarter of 2003.

For the six months ended June 30, 2004, YNB’s net income increased 20.0 percent to $8.3 million from the $6.9 million earned in the same period a year ago. Diluted earnings per share increased 16.7 percent to $0.77 from the $0.66 reported in the prior year’s first half. Increased net interest income and a higher net interest margin resulted in the notable improvement in YNB’s financial performance from the comparable periods, despite an increase in non-interest expense and a higher provision for loan losses.

Total loans showed an impressive increase in the first half of 2004. Strong growth in commercial loans, primarily commercial real estate, resulted in a 22.3 percent rise in total loans to $1.63 billion from $1.33 billion at June 30, 2003. YNB has continued to focus on improving overall loan quality. Nonperforming assets decreased from the first quarter of 2004, dropping to $11.8 million at June 30, 2004 from $13.3 million at March 31, 2004, while nonperforming assets as a percent of total assets decreased to 0.45 percent at June 30, 2004, compared to 0.52 percent at March 31, 2004. At June 30, 2004, YNB’s allowance for loan losses was $18.5 million, or 1.14 percent of total loans, covering 156.8 percent of total nonperforming loans. In the first half of 2004, YNB provided $4.4 million for possible loan losses, primarily due to an increased level of net loan charge offs and the strong loan growth experienced.

“Commercial loan growth in the first six months of 2004 was significant,” said YNB Chief Executive Officer and President Patrick M. Ryan. “Our larger core deposit base, led by our very successful Simply Better Checking^SM product, enabled us to support our lending growth at a lower cost. This, in turn, should further improve our net interest margin as we go forward, an essential element for YNB’s future success,” Mr. Ryan noted.

For the six months ended June 30, 2004, YNB’s net interest margin continued to advance to 2.72 percent, a major improvement over the margin of 2.34 percent a year ago. The combination of continued commercial loan growth and higher levels of lower cost deposits is expected to push the net interest margin higher in the second half of 2004.

YNB also experienced solid deposit growth, as deposits rose 19.9 percent to $1.69 billion at June 30, 2004 from $1.41 billion at the same date in 2003. YNB’s aggressive consumer deposit campaign made a major contribution to this growth, as YNB’s popular Simply Better Checking product brought in $83.5 million in account balances in the first half of 2004.

New branch offices also have a role to play in the company’s profitability. YNB already has filed an application for a new branch at Pennington Pointe West, in Northern Mercer County. Subject to regulatory approval, it is anticipated that the branch will be ready to open in the first quarter of 2005. Plans are also on the drawing board for 2005 for branches in West Windsor, New Jersey in Mercer County; Readington, New Jersey in Hunterdon County; and in Morrisville, Pennsylvania in Bucks County.

“By following our retail strategy and bringing our products and services to a larger audience, we can further enhance shareholder value,” Mr. Ryan concluded.

YNB’s Executive Vice President and Chief Financial Officer provided further guidance on the company’s second half prospects. “The ongoing growth of net interest income and our net interest margin are critical in meeting our financial goals for 2004,” Stephen F. Carman noted. “Based on current or projected higher interest rates in the second half of the year, we are well-positioned, should credit quality continue to improve, to achieve net interest margin and net income goals for 2004,” he concluded.

YNB’s capital structure to support future growth remains solid, as the company recently completed the private sale of $15.0 million in floating rate trust preferred securities. At June 30, 2004, YNB’s Tier 1 and risk-based capital ratios exceeded those required by regulatory guidelines to be considered well-capitalized. Shareholders were also well-rewarded, as YNB paid a cash dividend for the 42nd consecutive quarter.

As of June 30, 2004, YNB had $2.66 billion in assets, with twenty-two branches serving individuals and businesses in Mercer, Hunterdon, Somerset, Burlington and Middlesex Counties in New Jersey, and Bucks County, Pennsylvania. Located in the corridor between New York City and Philadelphia, YNB offers a broad range of lending, deposit and other financial products and services.

Note regarding forward-looking statements

This press release and other statements made from time to time by our management contain express and implied statements relating to our future financial condition, results of operations, plans, objectives, performance, and business, which are considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements that relate to, among other things, profitability, liquidity, loan loss reserve adequacy, plans for growth, interest rate sensitivity, market risk, regulatory compliance, and financial and other goals. Actual results may differ materially from those expected or implied as a result of certain risks and uncertainties, including, but not limited to, the results of our efforts to implement our retail strategy, adverse changes in our loan portfolio and the resulting credit risk-related losses and expenses, interest rate fluctuations and other economic conditions, our ability to attract core deposits, continued relationships with major customers, competition in product offerings and product pricing, adverse changes in the economy that could increase credit-related losses and expenses, compliance with laws and regulatory requirements of federal and state agencies, other risks and uncertainties detailed from time to time in our filings with the SEC, as well as other risks and uncertainties detailed from time to time in statements made by our management.

Yardville National Bancorp

Summary of Financial Information

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share amounts)	2004			2003			2004			2003
Stock Information:
Weighted average shares outstanding:
Basic		10,444			10,395			10,435			10,396
Diluted		10,803			10,614			10,799			10,590
Shares outstanding end of period		10,478			10,416
Earnings per share:
Basic	$	0.43		$	0.35		$	0.80		$	0.67
Diluted		0.41			0.34			0.77			0.66
Dividends paid per share		0.115			0.115			0.23			0.23
Book value per share		13.48			14.28
Tangible book value per share		13.29			14.28
Closing price per share		24.95			19.52
Closing price to tangible book value		187.74	%		136.69	%
Key Ratios:
Return on average assets		0.68	%		0.62	%		0.65	%		0.61	%
Return on average stockholders’ equity		12.48			9.73			11.46			9.46
Net interest margin (tax equivalent)		2.76			2.37			2.72			2.34
Equity-to-assets at period end		5.30			6.30
Tier 1 leverage ratio (1)		7.83			7.75
Asset Quality Data:
Net loan charge-offs	$	1,593		$	303		$	3,176		$	1,163
Nonperforming assets as a percentage of total assets		0.45	%		0.38	%
Allowance for loan losses at period end as a percent of:
Total loans		1.14			1.31
Nonperforming loans		156.81			238.59
Nonperforming assets at period end:
Nonperforming loans	$	11,826		$	7,338
Other real estate		—			1,651
Total nonperforming assets	$	11,826		$	8,989

(1) Tier 1 leverage ratio is Tier 1 capital to adjusted average assets

Yardville National Bancorp and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2004		2003		2004		2003
INTEREST INCOME:
Interest and fees on loans	$	24,149	$	20,910	$	47,248	$	40,964
Interest on deposits with banks		59		17		110		24
Interest on securities available for sale		8,631		8,218		16,796		17,051
Interest on investment securities:
Taxable		32		39		75		97
Exempt from Federal income tax		786		698		1,564		1,329
Interest on Federal funds sold		44		165		126		376
Total Interest Income		33,701		30,047		65,919		59,841
INTEREST EXPENSE:
Interest on savings account deposits		2,984		2,829		5,552		5,469
Interest on certificates of deposit of $100,000 or more		983		1,039		1,957		2,097
Interest on other time deposits		3,047		3,738		6,293		7,591
Interest on borrowed funds		8,879		8,897		17,753		17,931
Interest on subordinated debentures		840		712		1,650		1,592
Total Interest Expense		16,733		17,215		33,205		34,680
Net Interest Income		16,968		12,832		32,714		25,161
Less provision for loan losses		1,975		1,250		4,425		1,850
Net Interest Income After Provision for Loan Losses		14,993		11,582		28,289		23,311
NON-INTEREST INCOME:
Service charges on deposit accounts		787		572		1,650		1,119
Securities gains, net		—		539		586		690
Income on bank owned life insurance		491		522		977		1,031
Other non-interest income		438		905		877		1,270
Total Non-Interest Income		1,716		2,538		4,090		4,110
NON-INTEREST EXPENSE:
Salaries and employee benefits		5,643		5,227		11,475		10,244
Occupancy expense, net		1,077		935		2,167		1,961
Equipment expense		816		737		1,610		1,427
Other non-interest expense		3,047		2,267		5,618		4,181
Total Non-Interest Expense		10,583		9,166		20,870		17,813
Income before income tax expense		6,126		4,954		11,509		9,608
Income tax expense		1,664		1,362		3,169		2,660
Net Income	$	4,462	$	3,592	$	8,340	$	6,948
EARNINGS PER SHARE:
Basic	$	0.43	$	0.35	$	0.80	$	0.67
Diluted		0.41		0.34		0.77		0.66
Weighted average shares outstanding:
Basic		10,444		10,395		10,435		10,396
Diluted		10,803		10,614		10,799		10,590

Yardville National Bancorp and Subsidiaries

Consolidated Statements of Condition

(Unaudited)

	June 30,						Dec. 31,
(in thousands)	2004			2003			2003
Assets:
Cash and due from banks	$	32,629		$	30,781		$	25,785
Federal funds sold		20,845			31,125			7,370
Cash and Cash Equivalents		53,474			61,906			33,155
Interest bearing deposits with banks		14,798			25,782			20,552
Securities available for sale		817,406			807,692			798,007
Investment securities		69,876			63,796			68,686
Loans		1,628,576			1,332,007			1,443,355
Less: Allowance for loan losses		(18,544	)		(17,508	)		(17,295	)
Loans, net		1,610,032			1,314,499			1,426,060
Bank premises and equipment, net		10,898			11,961			12,307
Other real estate		—			1,651			—
Bank owned life insurance		43,768			41,843			42,816
Other assets		37,152			24,951			29,610
Total Assets	$	2,657,404		$	2,354,081		$	2,431,193
Liabilities and Stockholders’ Equity:
Deposits
Non-interest bearing	$	199,485		$	144,251		$	163,812
Interest bearing		1,493,903			1,268,001			1,319,997
Total Deposits		1,693,388			1,412,252			1,483,809
Borrowed funds
Securities sold under agreements to repurchase		10,000			10,000			10,000
Federal Home Loan Bank advances		726,000			726,000			726,000
Obligation for Employee Stock Ownership Plan (ESOP)		566			955			755
Other		369			1,033			1,325
Total Borrowed Funds		736,935			737,988			738,080
Subordinated debentures		62,892			37,118			47,428
Other liabilities		23,247			18,515			18,319
Total Liabilities	$	2,516,462		$	2,205,873		$	2,287,636
Stockholders’ equity:
Common stock: no par value		90,831			89,550			90,079
Surplus		2,205			2,205			2,205
Undivided profits		62,088			55,189			56,152
Treasury stock, at cost		(3,160	)		(3,154	)		(3,160	)
Unallocated ESOP shares		(566	)		(955	)		(755	)
Accumulated other comprehensive (loss) income		(10,456	)		5,373			(964	)
Total Stockholders’ Equity		140,942			148,208			143,557
Total Liabilities and Stockholders’ Equity	$	2,657,404		$	2,354,081		$	2,431,193

Financial Summary
Average Balances, Yields and Costs
(Unaudited)

	Three Months Ended								Three Months Ended
	June 30, 2004								June 30, 2003
						Average								Average
	Average					Yield /			Average					Yield /
(in thousands)	Balance			Interest		Cost			Balance			Interest		Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks	$	25,230		$	59		0.94	%	$	5,440		$	17		1.25	%
Federal funds sold		18,146			44		0.97			56,975			165		1.16
Securities		879,623			9,449		4.30			883,593			8,955		4.05
Loans (1)		1,594,495			24,149		6.06			1,278,949			20,910		6.54
Total interest earning assets	$	2,517,494		$	33,701		5.35	%	$	2,224,957		$	30,047		5.40	%
NON-INTEREST EARNING ASSETS:
Cash and due from banks	$	28,847							$	24,990
Allowance for loan losses		(18,488	)							(16,871	)
Premises and equipment, net		11,244								12,189
Other assets		78,071								65,421
Total non-interest earning assets		99,674								85,729
Total assets	$	2,617,168							$	2,310,686
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and interest bearing demand	$	870,158		$	2,984		1.37	%	$	635,619		$	2,829		1.78	%
Certificates of deposit of $100,000 or more		157,867			983		2.49			139,178			1,039		2.99
Other time deposits		453,126			3,047		2.69			463,099			3,738		3.23
Total interest bearing deposits		1,481,151			7,014		1.89			1,237,896			7,606		2.46
Borrowed funds		737,275			8,879		4.82			739,026			8,897		4.82
Subordinated debentures		49,662			840		6.77			37,118			712		7.67
Total interest bearing liabilities	$	2,268,088		$	16,733		2.95	%	$	2,014,040		$	17,215		3.42	%
NON-INTEREST BEARING LIABILITIES:
Demand deposits	$	182,637							$	131,603
Other liabilities		23,387								17,377
Stockholders’ equity		143,056								147,666
Total non-interest bearing liabilities and stockholders’ equity	$	349,080							$	296,646
Total liabilities and stockholders’ equity	$	2,617,168							$	2,310,686
Interest rate spread (2)							2.40	%							1.98	%
Net interest income and margin (3)				$	16,968		2.70	%				$	12,832		2.31	%
Net interest income and margin (tax equivalent basis)(4)				$	17,360		2.76	%				$	13,196		2.37	%

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

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

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

(4) In order to present pre-tax income and resultant yields on tax exempt investments and loans on a basis comparable to those on taxable investments and loans, a tax equivalent adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 35% in 2004 and 34% in 2003 and has the effect of increasing interest income by $392,000 and $364,000 for the three month periods ended June 30, 2004 and 2003, respectively.

Financial Summary
Average Balances, Yields and Costs
(Unaudited)

	Six Months Ended								Six Months Ended
	June 30, 2004								June 30, 2003
						Average								Average
	Average					Yield /			Average					Yield /
(in thousands)	Balance			Interest		Cost			Balance			Interest		Cost
INTEREST EARNING ASSETS:
Interest bearing deposits with banks	$	22,772		$	110		0.97	%	$	3,417		$	24		1.40	%
Federal funds sold		25,814			126		0.98			65,788			376		1.14
Securities		863,642			18,435		4.27			892,765			18,477		4.14
Loans (1)		1,548,310			47,248		6.10			1,247,927			40,964		6.57
Total interest earning assets	$	2,460,538		$	65,919		5.36	%	$	2,209,897		$	59,841		5.42	%
NON-INTEREST EARNING ASSETS:
Cash and due from banks	$	27,582							$	24,290
Allowance for loan losses		(18,072	)							(16,676	)
Premises and equipment, net		11,747								12,171
Other assets		73,190								63,751
Total non-interest earning assets		94,447								83,536
Total assets	$	2,554,985							$	2,293,433
INTEREST BEARING LIABILITIES:
Deposits:
Savings, money markets, and interest bearing demand	$	821,177		$	5,552		1.35	%	$	603,623		$	5,469		1.81	%
Certificates of deposit of $100,000 or more		154,604			1,957		2.53			138,418			2,097		3.03
Other time deposits		453,925			6,293		2.77			464,527			7,591		3.27
Total interest bearing deposits		1,429,706			13,802		1.93			1.206,568			15,157		2.51
Borrowed funds		737,450			17,753		4.81			748,132			17,931		4.79
Subordinated debentures		48,545			1,650		6.80			38,288			1,592		8.32
Total interest bearing liabilities	$	2,215,701		$	33,205		3.00	%	$	1,992,988		$	34,680		3.48	%
NON-INTEREST BEARING LIABILITIES:
Demand deposits	$	172,851							$	125,973
Other liabilities		20,890								27,509
Stockholders’ equity		145,543								146,963
Total non-interest bearing liabilities and stockholders’ equity	$	339,284							$	300,445
Total liabilities and stockholders’ equity	$	2,554,985							$	2,293,433
Interest rate spread (2)							2.36	%							1.94	%
Net interest income and margin (3)				$	32,714		2.66	%				$	25,161		2.28	%
Net interest income and margin (tax equivalent basis)(4)				$	33,516		2.72	%				$	25,861		2.34	%

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

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

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

(4) In order to present pre-tax income and resultant yields on tax exempt investments and loans on a basis comparable to those on taxable investments and loans, a tax equivalent adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 35% in 2004 and 34% in 2003 and has the the effect of increasing interest income by $802,000 and $700,000 for the six month periods ended June 30, 2004 and 2003, respectively.